Pipeline companies will have to build at least 4.4 Bcf/d to 5.6 Bcf/d of new mainline facilities next year just to accommodate the 50,000 MW of gas-fired power generation capacity that is expected to come on-line in the United States during 2002, according to a report issued last week by the Energy Information Administration (EIA).

If all proposed pipeline projects are realized, the Department of Energy (DOE) agency estimates that U.S. pipeline companies will be able to meet this challenge, adding as much as 11 Bcf/d in new pipelines and expansions next year, or twice the amount of capacity that will be needed to satisfy new generation demand.

In Michigan alone, about 3,800 MW of gas-fired generation facilities are scheduled to begin operation in 2002, according to the EIA, which it says will require the construction of an additional 300-425 MMcf/d of new pipeline capacity within the state. It’s estimated that every 100 MW of gas-turbine power generation built will require between 8.8 and 11.2 MMcf/d of gas to operate, the agency noted.

The national pipeline network has “expanded sufficiently” over the past years to meet the growing demand of the nation, but “the large incremental needs of power plants over the next several decades can be expected to place unusual demands upon the natural gas pipeline industry,” said the EIA in its report, “Natural Gas Transportation — Infrastructure Issues and Operational Trends.”

The “methodical process” for permitting and certificating pipelines at the federal and state levels “has worked exceedingly well in the past and should be able to handle even the major growth expected over the next 20 years,” the EIA noted, but it cautioned that prolonged delays could result in “short-term deficiencies” that would significantly affect services to new power generation customers.

The EIA estimates that at least 65 gas pipeline projects were completed and placed into service during 1999 and 2000, accounting for more than 12.3 Bcf/d of new pipeline capacity. Between 1997 and 2000, gas pipeline capacity grew in excess of 5 Bcf/d per year, totaling almost 20 Bcf/d, while annual expenditures for new pipeline development were more than $2 billion during that period, it said. Total pipeline expenditures are expected to climb to more than $5 billion in 2002, according to the agency.

Through 2003, the EIA said that a total of 32 Bcf/d of new pipeline capacity has been proposed, with most of the lines directed at growing markets in the West and Northeast. The Southeast also has become a magnet for new gas pipeline projects.

For this year alone, the EIA reports that pipeline companies are expected to build 5.89 Bcf/d of new pipelines and 4.45 Bcf/d of expansions. New pipeline construction will climb to 6.7 Bcf/d during 2002, the agency said, while expansion projects will add another 4.3 Bcf/d of capacity.

The EIA sees Canada remaining a key area for pipeline companies. Since 1998, it said there has been a 58% increase in gas import capacity into the Midwest, and a 23% hike into the Northeast. The agency noted that pipeline capacity from Canada could grow by about 0.7 Bcf/d by 2002, if all the proposals are approved and placed into service.

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