top of page
CEPM Staff

Pa. to Texas: ATEX Pipeline is Expanding


Transporting natural gas can be complicated, particularly from one end of the country to the other. In order to move gas such distances, extractors rely on various freighting methods. While millions of cubic feet of gas is transported by tanker vessels via the sea, and transport by rail car is being discussed by federal agencies currently, pipelines remain the key method.


One major cross country pipeline is now due for expansion in response to increased demand. Earlier this year, Enterprise Products Partners LP announced their intent to expand the capacity of Appalachia-to-Texas, or ATEX pipeline. The ATEX is a 1,200-mile long pipeline that transfers ethane from the Marcellus and Utica shale basins to storage facilities near Houston, Texas. As it stands today, the ATEX can transport 145,000 barrels of natural gas liquids per day. Enterprise’s capacity expansion plans to boost the current capacity by 45,000 to 190,000 barrels per day.


The expansion is in response to the increased need for cross country transport from the northwest to storages in the south central region of the US, and to major export terminals and downstream operations in the Gulf Coast. In an effort to gauge interest, Enterprise held an “open season” earlier this year where extractors could essentially reserve capacity within the expanded pipeline. In a statement on the expansion, senior management for Enterprise called the open season a “success” that “reflects the demand for additional, reliable ethane takeaway capacity from the Appalachia region”.


Appalachian extractors need for access to export terminals and storage in the south is warranted. The U.S. is increasingly exporting more natural gas. According to the EIA, exports from the U.S. doubled in the first half of 2019 compared to the previous year. The vast majority of gas exported was through terminals on the Gulf Coast. Additionally, while production has slowed due to low prices, the Marcellus and Utica basins are still productive, but storages are filling. The EIA reports that storages in the eastern part of the country are at 91 percent capacity, compared to just 85 percent in the south central region.


As the ATEX pipeline continues to take ethane to processing and export facilities in the southwest, work is underway in the Appalachian region to build out the petrochemical industry so that more of the natural gas by products can be used locally. The Shell cracker plant under construction in Beaver County, Pa., is just the first step. The Shell plant will turn ethane and other byproducts into polyethylene pellets, which are the building blocks of the plastics industry. Shell estimates that half of its customers for this product are located within 500 miles of the plant.


A second plant is under strong consideration in Belmont County, Ohio, and there are reports that ExxonMobil is scouting the area for a location for its own plant. These plants would allow more locally produced ethane to be used here and also bring downstream manufacturing activity to the Appalachian Basin. But until those operations are built, producers will have to find markets for their products in other areas and export them to other countries.

2 views0 comments

Comments


bottom of page