Will New Pipes Coming Online Lift Marc/Utica Prices This Year?

With new pipelines coming online in the Marcellus/Utica, will the price of natural gas bought and sold at regional trading points, like Dominion South and TGP (Tennessee Gas Pipeline) Zone 4 go higher? It certainly makes sense that with more of our gas flowing out of the area, there will be less gas left in the area and therefore will fetch a higher price. In fact, just after Energy Transfer’s Rover Pipeline, now in partial service, began to flow, the price of gas at the Dominion South hub jumped 31% (see Rover Pipeline Triples Volume of Gas Flowing, Prices Go Up). However, the analysts at BTU Analytics are not convinced. BTU is running a complimentary webinar on Nov. 2 titled, “Northeast Pipes Have Arrived. Now What?” Ahead of that webinar they’ve posted a blog teasing some of their thinking. The bottom line from that post: “Will Rover or this year’s takeaway projects help uplift weak prices in the Northeast? We don’t think so.” Hmmmm. Looks like we’ll have to attend the webinar to find out all the reasons why they that so. In the meantime, BTU provides some helpful background in their blog…

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