Texas Companies to Invest $1.2B for Ohio Utica Pipeline
HOUSTON – Spectra Energy Corp., DTE Energy and Enbridge Inc. announced Tuesday a memorandum of understanding to construct a pipeline intended to ship Utica shale gas from northeastern Ohio to markets in the Midwest and Ontario, Canada.
The new venture, called the Nexus Gas Transmission system, would originate in northeastern Ohio and consist of 250 miles of large-diameter pipe, Spectra said in a press release.
Spectra, DTE and Enbridge are characterized as big players in the energy midstream industry. The cost of the venture is estimated to range from $1.2 billion to $1.5 billion, according to the Houston Chronicle.
"The Nexus project is a great supply-meets-demand story” for the Utica shale region, said Brian McKerlie, vice president of business development for Spectra, the newspaper reported. (READ STORY)
The system would be capable of transporting one billion cubic feet of natural gas per day and would extend west from Ohio and connect with an existing Vector pipeline system in Michigan, the company reported.
The Vector line will ship the gas to Ontario and serve distribution companies, power generators and industrial users in the Ohio, Michigan and Ontario markets. Once the project is completed, Spectra will become a 20% owner of the Vector pipeline, now owned by DTE and Enbridge.
The Nexus Gas Transmission pipeline project comes as Spectra, Chesapeake Energy Corp., Texas Eastern Transmission LP and American Electrical Power develop their Ohio Pipeline Energy Network, or OPEN.
That system, announced last December, would connect processors in Columbiana County with a 70-mile pipeline running through southeastern Ohio. The line is capable of handling one billion cubic feet of natural gas per day and would tie into the existing Texas Eastern system, which transports natural gas to the Gulf of Mexico region.
Meantime, Dominion Transmission announced last Thursday that its Appalachian Gateway project, which included the construction of a 110-mile pipeline from West Virginia to Delmont, Pa., in the southwestern part of that state, was placed in service.
An open season for the project – that is, the period when the system can solicit customers – is scheduled for the fourth quarter, Spectra said. The partners expect to have the pipeline in service by November 2015, depending on demand and market conditions.
In its announcement, Spectra noted the project has already received "expressions of interest" from potential customers with enough capacity to anchor the project.
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