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Expo/Industry events for the next few months

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 

FERC Confirmation Hearings More Updates.  The Senate Committee on Energy and Natural Resources today held a business meeting to advance four nominees to the Senate floor: David Bernhardt to be Deputy Secretary of the Interior, Dan Brouillette to be Deputy Secretary of Energy, and Neil Chatterjee and Robert Powelson to be Members of the Federal Energy Regulatory Commission (FERC).

“Secretary Zinke and Secretary Perry need their deputies in place to help them set strategic direction and run their departments on a day-to-day basis. At more than four months and counting, it is also critical to restore a working quorum at FERC as soon as possible,” Murkowski said. “I recognize that calendar space is limited, but is hopeful that we will be able to confirm all four of these nominees during this work period.”

The committee favorably reported Bernhardt by a vote of 14-9, Brouillette by a vote of 17-6, Chatterjee by a vote of 20-3, and Powelson by a vote of 20-3.

Murkowski supported all four nominations, which now heads to the Senate floor for confirmation.

Murkowski is chairman of the Senate Committee on Energy and Natural Resources.

PTTGC Update.  It looks like the announcement may be getting closer.  I’ve heard that PTT has secured financing which is less than had been initially sought.  Consequently, the cracker plant may be little smaller than originally planned.  (RUMOR)

Utica Midstream Highlights – More Rigs.  One theme of the seminar was the feeling by most midstream companies that there is not enough production in the Appalachian Basin to meet the demand.  Many project that 40 Bcfd will be needed in production by 2022. To meet that demand, the number of rigs in the Appalachian Basin would have to increase from 65 to 180.  We’ll have to see to how future production demand is met.

Utica Midstream Report.   The stalled NEXUS Gas Transmission project still could be completed before year’s end, but federal regulators would have to approve the pipeline soon to meet that target.

“We’ve got that race car sitting there revved and all ready to go, we just need that go ahead,” NEXUS President James Grech said Wednesday during the Utica Capital Midstream Seminar at Walsh University.

NEXUS was one of several pipeline projects discussed at the conference hosted by the Canton Regional Chamber of Commerce and ShaleDirectories.com.

NEXUS is a proposed 36-inch-diameter interstate natural gas pipeline. The $2.1 billion project would cross eastern and northern Stark County and the city of Green in Summit County and carry natural gas from the Utica and Marcellus shales to users in Ohio, Michigan, Canada and other Midwestern markets.

Detroit-based DTE Energy and Spectra Energy, which merged this year, with Calgary-based Enbridge, are partners in the project.

NEXUS had expected the Federal Energy Regulatory Commission to approve the project earlier this year and to have the pipeline in service during the fourth quarter.

That didn’t happen before one of FERC’s three commissioners resigned in February, leaving the commission without a quorum and stalling the project. The term of another commissioner ends June 30.

“We were waiting until the last minute to see if we got our certificate, and obviously we didn’t get it, but we feel pretty good about our prospects once FERC has its quorum back in getting approved,” Grech said.

That quorum could arrive soon.

On Tuesday, the Senate Energy and Natural Resources Committee sent President Donald J. Trump’s two FERC nominees — Robert Powelson and Neil Chatterjee — to the full Senate for a vote.

Powelson is a member of the Pennsylvania Public Utility Commission. Chatterjee is a senior energy adviser to Senate Majority Leader Mitch McConnell, R-Kentucky.

The Coalition to Reroute NEXUS (CORN) landowner group, with support from the city of Green, took FERC and NEXUS to court in May, asking a federal judge to bar FERC from approving the project.

CORN alleged that FERC’s review of the project was arbitrary and failed to account for safety issues. The case is pending.

NEXUS also would need to find workers to build the pipeline at a time when other projects, such as Energy Transfer’s Rover Pipeline are under construction.

Grech said contractors have assured NEXUS they will have the needed workers to build the pipeline.

Project spokesman Adam Parker said NEXUS would follow all safety and environmental guidelines in trying to meet the year-end target.

“We pride ourselves on that and feel it sets us apart from others,” Parker said.

Conference attendees also heard an update on Kinder Morgan’s Utopia Pipeline.

Utopia is a 12-inch-diameter pipeline designed to carry natural gas liquids, such as ethane or an ethane-propane mix, roughly 215 miles from Harrison County, OH to Fulton County for shipment to Canada.

The $540 million pipeline is under construction and should be in service in January, said Allen Fore, Kinder Morgan’s vice president of public affairs.

Utopia’s route crosses southwestern Stark County and parts of Tuscarawas and Carroll counties.

Cabot’s $1 Billion in Royalties.  During an update to the community and elected officials, Cabot Oil & Gas Corporation announced several major milestones from its past decade of operations in the region. This ten-year look-back included the announcement that to date, more than $1 billion has been paid in royalties to landowners in Susquehanna and Wyoming Counties and nearly $500,000,000 has been paid out in signing bonuses since Cabot commenced operations in 2006.

"Cabot is pleased to announce that we have paid our landowners over a billion dollars in royalties,” said George Stark, Director of External Affairs for Cabot. “We have seen firsthand how these dollars have improved the community overall. We look forward to our continued partnership with our community leaders. Let’s hope we can do this again, but in less than 10 years."

Several regional legislators applauded the announcement.

"A billion dollars flowing into our rural economy is an extremely big deal,” said Representative Jonathan Fritz (R-111). “Being pro-jobs and pro-business, I extend my appreciation to Cabot Oil & Gas. The energy industry has been a blessing to our area and I look forward to Cabot's continued success and the widespread economic benefit that comes along with it."

"Royalties from natural gas development have provided additional income during tough economic times," said Senator Gene Yaw (R-23). "Whether it's expanding a farming operation, supporting area businesses or simply putting money away for a child's college fund, royalties have greatly benefited rural Pennsylvanians. Further, no other industry has had such a dynamic impact on rural Pennsylvania. I am pleased to hear that Cabot is making good on their commitment to royalty owners in Pennsylvania with over $1 billion in payments and hope that with improved market conditions and added infrastructure development these monies will increase for leaseholders across the state."

U.S. Remains #1 in Oil and NatGas.  The U.S. remained the world's top producer of petroleum and natural gas hydrocarbons in 2016 for the fifth straight year despite production declines for both petroleum and natural gas compared to 2015 levels, the Energy Information Administration reports.

America has been the world's top producer of natural gas since 2009, when U.S. natural gas production surpassed that of Russia, and it has been the world's top producer of petroleum hydrocarbons since 2013, when its production exceeded Saudi Arabia’s.

Total petroleum production is made up of several different types of liquids, including crude oil and lease condensate, tight oil, extra-heavy oil, and bitumen. In addition, various processes produce natural gas plant liquids (NGPL), biofuels, and refinery processing gain, among other liquid fuels.  Another part of the process produces by-products, one being ethane.  By virtue of having the ethane in the northeast attracts crackers plants such as the Shell plant now under construction.  With that comes additional jobs and other ancillary businesses.

In the U.S., crude oil and lease condensate accounted for roughly 60% of total petroleum hydrocarbon production in 2016. In Saudi Arabia and Russia, this share is much greater, as those countries produce lesser amounts of natural gas plant liquids, and they also have much smaller volumes of refinery gain and biofuels production.

U.S. petroleum production fell by 300,000 barrels per day (BPD) in 2016, a result of relatively low oil prices, Kallanish Energy finds.

Dry NatGas Reverses Decline.  U.S. dry natural gas production is forecast to average 73.3 billion cubic feet per day (Bcf/d) in 2017, a 1.0 Bcf/d increase from the 2016 level, the Energy Information Administration’s Short-Term Energy Outlook (STEO) projects.

This forecast increase would reverse a 2016 production decline — the first annual decline since 2005. Natural gas production in 2018 is forecast to be 3.3 Bcf/d above the 2017 level, Kallanish Energy finds.

In May, the average Henry Hub natural gas spot price was $3.15 per million British thermal units (MMBtu), 5 cents/MMBtu higher than in April.

New natural gas export capabilities and growing domestic natural gas consumption contribute to the forecast Henry Hub natural gas spot price rising from an average of $3.16/MMBtu in 2017, to $3.41/MMBtu in 2018, STEO reports.

Cardinal Midstream to Pursue Midstream Opportunities.  Cardinal Midstream plans to expand its natural gas-gathering operations in the Utica Shale, in Pennsylvania’s Tioga County, Kallanish Energy finds.

That announcement came after the company and EnCap Flatrock Midstream formed Cardinal Midstream III with a $250 million equity commitment from EnCap.

Cardinal III intends to pursue midstream opportunities across North America, the companies said, in a joint statement.

Cardinal II “has established a solid platform that is well positioned for growth,” said Cardinal Midstream chairman and CEO Doug Dormer, in a statement. “We are excited about the prospects to grow our gathering footprint in Tioga County, PA, as well as the opportunity to enter other basins across the country.”

“Cardinal has a great track record, driven by a deep understanding of producer needs and how to safely execute on them with speed and operational excellence,” said EnCap Flatrock managing partner and founder Billy Lemmons, in the statement.

Last March, Cardinal Midstream II closed on the sale of its interest in Cardinal PA Holdings LLC to a subsidiary of Energy Transfer Partners.

Cardinal PA provides natural gas and condensate gathering, compression and condensate stabilization in the Marcellus Shale in southwest Pennsylvania.

Cardinal II continues to own and operate a natural gas-gathering system in the dry gas Utica Shale in northcentral Pennsylvania.

Cardinal is based in Dallas and EnCap Flatrock is based in San Antonio.

Cuomo Loves Fracked NatGas.  In May MDN told you that New York Gov. Andrew Cuomo had announced plans to construct a new “state-of-the-art, locally-sourced mini-power grid” that will connect to the statewide electric grid but will also be able to operate independently, to power the Empire State Plaza in Albany–a complex of buildings in downtown Albany housing much of New York State government (see NY Gov Cuomo Building New Fracked Gas Elec Plant to Power Albany!). The energy-efficient microgrid will supply 90% of the power for the 98-acre downtown Albany complex, and is expected to save the Plaza more than $2.7 million in annual energy costs. The project will also remove more than 25,600 tons of greenhouse gases from the atmosphere each year – the equivalent of taking more than 4,900 cars off the road–supporting New York’s goal to reduce emissions by 40 percent by 2030 from 1990 levels. In an emergency, it can power a shelter for Albany residents. So what will power the magical microgrid and deliver this nirvana of cheaper electricity AND reduce so-called greenhouse gas emissions at the same time? Is it a huge solar array erected in Albany or in the nearby countryside? Nope–the sun doesn’t always shine. Must be a wind farm, maybe off the coast of Long Island? Nope. The wind doesn’t always blow. The magic fuel for the magic microgrid is you guessed it–fracked shale gas from the Marcellus. Here’s something that will leave you (as it did us), speechless: Gov. Cuomo recently handed out $1 million each for 11 more microgrid projects–as seed money to get them going (making them eligible for more money from the NY Green Bank). And yes, each and everyone one of those 11 microgrids will be powered primarily by fracked shale gas. If that doesn’t beat all…

U.S. LNG to Poland.  The first-ever tanker carrying liquefied natural gas from the U.S. to Poland arrived Thursday as part of the country's efforts to diversify its energy sources and cut dependence on pipeline deliveries from Russia.

It was the first delivery of U.S. gas to eastern and northern Europe, establishing new energy ties between the region and North America, Kallanish Energy reports.

Last year, Poland opened its first terminal for LNG in Swinoujscie, on the Baltic Sea coast, to be able to receive gas from distant suppliers like the U.S. or Qatar, which has already made some deliveries.

During a ceremony welcoming the U. S. tanker, Prime Minister Beata Szydlo said it was a historic moment that improves the region's energy security. She urged the U.S. to develop "further and more efficient cooperation," The Associated Press reported.

The region is trying to cut its reliance on Russia, which has occasionally used its gas exports to exert political pressure. It is planning to bring in gas from the North Sea and also to boost its own production.

The U.S. State Department said in a statement LNG exports "support American jobs, lower energy prices for our partners abroad, and contribute to Europe's energy security goals using a reliable, market based supplier."

Universal continues hiring and may need as many as 6000 total new hires, (RUMOR)  

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Rig Count 

  • Baker Hughes Rig Count the week of June 9, 2017
     
  • PA     
    • Marcellus 34 up 1
  • Ohio 
    • Utica 27 up 2
  • WV 
    • Marcellus 13 up 2
  • TX
    • Eagle Ford 84 down 2
  • TX
    • Permian Basin – 368 up 4
  • ND
    • Williston – 46 unchanged
  • CO
    • Niobrara – 27 down 1
       
  • TOTAL U.S. Land Rig Count 903 up 13

PA Permits June 1, to June 8, 2017

       County               Township           E&P Companies

1.    Beaver                New Sewickley     PennEnergy
2.    Bradford              Pike                    Reposol
3.    Bradford              Pike                    Reposol
4.    Bradford              Pike                    Reposol
5.    Bradford              Standing Stone    SWN
6.    Bradford              Standing Stone    SWN
7.    Lycoming            Gamble               PA Gen Energy
8.    Lycoming            Plunkets Creek    PA Gen Energy

OH Permits for week June 3, 2017

        County                Township             E&P Companies

1.    Columbiana            Elk Run                Hilcorp
2.    Columbiana            Elk Run                Hilcorp
3.    Columbiana            Elk Run                Hilcorp

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

DUG Technology