Interstate Natural Gas Pipeline Additions Fell To A Record Low In 2022

There were five new interstate natural gas pipeline projects in the United States last year, adding a total of 897 million cubic feet per day (MMcf/d) to interstate natural gas pipeline capacity. That is the least new capacity coming online since records began in 1995, the U.S. Energy Information Administration (EIA) says.

Higher growth in intrastate capacity and a reduction in overall capital expenditures from oil and gas firms led to the low capacity additions to interstate natural gas pipelines last year, the EIA said in a new analysis based on its State-to-State Capacity Tracker. 

In previous years, most of the interstate capacity additions were coming from new interstate pipelines to carry natural gas out of the Appalachia basin. With most of those projects now complete, the more recent natural gas growth has come predominantly from the Permian and Haynesville regions in Texas and Louisiana, many of which have accommodated growing output with intrastate pipelines.

“In Texas and Louisiana, intrastate projects, rather than interstate projects, have increased takeaway capacity and connected natural gas production to LNG export terminals,” the EIA said.

In 2022, the five interstate projects that added capacity to the U.S. natural gas pipelines crossing state borders were Columbia Gulf Transmission’s Louisiana XPress Project, Florida Gas Transmission’s Mobile County Project, Florida Gas Transmission’s Southwest Alabama Project, ANR Pipeline Company’s Wisconsin Access Project, and Gulfstream Natural Gas’s Gulfstream Phase VI Expansion Project.

While Texas and Louisiana are close to the U.S. LNG export facilities on the Gulf Coast, regulatory hurdles are stymieing growth in gas production in the Marcellus-Utica basin, the largest U.S. gas-producing region, which is set to miss out on the expected boom in American LNG exports in the coming years.

Not only is Marcellus-Utica missing the opportunity to export and monetize natural gas in a world scrambling for LNG supply, but it is also unable to provide more natural gas to the regions close to it in New England, analysts and the pipeline industry say. In one of the most ironic twists in American energy these days, the U.S. Northeast has been importing LNG from foreign producers to meet its gas demand.  

By Tsvetana Paraskova for Oilprice.com

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