EIA sees spurt in U.S. gas line construction

The U.S. Energy Information Administration said that planned gas pipeline development and expansions could add as much as 16 bcfd of capacity to the U.S. transmission network during 1999-2000, at a total cost of about $9.5 billion.

EIA said that, while all of the proposed projects may not be built because of changes in market conditions, total expenditures are expected to far exceed the $5.1 billion invested during the last major period of new pipeline development, in 1992-93.

EIA's predictions came in a report, "Natural Gas Pipeline Network: Changing and Growing," and in a forthcoming report, "Natural Gas 1998: Issues and Trends."

Rising pipeline outlays

"Since dipping in 1994, investment in additional natural gas pipeline capacity has increased each year and could reach $6 billion in 2000, as demand for natural gas has steadily grown and as sources of production have shifted," EIA said.

"A major portion of this investment represents development of new pipe- line capacity to carry supplies of Canadian natural gas to various U.S. markets."

EIA said that, while more than 11 bcfd of capacity was added to the transmission network in 1998, costs were relatively low at $2.9 billion, compared with $3.1 billion in 1999 and $6.3 billion in 2000.

It said that, although the amount of capacity slated to be added in each of those years, 8.2 bcfd and 7.8 bcfd, respectively, would be less than that added in 1998, the investment will be greater, because several major long-distance pipelines, such as the Alliance, Independence, Tri-State, and Vector pipeline systems, are planned.

EIA said most of the capacity added in 1998 comprised comparably less-expensive expansions and upgrades to existing systems.

Rising imports

EIA contends that the growth of Canadian imports into the U.S. Midwest will increase use of the Chicago hub market center as a transshipment point for supplies en route to a growing gas market in the U.S. Northeast.

It said a market center near Leidy, Pa., where several pipelines serve the Northeast interconnect, also should grow significantly. "This major hub area will experience not only increased movements of Canadian import volumes but also several system expansions designed to transport additional supplies to the Northeast from Texas, Louisiana, and the Gulf of Mexico."

EIA said the pipeline growth largely is due to growing demand for gas as fuel for electric generating plants that are replacing replace coal and oil-fired units.

It said that, since 1990, gas use for power generation has grown 17%/year in the Midwest and about 9% in the Southeast. Gas use for generation grew less than 1%/year in the Southwest, but it accounts for more than 22% of all gas consumed there.