This market alert examines this major shift in flows and some of the immediate market impacts due to completion of the Rockies Express Pipeline system.
When the Rockies Express (REX East) Pipeline system began service into Lebanon, OH, the new capacity triggered massive changes in natural gas flow patterns and pricing relationships.
By providing direct access to higher-priced markets in Ohio, REX prompted a shift in REX deliveries farther east, putting downward pressure on Ohio prices. At the same time, this shift in flows eastward reopened Midwest market access for traditional Midcontinent suppliers, putting upward pressure on Midcontinent producing area prices. In addition, the influx of new cheaper supply into Ohio resulted in a displacement of traditional supply arriving in Ohio from the Southeast/Gulf.
REX Rambles On examines these shifts in flows and some of the immediate market impacts.