Natural Gas Pipeline Update
One of the issues at the heart of the natural gas pipeline expansion is the difference in planning and investing time frames of natural gas pipeline companies and market based power generators. For natural gas pipelines to expand they are required to seek 15 year contracts for the additional capacity. Power generators though have very short three year planning cycles linked in part to generation capacity markets. Unfortunately it is these natural gas fired generators that are the source of New England's added natural gas pipeline requirements. To try to find a work around the New England Governors through the New England State Committee on Electricity (NESCOE) met this past summer to review a number of proposals on how to create a bridge between the pipelines and generators requirements. Unfortunately no agreement came out of this meeting.
Utilities though have the same investment time frame as the natural gas pipelines. So from a investor stand point New England was back where it started with utilities as the only viable pipeline backers. Filling the vacuum left by the Governors, Spectra, owner of the Algonquin pipeline, and Northeast Utilities jointly proposed the Access Northeast project. The Access Northeast project is expected to add additional capacity and deliverability to New England's natural gas generators, 60% which are sited on the Algonquin Pipeline.
There are a lot of pipeline projects proposed for New England at the moment. How much additional capacity does New England need? In a presentation provided to NESCOE by Law Seminars International, the region requires an additional 1 million Dth/day or 1 Bcf of additional natural gas pipeline capacity. As of September 2014 nearly 2.4 Bcf/day has been proposed so it is unlikely that all of the proposed projects will be completed. From a consumer's perspective we hope that there will be some excess capacity so that our power and natural gas prices will be driven down.
Shown below by pipeline company are the projects, projected in-service dates and potential capacity.
Natural Gas Pipeline Scorecard
Spectra - Algonquin Pipeline Total Proposed 1.54 Bcf/day
Algonquin Incremental Market (AIM) - 340,000 Dth/day, expected to be operational November 2016.
Atlantic Bridge - 600,000 Dth/Day, expected to be operational November 2017.
Access Northeast - Up to 600,000 DTh/day at increments of 200,000 Dth/day, expected to be operational in November 2018.
Kinder Morgan - Tennessee Pipeline 500,000 Dth/day
Northeast Energy Direct- 500,000 Dth/Day, expected completion November 2018
Portland Natural Gas Transmission System 350,000 Dth/day
Expansion of existing line, up to 350,000 Dth/Day, expected to be operational as early as November 2016.
If you would like Howell Energy Consulting to discuss how to navigate through this period of tight natural gas pipeline capacity please contact me at :
[email protected] or via phone at 860-205-3863.
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