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EIA Sees 16 Bcf/d of Pipe Capacity Planned for Next 2 Years

EIA Sees 16 Bcf/d of Pipe Capacity Planned for Next 2 Years

New pipeline development and expansions could add 16 Bcf/d of capacity to the national transmission network over the next two years (1999-2000) at an estimated cost of about $9.5 billion, according to a report by the Energy Information Administration. While all of the proposed projects may not be built, total expenditures are expected to far exceed the $5.1 billion invested during the last major period of pipeline development in 1992-1993.

Since dipping in 1994, investment in additional pipeline capacity has increased each year and could reach $6 billion in 2000. A major portion of the new investment is designed to increase access to Canadian gas, according to the EIA's analysis, which is titled "Natural Gas Pipeline Network: Changing and Growing." The report is to be included in EIA's upcoming "Natural Gas 1998: Issues and Trends," which is expected to be released in February.

While more than 11 Bcf/d of capacity was added to the transmission network in 1998, total costs were relatively low, at $2.9 billion, compared with projected spending of $3.1 billion in 1999 and $6.3 billion in 2000, EIA said. Although the amount of new capacity slated to be added during each of those years, 8.2 and 7.8 Bcf/d, respectively, would be less than the amount added in 1998, the investment will be greater because several major new and expensive long-distance pipeline systems, such as the Alliance, Independence, Tri-State, and Vector pipeline systems, are scheduled to be constructed during the period. Most of the capacity added in 1998 was less expensive expansions and upgrades.

Supporting this expansive pipeline growth, in large part, is the growing demand for natural gas to generate electricity, EIA noted. Growing environmental concerns have spurred the construction of gas-fired generating to replace coal- and oil-fired plants in many sections of the country. Since 1990, gas use for power generation has grown at an annual rate of 17% in the Midwest and about 9% in the Southeast. Although natural gas use for electric generation grew by less than 1% per year in the Southwest, it still accounts for more than 22% of all gas consumed in the region. That is the largest regional use of gas for electric generation in the nation.

For copies see EIA's web site at http://www.eia.doe.gov.

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