One of the largest natural gas pipelines built in the United States will be made bidirectional to transport natural gas from Ohio to the Midwest and potentially to the West.
The Rockies Express Pipeline, called REX, previously was used to ship natural gas from Colorado and Wyoming to Ohio. But the shale boom in Ohio and Pennsylvania has reduced the demand for natural gas shipped east in the pipeline.
The announcement on the future of the 1,698-mile pipeline is additional evidence of the growing power of Ohio’s developing Utica shale. The news came this week from Rockies Express Pipeline LLC, based in Overland Park, Kan.
The company said it had signed an agreement with an unnamed Utica driller that wants to ship natural gas from Ohio to the middle of the United States.
Some have speculated the company involved in the pact is Colorado-based Antero Resources, which is drilling well in five southeastern Ohio counties: Harrison, Belmont, Guernsey, Monroe and Noble. It holds leases on 100,000 acres in Ohio.
An email sent to company officials went unanswered.
The project will require construction of a 14-mile pipeline that will connect the main line to MarkWest Energy Partners’ Seneca Processing Complex under construction in Noble County.
The west-flowing REX pipeline is expected to be in operation late this year.
The new facilities are expected to add “significant natural gas supply to the east end of REX for transport to points west or east” via connecting pipelines, the Kansas-based company said.
“We believe that making REX truly bidirectional is the next wave of takeaway capacity from the Utica shale play,” REX chairman William R. Moier said.
The pipeline runs from Opal in southwest Wyoming and Meeker in northwest Colorado east to Clarington on the Ohio River in Ohio’s Monroe County.
It is a joint venture of a subsidiary of Tallgrass Development LP (50 percent share); Sempra U.S. Gas & Power (25 percent share), a subsidiary of Sempra Energy; and a subsidiary of Phillips 66 (25 percent share). A wholly owned subsidiary of Tallgrass Development operates the pipeline.
It went into commercial operation in late 2009.
It is 36 and 42 inches in diameter in various spots and can handle up to 1.8 billion cubic feet of natural gas per day. That’s enough natural gas to heat about 4 million homes.
The pipeline includes 14 compressor stations and four booster stations with about 427,000 total horsepower.
REX also has capacity available in Wyoming’s Overthrust Pipeline as an alternative route via a long-term lease.
An initial pipeline partner was Kinder Morgan Energy Partners, a major pipeline company. It was forced to divest itself of certain assets in the Rocky Mountains after it acquired El Paso Corp.
In August 2012, Kinder Morgan sold a number of pipelines and facilities to privately held Tallgrass Energy Partners LP for $1.8 billion in cash and the assumption of Kinder Morgan’s proportionate amount of debt on the Rockies Express pipeline. The total value of the deal was $3.3 billion.
“Tallgrass, as the 50 percent owner and operator of REX, believes that we and our shipper have a common understanding of the future for transporting gas out of the Appalachian Basin,” Moier said in a news release.
“REX is a high-capacity, long-haul transmission pipeline that spans from Colorado-Wyoming to Ohio and can act as the nation’s northern-most east-to-west and west-to-east corridor for natural gas distribution,” he said.
Bob Downing can be reached at 330-996-3745 or email@example.com.