Two energy infrastructure companies are proceeding with the Bluegrass Pipeline for natural gas liquids from the Utica and Marcellus shales in Ohio and surrounding states.
The project is being developed by Williams and Boardwalk Pipeline Partners L.P.
The 24-inch pipeline is expected to be in operation by late 2015.
The project to ship the mixed liquids to the Gulf Coast for processing was approved last week by Williams, based in Tulsa, Okla..
It will also connect the Utica and Marcellus shale with developing petrochemical market in the Northeast.
The pipeline is needed because of infrastructure constraints in the Marcellus and Utica shales, the companies said in a statement.
"We are designing Bluegrass Pipeline to provide these two world-class resource plays (Utica and Marcellus shales) with access to one of the largest and most dynamic petrochemical markets in the world," said Williams president and CEO Alan Armstrong in a statement.
"In turn, this will help producers in Ohio, Pennsylvania and West Virginia achieve an attractive value for their ethane and other liquids," he said. "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."
Armstrong said existing liquids systems and markets in the Northeast will be overwhelmed by 2015.
Phase 1 of the project will provide producers with 200,000 42-gallon barrels per day of mixed natural gas liquids take-away capacity in Ohio, West Virginia and Pennsylvania.
Phase 2 will increase capacity to 400,000 barrels per day, primarily by adding additional liquids pumping capacity.
The pipeline will transport natural gas liquids including ethane, butane and propane that are all lucrative to drillers.
The route of the pipeline has not been officially announced.
But unofficial maps circulating show the pipeline running from Ohio’s Monroe County to the west and south across Ohio to east of Cincinnati. It then crosses the Ohio River into Kentucky and continues to the south and west. Its length is about 500 miles.
There are legs of the proposed pipeline extending into Ohio’s Mahoning County and Pennsylvania’s Lawrence and Mercer counties.
The new pipeline will connect with an existing pipeline at Hardinsburg, Ky. That 600-mile-long line is owned by Boardwalk’s Texas Gas Transmission LLC.
About 40 percent of the project is new construction.
A portion of the Texas Gas line from Kentucky to Louisiana will be converted from natural gas to liquid service.
By combining new construction with an existing pipeline, the two companies believe that the Bluegrass Pipeline should be in service sooner than other options.
The companies are working on planning including permitting, public consultation and right-of-way acquisition.
The project also calls for constructing a large fractionation plant and expanding storage facilities in Louisiana and constructing a new pipeline near Eunice, La.
Williams and Boardwalk, based in Houston, Texas, are also exploring the development of a liquefied petroleum gas export terminal and related facilities on the Gulf Coast to reach foreign markets.
The Bluegrass Pipeline requires approval of the Federal Energy Regulatory Commission and customer contracts to support the project, officials said.
The pipeline plans were initially announced last March.
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.