Increasing Appalachian Takeaway Capacity: Can Production Keep Up?


Dec. 18 2017, Updated 12:20 p.m. ET

Takeaway capacity in Appalachia

As we’ve learned so far in this series, rising natural gas production in the Appalachian region has created the need for new midstream infrastructure, including natural gas processing plants (see the previous article) and pipelines. Several new pipeline projects are being developed to increase takeaway capacities from the Marcellus and Utica supply regions into the US Gulf Coast, the midwestern states, and eastern Canada.

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Recent projects

In November, seven pipeline projects were placed into service. These projects included the Spectra Energy (SE) and Enbridge (ENB) owned Algonquin Gas Transmission Atlantic Bridge pipeline (Spectra and Enbridge merged in February 2017), TransCanada’s (TRP) Rayne Express pipeline, the Access South project on ENB’s Texas Eastern Transmission (or TETCo), and the Connecticut expansion on the Tennessee Gas Pipeline (or TGP) owned by Kinder Morgan Energy Partners (KMP).

Upcoming projects

Next year, investors will look forward to the completion of the Energy Transfer Partners–owned (ETP) Rover pipeline and the startup of TransCanada’s Leach Xpress. Williams’s (WMB) Atlantic Sunrise is also expected to come online next year, which will provide 1.7 Bcf/d of incremental capacity out of Eastern Appalachia.

At the end of 2018, more projects are expected to come online, including ENB’s Nexus Gas pipeline, TRP’s Gulf Xpress pipeline, and EQT’s (EQT) Mountain Valley pipeline, which will add 4.4 Bcf/d of takeaway capacity.

Investors will be watching to see how quickly production will respond as new capacity comes online and whether the additional capacity will uplift weak natural gas prices in the Appalachian region.


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