pipeline project

Pipeline Approvals To Boost Northeast Breakbulk

The approval of five major U.S. pipeline projects in the last month has boosted the outlook for breakbulk demand in the Northeast.

In October alone, the Federal Energy Regulatory Commission, or FERC, approved the 2 billion-cubic-feet Mountain Valley Pipeline, the Equitrans Expansion Project, the Supply Header Pipeline, the Atlantic Coast Pipeline and the Eastern Shore 2017 Expansion Project.

The projects will increase delivery capacity from the Northeast’s Utica and Marcellus shales, and mark the next phase for development, following US$10 billion in new investment approved last year. Construction and preparation for the pipelines is expected to drive demand for breakbulk transportation services throughout the region.

“We find that the public convenience and necessity requires approval of Mountain Valley’s proposal … natural gas capacity in the Southeast will reach 8.3 billion cubic feet per day by 2030. Much of the gas needed to meet this demand would be from the Marcellus and Utica shale regions,” a spokesperson for FERC said in approving the new Mountain Valley Pipeline.

The new pipelines are also expected to provide a boost for the development of plastics and chemicals facilities in the region, with Shell Chemical Appalachia already starting work on a new ethylene cracker unit, near Pittsburgh, Pennsylvania.

LyondellBasell/ Braskem Talks Stall

The plastics sector may be in need of some uplift after figures from the American Chemistry Council suggest that major plastic resin production decreased 9.3 percent in September due to shutdowns following Hurricane Harvey.

There was additional uncertainty in the U.S. plastics sector as multinational chemical company LyondellBasell’s talks to purchase rival Braskem have reportedly stalled.

Braskem issued a regulatory filing to the Securities and Exchange Commission stating that the firm was not for sale. The takeover was widely seen as a move by LyondellBasell to expand into Latin America, where Braskem has a strong footprint.

NAFTA fears create investment uncertainty

It is not only LyondellBasell that may face tougher negotiations with Latin America as fears grow about president Trump’s plans for NAFTA. The U.S. petrochemical industry has warned that changes to the North American Free Trade Agreement is creating uncertainty and may damage investment.

“Any proposals that would risk a crisis every five years on NAFTA wouldn’t provide the certainty our members need to bring these investments forward.. We are going to have a huge increase in domestic production, and there is no way we can consume that domestically,” said Greg Skelton, head of global affairs at the ACC.

Photo: Oil pipeline under construction. Credit: Wikimedia

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