Williams, Boardwalk plan shale NGL pipeline for US petchems

06 March 2013 15:10  [Source: ICIS news]

HOUSTON (ICIS)--Williams and Boardwalk Pipeline Partners plan jointly to develop a pipeline project that will ship natural gas liquids (NGLs) from the Marcellus and Utica shale gas plays to markets on the US Gulf Coast and the US northeast, the midstream energy firms said on Wednesday.

The companies’ proposed “Bluegrass Pipeline” project would give Marcellus and Utica shale gas producers access to the US Gulf Coast petrochemical market, thus providing them with better value for their ethane other liquids, they said.

Bluegrass would have 200,000 bbl/day of mixed NGLs takeaway capacity, which could later be increased to 400,000 bbl/day.

The project would combine new construction with existing pipeline infrastructure, thus enabling it to come into service as early as the second half of 2015, subject to regulatory approvals and other conditions, the companies said. 

The NGLs would be supplied to proposed new fractionation and storage facilities, “which would have connectivity to petrochemical facilities and product pipelines along the coasts of Louisiana and Texas,” they said.

Bluegrass involves first building a new NGL pipeline from producing areas in West Virginia and Ohio to an interconnect with Boardwalk's Texas Gas Transmission system (“Texas Gas”) in Hardinsburg, Kentucky.

Second, Williams and Boardwalk plan to convert a portion of Texas Gas from Hardinsburg to Eunice, Louisiana (“TGT Loop Line”) from natural gas service to NGL service.

Third, the companies plan to build a new large-scale fractionation plant, expand NGL storage facilities in Louisiana, and build a new pipeline connecting these facilities to the converted TGT Loop Line.

"We are designing Bluegrass Pipeline to provide the [Marcellus and Utica shale gas] resource plays with access to one of the largest and most dynamic petrochemical markets in the world,” said Alan Armstrong, president and CEO of Williams.

“In turn, this will help producers in Ohio, Pennsylvania and West Virginia achieve an attractive value for their ethane and other liquids," he said.

Current NGL pipeline infrastructure constraints in the US northeast were slowing drilling and isolating liquids supplies from markets in the Gulf that are poised to grow substantially over the next five years, he added.

He predicted that, given the market dynamics in the northeast, existing liquids systems and local outlets will be overwhelmed by 2016. He also said that by 2020, total NGL volumes in the US northeast are expected to exceed 1.2m bbl/day.

The proposed Bluegrass Pipeline joint venture would support Williams' midstream assets in the region, offer an attractive return and enable Williams to become the premier NGL infrastructure provider, by economically linking the Utica and Marcellus region to petrochemical complexes on the US Gulf Coast, Armstrong added.

Williams and Boardwalk are also exploring the development of a new export liquefied petroleum gas (LPG) terminal and related facilities on the Gulf Coast, they said.

By: Stefan Baumgarten
+1 713 525 2653

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