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Ohio Utica Shale

More details on Williams' NGLs Bluegrass Pipeline decision

By Bob Downing Published: April 28, 2014

An Oklahoma-based pipeline company has halted additional investments on the proposed Bluegrass Pipeline to ship natural-gas liquids from Ohio and surrounding states to the Gulf Coast.

The reason is insufficient customer commitments, said Williams, one of two companies that had been involved in the proposed pipeline

It made the announcement on Monday and said the company will focus its capital on other projects.

Williams said it is still talking with potential customers on their needs and timing of demand for services and the required firm contractual commitments that would support any future capital investments.

Two companies were behind the project: Williams, based in Tulsa, and Boardwalk Pipeline Partners of Houston. They formed a joint venture, Bluegrass Pipeline LLC. They issued a statement thanking people for support.

The Bluegrass Pipeline appears to be a project ahead of its time, said spokesmen Bill Lawson and Michael McMahon in a joint statement.

They said the companies will not proceed with the pipeline "at this time."

The need for the pipeline is growing but companies are unwilling to commit to a pipeline to the Gulf Coast at this time, they said. Grass-roots opposition to the pipeline in Kentucky was not a factor in the decision, they said.

The pipeline was to have stretched 1,153 miles from Ohio, western Pennsylvania and West Virginia to the Gulf Coast for processing and possible export.

The project would have included 500 miles of new pipeline in Ohio and Kentucky.

The new pipeline was to have connected with an existing pipeline at Hardinsburg, Ky. That 623-mile-long line is owned by Boardwalk’s Texas Gas Transmission LLC and consists of three parallel lines from Kentucky to Eunice, La.

The companies had proposed having the extended pipeline in operation by late 2015.

The Williams’ announcement also impacts a proposed liquefied petroleum gas (LPG) processing and export facility that two companies had proposed in Moss Lake, La.

Williams is no longer investing in that project, a company spokesman said.

That facility was proposed to store 900,000 barrels of fully refrigerated propane and butane. It could load 25,000 barrels per hour for export.

Ohio’s Utica shale is rich in ethane, butane and propane.

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