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NewsLetters

Expo/Industry events for the next few months

Ohio Valley Oil & Gas Regional Expo
April 25-26, 2017
Belmont County Carnes Center
St. Clairsville, OH
http://www.ohiovalleyoilgasexpo.com/ 

Utica Midstream
June 7, 2017
Walsh University
North Canton, OH
http://www.uticasummit.com/  

Appalachian Storage Hub Conference
June 15, 2017
Hilton Garden Inn
Southpointe, PA
http://www.appastorage.com/ 

DUG East
June 20-22
David L. Lawrence Convention Center
Pittsburgh, PA
http://www.dugeast.com/  

For other events visit http://www.shaledirectories.com/site/oil-and-gas-expo-information.html

Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, Bakken and Niobrara Shale Plays 

1st Qtr. Appalachian Basin Review.  As we close the quarter, let’s take a look at the trends we are seeing.

  • Rigs – Jan to March increase; PA 32 to 33; OH 19 to 21 and WV 8 to 11. Not much movement here.
  • Permits – OH is issuing many more permit than PA; OH 83 vs. PA 64; WV’s weekly permitting is not readily available.
  • Pipelines:
    • PA – Mariner East 2 and 2X have begun construction; Atlantic Sunrise is waiting for PA permits.  Williams hopes to start construction mid-summer 
    • Rover has begun construction – 
    • Lexus delayed construction probably will not start until next year
    • Mountain Valley is delayed 
  • Cracker plants:
    • Shell’s construction is moving as fast as possible
    • PTTGC’s decision is delayed until 4th Qtr. 2017.  The Thai’s are still negotiating with possible partners on the cracker.
    • Marcellus Utica Midstream speakers said that the Appalachian Basin can hold 4 to 6 cracker plants.
    • IHS Markit just completed a study for the state of PA which said that PA can support 4 cracker plants.
  • Storage facilities are necessary for the cracker plants to operate.  I’ve heard from a number of people in the know that the cracker plants cannot operate without underground storage.  Mountaineer NGL has a head start on everyone.
  • The Appalachian Basin will only realize its true potential if there is enough above and below ground storage.
  • 2017 looks like it’s going to be a good year, but the lack of workers could be problematic. 

Badlands Group Moving in on PTTGC? RUMOR? Below is an article that appeared in Shale Directories in September 2015.  It now appears that the Badlands group is looking to build a cracker in Dilles Bottom in Belmont County, OH.  For those of you who are not current on OH geography, like me, that is the same location as the proposed PTTGC cracker plant.  This rumor begs more questions.

  • Is the Badlands Group looking to partner with PTTGC?
  • Will the Badlands Group takeover the site if PTTGC walks away?

I heard this rumor at our Utica Upstream seminar this past Wednesday. (RUMOR)

Badlands advances proposed North Dakota processing plant
 
Continental Resources Inc., Oklahoma City, has entered a deal with Badlands NGLs LLC, Denver, for the long-term supply of ethane to Badlands’ proposed polyethylene (PE) production plant to be built in North Dakota.

Badlands, which announced the deal on Sept. 25, disclosed neither a value of the contract nor the contractual volume of ethane that Continental has committed to supply from its production operations in North Dakota’s Williston basin.

Details regarding the duration of the supply contract also remained unavailable.

Badlands did confirm, however, that it has decided to expand the nameplate production capacity of the PE plant to a proposed 2 million tons/year from its originally planned 1.53 million-tpy capacity as a result of ongoing discussion with North Dakota and Western Canadian NGL-sourced ethane feedstock suppliers.

William Jeffry Gilliam, Badlands’ chief executive officer, said the company has signed licensing agreements with key technology partners over the last several weeks, but a precise timeline for the project’s completion has yet to be revealed.

First announced last year, the PE plant is intended to process abundant supplies of ethane available from the Williston basin, Badlands said in an Oct. 13, 2014, release.

At the time, the company already had made agreements with two strategic partners for the plant’s development.

Spain’s Tecnicas Reunidas SA, Madrid, and Vinmar Projects LLC, a subsidiary of Vinmar International Ltd., Houston, were due to complete a preliminary engineering analysis for the proposed plant, which was to include technology evaluations as well as ethane-to-ethylene and ethylene-to-PE licensor selection, ethane aggregation engineering and planning, and final site selection, by yearend 2014, Badlands said.

Badlands also signed a mutually binding, product offtake memorandum of understanding with Vinmar, which agreed to take 100% of PE output produced by the proposed project for 15 years, the company said.

As of October 2014, the project required a capital investment of about $4 billion to complete, Badlands said.

Multibillion-dollar Permian Pipeline.  NAmerico Partners is proposing a multibillion-dollar pipeline to flow natural gas from the Permian Basin in West Texas, to the Gulf Coast, the company told Reuters Monday.

The pipeline, one of at least three being considered to ease a looming gas glut in the Permian, would link to existing lines, including those that export gas to Mexico, and to a Cheniere Energy liquefied natural gas export facility under construction in Corpus Christi, Texas.

The pipeline would be the first major project by NAmerico Partners, founded two years ago in Houston, Kallanish Energy learns. The company is backed by private equity fund Cresta Energy, whose management includes former executives from Regency Energy Partners, an energy infrastructure company bought by Energy Transfer Partners in 2015.

NAmerico managing partner Jeff Welch told Reuters that with discussions with prospective, unnamed shippers at an advanced stage, the developer is confident the so-called Pecos Trail Pipeline will be built and begin operations in 2019.

NAmerico's 468-mile Pecos Trail line would transport some 1.85 billion cubic feet per day (Bcf/d) of natural gas to Corpus Christi.

Last month, Kinder Morgan revealed a plan to build a 430-mile pipeline traveling a similar route, with a 1.7 Bcf/d capacity. And pipeline operator Enterprise Products Partners previously has said it may build a gas line to Corpus Christi from the Permian.

Analysts said the potential for new supplies could allow multiple projects to proceed.

Demand for natural gas in south Texas and the Corpus Christi area is expected to soar in coming years. Cheniere Energy has said it has customers for 8.42 million metric tons annually of LNG from its site, which is expected to begin operations around 2018.

Partners ExxonMobil and SABIC (Saudi Basic Industries Corp.), an arm of Saudi Aramco, the state-owned energy company, also have proposed building a multibillion-dollar chemical/plastics plant outside Corpus Christi. That plant would use natural gas as a raw material.

Gas production in the Permian is projected to reach 7.9 Bcf/d in April, up from 5.4 bcf/d the same month three years ago, according to the Energy Information Administration.

Hurray for Cabot!!  Dimock, a tiny township in Northeast, Susquehanna County, Pennsylvania that more than five years ago became the face of protests against hydraulic fracturing and drilling in general, is back in the news.

A federal judge last Friday overruled a jury that awarded $4.24 million to two Pennsylvania families who claimed their well water was contaminated by gas drilling, saying the award bore little or no relationship to the evidence presented at the 2016 trial.

U.S. Magistrate Judge Martin Carlson of the Middle District of Pennsylvania ordered a new trial of the case brought by the families in Dimock, who have contended their water had been contaminated since 2008.

Carlson, in his 58-page opinion released Friday, reversed the award against Cabot Oil & Gas, which the jury determined had been negligent in its drilling in Dimock, Kallanish Energy reports.

“Cabot felt confident that once a thorough review of the overwhelming scientific evidence and a full legal analysis of the conduct of the plaintiff’s counsel was conducted, the flaws in the verdict would be understood,” company spokesman George Stark said, in a statement.

The judge said the evidence presented during the three-week trial in March 2016, was often discredited or rebutted, and was “notably lacking” in respect to damages.

He said the award “bore no discernible relationship” to the evidence, which he said was “at best limited.”

Even if the court were to find that the jury’s verdict of liability should stand, the damages could not withstand “even passing scrutiny,” he said.

“The Court is constrained to find that a new trial is not only justified, but required,” the judge wrote. “Accordingly, Cabot’s motion will be granted in part, the verdict will be set aside, and a new trial will be ordered.”

Saudi’s Cashing Out.  

When I told a friend a mine who is Wall Street trader about the Saudi Aramco IPO, he said with hesitating, “They’re cashing out.  They are running out of oil.”  

Another hypothesis is that the Saudi’s are afraid the world is moving so quickly to renewables that they will never be able to pump all the oil that’s underground. 

We’ll never really know, but it’s interesting.

Saudi Arabia's state-owned oil giant Saudi Aramco has formally appointed JPMorgan Chase, Morgan Stanley and HSBC as international financial advisers for its initial public offering, sources familiar with the matter told Reuters.

The trio join Moelis & Co and Evercore, previously appointed independent financial advisers, one source said of what is expected to be the world's biggest-ever share sale.

The Saudi authorities look to sell up to 5% of Aramco, listing the shares in Riyadh and at least one foreign exchange to raise cash for investment in new industries in a bid to diversify away from oil exports.

Aramco has appointed Saudi Arabia's NCB Capital and Samba Capital as local advisers, the sources told Reuters.

One source said all the banks had now been "on boarded,” meaning each had been fully briefed on the IPO process, and had been tasked with work that includes helping ensure systems on the Saudi stock exchange, the Tadawul, can be integrated with a foreign exchange.

Saudi Aramco has yet to pick a foreign site to list, Kallanish Energy reports.

Saudi Aramco told Reuters it did not respond to rumor or speculation. Officials at NCB Capital were not immediately available and other banks have previously declined to comment on their role.

OH’s Next NatGas-Fired Power Plant.  Ohio may be getting another natural gas-fired power plant, Kallanish Energy reports.

The site of a former aluminum smelter in Monroe County is where Ohio River Partners Shareholder wants to build the $500 million, 485-megawatt plant, according to the Marietta Times newspaper.

The location, now known as Center Port Terminal on the Ohio River, was the former site of an Ormet Corp. plant that employed 1,000 workers. That plant was closed in late 2013, after Ohio state regulators rejected a plan to reduce electric costs. The company filed for bankruptcy.

The site was purchased for $25.25 million in late 2014 by Niagara Worldwide, now called Hannibal Development.

Construction on the power plant could begin in late 2017, if needed permits are acquired. The plant could begin operations by late 2020. The plant at Hannibal would employ 300 to 400 workers during construction and would create 20 full-time jobs.

Ohio has roughly a dozen gas-fired power plants under construction or in development. The plants are to be fueled by natural gas from the Utica and Marcellus Shale plays in the Appalachian Basin.

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Rig Count

  • Baker Hughes Rig Count the week of April 7, 2017
     
  • PA
    • Marcellus 33 unchanged
  • Ohio 
    • Utica 21 unchanged
  • WV 
    • Marcellus 12 up 1
  • TX
    • Eagle Ford 72 down 1
  • TX & NM
    • Permian Basin – 331 up 12
  • ND
    • Williston – 42 unchanged
  • CO
    • Niobrara – 23 unchanged
       
  • TOTAL U.S. Land Rig Count 813 up 15

PA Permits March 30, to April 6, 2017

       County        Township    E&P Companies

1.    Allegheny     Forward        EQT
2.    Butler          Center          Rex
3.    Greene        Center          EQT
4.    Greene        Morris          EQT
5.    Greene        Morris          EQT
6.    Greene        Morris          EQT
7.    Greene        Morris          EQT
8.    Greene        Morris          EQT
9.    Greene        Morris          EQT
10.    Greene        Morris        EQT

OH Permits for week April 1, 2017

        County       Township    E&P Companies

1.    Belmont       Smith          Rice
2.    Belmont       Smith          Rice
3.    Belmont       Smith          Rice
4.    Belmont       Smith          Rice
5.    Belmont       Smith          Rice
6.    Guernsey    Millwood       Eclipse Resources
7.    Guernsey    Millwood       Eclipse Resources
8.    Monroe        Malaga        Antero
9.    Monroe        Malaga        Antero
10.  Monroe        Malaga        Antero
11.  Monroe        Malaga        Antero
12.  Monroe        Malaga       Antero
13.  Monroe        Malaga       Antero

Joe Barone jbarone@shaledirectories.com 610.764.1232
Vera Anderson vera@shaledirectories.com 570.337.7149

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