Don't Stop Believin' - Data Centers, LNG Exports and Southeast Demand Key to Marcellus/Utica Growth

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Tuesday, 06/10/2025  Published by: Housley Carr

Marcellus/Utica natural gas production grew by leaps and bounds in the 2010s, but the pace of growth has slowed dramatically in recent years, mostly due to takeaway constraints. Finally, the prospects for renewed growth are improving. New pipeline capacity out of Appalachia is coming online — especially to the booming Southeast, and maybe the Gulf Coast too. New LNG export capacity is about to be commercialized. And a lot of new gas-fired generating capacity — much of it tied to planned data centers — is under development within (or very near) the Marcellus/Utica region. In today’s RBN blog, we examine the three big gas-demand drivers behind the shale play’s impending renewal. 

As we said in Part 1, the Marcellus/Utica is by far the most prolific gas production area in the U.S., accounting for about one-third of the nation’s daily output. The shale play’s gas production soared from less than 2 Bcf/d to more than 33 Bcf/d over that decade, but its output through the first half of the 2020s has stayed close to flat, averaging about 35 Bcf/d over that period — ~24 Bcf/d from the NGL-rich “wet Marcellus/Utica” in southwestern Pennsylvania, northern West Virginia and eastern Ohio and ~11 Bcf/d from the “dry Marcellus” in northeastern Pennsylvania.

The primary hurdle to further growth has been takeaway capacity; there hasn’t been enough space on pipelines out of Appalachia to move more of the shale play’s gas to demand centers hundreds of miles away. That’s been changing, however, mostly due to the June 2024 startup of the 2-Bcf/d Mountain Valley Pipeline (MVP; aqua line in Figure 1 below) from northern West Virginia to Transco Station 165 in south-central Virginia and the advancement of several capacity-expansion projects on or near Transco itself. A few of these projects (Regional Energy Access, Southside Reliability Enhancement Project, Carolina Market Link, and Southeast Energy Connector) came online over the past 18 months, and others (Commonwealth Energy Connector, MVP Southgate, Southeast Supply Enhancement, and Alabama Georgia Connector) will follow later this year and in 2027-28. (See Part 1 for details.)

Three other projects now in the works will take the Marcellus/Utica’s egress capacity to the next level and, with the projects noted just above, will enable producers in the play to significantly ramp up deliveries to three key growth markets: (1) power generation for data centers within and near the Marcellus/Utica region, (2) LNG export terminals in Louisiana and Texas, and (3) fast-growing demand centers in the Southeast, including the Carolinas, Georgia, Florida and Alabama.

First, there’s Williams’s newly announced Power Express project (dashed purple line in Figure 1), which by Q3 2030 would add 950 MMcf/d of capacity on Transco between Station 165 and the data-center mecca in northern Virginia — an area also served by gas flowing south on Transco Zone 6. Then there’s the plan by MVP’s co-owners (EQT Corp., NextEra Energy, Consolidated Edison, AltaGas and RGC Resources) to expand the capacity of that key pipeline by 500 MMcf/d (to a total of 2.5 Bcf/d) by adding new compression along its route (again, the aqua line). The timetable for that project has not been revealed, but it may well be timed to enter service with Williams’s massive Southeast Supply Enhancement project, which will add a total of 1.6 Bcf/d of capacity along Transco from Station 165 to Alabama by Q4 2027.

The third big takeaway project on the horizon is the proposed Borealis Pipeline (dashed pink line in Figure 2 below), a greenfield pipe that would run about 180 miles from Clarington, OH, to the northeastern tip of Boardwalk Pipeline’s Texas Gas Transmission (TGT; purple line) system in Lebanon, OH. The project would also involve enhancements to TGT itself, which could allow up to 2 Bcf/d to flow south to the Gulf Coast. Boardwalk on April 1 initiated — and on April 30 concluded — a non-binding open season for Borealis and is currently evaluating the responses it received.

As we said, the Power Express, MVP expansion and Borealis Pipeline projects highlight the three key demand drivers Marcellus/Utica E&Ps are banking on to propel production growth in the basin through the balance of the 2020s and into the next decade. Next, we’ll discuss each of them in more detail.