SALEM, Ohio — Most of the major, interstate natural gas pipelines under construction in 2017 to transport natural gas and petroleum-based products from the Utica and Marcellus shale regions are either in service, or will be later this year.
The Enbridge Nexus line remains under construction, with an expected in-service date by year’s end.
The Leach, Rover and Nexus lines will all transport natural gas, with a combined capacity of about 6.25 billion cubic feet per day. The largest line, Rover, will have a capacity of 3.25 bcf/day. The Utopia line will transport ethane — with a capacity of 50,000 Bbls/day.
Supply and demand
The expansion is expected to have a significant impact on natural gas supply and demand, and could provide more reason to drill in the region.
“The most important thing is that it’s going to have that take-away capacity,” said Mike Chadsey, spokesperson for the Ohio Oil and Gas Association. “We have an opportunity to put this gas in a pipeline and get it to markets out west and up north.”
Limited infrastructure and an abundant supply have resulted in historically low natural gas prices, which temporarily slowed drilling among energy companies. According to the Energy Information Administration, spot prices for November were $3.01 per million Btu, the same as they were in 1997, although a bitter cold end to 2017 is likely to send prices higher.
Drilling activity increased significantly as 2017 came to a close, the same time many of the pipelines were coming on line.
The Ohio Department of Natural Resources issued 80 oil and gas permits in Ohio’s Utica, Point Pleasant and Marcellus shale plays in the final two months of 2017. That’s up 10 from the 70 permits issued during that same time period in 2016.
The Pennsylvania Department of Environmental Protection issued 425 unconventional gas well permits during November and December 2017.
“We’ve got more gas than we can use right now in Ohio,” Chadsey said. “That (new pipelines) will incentivize our producers to poke more holes in the ground, benefiting landowners.”
The pipeline companies generally declined to be interviewed on the phone, or were not available by press time. Instead, they sent statements and emails to Farm and Dairy about the progress.
The Rover pipeline is 95 percent complete, and has been in partial service since Aug. 31, according to a statement emailed by a Rover spokesperson.
The Nexus pipeline received its federally approved Certificate and Notice to Proceed in 2017, and construction began in October, according to Adam Parker, company spokesperson.
“Project activities will generally continue until the pipeline is placed into service in the third quarter of 2018,” Parker wrote in an email.
Construction on that project is expected to increase as spring arrives.
Dale Arnold, energy director for Ohio Farm Bureau Federation, said even though some lines are in service, and more soon will be, landowners need to stay involved with what’s going on. He said landowners need to keep a close eye on the remediation of their property, and see that things are put back the way the lease specified.
“Pay attention to the land improvement aspects,” he said, adding that landowners should “continue to have working relationships” with the pipeline company and the local land improvement contractor.
Arnold expects to see additional construction projects, especially as more utility companies seek ways to connect to the pipelines.
“We’ll probably be seeing construction activity well into the middle of the next decade,” he said.
On Jan. 2, the same day TransCanada announced its Leach Xpress line was in service, the company also announced that the Federal Energy Regulatory Commission (FERC) had issued a certificate of public convenience and necessity for its Mountaineer XPress (MXP) and Gulf XPress (GXP) projects.
The MXP line, which will cut south from Marshall County to Wayne County, West Virginia, will deliver approximately 2.6 Bcf/d of gas on the Columbia Gas Transmission System through the construction of 170 miles of 36-inch pipeline. The project includes three new compressor stations and upgrades to three existing compressor stations, according to TransCanada.
And the GXP will transport approximately 08 Bcf/d from the Appalachian region to Southeast and Gulf Coast supply markets, through the construction of seven new compressor stations, and upgrades to one existing compressor station, along TransCanada’s existing Columbia Gulf System in Kentucky, Tennessee and Mississippi.