Natural gas production in June 2014 for the Marcellus Shale reached 15 billion cubic feet per day which has led to abundant supplies keeping a lid on prices. Even more stunning is the fact that production could rise to 24 bcf/day by 2020. Without a massive build out of pipeline capacity, the enormous volumes of natural gas will struggle to reach consumers. This is not lost on major pipeline companies, which are already undertaking major capacity expansions.
In early December, the Federal Energy Regulatory Commission (FERC) gave the go-ahead for the construction of the Constitution Pipeline, which will be built to connect natural gas from the Marcellus Shale to northeastern states like New York and Massachusetts. The pipeline will run from northeastern Pennsylvania near Scranton to an interconnection near Schenactady in New York. The pipeline may begin construction at the beginning of 2015 and could provide additional natural gas supplies to 3 million homes in New England as soon as the winter of 2015 or 2016.
The 124-mile Constitution will link up with two major natural gas interconnections. The Iroquois is a major pipeline that runs from Canada through upstate New York, terminating in the Bronx in New York City. The Constitution will also connect to the Algonquin Transmission Line, a pipeline owned by Spectra Energy (NYSE: SE), which runs through Connecticut and services much of Massachusetts, including Boston.
The Constitution will allow Marcellus…