Natural Gas Pipeline and Storage Deliverability

Naruc Winter Conference

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This presentation was given before the National Association of Regulatory Utility Commissioners (NARUC*) Winter Meeting held in Washington, February 21-24, 1999. It provides an a broad overview of the current capabilities of the U.S. natural gas pipeline transmission network and the underground natural gas storage facilities associated with that network. Over the last 7-8 years the natural gas pipeline transmission network in the U.S. has changed and grown significantly. Several factors have brought about this change: 1) Market demand rebounded from its slump of the 1980's; 2) Open-access under FERC Order 636 has created a more flexible and competitive gas transportation market; 3) Supply sources have shifted; 4) New pipelines have been built to tap into these supplies and others have been expanded extensively; and 5) End-use markets such as the electric Generation market have expanded their use of natural gas throughout the country, necessitating the building of new laterals and major expansions on regional pipelines. Underground Natural Gas Storage capabilities changed and expanded in response to pipeline transportation market changes and greater demand for peaking services.

 * The NARUC Natural Gas Committee provides an ongoing forum for States to promote the uniformity of regulation of public utilities and to further cooperative efforts among States concerning the safe operation and supervision of public utilities and carriers. The Committee also promotes cooperative efforts between of the State utility commissions and Federal counterparts.

Table of Contents

Overview

A Vast Network of Pipelines Provides a National Natural Gas Transportation Service

Natural Gas Market Centers Have Become Major Trading and Transshipment Points

At the end of 1998 there were 410 underground natural gas storage sites in the U.S.

During peak months of the 1997-98 winter, net interstate capacity to 20 States was almost fully utilized

Between 1990 & 1998, 18 new natural gas pipeline systems were built in the U.S.

Over 80 Pipeline Development Projects Completed in 1997-1998 Added 14.2 Bcf/d to National Deliverability

Except for 1994-96, the amount of added capacity each year has been above 4 Bcf/d

Proposed natural gas pipeline expansions 1999-2000 (84 Project, 23.2 Bcf/d)

Interregional Capacity increases will primarily come from Canadian Sources Supplying the Midwest and Northeast

Over the next several years new and expansion pipelines will add significantly to import capacity

Alliance & Northern Border to Chicago, Tri-State & Vestor to Ontario, Millennium West to Niagara and Columbia Millennium to New York/New England

Expenditures for pipeline development/expansions could reach $6 billion in 2000

Types of Underground Natural Gas Storage

Working Gas Capacity is ...

The largest number of underground storage sites are located in the Midwest (128) and Northeast

Through 2003, 43 projects (12 new sites and 31 expansions) are proposed

The majority of proposed (1999-2003) underground storage deliverability is slated for the Northeast

As daily storage deliverabilty inceased more than 17% between 1991 and 1998...

21 percent of added deliverability through 2003 could come from high-deliverability salt cavern storage sites

Summary

Author: James Tobin