Canadian NOVA Chemicals to Ship Utica Ethane via UTOPIA
In December, midstream company Kinder Morgan announced they would build a 210-mile, 10-inch natural gas liquids (NGL) pipeline that will carry Utica ethane and propane from Harrison County, OH, to Riga, MI. From Riga, the NGLs will hitch a ride via the KM Cochin Pipeline east to Windsor, Ontario, Canada (see UTOPIA is Coming! The UTOPIA Pipeline, that is…). Earlier this month MDN told you that UTOPIA launched an open season to sign up customers for the pipeline (see UTOPIA Open Season Begins Today – OH to MI NGL Pipeline). Not surprisingly, Kinder has just announced that NOVA Chemicals, owner of the Corunna ethane cracker plant in Ontario, has signed up as one of Kinder’s main customers for UTOPIA. We did, however, notice a few interesting things about this latest announcement…
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Lately it seems like a week doesn’t go by that a new pipeline project is announced. No one should be surprised, but of course we all are. It only makes sense: drillers have sunk a lot of holes in the Marcellus and Utica, and now all of that gas and natural gas liquids (NGLs) needs a way to get to market. The northeast alone can’t handle all of the gas and NGLs being produced. Yes, the ethane cracker plants will help with regards to ethane–but there’s still way more ethane that even the planned three cracker plants can handle. And way more methane (natural gas) than the northeast can absorb. How do you get it to market? With pipelines. The first thing pipeline operators do is pick the “low hanging fruit”–in this case reversing pipelines and using loops to increase capacity and change the direction of the flows. But according to the midstream companies themselves, the low hanging fruit is about all picked. Now it’s on to the higher hanging fruit–so-called “greenfield” pipelines that cut through “virgin” land. Below we have a very interesting quote about decisions that will soon be made impacting the rest of this decade, along with a very useful chart of pipeline projects…