Finding innovative ways to increase pipeline access to new tight gas deposits, further improving pipeline safety and integrity, and working to advance gas and electric integration will be three of the top 2013-14 priorities for US interstate natural gas pipeline operators, the incoming chairman of their national trade association said on Oct. 9.
“Development of shale gas has dramatically changed the natural gas resource base in North America,” observed David J. Devine, president of Kinder Morgan Inc.’s central US gas pipelines group, at a luncheon with reporters during the Interstate Natural Gas Association of America’s annual board meeting.
“There is an abundant supply of shale gas that will drive new uses that, in turn, will influence the utilization of natural gas pipeline and storage infrastructure,” he continued. “The pace and location of infrastructure development will be affected by the relative price and quantities of gas, natural gas liquids, and crude oil in the shale plays because the overall value of these commodities determines which prospects are more attractive for producers.”
Devine said shale gas production basins’ locations in relation to markets will continue to drive adaptations of the interstate pipeline grid which will include, depending on location, construction of new infrastructure; shifts in direction of flows; and repurposing of pipelines between dry gas, NGLs, and crude oil.
“This is what we refer to as the rationalizing of the pipeline grid—taking pipe in the ground that may no longer be highly utilized as designed, and putting it into service in a different, higher valued purpose,” he said, adding that growing Marcellus shale production has changed the direction gas is moving through some interstate pipelines.
Repurposing a pipeline boils down to specifics, Devine said. “If a company sees an opportunity to do this, it has to make sure it will remain safe when new materials move through it,” he said. “Customer interest, regulatory requirements, and other issues need to be considered.”
Making further pipeline safety improvements is a priority many of his predecessors also identified, Devine indicated. “Safety is ‘Priority One,’ and INGAA staff and industry members are working tirelessly to see that regulations reflect a sound approach that provides for safety while also allowing for appropriate cost recovery,” he said. “We will continue working to keep pipelines safe and operationally sound today and for future generations.”
Gas-electric integration also must continue to be addressed because gas will need to be burned to generate more electricity as the US tries to improve its air quality, Devine continued. He said INGAA would continue to work with the US Federal Energy Regulatory Commission, power generators, electric transmission system operators, and other stakeholders to find workable solutions.
Asked if the federal government shutdown has affected any of KMI’s operations, Devine said it has not so far, but it could create permitting problems if it goes on very long. INGAA Pres. Donald F. Santa, who was also at the luncheon, said FERC has continued operating, but agencies that issue other permits have not. “Like everyone else, we’d like to see this resolved so everybody can go back to work,” he said.
Summing up, Devine said: “There are opportunities all over the place. There’s a good environment for investment. Natural gas is an important part of the national, as well as the energy, economy, and it’s growing. It’s a good time to be in the business.”
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