The proposed 200,000 barrel-a-day pipeline would run from West Virginia to Kentucky where it would connect to Boardwalk’s existing Texas Gas Transmission system to Louisiana, the companies said in a statement today. The pipeline may be in service in the second half of 2015 and may be expanded to carry 400,000 barrels a day. The companies didn’t disclose the project’s cost.
Pipeline companies are building infrastructure to move gas and natural gas liquids out of the Marcellus and Utica shale formations. Petrochemical companies are proposing new plants on the Gulf Coast to take advantage of lower-cost feedstocks, like ethane. As part of this project, Boardwalk will convert its Texas Gas line to moving liquids.
“The current infrastructure challenge with natural gas liquids in the Northeast is slowing drilling and isolating liquids supplies from the robust markets in the Gulf that are poised to grow substantially over the next five years,” Alan Armstrong, Chairman and Chief Executive Officer of Tulsa, Oklahoma-based Williams, said in the statement.
The deal allows Houston-based Boardwalk to diversify into gas liquids, CEO Stan Horton said. Texas Gas’s existing customers will be served by other lines.
Texas Gas, portions of which are 65 years old, was built to carry the fuel from Texas and Louisiana to utilities and other customers in Ohio. In the past five years, output from the Marcellus and Utica shale in Pennsylvania and Ohio have reduced the need to ship gas to the U.S. Northeast.
Enterprise Products Partners LP, the second-biggest U.S. pipeline operator, is reversing a pipeline between Cape Girardeau, Missouri, and Mont Belvieu, Texas, to carry ethane from the Marcellus to chemical plants near Houston.
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