September 17, 2015
by David Conti
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PHILADELPHIA — If one word was mentioned more than any other during this year’s Shale Insight gas industry conference this week it was pipelines.
Speeches and sessions over two days here in the Pennsylvania Convention Center revolved around where, how and mostly why to build the pipes necessary to connect the still-growing number of shale wells to consumers willing to pay big bucks for the gas and related liquids they produce.
“In order for us to really get the benefits of the Marcellus shale, we know we have to focus on expanding the pipeline infrastructure and getting that gas to market,” said state Department of Community and Economic Development Secretary Dennis Davin, echoing an oft-stated sentiment.
A glut fed by insufficient pipelines in the Appalachian basin will keep prices in the cellar until more pipelines are built, according to nearly all the speakers this week. (Mark Brownstein from the Environmental Defense Fund, who spoke about methane, might have been the sole dissenter on that topic. We quoted him in this story on … pipelines.)
Some speakers employed by or connected to midstream companies boasted of their efforts to fix the problem. Randy Nickerson, executive vice president at MarkWest Energy Partners, nearly rode onto stage atop a white horse.
“The title of the discussion this morning is … the cavalry is on the way,” he said Thursday morning before spending about 30 minutes outlining efforts to process and move natural gas liquids such as ethane and propane through its plants.
Many of the speakers and panelists that preceded Nickerson talked up the Philadelphia region’s role in this charge. Sunoco Logistics is set to accept at its Marcus Hook terminal many of the NGLs MarkWest is processing in the shale fields.
“We need to make sure that happens,” state Chamber of Business and Industry head Gene Barr said about adding to the site with manufacturers and other big users.
Efforts such as that will bring balance to the liquids markets in a year and a half, Nickerson said. But it will be short-lived. To maintain balance, more projects are needed, he said. And they need to connect with places other than the Delaware River.
That means the Gulf Coast, a destination most other speakers did not promote this week. While promoting the Appalachian basin as the nation’s top producer — bigger than the Gulf — Nickerson made clear his company’s support for pipeline builder Kinder Morgan’s Utica Marcellus Texas Pipeline project that would take “huge amounts” of product to end-users and exporters there.
Nobody in the crowd booed — at least not loudly — probably because they all realize the necessity of finding customers and ways to deliver to them, which Nickerson said is happening, thanks to the pipeline cavalry.
He predicted that by the 2018 conference, “We’re going to be saying, ‘It doesn’t matter where you produce gas in the best play in the entire world. It’s going to be at good market prices.'”
The top choice among many of those attending the conference seemed to be pursuing customers here, getting manufacturers to build plants that would use anything and everything coming from shale wells.
But there was a quieter sentiment among some that it didn’t matter where the gas and liquids go, as long as demand increases.
“There is too much gas in this play just for Pennsylvania,” said Public Utility Commissioner Robert Powelson.