For the first time, Utica Shale gas is flowing to utility customers in north-central Pennsylvania, hundreds of miles away from the play's sweet spot in eastern Ohio.
UGI Utilities Inc. became the first natural gas utility in Pennsylvania to directly connect its natural gas distribution system to a Utica well drilled in Tioga County by Royal Dutch Shell plc affiliate SWEPI Inc.
UGI called it a "historic direct interconnection" that will increase available natural gas supply to UGI customers in Tioga and nearby Potter counties. The Utica well and two other Marcellus Shale wells were connected with UGI's system to provide up to 14,000 Dth/d. The company said annual available supply from the interconnection will be enough to provide the natural gas needs of more than 50,000 homes in its service area.
In September, Shell announced two Utica discovery wells in Tioga County that helped pique additional interest in the formation's potential more than 100 miles northeast of the nearest horizontal Utica operator (see Shale Daily, Nov. 24;Sept. 3).
UGI officials have said sourcing local gas is becoming increasingly important, with industry and power generation demand rising as more homes in its service territory convert from oil, electricity and propane to heat with natural gas (see Shale Daily, Oct. 14).
Last month, the company said it had completed two key gathering projects in northeast Pennsylvania, giving a boost to utility customers and operators looking to move more of their production, by completing its Union Dale pipeline project and expanding its Auburn Gathering System to carry 150,000 Dth/d of additional natural gas (see Shale Daily, Nov. 21).
UGI Vice President of Supply Kelly Beaver said more than 70% of the natural gas currently being delivered by the company is produced in the Marcellus Shale and added that "we are pleased to add volumes of lower-cost Utica Shale natural gas to our portfolio as another supply source."