If there were any more proof needed that there’s too much gas in the Marcellus Shale region and it needs to get out, the industry got it last week with the announcement of two pipeline projects — estimated to cost about $1 billion each — that would carry Marcellus supplies to greener markets.

Some of the growing gas supply coming out of the Marcellus could find a home in gas-fired power plants in Georgia, Alabama and Tennessee thanks to a proposal from Spectra Energy Corp. to move gas from the booming shale play to markets southward. And some Marcellus gas could be bound for southeastern Pennsylvania, Philadelphia and the Baltimore and Washington, DC, on a project proposed by Inergy Midstream LP, UGI Energy Services Inc. and Capitol Energy Ventures Corp., a unit of WGL Holdings Inc., called Commonwealth Pipeline.

Spectra’s proposed Renaissance Gas Transmission would flip the decades-old convention that gas in the United States moves from supply basins in the Gulf region to markets in the Northeast.

“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.

Spectra has other projects targeting the Marcellus as well (see NGI, Jan. 23). “The strength of these expansion efforts comes down largely to what Texas Eastern offers to both ends of the equation,” a Spectra spokesperson said. “Our markets have access to all the supply basins — whether it’s the Gulf Region, Rockies gas, LNG [liquefied natural gas] and shale — so they’ve got a lot of supply optionality, and obviously then our producers have access to premium markets, including power generation in the Midwest, Mid-Atlantic and Southeast, and the chemical industry and potential LNG exports of the Gulf Coast.”

Separately, Commonwealth Pipeline is a proposed 200-mile, 30-inch diameter system that 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. Service would begin in 2015. UGI Energy Services and Capitol Energy Ventures Corp. are expected to be anchor shippers on the line.

“Gas production in the region has been limited by the lack of takeaway capacity in existing interstate pipelines, most of which currently serve markets outside of Pennsylvania,” said UGI Energy Services President Bradley Hall. “Our goal in participating in this project is to bring gas produced in Pennsylvania directly to the major markets in central and eastern Pennsylvania.”

The pipeline would connect markets to Marcellus Shale gas production from across Pennsylvania while providing a more cost-effective transportation path compared to traditional routes, the backers said. “The pipeline is expected to cross and interconnect with a number of interstate pipelines along its route, providing even greater supply diversity while providing producers with direct access to markets that are currently served only through existing interstate pipelines.”

The sponsors expect to own equal equity interests in the project company formed to own the pipeline. Inergy Midstream will construct and operate the pipeline, which is expected to cost approximately $1 billion and be funded equally by the sponsors.

A nonbinding open season is to be announced this month, the partners said.

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 NGI, Feb. 20).

El Paso Corp. recently said it is considering adding pipeline infrastructure to carry gas from northeastern Pennsylvania to an interconnection near Albany, NY, following a nonbinding open season that was held last year (see NGI, Feb. 27a). Also eyeing northeastern Pennsylvania, Williams Partners formed a joint venture with Cabot Oil & Gas Corp. to build the 120-mile Constitution Pipeline to connect a Williams gathering system in Susquehanna County, PA, to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, NY (see NGI, Feb. 27b).

Late last year El Paso’s Tennessee Gas Pipeline Co. placed its long-awaited 300 Line forward-haul expansion in service, increasing capacity on the Tennessee Gas Pipeline system by 350 MMcf/d, a nearly 50% boost (see NGI, Nov. 7, 2011). The pipeline’s Northeast Upgrade Project, which when combined with the 300 Line expansion, will add 1 Bcf/d of capacity to transport gas from the Marcellus Shale to Northeast markets recently received a favorable environmental review at the Federal Energy Regulatory Commission.

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