New planned pipelines to carry natural gas from the Marcellus and Utica shales to the Chicago, Illinois, area could spur fierce price competition and displace Canadian and Rockies supply.The projects, which include making part of the Rockies Express (Rex) pipeline bi-directional, could also lead to lower basis prices in Chicago, despite an expected increase in demand.The proposals include the Prairie State pipeline, which could move as much as 1.5 Bcf/d (42mn m³/d) from Douglas County, Illinois, to Chicago. The pipeline system, a joint effort between Tallgrass Development and AGL Resources, would span 140 miles (225km) and include connections to gas distribution systems, storage fields and interstate pipeline companies in the Chicago area.Another plan by Natural Gas pipeline (NGPL) is a potential expansion to its Gulf coast mainline from the Rex connection in Moultrie County, Illinois, to locations north on the pipeline system.That project could increase NGPL’s capacity by up to 435mn cf/d for delivery to markets in and near Chicago, said Kinder Morgan, the midstream group that owns and operates NGPL.The expansion could provide access to more than 100 of NGPL’s interconnects with Chicago-area local distribution companies, power plants, industrial end users, interstate pipelines, and NGPL’s storage and pooling locations.TransCanada is considering an expansion of the ANR pipeline system that could add about 2 Bcf/d of natural gas transportation into the Chicago area.And the potential reversal of Rex could bring 1.2 Bcf/d of gas from the Appalachian basin to Great Lakes demand centers. This is in addition to Rex’s Seneca lateral, which went into service in June, and is moving up to 362mn cf/d of production from the MarkWest Seneca gas processing plant in southeast Ohio into the Rex mainline, providing an outlet for Marcellus and Utica production. The pipeline is planning to increase capacity on the Seneca lateral to 580mn cf/d.The varied projects could lead to an oversupply of gas into Chicago, leading to fierce competition between competing basins, said Ed Kallio, director for gas consulting at Ziff Energy.”Chicago is going to be a blood bath,” Kallio said.
via News – Argus Media.