Two energy infrastructure companies are proceeding with a 1,153-mile pipeline project that will deliver natural gas liquids from rapidly developing Utica and Marcellus shales in Ohio and surrounding states to the Gulf of Mexico for processing and possible export.
The Bluegrass Pipeline was approved recently by the board of directors of Williams, a company in Tulsa, Okla., and is expected to be in operation by late 2015.
Williams and Boardwalk Pipeline Partners of Houston have formed a joint venture, Bluegrass Pipeline LLC.
The project will include new and existing pipelines. The new pipeline will connect with an existing pipeline in western Kentucky owned by Boardwalk.
The two companies expect that, at the Louisiana end, there will be need for processing facilities, additional pipeline and possible export terminals for the natural gas by-products including ethane, butane and propane.
The route of the Bluegrass Pipeline has not been officially announced or finalized, but maps in circulation suggest it will cross from Kentucky into Ohio east of Cincinnati, traverse southern Ohio to Noble County, where it will divide into two legs. One will extend east into West Virginia, and the other northeast past Youngstown and into Lawrence and Mercer counties in northwest Pennsylvania.
The total length of the new pipeline in Ohio and Kentucky is about 500 miles.
The pipeline also will connect the Utica and Marcellus shale with developing petrochemical markets in the Northeast.
The companies are negotiating access with landowners, said spokeswoman Sara Delgado of Williams.
The pipeline is needed because of infrastructure constraints in the Marcellus and Utica shales, the companies said.
“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 news release.
“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 a capacity to move 200,000 42-gallon barrels per day of mixed natural gas liquids out of Ohio, West Virginia and Pennsylvania.
Phase 2 will increase capacity to 400,000 barrels per day, primarily by adding additional liquids pumping capacity.
The new pipeline plan includes 100 miles of 20-inch diameter pipe and 400 miles of 24-inch diameter pipe, Delgado said.
The new pipeline will connect 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.
A portion of that line 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 in the planning stages, with permitting, public consultation and right-of-way acquisition still to be completed.
More facilities planned
The project also calls for constructing a large fractionation plant to separate the liquids, expanding liquid storage facilities and constructing additional pipeline in Louisiana.
Williams and Boardwalk also are exploring the development of a new liquefied petroleum gas (LPG) export terminal and related facilities on the Gulf Coast to reach foreign markets.
U.S. propane exports are set to double and match those of Saudi Arabia, by the end of this year, as companies expand capacity to transport surging output from North American shale fields, Reuters reported this spring. .
New LPG export terminals have been proposed in Texas and Louisiana.
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 in March.
Bob Downing can be reached at 330-996-3745 or email@example.com.