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New Spectra Pipe Would Carry Marcellus Gas to Southeast Power Generators

Growing gas supply in the Marcellus Shale and projected growth in gas-fired power generation among southern states could mean a renaissance for the traditional Gulf of Mexico-to-Northeast pipeline business. Spectra Energy Corp. would seem to think so, as its latest project, called Renaissance Gas Transmission, would carry Marcellus gas south to Georgia, Alabama and Tennessee.

"With our existing Texas Eastern [Transmission Co. (Tetco)] system footprint, Spectra Energy can readily connect the shale gas production potential from the Marcellus and Utica shales to the doorstep of an exciting, high-demand market," said Mark Fiedorek, group vice president for Spectra Energy Transmission, southeast. "Taking advantage of expanding domestic onshore resources and creating access to growing natural gas markets will enable us to offer greater flexibility to both new and existing customers."

Spectra is holding a nonbinding open season for Renaissance through March 30. The company said it expects gas demand from power generators to grow in the southern region. Additionally, it has inked a nonbinding letter of intent with AGL Resources to explore collaboration and transportation service options for local distribution companies owned by AGL that would be near the new pipeline. AGL is expected to be an anchor customer on Renaissance.

Power generators in the region targeted by Renaissance will increasingly rely on their gas-fired units and will also be constructing new ones, Spectra said. "The Renaissance project will support multiple service offerings to these generators, as well as local distribution companies and industrial users, by bringing high-pressure capabilities to serve the swing and hourly delivery requirements that these markets require," Spectra said.

The pipeline would begin at an interconnect in Columbia County, TN, with Tetco, which has existing connections through the Marcellus, Utica, Appalachian and other shale gas sources, creating a direct link from these basins to the Renaissance project, Spectra said. Renaissance would traverse Alabama and northern Georgia to connect with Williams' Transco system near Lawrenceville, GA.

Renaissance would run for 230 miles and have capacity of about 1.25 Bcf/d with estimated in-service during late 2015. It would be a greenfield project but would follow existing rights-of-way wherever possible, Spectra said. The project is expected to cost more than $1 billion. Open season results will dictate compression and other facility needs, the pipeline said.

"Texas Eastern offers additional supply options for Renaissance customers with its traditional access to Gulf of Mexico and Gulf Coast supply as well as its access to the Fayetteville, Haynesville, Woodford, Barnett and Eagle Ford shale plays. These direct links to multiple supply basins will serve to diversify customer's clean energy options and offer significant liquidity and supply reliability."

Gas-fired power generators are seen as the most promising growth prospect for natural gas demand, according to analysts. "Some 12.5 GW [gigawatts] of gas-fired electric power generation is under construction with in-service dates ranging from between May 1, 2012 and Dec. 31, 2013," Bentek Energy LLC said recently. "This new gas-fired capacity equals gas demand estimated by Bentek at more than 1.1 Bcf/d."

Renaissance joins a number of projects intended to carry Marcellus gas to market. In recent days Inergy Midstream LP, UGI Energy Services Inc. and Capitol Energy Ventures Corp., a unit of WGL Holdings Inc., announced their plans for Commonwealth Pipeline, which would carry at least 800,000 Dth/d from the southern terminus of Inergy Midstream's MARC I pipeline in Lycoming County, PA, through central and eastern Pennsylvania to markets across southeastern Pennsylvania, Philadelphia and the Baltimore and Washington, DC, areas (see Shale Daily, March 2).

Spectra has other projects targeting the Marcellus as well (see Shale Daily, Jan. 20).

A recent analysis of the Marcellus region and natural gas infrastructure by LCI Energy Insight and Energy Ventures Analysis found that infrastructure developers are racing to keep up with producers. "At present, the Marcellus Shale play is the fastest growing gas play in the U.S.," LCI and EVA said. "In 2012, it is projected to account for over 40% of expected increases in U.S. shale production and approximately one-third of the increases in shale production in 2013" (see Shale Daily, Feb. 21).

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