TorcUP

NewsLetters

Expo/Industry events for the next few months

Utica Summit
October 11, 2017
Walsh University
North Canton, OH
http://www.uticasummit.com/  
 
Midstream PA 2017
October 19, 2017
Penn Stater Conference Center
State College, PA
http://midstreampa.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 

 
Chevron Building Mega Well Pads.  I have heard that Chevron is building two mega well pads in Marshall County, WV around Moundsville.  Chevron is going to drill 35 wells per well site.  That’s 70 wells from two well pads.  It’s almost unfathomable.  (RUMOR)
 
For those of you who are familiar with WV geography, Moundsville is right across the Ohio River from the site of the PPTGC cracker plant site.
 
Appeals Court Overrules Cuomo.  Thank you MDN.  An Appeals Court decision issued Friday has (in our opinion) HUGE ramifications for New York State and the Dept. of Environmental Conservation (DEC) that has been corrupted by political influence from Gov. Andrew Cuomo. It also has ramifications in other states with overactive environmental agencies too. It is hard for us to overstate how important we think this decision is. The NY DEC has been corrupted and politicized by one of the most corrupt governors New York has ever had: Andrew Cuomo. 
 
The Cuomo DEC has unilaterally decided not to issue 401 water crossing permits for several federally-authorized pipeline projects, including Williams’ Constitution Pipeline, NFG’s Northern Access Pipeline, and a teeny tiny 9-mile pipeline Millennium wants to build from their main pipeline to an under-construction NatGas-fired electric plant in Orange County, NY, called the Valley Lateral Project. Millennium took the bull by the horns early on, when it was apparent the DEC was following the same pattern of delay and then deny, suing the DEC (see Millennium Pipeline Sues Cuomo’s Corrupt DEC Over Expansion Delay). 
On Friday, the U.S. Court of Appeals for the District of Columbia Circuit dismissed the lawsuit by Millennium, which at first blush may seem like a blow. But it was the reasoning and opinion of the judges in dismissing the case that may change everything in New York. The judges said there is no case because if, as Millennium says, the DEC is denying the water permits, FERC itself has the power to jump back in and simply override NY DEC and issue the permits. This is a BOMBSHELL decision. That is, it’s a bombshell if FERC (with a soon-to-be-in-place quorum) exercises its constitutional authority…
 
The Cuomo DEC has unilaterally decided not to issue 401 water crossing permits for several federally-authorized pipeline projects, including Williams’ Constitution Pipeline, NFG’s Northern Access Pipeline, and a teeny tiny 9-mile pipeline Millennium wants to build from their main pipeline to an under-construction NatGas-fired electric plant in Orange County, NY, called the Valley Lateral Project. Millennium took the bull by the horns early on, when it was apparent the DEC was following the same pattern of delay and then deny, suing the DEC (see Millennium Pipeline Sues Cuomo’s Corrupt DEC Over Expansion Delay). 
On Friday, the U.S. Court of Appeals for the District of Columbia Circuit dismissed the lawsuit by Millennium, which at first blush may seem like a blow. But it was the reasoning and opinion of the judges in dismissing the case that may change everything in New York. The judges said there is no case because if, as Millennium says, the DEC is denying the water permits, FERC itself has the power to jump back in and simply override NY DEC and issue the permits. This is a BOMBSHELL decision. That is, it’s a bombshell if FERC (with a soon-to-be-in-place quorum) exercises its constitutional authority…
 
FERC Gives Favorable EIS to Mountain Valley Pipeline.  Thank you, MDN. As predicted, on Friday the Federal Energy Regulatory Commission (FERC) issued a favorable final Environmental Impact Statement (EIS) for the Mountain Valley Pipeline (MVP) is a $3.5 billion, 303-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. In the EIS (full copy below), FERC says: “We determined that construction and operation of the projects would result in limited adverse environmental impacts, with the exception of impacts on forest….We conclude that approval of the projects would result in some adverse environmental impacts, but the majority of these impacts would be reduced to less-than-significant levels.” While a favorable EIS all but assures the project will get approved, it is not a final approval. A final approval will come after a full quorum of voting commissioners is in place–currently there are only two of five members sitting who can vote. Anti-groups did their best to spin and smear the MVP project–all to no avail. All of their machinations, even with help from local anti-reporters, amount to nothing. This project is happening…
 
MPL Complete Harpster – Lima Pipeline.  A new 50-mile pipeline, constructed between Harpster in Wyandot County and Lima in Allen County, is operational and will supply fuel to 10 Midwestern refineries.
 
The new line is a project of Marathon Pipe Line, a subsidiary of MPLX.
On Tuesday, company officials said it took 450 contractors over one million man-hours to construct the pipeline, but the project was on time and under budget.
The pipeline, known as Harpster-Lima, passed several tests during its commissioning. The line was tested with water under high pressure, welds were X-rayed, and a “smart tool” checked the length of the pipe for dents or corrosion.
The pipeline will be controlled from MPLX’s Findlay headquarters, and will be monitored constantly for pressure and flow rate, with real-time leak protection and aerial surveillance.
 
Aerial surveillance will be used to guard against construction over the pipeline and for storm damage.
 
In all, the company will invest $500 million to create a network of pipelines to move oil and gas products found in Utica shale from wells in eastern Ohio to refineries in the Midwest and Canada. The project interconnects both existing and new pipelines.
 
Much of the output from the wells, now numbering in the thousands, has been transported by barge, truck and rail car.
 
The pipelines will connect refineries in Ohio, Michigan, Indiana and Illinois to the shale operations. With the Harpster-Lima pipeline complete, Marathon Pipe Line will now focus on extending the network to the Canadian market. That work should be completed by December.
 
The pipeline will have a capacity of 50,000 barrels per day of either condensate (a mixture of light hydrocarbon liquids, separated from hydrocarbon gases) or natural gasoline (low-octane gasoline) from the Utica shale.
A tractor-trailer can only haul 190 barrels of fuel at a time. A single barrel holds the equivalent of 42 gallons.
 
In 2015, MPLX bought MarkWest, the nation’s second-largest natural gas processor. It is the largest gas processor in the Marcellus and Utica shale plays in eastern Ohio and the northeastern U.S. The Marcellus-Utica shale is the largest in the United States and possibly the world.
 
The shale plays are expected to continue to produce fuel for the next 20 to 30 years, company officials said.
 
Trump Nominates a Dem for FERC Commissioner.  President Trump plans to nominate Senate aide Richard Glick to serve as a commissioner at the Federal Energy Regulatory Commission, Kallanish Energy learns.
 
Glick currently serves as the Democratic General Counsel for the Senate Committee on Energy and Natural Resources.
FERC has been without a quorum for months, and Trump's two Republican nominees are stalled in the Senate approval process.
 
The nomination of a Democrat to fill one of three vacant seats (counting the two previous nominees winning approval and a standing commission member resigning today) is seen as a concession to the opposition party.
 
FERC rules require no more than three commissioners from one party, so it's not out of the ordinary Trump nominated a Democrat. Media reported earlier this month Glick’s name had been floated.
 
Glick is now a Senate aide, but he is a former lobbyist for the wind industry. He was vice president of Government Affairs for Spanish firm Iberdrola's renewable energy, electric and gas utility, and natural gas storage businesses in the U.S. (now Avangrid Renewables) He previously served as a director of government affairs for PPM Energy.
 
Before that, he was director of government affairs for PacifiCorp. From 1998 to 2001, Glick served as a policy advisor to-then Secretary of Energy Bill Richardson.
 
Earlier this month, the U.S. Senate Committee on Energy and Natural Resources voted 20-3 to approve both Neil Chatterjee and Robert Powelson’s nominations to serve as FERC commissioners. The five-member agency has lacked a quorum since Commissioner Norman Bay resigned at the end of January, but even so, the full Senate has not acted on the nominations.
 
The agency today gets even more shorthanded, as Commissioner Colette Honorable, a Democratic nominee, steps down, wrapping up her term.
 
Sunoco Logistics Asks Court to Remove Protesters.  A Pennsylvania judge is expected to rule soon on a request by Sunoco Logistics (SXL) for authority to remove tree-sitting protestors from the route of its Mariner East 2 liquids pipelines, Kallanish Energy reports.
 
The company made its injunction request for tree cutting on Tuesday to Huntington County Common Pleas President Judge George Zanic.
 
Sunoco is seeking authority from the court to call in county sheriffs, if necessary, to remove the protestors from their highly complex system of ropes and tree stands along the route. Since March, protestors have been sitting in trees to protest the project.
 
The protestors are based at what has been called Camp White Pine, where Sunoco acquired a right-of-way easement through eminent domain in January 2016.
 
The eminent domain case has been appealed to and is pending before the Pennsylvania Supreme Court.
 
The $2.5 billion project would run two pipelines for about 350 miles across southern Pennsylvania. They would move up to 345,000 barrels per day of NGLs from the Utica and Marcellus Shale plays in southwest Pennsylvania to Marcus Hook near Philadelphia, where the liquids, mostly butane and propane, would be exported for sale.
 
Construction began in February, although the project has run into strong opposition in some areas. The project had been scheduled to begin service by Oct. 1.
 
The company’s Mariner East 1 Pipeline already is transporting roughly 70,000 BPD of ethane and propane to Marcus Hook.
 
The two new pipelines and the one existing pipeline will largely follow the same route, traversing 17 counties
 
Rover Asks If It Can Get Back to Work.  Rover Pipeline has asked the Federal Energy Regulatory Commission for approval to resume horizontal direction drilling (HDD) along the natural gas pipeline route across northern Ohio, Kallanish Energy reports.
 
The company and its parent firm, Texas-based Energy Transfer Partners, made the new request. The companies are seeking FERC approval to use HDD to cross streams and highways at eight locations in Stark, Ashland, Wayne, Tuscarawas and Henry counties in order to keep the project on-time.
 
The $4.2 billion Rover Pipeline is continuing HDD work at 27 sites where the drilling had been initiated before FERC halted the drilling in the wake of environmental problems at HDD sites in Ohio.
 
The pipeline has come under fire from eco-groups and the Ohio Environmental Protection Agency for HDD problems at seven sites in Ohio. One problem was drilling mud was found to be contaminated with diesel fuel.
 
The 711-mile pipeline will carry natural gas from the Marcellus and Utica Shale plays to the Midwest, Canada and the Gulf Coast. The project includes two, 42-inch lines that would move up to 3.25 billion cubic feet per day.
 
Rover Pipeline had been aiming to begin operations of Phase 1 of the pipeline in July or August, and Phase 2 by November. The company has indicated delays are likely.
 
Kinder Morgan Promoting NY and New England Pipeline.  A year after pulling the plug on Northeast Energy Direct, Tennessee Gas Pipeline is soliciting contracts for new natural gas pipeline capacity in New York and New England -- suggesting that tentative plans for new infrastructure may be in the works.
 
Tennessee, a Kinder Morgan subsidiary, announced an "open season" on May 23, seeking binding 20-year commitments for new capacity that could be in place by November 2018. The offer to anchor shippers will close on June 30.
 
The solicitation "will ultimately determine the level of customer interest for any additional gas service," said Kinder Morgan spokesman Richard Wheatley.
 
Kinder Morgan pulls the plug on Northeast Energy Direct-Tennessee Gas pipeline
 
Kinder Morgan pulls the plug on Northeast Energy Direct-Tennessee Gas pipeline
 
The pipeline would have carried natural gas from Pennsylvania to markets in New England.
 
The gas would flow from Dracut, where the Tennessee system connects with pipelines in Maine and eastern Canada, or from points on Tennessee's existing 200 Line, which traverses upstate New York and the southern tier of Massachusetts, according to the notice.
 
The new capacity would be available in Tennessee's Zone 5 and Zone 6, which serves utilities in Massachusetts, New York, Connecticut, New Hampshire and Rhode Island.
 
Tennessee "is working to address the needs of local distribution companies that are unable to fully serve their customers," Wheatley told The Republican.
 
Although the $5 billion NED pipeline has been terminated, "there is still demand for expansion capacity in the Northeast," according to Tennessee.
 
While no specific plan is on the table, capacity could be increased through three means: new compression or pipeline facilities; reserved capacity; or through building other facilities or modifications.
 
Tennessee will continue to reserve capacity "to facilitate the development of a future expansion" in the Northeast, the notice states.
 
Columbia Gas of Massachusetts imposed its moratorium on new service in Northampton and Easthampton at the end of 2014.
 
When the Houston-based firm announced in April 2016 it would abandon its Northeast Energy Direct project -- which would transport 1.2 billion daily cubic feet of Marcellus shale gas into New England -- it cited inadequate customer commitments for the new capacity.
 
"Given these market conditions, continuing to develop the project is not an acceptable use of shareholder funds," said a Kinder Morgan spokesman at the time.
 
It's not clear if market conditions have changed since then. Locally, Berkshire Gas and Columbia Gas, citing pipeline bottlenecks, maintain moratoriums on new service in parts of Western Massachusetts, but have signaled that a solution may be imminent.
 
Liberty Utilities in New Hampshire has said it plans to convert a propane-based distribution system in Keene to natural gas, and voters in Vernon, Vermont, have expressed support for a possible natural gas plant to replace the now-shuttered Vermont Yankee nuclear reactor.
 
TX Oil and Gas Production for April.  Texas crude oil production in April was 78.39 million barrels (MMBbl), according to data from the Texas Railroad Commission.
 
The "Lone Star State" also produced 605.38 billion cubic feet (Bcf) of natural gas, the state agency that oversees drilling reported.
 
The crude oil figure compares to 74.60 MMBbl originally reported, although that total has been updated to 83.15 MMBbl. The natural gas figure was originally 616.99 Bcf, updated to the current figure of 682.93 Bcf.
 
Total Texas production from May 2016 through April 2017 was 990 MMBbl of crude oil and 7.9 trillion cubic feet (Tcf) of natural gas, Kallanish Energy has learned.
 
The above data excludes condensate, which is listed separately by Texas.
 
In April 2017, Texas average crude production was 2.61 million barrels per day (MMBPD), compared to 2.49 MMBPD in April 2016.
 
April 2017 natural gas production averaged 20.18 billion cubic feet per day (Bcf/d), compared to 20.57 Bcf/d on average in April 2016.
 
Texas’ April 2017 production came from 179,422 oil wells and 92,879 natural gas wells.
 
The Top 5 counties for oil production in April were: Karnes, Midland, Dewitt, Reeves and LaSalle. The Top 5 counties for natural gas were Webb, Tarrant, Karnes, Dimmit and Panola, while the Top 5 counties for condensate were Dimmit, Culberson, Webb, Karnes and Dewitt.
 
Texas is the No. 1 drilling state in the U.S.
 
Bloomberg’s Northeast Pipeline Update.  Driven by the Marcellus and Utica shale plays, Appalachia will easily be the largest supplier of new natural gas in the U.S. In fact, Pennsylvania, West Virginia, and Ohio are the basis of the 700 trillion cubic feet of gas that our nation can produce when prices are $3 per MMBtu or less. For example, breakeven prices in the Marcellus to extract gas are now just $2 for some producers.
 
Along with mighty Texas of course, the entire nation, particularly the "we like to use gas but don't want to produce gas" huge importing states of New England (gas is 55% of power), California (gas is 60% of power), New York (gas is 57% of power), and Florida (gas is 67% of power), should be thanking Pennsylvania, West Virginia, and Ohio for supplying increasing amounts of natural gas - now our most vital source of electricity and the fuel that has led to drastic declines in CO2 emissions in the power sector, now at 30-year lows. West Virginia, yes West Virginia, has increased production this year alone by 0.7 Bcf/d to over 4.6 Bcf/d. And as acreage in the Permian basin (our second most vital gas field, after the Marcellus) becomes more expensive (here), the Northeast will become even more important for those states that "like to use but not produce."
 
Being a new major gas producing region, entire Appalachia needs more gas infrastructure to move gas to markets. We keep hearing about the pushback on pipelines, but make no mistake: the buildout is on. In charge of approving interstate pipelines, FERC in 2016 approved  almost 40 major pipeline projects across the country, covering 1,200 miles, over 14 Bcf/d of new capacity (total national consumption is around 75 Bcf/d), and over $10 billion in new investment.
 
Most of these pipelines are indeed getting approved in the eastern third of the U.S., with a concentration in the Marcellus and Utica shale states of Pennsylvania, West Virginia, and Ohio. Figure 1 illustrates an overview of FERC's certification process for nine major new pipeline projects in the region. FERC has actually lacked quorum since early-February, and as an independent agency now has two possible Republicans (Neil Chatterjee, Robert Powelson) coming on board with a Democrat (Richard Glick). Perhaps most important is the 100% subscribed, 3.25 Bcf/d Rover pipeline taking Appalachia shale gas into eastern Michigan and up into Dawn Hub in Canada. Rover is so instrumental that when it was first halted for construction by FERC on May 10 natural gas prices actually surged to 14-week highs ("A Single Pipeline's Taking U.S. Gas on a Rollercoaster Ride").
 
Pipelines are good investments. I've been fixated on the similar to Rover routed NEXUS pipeline, which has not yet been FERC approved but could have a 14% return on equity. And don't forget: due to a "pro-fossil fuel approach," midstream firms jumped in stock price after November's election (from Forbes, "Oil and Gas Industry Buoyed by Trump Election").
 
Figure 1: Nine Key Northeast Gas Midstream Projects
 
The Rover pipeline will be the largest gas pipeline ever constructed in the northeast.
 
As natural gas continues to rise in the U.S. electric power system, doubling its market share of our power generation to 35% since 2005, more infrastructure to move gas is crucial. Again, a headline not from Fox News but from The New York Times: "Shale Gas to the Climate Rescue."  That fact is clear: more natural gas is the primary reason why the U.S. power sector is UNIQUELY lowering CO2 emissions, when compared to other sectors. Check U.S. Department of Energy data here.
 
So around the country (and globally really), there is a growing push to utilize natural gas to supply reliable electricity, reduce emissions, and cleanly backup intermittent wind and solar power. Just think of New England, where gas is now nearly 60% of all electricity, but many residents remain opposed to more infrastructure more are needed to expand production. Measuring 2.6 Bcf/d at the Chandlersville-to-Clarington westbound segment, the Rockies Express pipeline is already 100% utilized.
 
But, the Northeast gas pipelines are indeed coming, perhaps more than 20 of them, with some 18-20 Bcf/d of new takeaway capacity by 2022. This will allow this once constrained gas market to continually reach even more end-users downstream and increase gas-on-gas competition. In fact, Appalachia gas will be fueling mushrooming gas power plants across the country and even distant LNG export terminals along the Gulf. Natural gas is surging toward being 50% of all U.S. generation capacity.
 
Indeed, moving forward it will be production that will need to keep up so pipes don't face under utilization rates. Low prices have producers growing within their means. For example, Range and Antero, subscribed to coming pipeline expansion projects Rover and Leach XPress, are currently producing near their full-year 2017 guidance targets, meaning that near-term output growth could be limited. The pipeline build will support multi-year growth plans for U.S. natural gas producers.
 
Shell Cracker Gets PA Wastewater Permit.  Royal Dutch Shell has been issued a required state permit for wastewater for its proposed $6 billion ethane cracker plant in Pennsylvania's Beaver County, Kallanish Energy reports.
 
The National Pollution Discharge Elimination System permit amendment was issued to Shell Chemical Appalachia by the Pennsylvania Department of Environmental Protection.
 
The permit allows for discharges of treated wastewater and storm water into the Ohio River, Poorhouse Run, and Rag Run from Shell’s proposed petrochemical complex northwest of Pittsburgh, at Monaca, Pa.
 
DEP held a public-comment period and several public hearings last year. Comments from the public were accepted at the public hearings and during public-comment periods in October and December 2016. The final modified Air Quality Plan was approved Dec. 30.
 
Ascent, Chesapeake and Gulfport Battling for Leases in Jefferson County, OH.  In early June, MDN brought you the news that officials with Ascent Resources (formerly American Energy Partners) and Chesapeake Energy said their respective companies are putting a renewed focus on Jefferson County, OH in the coming months (see Uptick in Utica Drilling Predicted for Jefferson County, OH). We have some evidence that their words are becoming actions. MDN pulled the list of requests to drill new horizontal wells in Jefferson for Jan 1 – Jun 29 from the Ohio Dept. of Natural Resources’ website. Indeed, we found 19 such permit requests, most of them from Ascent and a few from Chesapeake (see the chart below). However, before the drillbit hits the dirt, you must first lease land. An MDN reader and landowner who live in Jefferson County sent us an update on leasing activity in the county–very exciting leasing activity. Not only is Ascent active, so too is Gulfport Energy…
 
NJ DEP Rejects PennEast Pipeline.  The New Jersey Dept. of Environmental Protection (NJDEP) sent PennEast Pipeline a letter yesterday saying they have closed the application for water-crossing permits for the project–without granting those permits. In April the NJDEP temporarily rejected the permits, giving PennEast another 60 days to respond to requests for more detailed information about the project
 
U.S. LNG Going to Lithuania.  Lithuania’s state-owned gas trader, Lietuvos Duju Tiekimas (LDT), said Monday its first liquefied natural gas (LNG) cargo imported directly from the U.S. will arrive in the second half of August, Kallanish Energy learns.  
 
LDT signed the deal with a unit of Cheniere Energy, a company which is increasing competition in European gas markets and reducing Gazprom’s monopoly, especially in the Baltic States.
 
Poland received its first U.S. spot delivery of LNG from Cheniere this month and plans to increase shipments.
 
“It will be the first time Lithuania imports gas from the U.S. We opted for delivery from Cheniere after evaluating several offers for LNG,” LDT spokesman said.
 
The gas, to arrive at the LNG terminal at the Klaipeda port, will be stored at the Incukalns underground storage facility. The company didn’t disclose financial terms or cargo volume.
 
Stay connected and current on the oil & gas industry.  Receive Facts & Rumors directly to your email.  
Sign up now at http://www.shaledirectories.com/site/newsletter.html.   Be informed, be prepared.
Visit our Blog for daily updates on what’s happening in the oil & gas industry.
http://www.shaledirectories.com/blog/

Rig Count 

  • Baker Hughes Rig Count the week of June 30, 2017
    ‚Äč
  • PA
    • Marcellus 34 unchanged
  • Ohio 
    • Utica 27 unchanged
  • WV 
    • Marcellus 13 unchanged
  • TX
    • Eagle Ford 84 unchanged
  • TX
    • Permian Basin – 370 up 1
  • ND
    • Williston – 52 unchanged
  • CO
    • Niobrara – 27 down 1
       
  • TOTAL U.S. Land Rig Count 915 unchanged
PA Permits June 22, to June 29 2017
 
    County          Township          E&P Companies
 
1. Washington Amwell EQT
2. Washington Amwell EQT
3. Washington Amwell              EQT
4. Washington Amwell              EQT
5. Washington Amwell EQT
 
OH Permits for week June 24, 2017
 
    County               Township   E&P Companies
 
1. Columbian         Elk                River Hilcorp
2. Monroe Perry EM Energy OH
3. Monroe              Perry EM Energy OH
 
WV Permits for week June 19, 2017 
 
(Thank you, Keith Mauck, site publisher of GoMarcellesShale.com)
 
1. Doddridge Antero
2. Doddridge      Antero
3. Doddridge Antero
4. Doddridge Antero
5. Doddridge      Antero
6. Doddridge Antero
7. Doddridge Antero
8. Doddridge Antero
9. Doddridge     Antero
10. Pleasants   Jay-Bee O&G
11. Tyler Antero
12. Tyler Antero
13. Tyler Antero
14. Tyler Antero
15. Tyler Antero
16. Tyler Antero
17. Tyler Antero
 
Joe Barone jbarone@shaledirectories.com 610.764.1232
Vera Anderson vera@shaledirectories.com 570.337.7149
Torcup