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US Shale Gas Boom Prompts Shifts In Pipeline Strategy

by Kenneth E. DuBose on June 17, 2011

Shale Gas production is making pipeline operators create new strategies to move natural gas.

“So pipeline companies that once focused on bringing natural gas from the U.S. mid-Continent to Northeast, West Coast and Chicago markets now have to rethink the most profitable way to move gas around, said Dan Spears, a partner at Swank Capital LLC, a mutual fund that invests in pipeline companies.

“Whatever the pipe was originally meant for, you have to re-evaluate it in the light of these new shale plays,” Spears said.

“The shale boom was one of the drivers behind pipeline company Energy Transfer Equity LP’s (ETE) $4.2 billion purchase of competitor Southern Union Co. (SUG). Energy Transfer found itself awash in natural gas from newly productive shale formations in Texas and needed Southern’s access to markets in Florida and Midwest markets to relieve supply pressure, Energy Transfer Chief Executive Kelcy Warren said in an interview.”

Source: www.firstenercastfinancial.com

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