Natural gas pipeline investments may top $6 billion

Natural gas pipeline investments may top $6 billion

Planned new natural gas pipeline development and expansions could add as much as 16 billion cubic feet per day of capacity to the national transmission network over the next two years at an estimated cost of about $9.5 billion. Total expenditures are expected to far exceed the $5.1 billion invested during the last major period of new pipeline development in 1992-1993.

A major portion of this investment represents development of new pipeline capacity to carry supplies of Canadian natural gas to various U.S. markets, according to the Energy Information Administration`s analysis, “Natural Gas Pipeline Network: Changing and Growing.”

While more than 11 billion cubic feet per day of additional capacity was added to the U.S. natural gas transmission network in 1998, total costs were relatively low, at $2.9 billion, compared with projected spending of $3.1 billion in 1999 and $6.3 billion in 2000. Although the amount of new capacity slated to be added during each of those years, 8.2 and 7.8 billion cubic feet per day, respectively, would be less than the amount added in 1998, the investment will be greater because several major new and expensive long-distance pipeline systems-the Alliance, Independence, Tri-State, and Vector pipeline systems-are scheduled to be constructed during that period.

The growth in Canadian gas imports into the U.S. Midwest also is expected to spur additional growth and increased use of the Chicago (Hub) Market Center as a transshipment point for supplies en route to a growing natural gas market in the U.S. Northeast. Consequently, market centers located in the vicinity of Leidy, Pa., where a number of pipeline systems serving the Northeast interconnect, also should grow significantly. This major hub area will experience not only increased movements of Canadian import volumes but also several system expansions designed to transport additional supplies to the Northeast from Texas, Louisiana, and the Gulf of Mexico.

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