How low can and will prices go in the Marcellus/Utica? Without pipelines like the Constitution, Northeast Energy Direct and Access Northeast (among others), prices for natgas in the Marcellus/Utica can and will go pretty low. Would you believe the price of natural gas selling at the Dominion South trading point in southwestern Pennsylvania briefly hit $0.71 (yes, 71 cents) per thousand cubic feet in early July? Would you believe there’s talk the price could even go as low as 60 cents/Mcf? That’s apocalyptic, end of any more drilling kind of prices. Without pipeline infrastructure, shale drilling shuts down. Which is why it is vital these pipelines get built. One bright spot is the recent reversal of the Rockies Express Pipeline now carting Marcellus/Utica gas to the Midwest (see 1.8 Bcf/d of Marcellus/Utica Gas Heads West on REX Starting Aug 1). Two more pipeline projects, due to be fully online in September, will also help: Spectra Energy’s Uniontown to Gas City (U2GC) Project Sunoco Logistics’ Mariner East 1 NGL pipeline from western PA to the Marcus Hook refinery near Philadelphia (see 2 Pipelines Will Raise Gas Sale Price by $1 for Range Resources). More on how pipelines are directly tied to the price of gas and the future of drilling…
