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FERC on Thursday gave Columbia Gulf Transmission LLC the go-ahead to start up the 1 Bcf/d Rayne XPress Expansion Project, adding to the list of Appalachian natural gas takeaway expansions coming online in time for winter heating season.
Last week, the TransCanada Corp. subsidiary notified the Federal Energy Regulatory Commission that it was ready to place the Rayne into service, in line with the Tuesday (Nov. 1) in-service date TransCanada proposed last January. [CP15-539]. The system comprises two greenfield compressor stations and other facilities along Columbia Gulf's system in Kentucky’s Carter, Menifee and Montgomery counties.
Rayne would deliver additional Marcellus and Utica shale gas to markets on the Gulf Coast. The Columbia Gulf Pipeline consists of 3,341 miles of pipe running through Louisiana, Mississippi, Tennessee and Kentucky.
Rayne, along with Columbia Gas Transmission LLC's 1.5 Bcf/d Leach XPress, was first announced in 2014 by Columbia Pipeline Group (CPG), which planned the projects at a combined cost of $1.75 billion. CPG was acquired by TransCanada last year.
The greenfield, 160-mile Leach XPress is designed to run through West Virginia's northern panhandle and eastern Ohio, adding 1.5 Bcf/d of additional capacity to the Columbia Gas system. That project, like Rayne, was cleared for construction in January and is scheduled to start up this month, though TransCanada has not yet submitted an in-service request.
The in-service authorization for Rayne comes one day after FERC cleared Texas Eastern Transmission LP (Tetco) to start-up the Adair Southwest and Access South expansions, which also open up additional takeaway capacity for trapped Appalachian volumes.
Energy Transfer Partners LP's 3.25 Bcf/d Rover Pipeline has also begun service, taking about 1 Bcf/d east-to-west out of the basin and opening up avenues for Appalachian gas also to reach Gulf Coast markets. Rover east-to-west volumes are likely to increase when the project's next phase comes online, scheduled for the end of the year.
As more Marcellus and Utica takeaway projects hit the market, prices may not be able to support the kind of producer ramp up needed to fill all the new capacity, management for Range Resources Corp. said during the recent 3Q2017 conference call. The producer expects to see an incremental 900 MMcf/d of capacity by early 2018 from Rover, Rayne, Leach and Adair Southwest.
"We believe the industry cannot support the production increases equivalent to the capacity added from these projects in southwest Pennsylvania, especially given where the strip is today and with sweet spot exhaustion," Range COO Ray Walker said. "Unless we see a significant uptick in rig additions, we think the basin will see significant displacement of gas from local markets over the next few quarters as production is simply moved to better markets."