U.S. energy firms are looking at fresh opportunities to build pipelines out of the natural gas-rich Northeast, buoyed by pro-energy policies from the Trump administration.
That region – which produces about a third of the gas in the U.S. and has the largest gas reserves – has long suffered from lack of egress, which has limited production and prompted customers in the region to rely more heavily on heating oil.
Output from the Appalachian region – which covers the Marcellus and Utica shales – has increased each year since 2009, when it was only producing about 1.7 billion cubic feet per day of gas. Between 2015 and 2019, growth averaged about 15% a year, but slowed to 2% a year between 2020 and 2024, Scott DiSavino reports.
Production is anticipated to grow by just 1% a year in 2025 and 2026 – even as U.S. power and gas demand is expected to reach record highs both years amid a boom in liquefied natural gas exports and data center demand.
New and revived pipeline projects could change that. Williams is again looking at building the Constitution Pipeline to New York and the Northeast Supply Enhancement project to New Jersey and New York. Both were canceled after years of fighting for permits with state regulators.
Millennium Pipeline has started negotiations for binding commitments to add pipeline capacity in the region, while EQT and partners are looking at extending the Mountain Valley Pipeline from West Virginia into Virginia and North Carolina. Other projects are also in the works.
Mountain Valley encountered years of legal battles and delays before entering service last year. Environmental groups, including the Sierra Club, have still voiced concern for these projects, setting up potential hurdles despite Trump's pro-energy policies.
Still, many operators would rather buy than build new projects, Reuters deals reporter David French wrote earlier this year. Labor shortages, trade tensions, lower energy prices and the risks of legal battles make acquisitions a more efficient way to grow, he said.
In the first quarter of this year, there were 15 U.S. midstream deals, the highest quarterly number in the first months of the year since 2021.
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