Capacity construction for the natural gas industry has gone into overdrive recently with numerous new projects -- pipelines, storage and liquefied natural gas (LNG) terminals -- approved by FERC, in service or under construction.
So far this year Federal Energy Regulatory Commission (FERC) staff tallies show seven natural gas projects with a total of 847 miles of pipeline, plus compression, and 4.4 Bcf/d of capacity have been completed and added to the U.S. pipeline grid, along with nine storage projects with 85.6 Bcf of capacity and 1.8 Bcf/d deliverability. More are on the way. In the same time period the Commission approved new construction totaling 2,365 miles and 21.5 Bcf/d, a 50% increase over construction approved in all of 2006.
A staff review presented at a regular meeting of the FERC Thursday showed major growth in the amount of new pipeline capacity approvals over the last three years. In the two and a half years from the beginning of 2005 to date FERC has approved nearly 50 Bcf/d in new pipeline capacity, compared to only 26 Bcf/d approved in the five years including 2000 through 2004.
Jeff Wright, deputy director of the Office of Energy Projects, told the commissioners the pipes approved in 2006 and 2007 tended to be more traditional long line pipelines, while those in earlier years trended toward short, large-diameter connections to LNG projects.
Notably aimed at infrastructure improvements to increase the gas flow are the major REX West pipeline from the Rockies expected to go into service next year, and new pipes from East Texas going to eastern connections with existing long line pipelines. The new pipes are necessary because the nation's supply mix is changing.
Wright noted that the old stand-by supplies are declining as Gulf Coast production went from 25% or 5.1 Tcf of U.S. supply in 2001 to a current 3.1 Tcf or 17%. Canadian imports also are expected to decline from about 9 Bcf/d of supplies this year to 3.8 Bcf/d by 2025. Meanwhile, in the Rockies proven reserves have gone from 19.8% of the U.S. total to 23%, and that percentage should improve as new pipelines alleviate the bottlenecks for supplies to get to market.
Looking ahead, applications are pending at FERC for about 18 Bcf/d and 2,800 miles of new pipeline, plus compression, of which 47% is LNG-related. Another 3.3 Bcf/d of projects with little relation to LNG are in FERC's pre-filing process. And it is known that industry is considering potential projects -- none of them LNG related -- for another 18 Bcf/d of capacity.
As for LNG projects themselves, there are eight new terminal site applications pending before the Commission with redelivery capacity of 9.2 Bcf/d. The sites are in the Northeast, California and Oregon. Since 2002 FERC has approved 14 new LNG terminal sites with redelivery capacity of 24.7 Bcf/d and five expansions of existing terminals with redelivery capacity of 6.4 Bcf/d.
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