Shale gas development changes business for long-haul pipelines
(Reuters; June 5) - The burgeoning development of shale gas across the U.S. has changed the playing field for long-haul pipelines, according to a report published June 5 by Standard & Poor's Ratings Services: "The Shale Gas Boom Is Shaping U.S. Gas Pipelines' New Reality."
The booming Marcellus Shale region in New York and Pennsylvania, for instance, has diminished the need to move natural gas along traditional routes, such as to the East from the Rocky Mountains region. As a result, large stretches of pipelines are now underutilized.
Key trends for the pipeline industry include: Companies are trying various methods to adapt from a model in which long-haul pipelines capitalized on price spreads between producing areas and consuming regions, to one to one in which pipelines' greatest value is in clearing bottlenecks and providing end-users a reliable gas supply, even when demand is high. "Despite the industry's hiccups, we think its creditworthiness should remain largely stable," the S&P report said.