Pipeline Company Purchase Creates Mega-Network
The Wall Street Journal reports today on a deal struck by the natural gas pipeline company Kinder Morgan to buy its rival El Paso Corporation. The $38 billion dollar purchase (includes El Paso’s outstanding debt) gives Kinder Morgan control over the largest pipeline network in the country at a time when shale gas development is creating the need for new transmission lines in the Northeast.
“The new entity would have a network of 67,000 miles of natural-gas pipelines stretching into virtually every major region where natural gas is produced. It would connect Pennsylvania, Arkansas and Texas, and give Kinder Morgan entry in to Florida, a growing market for gas-fueled power generation.”-WSJ
The WSJ reports that although some energy companies struggle to turn a profit while gas prices are so low, the demand for new pipelines that carry that gas to market has shot through the roof.
“The Interstate Natural Gas Association of America Foundation, a trade group, estimates that companies will need to build 35,600 miles of big, high-pressure natural-gas pipelines between 2011 and 2035 to meet market demands, at a cost of $178 billion.”-WSJ
El Paso owns the Tennessee Gas Pipeline company, which runs a large transmission line across the top of Pennsylvania, into New Jersey and New York. Work on expanding that pipeline has already begun. The 127 miles of additional pipes will also include two new compressor stations in Northwest Pennsylvania.
Gas drilling opponents have begun to oppose pipeline construction projects, saying they harm the environment.