DENVER—Expansion of a natural gas pipeline from the Rockies to Ohio will likely boost profits for gas companies and prices for area consumers, an energy market expert said.
The Rockies Express pipeline, being built from Colorado and Wyoming to the East, will radically change the market’s structure, Porter Bennett of Bentek said Wednesday at the Colorado Oil and Gas Association’s annual natural gas convention.
Currently, gas from Colorado is cheaper than the national price because there aren’t enough pipelines to ship it to other regions. Competition for space in the pipeline results in a glut of supply, forcing producers to reduce prices to get the gas shipped.
The Rockies Express line, expected to be pumping gas to Ohio within two years, will change that, Bennett said.
“I think local demand has enjoyed some relatively low prices for a while,” Bennett said. “You’ve got to expect Front Range prices to come up a bit.”
Bennett said he thinks the Rockies Express will be good for the gas industry, but he expects prices to fluctuate in the next few years as more segments are completed.
Other speakers said they expect the Rockies Express to be full within three years because of unprecedented levels of drilling in the Rockies.
“We need (another) large pipeline out of this area around 2011-2012,” said Shelley Wright of Questar Corp., a natural gas company.
The pipeline starts around Meeker, runs north to Wyoming before heading east through Nebraska. It’s currently open through eastern Colorado.
Another pipeline, the TransColorado, is being expanded to ship gas from southwest Colorado to the Rockies Express hub, said John Eagleton with Kinder Morgan, which owns the TransColorado line.
