click image to zoom Last week, the Federal Energy Regulatory Commission (FERC) approved three projects to increase natural gas takeaway capacity from the Marcellus Shale formation. On February 11, FERC approved the TEAM 2014 project expansions on Spectra's Texas Eastern Transmission Co. (Tetco) pipeline. TEAM stands for Texas Eastern Appalachia to Market. The next day, FERC issued an environmental impact statement (EIS) on a new pipeline and related compressor station project—Williams's Constitution Pipeline and the Iroquois Pipeline's Wright Interconnect Project (WIP). The EIS recommended conditional approval for the two projects, pending the adoption of measures to mitigate their environmental impact. WIP has a projected in-service date of March 2015, while the Constitution Pipeline projects the beginning of service in late 2015 or 2016.
The TEAM 2014 project would provide Tetco with capacity to move an additional 0.59 billion cubic feet per day (Bcf/d) out of the Marcellus from interconnects in southwestern Pennsylvania and West Virginia. Expansions would allow for bidirectional flows on portions of Tetco that currently only flow gas from the Gulf and Rockies Express Pipeline into the Northeast. Two shippers—Chevron and EQT Energy—have contracted for the full amount of the capacity expansions. Rockies Express deliveries into the Northeast have declined over the past two years, and in November, FERC upheld a petition from Rockies Express Pipeline LLC allowing for the establishment of firm agreements to reverse direction and move gas east-to-west on the pipeline.
Chevron booked 0.29 Bcf/d of capacity to move gas on the expanded Tetco pipeline from Uniontown, Pennsylvania, to Lambertville, New Jersey, where Tetco connects with Spectra's Algonquin Gas Transmission (AGT) pipeline. EQT Energy booked the remaining 0.29 Bcf/d of firm capacity to move 0.24 Bcf/d of Marcellus gas south to Tetco's AA market zone in the Gulf of Mexico region, and 0.05 Bcf/d west to Lebanon, Ohio, where Tetco connects with the Rockies Express system. Outflows from the Northeast to other parts of the country as a result of these expansions would further decrease net flows of natural gas into the northeastern United States. These decreased flows have largely resulted from increasing Marcellus production, which enabled the Northeast to satisfy a greater portion of its own demand, and increasingly, send gas to other regions. TEAM 2014 would also help alleviate capacity constraints in transporting natural gas to northeastern markets, which contribute to high natural gas and power prices during periods of peak demand.