US Pipeline Contracts
are being awarded in Ohio, Pennsylvania, West Virginia, Tennessee, Virginia,
California, Texas, Michigan, Indiana, Illinois, Iowa and Alabama.
The US
plans to add 15,038 miles of pipelines. This would reduce the use of truck and
rail delivery. Global pipeline additions total 46,304 miles from continent to
continent. This would reduce the use of
oil tankers.
United States - While pipeline construction has
increased throughout North America, the heaviest activity has been concentrated
around major U.S. shale plays with takeaway capacity constraints – most
notably, the Permian Basin of West Texas and New Mexico and the Marcellus/Utica
basins of Appalachia.
Pipeline capacity from the gas-rich Marcellus increased in 2018
with the completion of Columbia Pipeline’s Leach Xpress, which added 1.5 Bcf/d
of capacity from West Virginia in January, and Williams’ Atlantic Sunrise
project. A $3 billion expansion of the Transco system, Atlantic Sunrise added
186 miles of greenfield pipe in Pennsylvania and 1.7 Bcf/d of takeaway capacity
when it began full operations in early October.
The $5 billion, 600-mile (970-km) Atlantic Coast Pipeline is a
42-inch natural gas pipeline developed through a joint venture between Dominion
Energy, Duke Energy, Piedmont Natural Gas and Southern Company Gas. The 1.5
Bcf/d pipeline, which has faced opposition and delays, is scheduled for
completion in late 2019.
Mountain Valley Pipeline officials said the $4.6 billion project
is on target to be fully in-service in the fourth quarter of 2019. Mountain
Valley, which spans 303 miles from northwestern West Virginia to southern
Virginia, was reported to be 70% complete by the end of 2018, including 58% of
all welding, and planned to finish remaining construction of compressor
stations and interconnects by February.
Additional Marcellus projects include Mountaineer Xpress, which
will add 2.7 Bcf/d, and TCO’s Columbia Gulf and WB Xpress expansions, which
will combine for up to 2 Bcf/d of capacity. Rover Phase 2 adds 3.25 Bcf/d to
the Midwest and Ontario, and NEXUS Pipeline, which follows a similar route to
Rover, will deliver 1.5 Bcf/d of new capacity.
In the Permian Basin, more than 2 MMbpd of pipeline capacity has
been proposed, and several of those projects have moved forward following
successful open seasons that revealed strong customer interest. Production in
the hottest U.S. shale oil play began pushing against takeaway capacity in
2017, causing tariffs to rise, and surpassed it during 2018.
A number of major Permian projects are scheduled for completion
during 2019, including the 730-mile Epic crude oil pipeline to Corpus Christi,
Texas, which is developing into a major crude and NGL export hub. The Epic
crude line will add 590,000 bpd of takeaway capacity, following the path the
Epic NGL pipeline which also is under construction.
Plains All American expects first flow on its Cactus II project
in the second half of this year. Cactus II was proposed as a 585,000 bpd
project linking Permian production to Corpus Christi/Ingleside via existing and
two new pipelines. Due to customer interest, Plains conducted a successful
second open season for expanded capacity. Cactus II is expected to start
partial service in the third quarter of 2019, Plains is targeting full service
on the 670,000 bpd line in April 2020.
Other notable Permian crude oil projects include the Phillips
66/Enbridge Gray Oak Pipeline to Corpus Christi, Freeport and Houston. Gray
Oak, which is scheduled to begin service in the second half of this year, will
have an initial capacity of 385,000 bpd.
Most recently, Houston-based Jupiter Energy Group commenced an
open season in December for a 650-mile, 36-inch crude oil pipeline with
expected completion by the fourth quarter of 2020. The pipeline would have
capacity up to 1 MMbpd with origination points near Crane and Gardendale/Three
Rivers in West Texas and an offtake point in Brownsville, Texas. Privately held
Jupiter said it also is constructing a crude upgrading, processing and export
terminal capable of loading VLCCs in the Port of Brownsville.
The Permian pipeline shortage is not limited to crude oil
production, however. With associated gas accounting for about a third of the
Permian output and regulations limiting the amount of gas that can be flared,
natural gas pipeline constraints have also put a ceiling on oil production
while pushing gas prices in West Texas down to the lowest of any major U.S.
hub.
Fortunately, Mexico is providing a growing export market for
piped gas from Texas, as its southern neighbor has been aggressively expanding
its natural gas infrastructure.
EEIA
lists 4,457 miles of natural gas pipelines and 4.803 miles of oil and LNG
pipelines that are completed, under construction and proposed in the US.
Norb Leahy, Dunwoody
GA Tea Party Leader
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