Bluegrass Pipeline to feed Gulf Coast Petrochemicals
The Oklahoma-based Williams and the Houston-headquartered Boardwalk Pipelines Partners (Boardwalk) signed a letter of intend (LOI) to form a joint venture on building the Bluegrass Pipeline project in USA to connect the Marcellus and Utica giant shale gas fields in the northeast to the petrochemical industry lying along the Gulf Coast across Texas and Louisiana with natural gas liquids (NGL).
Although the Bluegrass Pipeline project is still at feasibility stage, Williams and Boardwalk intend to develop their NGL pipeline on fast track in competition with other similar projects as they plan to use existing transportation infrastructures for 60% of the distance, thus to have to build new sections only for the remaining 40%.
Williams and Boardwalk observe that most of the shale gas production in Ohio, Pennsylvania and West Virginia are slowing down primarily because of the low gas prices but also because of the lack of infrastructures to export the associated natural gas liquids to the petrochemical markets concentrated in the northeast and in the south of the USA along the Gulf of Mexico.
– Supply side of the opportunity given to the shale gas producers in Marcellus and Utica to monetize their liquid-rich reserves
Since the natural gas market prices collapsed around $3 per million BTU, all the companies concentrated their exploration and production efforts on the fields of the Marcellus and Utica basins having the largest content of condensate.
Williams – Boardwalk plan new NGL fractionation plant
In this context, Williams and Boardwalk forecast the actual infrastructures to gather, treat and export natural gas liquids should be saturated by 2016, justifying to develop the Bluegrass Pipeline project in two phases:
– In the first phase, the project should have a capacity of 200,000 b/d of NGL
As part of the on-going feasibility study, Williams and Boardwalk are currently working on selecting the final route of the Bluegrass Pipeline but the main guideline is to re-use existing pipelines sections in beginning with the Texas Gas Pipeline owned and operated by Boardwalk.
So the Bluegrass Pipeline project should include the:
– Construction of new large scale NGL fractionation plant in Louisiana
– Increase of NGL storage facilities in Louisiana
– Connection from the Texas Gas Pipeline in Eunice, La, to the NGL fractionation plant.
The costs estimation are currently on-going, but Williams and Boardwalk are targeting to save capital expenditure and time so that the Bluegrass Pipeline project could run into commercial operations in 2015.