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Williams and Boardwalk to double Marcellus-Utica NGL export capacity

Bluegrass Pipeline to feed Gulf Coast Petrochemicals

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolThe Oklahoma-based Williams and the Houston-headquartered Boardwalk Pipelines Partners (Boardwalk) signed a letter of intend (LOI) to form a joint venture on building the Bluegrass Pipeline project in USA to connect the Marcellus and Utica giant shale gas fields in the northeast to the petrochemical industry lying along the Gulf Coast across Texas and Louisiana with natural gas liquids (NGL).

Although the Bluegrass Pipeline project is still at feasibility stage, Williams and Boardwalk intend to develop their NGL pipeline on fast track in competition with other similar projects as they plan to use existing transportation infrastructures for 60% of the distance, thus to have to build new sections only for the remaining 40%.

Williams-Boardwalk_Bluegrass-Pipeline_Project_MapWilliams and Boardwalk observe that most of the shale gas production in Ohio, Pennsylvania and West Virginia are slowing down primarily because of the low gas prices but also because of the lack of infrastructures to export the associated natural gas liquids to the petrochemical markets concentrated in the northeast and in the south of the USA along the Gulf of Mexico.

In focusing on the ethane and other valuable natural gas liquids, Williams and Boardwalk expect to benefit from the:

 – Supply side of the opportunity given to the shale gas producers in Marcellus and Utica to monetize their liquid-rich reserves

 – Demand side of the accumulation of downstream projects in the petrochemical industry willing to take advantage of the competitive feedstock provided by the shale gas glut.

Since the natural gas market prices collapsed around $3 per million BTU, all the companies concentrated their exploration and production efforts on the fields of the Marcellus and Utica basins having the largest content of condensate.

Williams – Boardwalk plan new NGL fractionation plant

By 2020, Williams and Boardwalk estimated that the production of NGL in the northeast shale gas fields could reach 1.2 million barrels per day (b/d).

In this context, Williams and Boardwalk forecast the actual infrastructures to gather, treat and export natural gas liquids should be saturated by 2016, justifying to develop the Bluegrass Pipeline project in two phases:

 – In the first phase, the project should have a capacity of 200,000 b/d of NGL

 – In a second phase, Williams and Boardwalk would increase the capacity to 400,000 b/d of NGL by the addition of pumping capacities.

Williams-Boardwalk_Bluegrass-NGL-Fractionation_ProjectAs part of the on-going feasibility study, Williams and Boardwalk are currently working on selecting the final route of the Bluegrass Pipeline but the main guideline is to re-use existing pipelines sections in beginning with the Texas Gas Pipeline owned and operated by Boardwalk.

So the Bluegrass Pipeline project should include the:

 – Conversion of the Texas Gas Pipeline section between Hardinsburg, Kentucky, and Eunice, Louisiana, from natural gas to NGL with pumping stations and associated facilities

 – Deployment of a natural gas liquids gathering system in Ohio and West Virginia to collect the condensate from the production fields and feed the converted Texas Gas Pipeline at Hardinsburg, Ky. 

 – Construction of new large scale NGL fractionation plant in Louisiana

 – Increase of NGL storage facilities in Louisiana

 – Connection from the Texas Gas Pipeline in Eunice, La, to the NGL fractionation plant.

The costs estimation are currently on-going, but Williams and Boardwalk are targeting to save capital expenditure and time so that the Bluegrass Pipeline project could run into commercial operations in 2015.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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