Tulsa-based pipeline giant Williams is expecting robust demand growth on its Atlantic-Gulf corridor natural gas pipelines over the coming years, driven largely by liquefied natural gas (LNG) exports, executives said Thursday during the company’s analyst day in New York City.
LNG exports are forecast to account for more than half of the 24.4 Bcf/d of demand growth in the United States for the 2018-2025 period, CEO Alan Armstrong said, citing forecasts from Wood Mackenzie.
Gas flows to LNG facilities on the flagship Transcontinental Gas Pipeline Co. LLC (Transco) pipeline stood at about 2.25 Bcf/d as of November, up from around 0.6 Bcf/d in January 2017. Williams currently delivers about 30% of all LNG feed gas in the United States.
Senior Vice President Chad Zamarin, who handles corporate strategic development, said Williams plans to seek to connect gas supply from the Haynesville Shale and Permian Basin to the Transco mainline to meet growing gas demand from LNG exporters on the Gulf Coast.
Although the Permian now suffers from a lack of long-haul takeaway capacity, the economics today do not support an investment in a large-diameter, long-distance pipeline from the basin, Zamarin said.
“That said, we keep a very close eye on the Permian, and as Permian supply migrates to the Gulf Coast, we will be expanding and reconfiguring our footprint and our Transco mainline, in order to deliver gas to key demand markets,” he added.
Armstrong highlighted that emerging economies will account for the overwhelming majority of energy demand growth between now and 2040, presenting an opportunity for Lower 48 LNG exporters.
Williams has a backlog of 19 projects that it is actively pursuing, including eight to transport gas to LNG facilities, seven to serve industrial demand or local distribution companies, and four to transport gas to power generators.
The company has $3.2 billion of expansion projects in execution in the Atlantic-Gulf corridor, COO Michael Dunn said.
These projects have targeted in-service dates ranging from 2019-2023, and include the Northeast Supply Enhancement (fall 2021), Leidy South (late 2021), Regional Energy Access (4Q2023), and Gateway (4Q2019) expansion projects, which could add about 2 Bcf/d of combined capacity to serve Maryland, New Jersey, New York and Pennsylvania.
Plays in the Northeast, namely the Marcellus and Utica shales, will continue to be the country’s largest suppliers of gas over the coming years, Zamarin said. He noted there is more than 10 Bcf/d of excess takeaway capacity coming out of the Northeast.
“As supply continues to grow in the northeast, we will continue to adapt and expand the receipt and deliverability of our infrastructure to move gas in even more flexible ways,” Zamarin said.