Natural Gas CEO Admits to Excess Pipeline Capacity from Marcellus Basin

From Allegheny-Blue Ridge Alliance’s ABRA Update 232, August 13, 2020

There is excess pipeline capacity for natural gas produced from the Marcellus shale field and the gap of excess capacity over gas produced is expected to grow, according to Toby Rice, CEO of EQT Corporation, the largest shale gas producer in the United States and a potential major shipper of gas for the Mountain Valley Pipeline (MVP). His observations were made during a July 27 earnings call with representatives of investment firms. In answer to a question about his “view on the future pipeline development out of Appalachia” in the wake of the cancellation of the Atlantic Coast Pipeline, Rice said:

. . . the dynamics that are set up right now is Appalachia is producing around 32 Bcf a day. We’ve got about call it 35 Bcf a day of local takeaway — of takeaway and local demand. So, there is a 3 Bcf a day gap between what we are producing and what we are able to take away. Adding MVP that takes — that takes you up to – call it – 37 Bcf a day. So, you’ve got a pretty big gap between capacity and supply in the basin. I think, you couple that with the fact that the basin is going to struggle to grow. I mean, you’ve got all operators saying that they’re hanging in a maintenance mode. We’re also seeing activity levels today, which suggest that this basin is going to decline. All of that is going to widen the gap of takeaway.