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Jared Hunt: More gas pipelines drive state exports

Infrastructure investments have led to a 51 percent surge in Marcellus shale gas production over the last year, the U.S. Energy Information Administration reported Tuesday.

A post on the agency's "Today in Energy" blog highlighted the effect new pipelines and processing facilities have had on northern West Virginia and southern Pennsylvania production.

While the state has a rich supply of natural gas, companies still have to find a way to get it to customers who have a demand for it. New pipelines and compressor stations made it easier for supply to meet demand, EIA analysts said.

"Natural gas production in West Virginia and southern Pennsylvania has risen as these expansions provided increased access to markets," the post said.

Between July and September 2012, three key projects boosted production capacity in the region expanded nearly 1 billion cubic feet per day:

* In July, Equitrans brought its Sunrise Project online. The pipeline has the capacity to carry 310 million cubic feet per day from Wetzel County to Greene County, Pa., and also provides access to five other interconnections that serve companies throughout the Mid-Atlantic region.

* In September, Dominion Transmission began service on its Appalachian Gateway Project, which features four new compressor stations and 110 miles of new pipeline. That project can handle up to 470 million cubic feet of natural gas per day, transferring it from production areas in West Virginia and southern Pennsylvania to an interconnect with the Texas Eastern Transmission Pipeline.

* Also in September, Equitrans brought its new Blacksville Compressor Station in Monongalia County online. That station is capable of handling 200 million cubic feet of gas per day.

EIA analysts said the new capacity helped increase West Virginia's average daily natural gas production by 51 percent year to date.

Between January and mid-July 2012, the state averaged about 1.55 billion cubic feet of production each day. Now, this year, the state production has averaged 2.34 billion cubic feet per day - an increase of 790 million cubic feet per day.

Production in bordering regions in southern Pennsylvania has also doubled during the same time frame, increasing from 0.86 to 1.73 billion cubic feet per day.

That comes in spite of the fact that the Pennsylvania regions are considered more "dry," meaning the shale gas has less liquid gas, including propane, than some so-called wet regions in West Virginia.

The EIA also noted that additional infrastructure is expected to come online over the next year and a half.

Texas Eastern Transmission plans to build a pipeline capable of handling 390 million cubic feet of gas per day by the end of 2014.

"Planned processing plant expansions through the end of this year could also add significantly to the state's processing capacity, which totaled 0.85 (billion cubic feet per day) in 2012," the EIA said.

That means that even without construction of a coveted "cracker" plant, West Virginia's natural gas production could continue to rise substantially over the coming 18 months.



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