Multiple pipeline expansions expected to come online between now and 2015 in the Northeast will take more gas out of the Marcellus Shale, but they won't do much to alleviate winter price spikes in New England, according to the Energy Information Administration (EIA).
The new projects are largely focused on transporting gas to the New York/New Jersey and Mid-Atlantic regions and will have "limited benefit" for consumers in New England, EIA said. New England price spikes are likely to persist.
Projects with expected in-service dates between now and 2015 would add at least 3.5 Bcf/d of capacity to New York/New Jersey and Mid-Atlantic markets. More than 2.0 Bcf/d of expansions are expected for this winter alone. The largest of these is the 0.78 Bcf/d NY-NJ Expansion on a portion of Spectra Energy's Texas Eastern Transmission Co. pipeline from Linden, NJ, to Manhattan in New York City (see Daily GPI, March 19, 2012). The project is expected to enter commercial service Friday.
Also expected to enter service Friday is the second phase of Transcontinental Gas Pipe Line’s (Transco) Northeast Supply Link, which will add another 125, 000 Dth/d of capacity to New Jersey and New York to the 125,000 Dth/d, which was added to the Williams pipeline in August (see Shale Daily, Aug. 16). And Tennessee Gas Pipeline (TGP), a Kinder Morgan pipeline, is expected to place into service its Northeast Upgrade project on Friday. It will allow an additional 636,000 Dth/d of Marcellus gas to be transported along TGP's 300 Line to an interconnect with Algonquin Gas Transmission in Mahwah to serve the Northeast (see Shale Daily, Oct. 7).
However, New England consumers will not significantly benefit from currently planned pipeline expansions until 2016. Algonquin Gas Transmission, which takes gas from the Marcellus and elsewhere to New England, has been running full during winter peak periods. The system's next planned expansion is the Algonquin Incremental Market (AIM) project, which would enable the pipeline to flow north an additional 0.42 Bcf/d of gas received at its interconnect with Millennium Pipeline in Ramapo, NY (see Daily GPI, Oct. 15). The target in-service date for the AIM Project is Nov. 1, 2016.
The difference in construction activity for New York and New England markets is reflected in market prices for natural gas. Monthly forward prices for gas purchased at Algonquin continue to spike in the winter compared to Henry Hub. By contrast, the forward price at the Transco Zone 6-New York is similar to the Henry Hub forward price.