Pipeline Projects Pump Up Ohio Valley’s Production Levels

Source: The Intelligencer / Wheeling News-Register

WHEELING – The Atlantic Coast Pipeline, the Mountain Valley Pipeline, the Rover Pipeline and the Leach XPress are some of the multi-billion-dollar projects Corky Demarco believes will keep Marcellus Shale production levels climbing for years to come – just as they jumped more than 1,000 percent over the last five years.

Even as drillers cutback on capital expenditures for this year amid lower oil and natural gas prices, data tabulated by the federal Energy Information Administration indicates these pipelines will allow for an even greater demand for Marcellus material.

“We may have shown a 200-300-percent increase a couple of years ago, but we had no way to get the gas out of here because of the pipeline problem,” said Demarco, executive director of the West Virginia Oil and Natural Gas Association. “Now, the production is a little down, but it will get going once the pipelines are open.”

The federal data show the Marcellus formation is now pumping 14.6 billion cubic feet of natural gas per day compared to the 1.3 Bcf it yielded per day five years ago. In other words, drillers can now produce as much natural gas in one day as it previously took them 11 days to yield.

To put that in perspective, one Bcf is enough to power 24,315 homes for a whole year, according to Cabot Oil and Gas.

Demarco is not the only industry leader to believe Marcellus production levels will keep growing as pipelines continue coming online.

“We have seen drilling declining, but production is still growing quite a bit,” said Randall Collum, managing director of supply analytics for industry analyst Genscape Inc. “We’re not seeing a decline in production whatsoever.”

The EIA indicates the Utica Shale region has also seen rapid increases in production, particularly over the past two years, though not at the rates found in Marcellus. The Utica is currently producing just under 2 Bcf per day.

Since early this month, the EIA shows several pipeline projects have made progress with the Federal Energy Regulatory Commission. Among these are:

— The $5 billion Atlantic Coast Pipeline, which will feature 42-inch diameter pipe sending natural gas from the Marcellus region to North Carolina.

— The $4.3 billion Rover Pipeline, featuring up to 42-inch diameter pipe that will ship natural gas from Upper Ohio Valley across Ohio.

— The 36-inch diameter Leach XPress pipeline, which will send natural gas from the Upper Ohio Valley to the southwest to a compressor station near Huntington, W.Va.

— The Mountain Valley Pipeline, developed by EQT Corp., which will send fuel southward from the MarkWest Energy Mobley complex in Wetzel County.

— The Texas Eastern Transmission’s Gulf Markets Expansion project, operated by Spectra Energy, which will carry gas from the Upper Ohio Valley to Gulf Coast states.

“We will continue to build this infrastructure so we can get this product to market,” Demarco said.

Demarco said most of the gas drawn from the Mountain State now goes to markets along the Eastern Seaboard, such as New York City, Philadelphia, Washington, D.C., Boston and others. He believes the newer pipelines that will send gas to North Carolina will go a long way to bolstering Marcellus production.

“There’s no reason to produce until you have somewhere to send your gas,” he added.