Williams and Boardwalk Pipeline Partners have executed a joint venture agreement to develop several projects that would increase supply of natural gas liquids (NGLs) for US petrochemical markets.
In a deal announced Wednesday, the companies announced further plans for the proposed Bluegrass Pipeline, a project that would transport natural gas liquids from the Marcellus and Utica shale plays to the rapidly expanding petrochemical and export complex on the US Gulf Coast, as well as the developing petrochemical market in the Northeast US.
Phase one of the proposed pipeline would provide producers with 200,000 bpd of mixed NGLs take-away capacity in Ohio, West Virginia and Pennsylvania. Phase two would increase capacity to 400,000 bpdto meet market demand, primarily by adding additional liquids pumping capacity.
The pipeline would deliver mixed NGLs from these producing areas to proposed new fractionation and storage facilities, which would have connectivity to petrochemical facilities and product pipelines along the coasts of Louisiana and Texas.
The proposed Bluegrass Pipeline would include constructing a new NGL pipeline from producing areas in Ohio, West Virginia and Pennsylvania to an interconnect with Boardwalk's Texas Gas system in Hardinsburg, Ky. From that point to Eunice, Louisiana, a portion of Texas Gas would be converted from natural gas service to NGL service.
The joint venture would also include constructing a new large-scale fractionation plant and expanding natural gas liquids storage facilities in Louisiana and constructing a new pipeline connecting these facilities to the converted Texas Gas line in the Eunice area.
Williams and Boardwalk are also exploring development of a new export liquefied petroleum gas terminal and related facilities on the Gulf Coast to provide customers access to international markets.
By combining new construction with an existing pipeline, Williams and Boardwalk believe that the Bluegrass Pipeline could be placed into service and begin serving customers sooner than other options.
"This timely joint venture with Boardwalk would link two liquids-rich resource plays in the Northeast US with the expanding petrochemical industry on the Gulf Coast, providing producers in Ohio, West Virginia and Pennsylvania with the ability to access large and growing markets," said Alan Armstrong, CEO of Williams.
"The large scale solution has many advantages including an early in service date, lower environmental impact, lower cost and lower permitting risk," he added.
Williams and Boardwalk said they are engaged in comprehensive project development planning including project design, cost estimating, economic and risk analysis, customer contracting, permitting and other legal and regulatory approvals and right-of-way acquisition.
Williams and Boardwalk expect that the planned project could be placed into service in late 2015, assuming all necessary conditions are met.
"We are pleased to have formalized this joint venture with Williams to develop an industry solution of connecting prolific Marcellus and Utica liquids production to the markets where these products are in high demand," said Stan Horton, CEO of Boardwalk.
"The Bluegrass Pipeline project provides an opportunity to leverage our liquids assets in the Lake Charles, Louisiana area and repurpose a portion of Texas Gas without impacting our firm service to existing natural gas customers."