Williams suspends Marcellus-to-US-Gulf Bluegrass NGL pipeline

(adds comments from Williams spokesman, paragraph 2)

HOUSTON (ICIS)–Williams has suspended investment in the Bluegrass Pipeline project, which would have connected natural gas liquids (NGLs) from the Marcellus and Utica shale plays to the US Gulf Coast, due to lack of firm customer commitments, the midstream company said on Monday.

There was a lack of firm customer commitments from NGL producers in the Marcellus and Utica shale plays, said Williams spokesman Tom Droege.

The pipeline project, announced in May 2013, was a joint venture with Boardwalk Pipeline Partners. The planned pipeline would have carried 200,000 bbl/day of mixed NGLs from Ohio, West Virginia and Pennsylvania, with an option to increase capacity to 400,000 bbl/day.

The project was pursued due to a US Energy Information Association (EIA) prediction of NGL production from the Marcellus and Utica shale areas rising to 650,000 bbl/day by 2016. The Bluegrass pipeline was scheduled to be on line in late 2015, according to a joint Williams and Boardwalk Pipeline statement on the Bluegrass pipeline website.

“While data show there will soon be a need for a large-scale solution like Bluegrass Pipeline to meet market needs, potential customers to-date have so far chosen to focus on local solutions,” the statement said.

While continued community support for the project will be sought, the companies said no additional capital will be invested at this time. Local offices with land acquisition teams have been closed, according to the website.

As announced in May 2013, the planned pipeline would include building an NGL pipeline from the shale plays to an interconnect with Boardwalk’s Texas Gas Transmission system in Hardinsburg, Kentucky. From there on to Eunice, Louisiana, a portion of Texas Gas would be converted from natural gas service to NGL service, the companies said.

The joint venture includes the planned construction of a large-scale fractionation plant and expanded NGL storage facilities in Louisiana and a new pipeline connecting these facilities to the converted Texas Gas Transmission line in the Eunice area.

Additional reporting by Jeremy Pafford