A huge shift in natural gas flows is expected as more than 40 infrastructure projects go online in the Southeast/Gulf region beginning in 2008, according to a report released Tuesday.
The study, released by Golden, Colo.-based Bentek Energy LLC, said 25 natural gas pipeline projects, 11 natural gas storage projects and four liquefied natural gas terminals are expected to shift gas flow patterns, disrupt regional pricing relationships and realign the value of transportation capacity across the most complex pipeline grid in North America between early 2008 and mid-year 2009.
Many of the projects under construction are by companies either based in Houston or with a large presence here, including Owensboro, Ky.-based Boardwalk Pipeline Partners LP (NYSE: BWP), CenterPoint Energy Inc. (NYSE: CNP), Enterprise Products Partners LP (NYSE: EPD), Kinder Morgan Energy Partners LP (NYSE: KMP), Plains All American Pipeline LP (NYSE: PAA) and Spectra Energy Corp. (NYSE: SE).
Many of the projects are tapping into areas in East Texas and will be moving gas into southeast and northeast markets.
The energy markets information company said the current level of industry infrastructure expansion has not been seen since the interstate construction boom of the late 1940s and early 1950s.
"The pipeline and LNG projects represent a total of more than 25.4 billion cubic feet per day of additional capacity serving the Southeast Gulf region, with an additional 6.3 Bcf/d of new storage deliverability as well," said Russell Braziel, managing director of Bentek. "But there's a catch: In the short term there will not be enough incremental supplies to fill the new pipeline and LNG terminal capacity."
Bentek expects the initial shortfall to affect regional flows and pricing from projects that will displace or "steal" gas from traditional pipelines; increased demand and supplies; and LNG supplies competing for the same markets.
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