Area Development
With the rapid increase in natural gas production and over two million miles of natural gas pipelines throughout the U.S., many corporate officials expect accessing gas infrastructure and service to be simple. Unfortunately, many prime industrial sites lack adequate pipeline infrastructure, and project managers have found it increasingly difficult and complex to develop new pipelines.

{{RELATEDLINKS}} No Pipeline = No Gas
Manufacturers typically look to either a local gas distribution company (LDC) or an interstate transmission company to secure access to the energy and manufacturing feedstocks they need. While both good options, often the parties have divergent business objectives. This can result in expensive, long-lead-time projects or worse, disinterest in building new infrastructure for your plant — forcing you to eliminate an otherwise competitive site.

For large interstate transmission companies that transport over two billion cubic feet of gas/day on a single pipeline, even a major manufacturing project may not provide adequate financial incentive to make your project a priority. Likewise, regulated LDCs may have a lower risk tolerance for developing new projects for a single user and be subject to a captive gas source with inflexible, high-cost tariff rates. But, a lesser-known alternative, midstream companies, could ultimately offer the best option and should always be considered in your evaluation.

Midstream companies build, own, and operate natural gas infrastructure to connect energy sources to energy markets. Although some midstream companies primarily focus on gathering gas from energy producers or building large interstate pipelines, there are a few midstream companies that are well suited to helping manufacturers not only develop turnkey infrastructure, but also develop the right strategy to source competitively priced natural gas from the market.

Midstream companies build, own, and operate natural gas infrastructure to connect energy sources to energy markets. A direct connection to interstate pipelines is becoming more common with sophisticated companies that seek to optimize infrastructure and energy costs. For example, the new $6 billion Shell Chemicals plant near Pittsburgh, Pennsylvania, and several new independent power projects such as EmberClear’s Birdsboro plant have recently partnered with midstream companies to build new infrastructure providing optionality and critical access to interstate gas markets.

As an example, Figure 1 illustrates a comparison of an LDC’s plan and our midstream plan for a new greenfield manufacturing plant in the Midwest. Option A was dead on arrival, and Option B (using a midstream company) was much more competitive and allowed the company to move forward with the site.

Benefits of Utilizing Midstream Companies
While there are similarities with respect to quality, safety, and regulatory compliance, midstream companies could offer some key distinctions that would be beneficial to your project.