Commodity Market Report

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

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19 July 2017

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.

Table of contents

Tables and charts

This report includes 13 images and tables including:

  • Northeast Pennsylvania wells and major pipelines
  • Marcellus key play map
  • Utica key play map
  • 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
  • Transco basis
  • Changing flows: implications for destination markets: Image 2
  • Impact of Northeast capacity into Ohio/Michigan/Indiana/Illinois

What's included

This report contains:

  • Document

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

    PDF 14.82 MB

  • Document

    Executive summary

    PDF 89.49 KB

  • Document

    Mid-term drilling ramp: how robust is this growth?

    PDF 192.14 KB

  • Document

    Northeast Pennsylvania: Looking for the Leidy Line

    PDF 2.78 MB

  • Document

    Changing flows: implications for destination markets

    PDF 166.56 KB

  • Document

    Long-term Northeast growth: Dependent on new deal structures

    PDF 93.69 KB

  • Document

    Appendix: Methodology

    PDF 11.74 MB