Norwegian oil and gas company Statoil has concluded an agreement for the transportation of gas through a pipeline from the Northern Marcellus shale gas area in Pennsylvania to Niagara at the US-Canadian border.
Statoil Natural Gas (SNG), a US subsidiary, has concluded a transportation agreement with National Fuel Gas Supply, securing Statoil the right to transport up to 3.2 billion cubic metres (bcm) per year/320 000mcf/day of gas through an interstate pipeline.
National Fuel’s pipeline system has historically been used to import gas into the US from Canada, but as Canadian production declines combined with increased Canadian gas demand, signals from the market suggest that the eastern part of Canada will need imports from the US. The Marcellus play is ideally situated to meet this demand, according to the company.
Statoil has now agreed with National Fuel to facilitate reversal of the flow of the pipeline. This will require some additional compression and other minor modifications.
The pipeline lands at the Niagara delivery point, which is directly connected through existing infrastructure to the Greater Toronto metropolitan area and Union Dawn market hub in Canada.
The expected in-service date is mid 2012 and Statoil has booked the capacity for a 20 year period. The starting point for the pipeline will be Ellisburg, Pennsylvania.
In March 2010, Statoil entered into a transportation agreement ensuring the right to transport and deliver gas from Northern Marcellus to the New Jersey and New York City areas.