Transco pipeline expansions projected to transform Leidy, PA, into a major natural gas supply hub

Thursday, April 19, 2012

BENTEK's Northeast Observer reports that on Monday, April 16, Transco proposed three pipeline expansions to transport approximately 700 MMcf/d of natural gas production out of the Leidy Hub in southern Potter County, PA, by 2016. The proposed Leidy West Path would flow up to 200 MMcf/d of gas west toward the northern Midcontinent markets. The Station 520 and Station 517 expansions would enable 500 MMcf/d of gas to flow southeast on the Leidy Line to the Atlantic Seaboard. The Leidy West Path could face competition with growing production from the Marcellus in southwestern Pennsylvania. The Stations 520 and 517 expansions would enable northern Marcellus producers to access a market with higher demand growth potential.

Transco’s proposed projects respond to a significant increase in natural gas supply anticipated to hit the Leidy Hub by fall, which the Northeast Observer attributes to the William’s Springville Gathering Phase II and Inergy’s Marc I Hub pipeline expansions. These expansions are expected to come online this summer and add 875 MMcf/d of new capacity for production to access Transco’s Leidy Line. The increased supply will largely impact the Leidy Hub by reversing this historically supply-short market and shifting it to a supply distribution center.

Follow BENTEK’s weekly Northeast Observer for ongoing analysis of the Leidy Hub and pipeline expansions that will affect the Northeast natural gas market.

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• Prices, pipeline variable costs and price spreads for key Northeast pipeline flow corridors


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