Midstream Investment Continues in the Utica
Despite the stall in the Utica Shale boom, the nation’s biggest pipeline company is set to begin construction on a half-a-billion dollar transmission system across northern Ohio.
Kinder Morgan’s ‘Utopia East’ pipeline would be for ethane, a secondary product of natural gas drilling vital to chemical plants. The 12- inch line is planned to run from Harrison County to a system near Toledo; that would send the ethane on to Canada.
Of the depressed state of Ohio’s oil & gas boom, company vice president Allen Fore says: given the scale of the Utica shale play…that will pass. “There is a resiliency here. The infrastructure investments have been made. And a lot of significant capital has been put into the development of that infrastructure. And it certainly has the ability to very quickly ramp up. More quickly than it ramped down.”
Fore says to move this far along, the project had to meet critical financial criteria.
It had to prove its commercial viability in order to get investors to put up money for construction. And, it had to prove its business sustainability in order to get regulators to allow installation of a pipeline that will be in operation for decades.
“It’s not a process of ‘if you build it, will they come?’ Commercial threshold is related to the regulatory threshold. You have to have shipper commitments on the project. In the case of Utopia, we do. And that’s why we’re moving forward on the project.”
Kinder Morgan currently operates more than 84,000 miles of pipeline in North America.