AGA TOTES UP NEW U.S. GAS-PIPELINE MILEAGE, STORAGE CAPACITY

More than 8,000 miles of new U.S. natural gas transmission line or pipeline looping have been built, are under construction, or are proposed in 1993-94, the American Gas Association, Arlington, Va., states in its latest annual report on new construction (OGJ, May 23, Newsletter).

Additionally, AGA lists 47 proposed natural-gas storage projects in various stages of development to add more than 500 bcf of working-gas storage capacity and, if constructed, would increase total U.S. working-gas storage capacity by nearly 20%.

Throughout 1993 and 1994, more than $9 billion of new gas-pipeline construction projects have been in various stages of development.

AGA classifies these projects as either built in 1993 or 1994 and operational, or currently under construction, or proposed and pending.

In aggregate, the projects total 8,087 miles of new pipeline and pipeline looping, 1,098,940 hp of additional compression, and 15.3 bcfd of additional capacity.

Table 1 shows the regional breakout.

EXPANSION, ADJUSTMENT

The existing U.S. gas-transmission network consists of more than 284,500 miles of pipeline and more than 14 million hp of compression with a total book value of nearly $54 billion.

Although significant, the miles of pipeline the association identifies in its report would if constructed represent an increase of only 3%.

But AGA says that not all the projects will be constructed: competition will determine the success of both the newly constructed projects and those that will face new competition.

The projects listed and their volumes are not additive for the purpose of determining how much capacity will eventually be available to serve industry and consumer needs, says AGA.

These projects serve both supply and demand sectors and, therefore, aggregate capacities cannot be directly attributed to end-users.

From 1930 until the early 1970s, virtually uninterrupted expansion of the U.S. interstate system occurred as the system developed and accessed new regions.

Since natural-gas consumption peaked in 1972, however, addition of pipelines has been sporadic, with the exception of several short periods of significant activity, as the industry tried to adjust to a series of changing laws and regulations (Fig. 1).

Since the late 1980s, says AGA, demand for natural gas has grown steadily with annual consumption increasing in 6 of the 7 years since 1986.

During this time, the gas-transmission industry undertook significant expansion. Transmission companies constructed facilities designed to meet changing demand patterns for natural gas (both regionally and seasonally), as well as to access additional gas-supply areas.

AGA has reported elsewhere that 1991 and 1992 marked the first consecutive years since 1972 and 1973 that the industry installed more than 3,000 miles of transmission pipeline each year (Gas Facts, AGA, 1992).

Transmission line construction expenditures also increased steadily during the 5-year period 1988-1992 with total expenditures of more than $15 billion (Fig. 2).

The 1991 total of $3.7 billion and 1992, s $5.7 billion each set annual records. However large, says AGA, these figures represent a small portion of the gas transmission industry's $54 billion total investment in physical facilities.

Projections for 1993-1996 show expenditures decreasing slightly in 1993 from 1992, then in the remaining 3 years will hold at less than in 1991.

REGIONAL BREAKOUT

Pipeline construction in 1993 was dominated by completion of several major expansions which are better designed to integrate supply and demand areas as well as to improve operations.

In the west, Pacific Gas Transmission Co., Portland, Ore., completed construction of its 805-mile looping project. The expansion will deliver 903 MMcfd of Canadian supplies to shippers in California and the Pacific Northwest.

And Northwest Pipeline Corp., Salt Lake City, completed a major expansion of its system to deliver 433 MMcfd to 38 firm customers.

In the east, Panhandle Eastern Corp., Houston, began building its Integrated Transportation Project (ITP) to provide shippers with the ability to use all four of its interstate pipelines.

Facilities are also being constructed by both Texas Eastern Transmission Corp., Houston, and Algonquin Gas Transmission Co., Boston.

In the south, Florida Gas Transmission Co., Houston, has begun adding looping and compression to its system to increase gas deliveries into Florida.

Construction of those projects identified by AGA that were either completed or under construction in 1993 or 1994 cost nearly $4 billion and added more than 3,000 miles of pipeline and pipeline looping, nearly 500,000 hp of compression, and more than 5 bcfd (Table I top section).

The middle section of Table I details those projects that have been proposed and are currently pending.

These projects include several into the growing Florida market (SunShine and Peninsula), continued expansion into the capacity-constrained northeast (Liberty, Mayflower, and Portland Gas), and continued activity along the west coast (Mojave, Northwest, and Pacific Gas Transmission).

More than $5 billion of new projects are planned which will add nearly 5,000 miles of pipeline and pipeline looping, more than 600,000 hp of compression, and capacity totaling nearly 10 bcfd.

The bottom section of Table 1 combines the first two sections to show the sum of pipeline construction activity, either completed, under construction, proposed or pending during 1993 and the first quarter of 1994.

This portion of the table makes clear that more than 5 bcfd of pipeline capacity are being added to the gastransmission network. An additional 10 bcfd have been proposed and may also be constructed in the near future.

The expected construction costs of these pipeline projects exceed $9 billion.