TORONTO NiSource Inc. plans to begin construction late this summer on a $150-million, 70-mile pipeline system aimed at serving energy firms operating on the Marcellus and Utica shales.
The Merrillville, Ind.-based energy company said the project will include both the installation of new, and refurbishment of old, pipeline facilities in hydrocarbon-rich areas of western Pennsylvania, a region that has seen strong shale drilling activity.
NiSource did not respond to a request for comment Friday about what diameter, grade or wall thickness of pipe might be used for the project, how many tons might be required or which pipe mill might supply it.
Dubbed the "Big Pine Gathering System," the pipeline is expected to be in service by December 2012, NiSource said in a news release. The project has been anchored by a long-term gathering agreement with energy producer XTO Energy Inc., a subsidiary of Exxon Mobile Corp., the company said.
"The Big Pine Gathering System supports the critical needs of Pennsylvanias Marcellus producers to safely, efficiently and reliably get their natural gas to a choice of markets," Jimmy Staton, chief executive officer of NiSource subsidiary NiSource Gas Transmission & Storage, said in a statement.
The system will provide gathering, processing, liquids handling and other services to energy producers on both shale plays, said Joseph Blount, president and chief operating officer of NiSource Midstream & Minerals Group.
The rotary rig count in the United States stood at 1,979 for the week ended April 5, unchanged from the previous week but up 197 rigs from the same period last year, according to the latest data from Houston-based oilfield services firm Baker Hughes Inc.
But the rig count for Pennsylvania, where portions of the Marcellus shale are rich in natural gas liquids (NGLs), increased to 102 rigs, up two rigs from the previous week but down five from a year earlier, Baker Hughes data show.
NGLs fetch a premium to "dry" natural gas at market. As dry gas supplies increase and prices reach historic lows, producers have been shifting rigs toward plays with NGLs or oil.