Facts & Rumors # 573
November 2, 2024
How to Prepare the “Largest Machine in the World” for AI. Oil and Gas 360. The so-called electrical boom, the result of everything from growing economies and populations, cloud computing and cryptocurrency, and policies to electrify the economy wherever possible, has placed demands on utilities and the grid unforeseen just ten years ago. America’s electrical grid, sometimes referred to as “the largest machine in the world” due to its complexity, importance, and sheer power, presents engineers, financiers, policymakers and consumers infrastructure challenges among the most profound in human history.
S&P: Data Center Growth to Precipitate NatGas Demand in US. Data Center Dynamics. Skyrocketing US data center growth is driving high demand for natural gas, according to a new report from S&P Global. In its data center energy demand growth model, S&P concluded that if 50 percent of incremental capacity comes from natural gas-fired units, the grid would require up to 50GW of incremental generation supply. Demand for natural gas to support data centers could reach up to three billion cubic feet per day (bcf/d). Should natural gas assume a larger share, demand from data centers alone could climb as high as six bcf/d by 2030.
Massive Gas-Fired AI Data Center Coming to VA. Thanks, MDN. We are super excited to bring you the news that Balico, LLC has proposed building a gigantic, massive data center in Pittsylvania County, Virginia. Sound familiar? We’ll get to the location in a moment. The data center would be powered by its own on-site gas-fired power plant complex, with 15 30-MW Mitsubishi gas turbines. Truly incredible! We have not heard of a gas-fired power plant this big in the entire country. It’s twice as big as most large gas-fired plants. Pittsylvania County is where the Mountain Valley Pipeline (MVP) terminates and connects with Williams’ Transco pipeline. Both MVP and Transco flow Marcellus/Utica molecules. This massive data center will use enormous amounts of M-U molecules if built. It feels like Christmas came early!
EPA Approves TX Oil Port. WOW! Biden administration recommends approval of Texas oil port. Bloomberg. The Environmental Protection Agency has given its blessing for a proposed Texas oil port capable of exporting 1 million barrels of oil a day, even as the terminals face increasing scrutiny from environmental activists, progressive lawmakers and local officials.
U.S. Ethane Production Record. U.S. ethane production reached a record 3.0 million barrels per day in May 2024. U.S. Energy Information Administration. U.S. ethane production increased steadily over the last decade and reached a record of 3.0 million barrels per day (b/d) in May 2024. Ethane production in the first half of 2024 (1H24) averaged a record 2.8 million b/d, according to data from our Petroleum Supply Monthly. The increase was driven by more natural gas and ethane production in the Permian Basin.
Blackstone May Buy Stake in EQT Pipelines. Exclusive: Blackstone in talks to buy US pipeline stakes from EQT for $3.5 billion, sources say. Reuters. Private equity firm Blackstone is in advanced talks to acquire minority stakes in the interstate natural gas pipelines owned by EQT Corp for about $3.5 billion, people familiar with the matter said on Friday. If the talks are successful, the deal would help the natural gas producer slash the debt pile it accumulated from its acquisition of pipeline operator Equitrans Midstream earlier this year.
Equinor Buys EQT’s Northern Marcellus Assets. Norway’s Equinor will pay US$1.25 billion for the rest of US producer EQT’s non-operated interest in natural gas assets in the northern Marcellus shale in Pennsylvania, the companies said Tuesday.
The deal, expected to close by the end of this year, will increase Equinor’s position in the Marcellus assets from 25.7% to 40.7%. The assets are operated by Expand Energy, the company created after the Chesapeake Energy-Southwestern Energy merger.
Equinor had previously grown its share in the assets earlier this year when it struck a deal to swap its US onshore operated assets in the Marcellus and Utica shales in Ohio for a portion of EQT’s non-operated interest in the northern Marcellus formation.
The latest deal will hand the rest of EQT’s interest in the northern Marcellus assets to Equinor.
CNX 3rd Qtr. Drilling in the Utica in PA. Last week, CNX Resources issued its third quarter 2024 update. The company made $65.5 million in profit for the quarter, compared with a profit of $21.3 million in 3Q23 (more than doubling net income). Production was 134.5 Bcfe (billion cubic feet equivalent) in 3Q24 — which works out to 1.46 Bcfe/d — down from 143.4 Bcfe last year (a drop of 6%). Drilling all but stopped during 3Q. The company drilled just three new wells, all of them in the Utica in central PA.
“No” to New Permian Pipelines. New Permian oil pipelines unlikely to be built, say top operators. Reuters. Top executives of two U.S. energy pipeline operators on Thursday ruled out building new crude oil lines to move volumes out of the Permian shale field in West Texas because of tepid volume growth and difficulties constructing new lines. A wave of consolidation in the top U.S. shale field has concentrated output in the hands of companies that are promising to restrain output so as not to crash prices by over-producing.
US LNG Exports to Rise at Smallest Pace Since 2016. Reuters. U.S. liquefied natural gas exports this year will rise about 2%, analysts estimate, the smallest annual increase since 2016 when the first big U.S. LNG export plant opened, launching a boom that drove the country’s producers to the top of world gas exporters. Slower gains reflect delays and production outages and the absence of a new facility since March 2022 when Venture Global LNG’s started up its Calcasieu Pass, Louisiana, project. This year’s 2% increase in export volumes, to 12.1 billion cubic feet per day, is down from 12% last year and the average growth rate of 43% between 2018 and 2022, according to data from the U.S. Energy Information Administration.
The U.S. LNG Export Boom Faces Challenges. Oil Price. The U.S. LNG export industry has recently hit several stumbling blocks. And who will be America’s president in the next four years may not even be the biggest. Litigation at court from environmental groups, a contractor bankruptcy, and President Joe Biden’s permit pause have combined to increase uncertainty for U.S. LNG project developers and exporters this decade.
ConocoPhillips May Sell in the Permian. ConocoPhillips explores sale of Permian shale assets worth over $1 billion, sources say. Reuters. ConocoPhillips is exploring a sale of some of its shale operations in the Permian Basin worth more than $1 billion, two years after an unsuccessful attempt to find a buyer for the same assets, people familiar with the matter said on Wednesday. The Houston, Texas-based oil and gas producer is looking to shed some non-core assets as it prepares to close its $22.5 billion takeover of Marathon Oil by year end. It is set to assume about $5.4 billion of Marathon’s debt as part of the deal, and has outlined plans to raise $2 billion through asset sales.
Coterra Does LNG Deal. Yesterday, two European companies announced separate deals for Coterra Energy to provide Marcellus natural gas to an unidentified LNG export facility that will liquefy and sell it to them. One company was commodities trader Vitol (based in Switzerland) and the other utility giant Centrica (based in the U.K.). Both deals were for 100 MMcf/d (or 100,000 MMBtus) each. The Vitol deal is for 11 years, and the Centrica deal is for 10 years. Combined, it represents 1.4 million tonnes per annum (MTPA) of northeast Pennsylvania Marcellus natural gas heading to other European and Asian countries.
PA Permits October 21, to October 31, 2024
County Township E&P Companies
1. Beaver Economy Boro PennEnergy
2. Beaver Economy Boro PennEnergy
3. Lycoming Plunkett’s Creek PA Gen Energy
4. Lycoming Upper Fairfield PA Gen Energy
5. Susquehanna Auburn Coterra
6. Susquehanna Auburn Coterra
7. Westmoreland Derry XPR
8. Wyoming Braintrim Chesapeake
9. Wyoming Braintrim Chesapeake
10. Wyoming Braintrim Chesapeake
11. Wyoming Braintrim Chesapeake
12. Wyoming Braintrim Chesapeake
OH October 13 to October 19, 2024
County Township E&P Companies
1. No New Permits
WV Permits October 21, to October 25, 2024
1. Marion EQT
2. Marion EQT
3. Marion EQT
4. Marion EQT
5. Marion EQT
6. Marion EQT
7. Marion EQT
8. Marion EQT
9. Marion EQT
