Some M-U Molecules on REX Pipeline Could Get Bumped for Permian

We still marvel, to this day, at how Tallgrass Energy Partners turned what looked like a financial disaster into an economic bonanza. Tallgrass built the Rockies Express (REX) pipeline, which stretches from Colorado and Wyoming to Ohio, just in time for the shale revolution to take hold. Whoops! Talk about bad timing! A significant portion of REX, its Zone 3 pipeline from Missouri to Ohio, was in danger of drying up in 2012 due to the increase in Marcellus/Utica gas production (see REX NatGas Pipeline Faces Stiff Competition from Marcellus). Tallgrass did an about-face, reversing the flow of REX to run from Ohio to Missouri a year later, in 2013 (see REX Reverses Pipeline Flow from OH for Mystery Utica Customer). Since that time, volumes along the Zone 3 portion of REX have continued to increase. A lot of Marcellus/Utica gas now flows from our region to the Midwest by hitching a ride on REX---some 3.1 billion cubic feet per day (Bcf/d). However, M-U molecules will have to compete with cheaper molecules from the Permian if Tallgrass goes forward with a plan to build a new connecting pipeline from the Permian to REX.

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