LDCs Continue To Upgrade Gas Network

Gas Distribution Report
By Rita Tubb, Executive Editor | February 2014, Vol. 69 No. 2

Pipe replacement, upgrades

Natural gas utilities spend $7 billion annually on their gas pipeline pipeline systems. Atmos Energy Corporation, one of the nation's largest natural gas distributors, has invested more than $1.2 billion over the past three years to safeguard the communities it serves. In addition, the company was expected to spend more than $500 million on safety and reliability by the end of fiscal 2013.

In addition to modernizing its pipeline system, Atmos Energy maintains and monitors more than 72,000 miles of pipeline in eight states. For both its distribution and transmission pipelines, it has detailed integrity management programs that require periodic inspections and testing of its lines and equipment. Atmos Energy technicians monitor the company’s pipelines through aerial surveys, foot patrols and by using specially equipped vehicles to detect natural gas. Atmos has pipeline control centers in Dallas, TX, and Franklin, TN, that rely on advanced telecommunications technology, flow sensors and remote-control valves to control the system and protect the public.

Xcel Energy announced pipeline construction replacement projects earlier this year. The company’s work in Fort Collins and Loveland, CO, involved the replacement of approximately 16 miles of natural gas pipeline to improve service reliability and help Xcel continue to safely maintain its natural gas systems in Northern Colorado. The project is part of a multi-year program, with total investment of $140 million, in which Xcel Energy is installing or replacing approximately 77 miles of natural gas transmission pipeline in Larimer, Weld and Boulder counties. The project will include some distribution pipeline work and is expected to be completed by the end of 2016.

Moreover, while LDCs have made significant advances in modernizing and upgrading pipeline infrastructure over the last two decades, industry estimates indicate it may easily take another three decades of effort to finish the job at the current pace of replacement.

Gas Prices, consumption

The federal Energy Information Administration’s (EIA) expects the Henry Hub price for natural gas will increase from an average of $2.75 per MMBtu in 2012 to $3.68 per MMBtu in 2013 and $3.84 per MMBtu in 2014.