The proposed 'Bluegrass Pipeline' will take natural gas collected from the Marcellus and Utica Shale and carry it to the Gulf Coast where it can be processed and transported. (Source: Williams/Business Wire)
More natural gas liquids extracted from underneath Pennsylvania will start flowing to petrochemical facilities and export markets near the Gulf Coast through a new pipeline project announced Thursday.
Williams, an energy infrastructure firm, and Boardwalk Pipeline Partners LP said their proposed joint venture will build new pipelines and upgrade existing ones to provide a pathway for liquids like ethane to move from the Marcellus region in Appalachia to facilities in Texas and Louisiana.
The so-called "Bluegrass Pipeline" would transport up to 400,000 barrels per day of natural gas liquids from Pennsylvania, Ohio and West Virginia to the Gulf Coast, where the liquids can either be processed by that region's bevy of petrochemical facilities or shipped to other markets.
The joint venture, worth an undisclosed amount, also calls for building new facilities along the route and in the South to handle the Marcellus liquids.
About 40 percent of the project was characterized as new construction, mostly throughout the Marcellus region. The company said exact locations have not yet been determined.
The plan awaits approvals from the companies' boards and from regulators, which the firms hope to have sometime this year so the project can be put into service by the second half of 2015.
This agreement between Tulsa-based Williams and Boardwalk, a subsidiary of the New York-based Loews Corp., is the latest attempt to break Appalachia's bottleneck of oil and gas resources.
As development in the region's Marcellus and Utica shales has ramped up, producers have found themselves stuck with an underdeveloped infrastructure that can't yet handle processing or transporting all the oil and gas extracted here. Williams said the volume of natural gas liquids in the Northeast is expected to exceed 1.2 million barrels per day by 2020.
The Williams-Boardwalk project would build a pipeline from developed regions in West Virginia and Ohio to existing Boardwalk service in western Kentucky. From there, it will connect to Louisiana on infrastructure slated to be converted from natural-gas service to natural-gas-liquid service.
In Louisiana, the companies plan to build a new fractionation plant and expand liquid storage facilities for the increased supply.
Similar arrangements have been announced in the past. In 2011, Enterprise Products Partners L.P. and Chesapeake Energy announced plans to construct a pipeline to transport ethane from the Marcellus region to facilities on the Gulf Coast.