Commodity market report
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15 Pages

Constrained market no more? Implications of new Northeast pipelines for supply, flows and markets


Constrained market no more? Implications of new Northeast pipelines for supply, flows and markets

Report summary

After years of constraint, Northeast markets are on the precipice of being debottlenecked. Last winter’s pipeline expansions offered the most sustained period of basis relief since summer 2013, and a massive slate of projects is now under construction or in advanced regulatory stages. In the midterm Northeast exit capacity is likely to be under-utilized. Not enough acreage is economic at the $2.50/mmbtu in-basin prices expected to fill the expected buildout in pipeline capacity.

Longer term, we do expect the pipeline capacity to fill and for the area to run out of pipe again. The need for expensive new Northeast pipeline capacity is the primary catalyst of the higher Henry Hub prices in our forecast beginning in the mid-2020s. However, commercial questions around long-term pipe build, as producers’ growth prospects depend on funding still-more-expensive pipeline capacity. Producers and consumers will need to develop new commercial arrangements to facilitate long-term Northeast growth.

What's included?

This report includes 1 file(s)

  • Constrained market no more? Implications of new Northeast pipelines for supply, flows and markets PDF - 14.82 MB 15 Pages, 2 Tables, 11 Figures

Description

Volatility in oil markets and the growth of unconventional gas supply have created a high degree of uncertainty about future gas demand and the direction of gas prices.

This Gas Markets Long Term Outlook report forecasts future pricing, based on deep analysis of gas supply and demand fundamentals. Additionally, it addresses complex questions on gas flows, identifies future opportunities and informs fuel purchasing strategies.

Participants and investors can use this long term outlook report to understand gas markets and assess the impact of global gas dynamics and key market drivers.

Wood Mackenzie provides detailed supply, demand and price forecasts based on our integrated upstream, power, coal and LNG research. Our regional gas experts are based in the markets they analyse, providing comprehensive analyses of regional and global gas markets.

If you want to understand complex gas market dynamics and plan for the future, Wood Mackenzie is the premier resource to help you gain a clear, competitive advantage.

  • Executive summary
  • Mid-term drilling ramp: how robust is this growth?
    • Northeast cost of supply
    • Northeast pipe over-build
    • Northeast drilling outlook
    • West Virginia: how much growth?
  • Northeast Pennsylvania: Looking for the Leidy Line
  • Changing flows: implications for destination markets
    • Southeast
    • Midwest & Eastern Canada
  • Long-term Northeast growth: Dependent on new deal structures
  • Appendix: Methodology

In this report there are 13 tables or charts, including:

  • Executive summary
  • Mid-term drilling ramp: how robust is this growth?
    • Northeast cost curve (at Dominion South Point)
    • Mid-term drilling ramp: how robust is this growth?: Table 1
    • Northeast basis outlook
    • Northeast drilling
    • Rich-gas SW Pennsylvania drilling
    • Dry gas SW Pennsylvania drilling
    • Mid-term drilling ramp: how robust is this growth?: Table 2
  • Northeast Pennsylvania: Looking for the Leidy Line
    • Northeast Pennsylvania wells and major pipelines
  • Changing flows: implications for destination markets
    • Transco basis
    • Changing flows: implications for destination markets: Image 2
    • Impact of Northeast capacity into Ohio/Michigan/Indiana/Illinois
  • Long-term Northeast growth: Dependent on new deal structures
  • Appendix: Methodology
    • Marcellus key play map
    • Utica key play map
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