EIA says U.S. gas pipeline grid has grown 15%

The U.S. pipeline industry's capacity to move gas from region to region reached a record of more than 84 bcfd in 1997, up 15% from the installed capacity reported in 1990. An Energy Information Administration report said that, by 1996, gas shipments had increased 24% from 1990 levels, resulting in a record high 75% utilization of installed capacity. Between 1990 and 1996, U.S. gas consumption grew by 17%, marketed production increased by 6%, and net imports doubled to keep pace with this

June 1, 1998

3 min read

The U.S. pipeline industry's capacity to move gas from region to region reached a record of more than 84 bcfd in 1997, up 15% from the installed capacity reported in 1990.

An Energy Information Administration report said that, by 1996, gas shipments had increased 24% from 1990 levels, resulting in a record high 75% utilization of installed capacity.

Between 1990 and 1996, U.S. gas consumption grew by 17%, marketed production increased by 6%, and net imports doubled to keep pace with this growth.

EIA said, "Most of the projected 6-7% increase in domestic gas production through 2000 will come from the Gulf of Mexico, the San Juan basin, and the Rocky Mountain area.

"While planned pipeline expansions appear adequate to accommodate this increase, some bottlenecks may develop in moving new offshore production beyond onshore Louisiana. Potential bottlenecks may be partially or completely offset by planned new or expanded underground storage facilities."

It said, for the 12 months ended Mar. 31, 1997, about 78% of the gas pipeline system's capability was reserved under firm transportation contracts, but only about two-thirds of that reserved capacity was actually used, allowing substantial volumes to be transported under interruptible service contracts.

EIA noted significant changes in traditional patterns of gas movement since 1990.

"Gas from western and Rocky Mountain producing areas is increasingly being routed away from western markets, as producers seek alternative markets, and key pipeline projects have been constructed or are planned to accommodate the shifts.

"Producers in the Rocky Mountain area are looking to serve expanding Midwestern markets, while producers and pipeline companies in West Texas and New Mexico have shifted portions of their capabilities toward eastern markets."

Canadian imports

EIA said that the imported Canadian gas's share of U.S. consumption has increased every year since 1989, and pipeline capacity in the three Canada-to-U.S. transportation corridors has grown markedly.

"Taken together, these corridors have experienced more growth in the capacity to deliver gas since 1990 than any of the other seven major interregional transportation corridors: over 4 bcfd, or 69%. Further, these corridors have consistently been the most heavily utilized over this period, with pipelines in these corridors operating above 85% capacity throughout most of the year.

"The comparatively lower cost of Canadian gas over the past several years has been a key factor in maintaining these high utilization rates. The most extensive development of new pipeline capacity during the next several years will occur along the corridors connecting Canada to the U.S. Midwest and Northeast markets to handle the ever-growing Canadian imports.

"A completely new corridor is under development to bring gas from the developing Sable Island fields off the Canadian East Coast to Canadian and U.S. markets."

EIA said the expansions could add as much as 8.6 bcfd to U.S. import capacity from Canada during the next 3 years, an increase of 123% from 1996 levels. The pipeline capacity market could support additional growth beyond current levels, although the available capacity may not suit the needs of a particular shipper because of its location, term, and other factors.