A proposed pipeline project would move natural gas liquids from western Pennsylvania to Texas, opening a new market for gas producers in the Utica and Marcellus shale plays.
Houston-based Kinder Morgan Energy Partners LP (NYSE: KMP) and MarkWest Energy Partners LP (NYSE: MWE) in Denver said Monday they have formed a joint venture to construct the pipeline at a still-to-be determined cost.
The project would involve converting over 1,000 miles of Kinder Morgan’s Tennessee Gas Pipeline system from Mercer, Pa., to Natchitoches, La., and building approximately 200 miles of new pipeline from Natchitoches to a proposed processing facility at Mont Belvieu, Texas, on the Gulf of Mexico.
The Kinder Morgan pipeline now transports natural gas from Mercer in western Pennsylvania through eastern and southern Ohio, Kentucky, Tennessee, and Mississippi to northwest Louisiana. It would be converted to move natural gas liquids, which contain hydrocarbon compounds such as ethane, propane and butane.
As I’ve reported, Ohio’s Utica shale play has shown promise as a source for producing natural gas liquids.
“This project will provide consumers on the Gulf Coast with access to a new source of natural gas liquids from the Utica and the Marcellus shale plays,” Don Lindley, president of NGLs for Kinder Morgan Energy Partners, said in a press release. “Through Kinder Morgan and MarkWest’s existing pipeline footprint, this project is capable of accessing all of the (shale gas) processing facilities in the northeast in a cost-effective manner.”
Kinder Morgan and MarkWest said they have started accepting bids from companies that want to ship product through the pipeline. Subject to shipper commitments, regulatory approvals and capital improvements, the pipeline is targeted to be in service during the second quarter of 2016.
Columbia Business First