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Will Nexus oversupply the Midwest?

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The Nexus Pipeline commenced operation on October 13th with initial flows at less than 0.4 bcfd against a design capacity of 1.5 bcfd. Proposed back in July 2014, Nexus is the last Northeast de-bottlenecking project that targets the Midwest, as the remaining Northeast projects will focus on the eastern seaboard markets. As with its predecessors, the start-up of Nexus will impact flows on other competing pipelines, and regional basis should continue to improve with more takeaway capacity. But more importantly, more than 6 bcfd of new pipeline capacity will have been added to the Midwest since October 2017, putting significant price pressure to a region that is already well supplied from all directions. Despite higher Northeast supplies coming into the region, we believe the basis for the Midwest will stay relatively stable for next three to five years due to a combination of increased local demand and a clearing of surplus gas to the growing southern markets.

Table of contents

  • Executive Summary
  • Nexus re-shuffles pecking order for Northeast exit flows
  • Northeast re-shuffles pecking order for the Midwest supplies
  • How to clear the Midwest: power and pipeline reversals

Tables and charts

This report includes the following images and tables:

  • Map: Midwest pipeline system
  • Northeast to Midwest exit flows
  • Pipeline capacity vs. SWM+U production
  • Delivered cost comparison to Joliet Hub
  • Supply source for the Midwest (MI, IN, WS, IL)
  • Changes in gen stack in MISO
  • MISO power elasticity
  • Flows in and out of the Midwest
  • Midwest flows and exports
  • Flow changes (2018-2030)
  • Basis forecast

What's included

This report contains:

  • Document

    Will Nexus oversupply the Midwest?

    PDF 1.41 MB