Shale Directories’ Facts & Rumors newsletter is providing some good news for the oil and gas industry in the early 2017.
The Trump effect which includes his naming of Rick Perry as Secretary of Energy will profound impact on the industry. Trump wants to be known as the “Jobs President.” There is no better industry than the oil and gas industry for creating high paying jobs throughout the supply chain.
Last week, Shale Directories reported that FERC approved 3 pipelines.
- Atlantic Sunrise Pipeline. The Atlantic Sunrise is a $3 billion expansion of the Transco system. It’s designed to move Marcellus Shale gas from Susquehanna County in northeastern Pennsylvania as far south as Alabama and to the Cove Point export terminal on the Chesapeake Bay.
“We determined that construction and operation of the project would result in some adverse environmental impacts,” FERC staff writes. “But impacts would be reduced to less-than-significant levels with the implementation of Transco’s proposed and our recommended mitigation measures.
- Nexus Pipeline. The Federal Energy Regulatory Commission has given Spectra Energy approval to proceed with three projects on its Texas Eastern Transmission system to move natural gas from the Utica and Marcellus Shale plays to market.
- Leidy South Project. The Federal Energy Regulatory Commission on Tuesday granted approval for construction to begin on Dominion Transmission’s Leidy South Project, Kallanish Energy reports.
This week Facts & Rumors will have some positive news from the Energy Information Agency (EIA) with its forecasts for NatGas price and production increases. Coupled with the favorable news from EIA, Wood Mackenzie has good news about oil projects.
- NatGas Pricing Up. The Henry Hub natural gas spot price averaged $2.51 per million Btu (MMBtu) in 2016, and is expected to increase to an average $3.55/MMBtu in 2017, then average $3.73/MMBtu in 2018.
The Energy Information Administration estimates dry natural gas production averaged 72.4 billion cubic feet per day (Bcf/d) in 2016, down 1.8 Bcf/d (2.4%) from 2015 — the first time annual average natural gas production has fallen since 2005.
Production of marketed natural gas fell 1.8% in 2016 from 2015 levels, Kallanish Energy finds. The higher decline rate for dry natural gas production compared with marketed production reflects higher rates of ethane recovery, according to EIA’s just-released Short-Term Energy Outlook (STEO).
- NatGas Production Increasing. Dry natural gas production is forecast to increase in 2017 and 2018, rising by 1.4 Bcf/d (2.0%), and by 2.8 Bcf/d (3.8%), respectively. The return to increasing production reflects a forecast of higher Henry Hub natural gas spot prices, as well as pipeline buildout, particularly in the Marcellus and Utica Shale plays.
- Oil Projects Up. The oil industry in 2017 finally shakes off the effects of the worst downturn in decades, as companies more than double project approvals and increase exploration spending for the first time in three years, analytics/consulting firm Wood Mackenzie projects.
Companies will give the go-ahead to more than 20 oil and gas fields for development, compared with nine in 2016, the Edinburgh, Scotland-based Wood Mackenzie said in a report Wednesday.
Producers, led by U.S. shale operators, will also increase spending on exploring for new oil and developing existing projects by 3%, to $450 billion following two years of cuts.
“2017 will demonstrate how efficient the oil and gas industry has become; showing projects in better shape all round,” said Malcolm Dickson, a principal analyst for Upstream Oil and Gas for Wood Mackenzie.