The revolution in the world of natural gas and its production in the U.S. -- and almost certainly much of the world in the ralatively near term-- will ultimately bring about changes in numerous aspects of our lives.
Those changes simply must begin with rerouting gas transportation to accommodate new areas of production. For example, not even the most knowledgeable among us contemplated giant plays in areas of the Northeast, such as the Marcellus and Utica shales.
With this in mind, then, two of the nation's biggest pipelines are hooking up for both logistical and financial reasons. Dallas-based Energy Transfer Equity
Operationally, Energy Transfer's 24,000 miles of pipeline system, located largely in Texas, will be combined with the 21,000 miles in Southern Union's quiver. The result will be the largest natural gas pipeline in the United States. Energy Transfer's traditional role has largely been to transport gas from fields in the southern and western parts of Texas to an expanding consumer base in the Dallas-Fort Worth metroplex and other metropolitan areas to the northeast.
Conversely, Southern Union's customers range from the Midwest to Florida, but until we discover shale plays in Illinois, Georgia, or Florida, for instance, it is unable to access gas near its customer base. So, since opposites attract, the two companies are creating an alliance with 45,000 miles of pipeline -- slightly ahead of Houston's El Paso
Energy Transfer essentially operates through two limited partnerships, Energy Transfer Partners
Management expects to undertake capital expenditures of about $3.5 billion for new projects this year, abut 80% of which will be tied to projects in the Eagle Ford and Haynesville shale plays.
While Energy Transfer compares favorably with other solid midstream companies, including Kinder Morgan Energy Partners
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