Responding to the rapid growth of natural gas production from the Marcellus Shale, UGI Corp. said it plans to invest approximately $300 million over the next two years in midstream projects to support the development of natural gas infrastructure in the region.
Among the investments are the just-announced agreement between UGI’s midstream and energy marketing unit, UGI Energy Services Inc., and NiSource Gas Transmission and Storage (NGT&S) to market and develop a major pipeline project to provide Marcellus Shale producers in Pennsylvania improved access to high-value markets.
The plan is for an estimated 500,000 Dth/d of transportation capacity to be made available for increased production along NiSource’s Columbia Gas Transmission pipeline system in Clearfield, Centre and Clinton counties to interconnections with Transcontinental Gas Pipeline Corp., Tennessee Gas Pipeline Co., Dominion Gas Transmission Inc., and Millennium Pipeline Co. in north-central Pennsylvania and southern New York, as well as connections to UGI’s Tioga/Meeker natural gas storage facilities and extensive gas distribution network.
“With the significant increase in drilling and deliverability of natural gas in the Marcellus Shale, there is a growing need for capacity to facilitate the movement of producers’ gas to downstream markets,” said Christopher A. Helms, group CEO for NGT&S.
Bradley C. Hall, president of UGI Energy Services, said, “This joint marketing agreement brings together two major players with strategic assets, supplier relationships and customers in and near the Marcellus Shale region. UGI has a large appetite for natural gas and we believe this project will provide our utility and transportation service customers with cost effective and reliable gas supply.”
The parties expect to file preliminary plans with the Federal Energy Regulatory Commission (FERC) and to hold an open season for the project’s capacity by the end of the year. The project is targeted to be in-service in the fourth quarter of 2012.
In addition to the pipeline project, UGI plans to enhance the delivery options from its Meeker and Tioga storage fields in north-central Pennsylvania by drilling additional storage wells and adding dehydration and compression capacity. UGI’s storage fields are situated to enable Marcellus gas to efficiently serve temperature sensitive end-use markets. In addition, the fields are connected to UGI’s gas utility distribution system, as well as to the Dominion Gas Transmission Inc. and Tennessee Gas Pipeline interstate pipeline systems. The proposed pipeline by NGT&S and UGI also would connect to these storage fields. The project is planned to be available for service in 2013.
Additional projects to construct gathering facilities and purchase gas from Marcellus producers would bring locally produced gas to Pennsylvania and interstate markets during 2012. These projects would not be subject to FERC approval.
“The natural gas in the Marcellus Shale region of Pennsylvania is in areas in which we have a significant amount of assets, including much of our utility and gas marketing service territories,” said UGI CEO Lon R. Greenberg. “We believe these and future projects will provide our utility and transportation service customers with cost effective and reliable gas supply.”
©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |