Natural Gas Intelligence
Tennessee Line 300 to Loosen Briefly

Monday, October 03, 2011

Producers in northeastern Pennsylvania will get a respite from the region's pipeline capacity pinch -- but not for long -- according to Bentek Energy LLC.

The firm said in a market note that 575 MMcf/d of new capacity slated to come online during November in Tennessee Gas Pipeline's Line 300 will fill up quickly. "The Tennessee 300 Line expansion, which adds a total of 575 MMcf/d of forward-haul and backhaul capacity, will enable strong production growth from northern Pennsylvania," the firm said.

Bentek said an additional 150 MMcf/d of production is expected in the region during November and another 200 MMcf/d in both December and January.

Tennessee's Line 300 is not slated for another expansion until November 2012, Bentek said. "This will force producers in the Northeast portion of Pennsylvania to utilize other options for transporting Marcellus production growth," Bentek analysts said. "However, the [Tennessee] expansion, which is fully producer subscribed, will enable Marcellus producers to reach premium markets during peak winter demand on top of potential declines in inflows from the [southeastern] Gulf [of Mexico] and Midcontinent as a result of freeze-offs."

Bentek noted that northeastern pipeline expansions and/or "an extreme, early winter" could lift prices and encourage more drilling in the region.

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