New US northeast natgas creates shift in infrastructure

03 October 2011 20:57  [Source: ICIS news]

(recast with Pittsburgh dateline instead of Houston)

PITTSBURGH (ICIS)--Midstream companies are building and reconfiguring infrastructure to meet the new demands of growing natural-gas production in the US northeast, company executives said on Monday at Infocast Marcellus Infrastructure Finance and Development Summit.

“Supply all came from Texas,” said Mike Stice, president of Chesapeake Midstream. “Now the supply sector is the east coast."

He added: "The whole equation has to change so pipelines taking natural gas from the Gulf coast to the east coast could be stranded or reconfigured. What we’re seeing is more of it reconfigured.”

Stice said he does not see any of those pipelines coming on in the near-term for natural gas.

“The grid will just have to reconfigure itself,” he said.

Some equipment and infrastructure cannot be reconfigured, and new state-of-the-art equipment will need to be built, Stice said.

In Ohio, a state that has both the Marcellus shale play and recent production on the Utica shale, there is no processing plant, said president Jack Lafield with Caiman Energy.

Chesapeake is boring a pipeline under the Ohio river, which will connect the proposed Dominion cryogenic gas processing in Natrium West Virginia, to production in east Ohio. Dominion’s plant is scheduled to finish in late 2012.

Chesapeake Energy, the second largest natural gas producer in the US, has been working with all incumbents, such as Dominion and Caiman.

Ethane-rich natural gas poses a unique problem for Chesapeake and other production companies. Infrastructure is necessary because the large amount of ethane prevents all of it from being blended into the natural gas pipeline.

“We need the ability to de-ethanise so we can put that ethane in an ethane pipeline solution,” Stice said.

Chesapeake has 270 wells drilled in wet gas regions that it cannot push into production because the company has no way to move the ethane-saturated gas.

In January 2011, Caiman Energy completed its Fort Beeler processing plant I, a cryogenic processing facility near Cameron, West Virginia.

In the end, Chesapeake wants to build its own infrastructure, so sometimes it is working with Caiman, some days competing with Caiman and sometimes turning the keys over to Caiman, Stice said.

President Chuck Wilkinson of Stonehenge Energy Resources said its Sarsen Gas plant, a cryogenic processing plant and gathering system in Butler County, Pennsylvania, has a de-ethaniser and de-propaniser.  The plant is a joint venture with Rex Energy.

In addition, NOVA Chemicals made an agreement with Sunoco in September to move ethane through an existing Sunoco pipeline to the petrochemical market in Sarnia, Ontario, in Canada.


By: Sheena Martin
+1 713 525 2653



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