On the Marcellus, More Gas Requires More Infrastructure

A scene from Kinder Morgan's "Rockies Express" natural gas pipeline. (image: Kinder Morgan/kne.com)

To accommodate the natural gas liquids (NGLs) flowing out of the Marcellus shale, three separate energy companies have proposed building pipelines running to refineries in Louisiana or Ontario. Though it appears not all three ventures will lay pipe, and a $550 million project from Houston’s Kinder Morgan appears to have the most momentum, according to a report from the Columbus Dispatch.

Two other Houston-based companies are also making plans: the El Paso Group and Buckeye Partners, though a spokeswoman from Buckeye offered a vague statement that the company was “in stand down mode.”

The proposed pipelines would help process the growing yield — including propane and ethane — from the gas-rich shale formation that runs underneath the Appalachians in Pennsylvania and West Virginia. Meanwhile, other midstream companies are boosting their processing capacity in West Virginia to handle the hydrocarbons coming out of the ground, including a partnership led by MarkWest and another from Dominion Energy.

Geologists have found that the natural gas coming from the Marcellus shale is “wet” — the roughneck’s word for methane (the primary component in natural gas) that contains byproduct “liquids” (like ethane, propane, and butane). And with NGLs fetching historically higher prices than methane, these byproducts are gravy for suppliers.

Kinder Morgan’s proposed pipeline would run north along the length of Ohio, from outside Cincinnati to the Michigan line, where it could join the company’s “Cochin” propane line. However the project, which would cross wetlands and nature preserve, has raised red flags with Ohio environmentalists. Kinder Morgan has said the pipe’s path can be adapted. “This is not the final route,” a company spokesman said. “There are a variety of ways to deal with these issues.”

Kinder Morgan operates more than 37,000 miles of pipeline and 180 terminals across North America, according to the company website.

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