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Bentek: Marcellus Takeaway Capacity to Double by 2013

Marcellus Shale natural gas pipeline takeaway capacity will jump to 8.5 Bcf/d by 2013, more than double its current level, according to Bentek Energy LLC.

"About 5.0 Bcf/d of new Northeast expansion capacity is currently in the planning phase and scheduled to be operational during that timeframe," the firm said in a market update Wednesday. "These projects will help natural gas producers in the Marcellus grow production volumes and reach premium Northeast markets during peak winter demand."

Nearly 1.0 Bcf/d of Marcellus takeaway capacity is scheduled to come online in the next month as a result of El Paso Corp.'s Tennessee Gas 300 Line Expansion project (see Shale Daily, Oct. 10), Empire Pipeline Inc.'s Tioga Line Extension (see related story) and National Fuel's Line N expansion project in southwestern Pennsylvania, according to Bentek. The firm has said new capacity slated to come online in Line 300 will fill up quickly (see Shale Daily, Sept. 27).

"The Tennessee expansion will boost forward-haul capacity on their 300 Line by 350 MMcf/d, increasing delivery capacity to interconnects with Algonquin, Transco and Con Edison in White Plains, NY. This additional supply to the premium Northeast market will put downward pressure on regional prices," Bentek said Wednesday.

In addition, Equitrans LP, a subsidiary of Pittsburgh-based EQT Corp., recently received the go-ahead from the Federal Energy Regulatory Commission (FERC) to begin construction on a new pipeline in Pennsylvania and West Virginia that will provide additional takeaway capacity for Marcellus Shale gas producers (see Shale Daily, Sept. 23). The $272 million Sunrise project, which would expand Equitrans' existing mainline transmission system to accommodate the rapid development of natural gas from both the liquids-rich and dry areas of the Marcellus, is targeted for in-service in the summer of 2012.

But with only 1.0 Bcf/d of the total incremental capacity from those projects expected to reach New York City by 2013, the Bentek analysts said they expect the market to remain constrained and New York citygate prices to continue trading at a premium to other Northeast hubs this winter and in the winter of 2012-13.

Northeast access to local supply is expected to mitigate supply disruptions from hurricanes in the Gulf of Mexico and cold weather impacts in Texas, the Southeast Gulf, the Midcontinent and the Rocky Mountain regions, which all supply the Northeast, Bentek said.

Marcellus Shale production has increased from 2.7 Bcf/d to 4.7 Bcf/d in the past year, according to FERC's Winter 2011-12 Energy Market Assessment (see Shale Daily, Oct. 21).

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