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Penn Virginia Working Toward New Marcellus Pipe

In what it said was the first step to develop a new pipeline to move Marcellus Shale natural gas out of northeast Pennsylvania, Penn Virginia Resource Partners LP (PVR) has acquired an option to purchase an easement along a 28.8-mile long right-of-way corridor in Susquehanna County, PA.

The Radnor, PA-based company is evaluating whether to construct a gathering pipeline with an interconnection to the Tennessee Gas Pipeline system to serve producers in the region, according to William H. Shea Jr., CEO of PVR's general partner. The optioned easement extends north from the Tennessee pipeline right-of-way in Union Dale through the towns of Thompson and Lanesboro to the New York state line.

"The right-of-way was originally developed for railroad use and is ideally situated for pipeline construction," Shea said. "Use of the existing right-of-way will allow PVR to construct the line without creating another utility corridor in the region."

PVR expects to continue discussions with potential shippers to construct a 24-inch diameter mainline trunk system capable of transporting approximately 360 MMcf/d to major northeastern markets, Shea said.

The industry has been scrambling to put in place enough pipe to ship the Marcellus' skyrocketing production to market. In the past month alone, Southwestern Energy Services Co. asked the Federal Energy Regulatory Commission (FERC) to approve a mostly compression expansion of Millennium Pipeline by Feb. 1 so that it can be in operation by Nov. 1 (see Shale Daily, Jan. 5a); FERC issued a favorable environmental assessment of National Fuel Gas Supply Corp.'s Line N 2012 expansion project (see Shale Daily, Dec. 27, 2011); Williams said it was in the process of developing a pipeline to connect supply with market via its existing Transcontinental Gas Pipe Line (Transco) (see Shale Daily, Dec. 23, 2011); and Enterprise Products Partners LP said it is proceeding with plans for a 1,230-mile Marcellus-Gulf Coast ethane pipeline (see Shale Daily, Jan. 5b).

Last year PVR began commercial operations on the first large-diameter gathering pipeline in the north-central Pennsylvania Marcellus fairway (see Shale Daily, Feb. 18, 2011). The first section of the gathering system provided more than 850 MMcf/d of capacity on a 30-inch trunkline that connects to Transco. And in September subsidiaries of PVR and Aqua America Inc. announced that they would partner on a new private pipeline system that would supply fresh water to natural gas producers drilling in the Marcellus in north-central Pennsylvania (see Shale Daily, Sept. 22, 2011).

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