Dive Brief:
- Federal officials have approved a pair of pipeline projects proposed by TransCanada that aims to move gas supplies from production fields in the Marcellus and Utica shales to the Midwest and Gulf Coast markets.
- The pair of projects, estimated to cost $1.8 billion in construction, are planned to be online in November, though TransCanada is reviewing that date.
- The biggest portion of the projects, the $1.4 billion Leach XPress, is a 160-mile pipeline that will move 1.5 billion cubic feet per day (Bcf/d) of gas to homes, businesses and generators.
Dive Insight:
TransCanada's new projects, including Leach Xpress' three-state run, aim to move gas supplies from production fields to more expensive markets, and the company has inked long-term agreements underpinning the project. Leach will run through parts of West Virginia, Pennsylvania and Ohio, while the Rayne project adds compression to the Columbia Gulf Transmission system in Kentucky.
TransCanada Senior Vice President Stan Chapman said the projects provide "critically needed connectivity between the prolific, but constrained, Marcellus and Utica shale production areas and higher value markets"
The company will invest approximately $1.4 billion in Leach XPress, and another $400 million on Rayne. While Leach is a greenfield pipeline project, Rayne XPress calls for construction of two new compressor stations along TransCanada's Columbia Gulf system. The additional compression will create an additional 1 Bcf/d of transport out of the Marcellus and Utica.
FERC approved the projects on its consent agenda, without discussion. In additional to additional gas supplies, TransCanada has said the projects also create jobs and tax revenues for nearby communities.
The approval signals a growing trend of companies building out pipeline infrastructure to carry natural gas into markets like the Northeast as demand grows. TransCanada last year also sold $3.7 billion worth of merchant generation to finance its purchase of the Columbia Pipeline Group, signaling its intention to combine power and gas assets.
