A UGI Corp. subsidiary said this week it would expand its Auburn natural gas gathering system in Northeast Pennsylvania because of growing Marcellus Shale volumes. 

UGI CEO John Walsh said as “demand for Marcellus gas continues to grow rapidly,” the company must keep pace by building out infrastructure. UGI Energy Services LLC plans to construct two additional compressor stations in Susquehanna and Wyoming counties to expand the Auburn Gathering System. 

The project would increase capacity on the system by 150 MMcf/d, bringing total capacity to to 620 MMcf/d. UGI has been expanding the system for years now. Some new deliveries are expected to start on the expansion later this year and the rest are to begin flowing in 2019. 

“This expansion will supply gas to end-users and feed new pipelines that will connect Marcellus gas to regions that have not historically benefitted from access” to such supplies, Walsh said. 

The Auburn system spans a 46-mile area in Susquehanna, Wyoming and Luzerne counties and moves gas from producing fields to multiple outlets, including the Tennessee Gas Pipeline and the Transcontinental Gas Pipe Line.  

UGI said the latest expansion would serve Cabot Oil & Gas Corp., a dominant northeast Pennsylvania producer that operates only in Susquehanna County. The project, UGI said, is supported by a long-term agreement and is estimated to cost about $50 million to construct. 

For Cabot, which has about 1.5 Bcf/d of demand coming online this year, the Auburn expansion is another positive. The company expects two gas-fired power plants that it’s exclusively supplying and the Atlantic Sunrise expansion project to come online this year. A 20-year supply agreement with Sumitomo Corp. affiliate Pacific Summit Energy also recently kicked in after commercial operations started at the Cove Point liquefied natural gas export facility in Maryland.