OPAL Pipeline To Connect To Baltic Sea

Innovative Plans Optimize Excess Pipeline Capacity during Spring and Fall Seasons

Northeast natural gas demand is not consistent year-round. This challenges pipeline project developers to prove project necessity. However, developers are proposing enhancements to existing systems and innovative strategies to make use of potentially excess pipeline capacity. Some proposed options to optimize excess supply and capacity include on-site storage, directing supply to LNG export markets, and bidirectional pipeline flow.

During non-winter/summer months and other periods of low demand, natural gas-fired generators could liquefy a portion of their contracted volume for onsite storage. Despite the need for corresponding on-site infrastructure investments, this storage solution could mitigate the need for some proposed pipeline capacity, but also support other incremental capacity proposals. For dual-fuel generators, which make up about 40 percent of the regions gas-fired units, on-site oil storage could also provide additional insurance against natural gas supply shortfalls.

Another proposed solution for underutilized new pipeline capacity is to send natural gas to Canadian LNG terminals, such as Canaport LNG in New Brunswick, for export to global markets, as depressed U.S. natural gas prices relative to global markets has led to a reduction in northeast liquefied natural gas (LNG) imports. This could occur through the existing Maritimes & Northeast Pipeline, and possibly be supplanted by the Spectra Energy-proposed Northeast Expansion Direct (NED) project.

Finally, increased northeast natural gas production, largely in Pennsylvania, has led the natural gas pipeline industry to consider modification of its systems for bidirectional flow. This could provide the ability to transport up to 8.3 billion cubic feet per day (Bcf/d) out of the Northeast. According to a December 2014 Energy Information Administration (EIA) report, existing pipeline underutilization has prompted pipeline companies to propose bidirectional projects to supply outside the Northeast. Modifying underutilized long-haul pipeline systems into bidirectional systems would facilitate quicker response to market dynamics and improve pipeline utilization rates. The EIA projects that 32 percent of natural gas pipeline capacity into the Northeast could be bidirectional by 2017, and several bidirectional projects are already in progress to facilitate natural gas flow from the Northeast to Louisiana, Gulf Coast, Chicago, Detroit, and Canada.

Originally published by EnerKnol.

EnerKnol provides U.S. energy policy research and data services to support investment decisions across all sectors of the energy industry. Headquartered in New York City, EnerKnol is proud to be a NYC ACRE company.