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NewsLetters

Expo/Industry events for the next few months

Shale Insight
September 27-28, 2017
David Lawrence Center
Pittsburgh, PA
http://shaleinsight.com/ 

West Virginia Energy Expo
October 4, 2017
Morgantown, WV
http://www.wvenergyexpo.com/  

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/ 

2017 NARO Appalachia Annual Conference
October 30-31
The Greenbrier
White Sulpher Springs, WV
http://www.naro-us.org/event-2633934?CalendarViewType=0&SelectedDate=9/5/2017 

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 

ExxonMobil Cracker in the Appalachian Basin.  For the faithful readers of Facts & Rumors, we mentioned in late April that we heard rumors that ExxonMobil had a team in the Appalachian Basin exploring site for a cracker plant.  We identified this information as a RUMOR.  

Recently, we have heard from different individuals that ExxonMobil is looking at various sites for a cracker plant.  ExxonMobil was pursuing this cracker plant before Hurricane Harvey.  One has to wonder with the destruction caused by the hurricane will a cracker plant in the Appalachian Basin have a greater sense of urgency.  RUMOR.   

Cabot to Double Production.  Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Cabot Oil & Gas Corporation (NYSE:COG) (Houston, Texas), the dominant natural gas producer in the Marcellus Shale, expects to nearly double gas production there by the end of next year, assuming power plant and pipeline projects under development come online as scheduled, Scott Schroeder, the company's executive vice president and chief financial officer (CFO), told ENERCOM's The Oil & Gas Conference August 14. The conference, held in Denver, Colorado, drew over 2,000 bankers, analysts, financiers, Oil & Gas producers and a variety of professional services firms. 

Rover Volume Triples.  Phase 1A of the Rover Pipeline has been online for less than a week. As we reported on Sept. 1st, Energy Transfer planned to initially flow around 211 million cubic feet per day (MMcf/d) of Utica/Marcellus natural gas. However, according to flow data from Genscape (as reported by Natural Gas Intelligence), within a few days the pipeline ramped up and began flowing over 600 MMcf/d–triple the initial volume. The result? The commodity price at the Dominion South trading point popped. Last Friday natural gas at Dominion South was selling for an average of $1.05 per million BTUs (MMBtu). On Tuesday, the price averaged $1.38/MMBtu–a 31% increase. Behold the power of a single, partially completed pipeline!

US Methanol Now in WV. US Methanol broke ground yesterday in Institute (Kanawha County), WV for its very first methanol production plant. In August 2016 MDN was the first to share the news that US Methanol is building at least two, rumored up to five, methanol plants in the Mountain State US Methanol Building 5 Methanol Plants in WV). MDN shared a rumor (based on a reliable source) that until we disclosed it, was not public knowledge: The first methanol plant US Methanol plans to build will be in Institute, WV, and the second in Belle, WV–both in the Charleston region. Methanol plants convert natural gas into methanol, used as a chemical feedstock (or raw material) to create other things, like gasoline, antifreeze, plastic bottles–even LED and LCD screens. A number of dignitaries attended the groundbreaking in Institute, including colorful WV Governor Jim Justice. A really cool factoid: the plant will be constructed from a deconstructed methanol plant from Brazil. Usually it’s the other way around; plants get 
shipped from the U.S. to other countries. This time a plant is coming “home” to the U.S. The new plant, called Liberty One, will open in mid-2018–supplied with plenty of cheap and abundant Marcellus/Utica shale gas…

Shell Becoming Part of the Beaver County Community.  Shell Chemicals human resources manager has been appointed to fill a positon on Community College of Beaver County (CCBC) PA, board of trustees.

Brian Gelb was appointed at the most recent CCBC trustees meeting.  He works at Shell for the Pennsylvania Chemical Project, where he will ensure the planned ethane cracker plant is properly staffed.

PA #3 in NatGas Energy Suppliers.  In late July, the U.S. Energy Information Association released a new report ranking Pennsylvania third in the nation in net energy suppliers in 2015. Behind only Texas and Wyoming, two historic energy powerhouses, Pennsylvania climbed the ranks thanks to the state’s exponential growth in natural gas production. As a result of the development of resources in the Marcellus and Utica shale reserves, Pennsylvania gas production grew from 573 billion cubic feet in 2010 to a staggering 5,264 billion cubic feet in 2016. 

Pennsylvania’s transformation from natural gas importer to producer and exporter – let alone one of the most prolific in the nation – is remarkable. Prior to shale gas production, the Keystone State was a net importer of gas. Now, pipelines are being reconfigured to export gas interstate, to the Mid-Atlantic and Midwest regions. 

By 2030, Marcellus and Utica natural gas production is expected to account for over 40 percent of total U.S. production. Additionally, 40 percent of the natural gas produced is rich in natural gas liquids (NGLs), more than 70 percent of which is ethane and propane. As you know, ethane and propane are two important and high-value NGLs used in basic petrochemical production and plastics manufacturing.

Plastics production is on its way to becoming a major economic driver in Pennsylvania, as evidenced by Royal Dutch Shell’s $6-billion ethane cracker, slated for construction in Beaver County, Pa. Shell’s new location in Pennsylvania is within 700 miles of 73 percent of the nation’s polyethylene users — placing the product much closer to consumers than its competitors. 

As if the Shell plant isn’t enough of a game-changer, Pennsylvania Governor Tom Wolf, the Team Pennsylvania Foundation and DCED released a report, Prospects to Enhance Pennsylvania’s Opportunities in Petrochemical Manufacturing, which forecasts $2.7 to $3.7 billion in investments in NGL assets in Pennsylvania – along with the opportunity to attract up to four additional cracker plants and petrochemical and plastics manufacturing. This notable projection is, again, due to the abundant natural gas resources offered by the Marcellus and Utica Shale reserves. 

Pennsylvania’s plastics manufacturing has deep roots in the state, and companies can find both the resources and the talent needed to grow their business. Two of Pennsylvania’s universities offer plastics-specific undergraduate degrees, and two of the five ABET accredited plastics engineering technology programs. Penn State Behrend’s School of Engineering, and Penn College of Technology and its Plastics Innovation and Resource Center, also offer customized workforce development and training programs targeted to incumbent workers. These programs attract companies from around the globe who are looking to train their employees on the latest technologies and practices of the industry.  

All in all, Pennsylvania’s skilled workforce, tailored higher-education programs, prime location and plentiful NGL resources for plastics manufacturers – coupled with the positive IHS Markit forecast –  has the Keystone State truly poised to welcome its next era in energy.

Harvey Impacts Fractionation and Storage.  

Will this statement from Enterprise Products Partners be the first of many such statements from other companies in Mont Belvieu?  What if anything does this mean for the Appalachian Basin?

Enterprise Products Partners may curtail natural gas liquids fractionation and storage services at Mont Belvieu, Texas, Kallanish Energy learns.

The Houston-based energy infrastructure giant is evaluating the situation. It said in a statement that it “will provide a periodic update of this situation as factors warrant.”

The Mont Belvieu complex suffered only minor damage from Hurricane Harvey, the company said last week. The possible suspension of operations is a result of “the cumulative effects of the impacts of Hurricane Harvey,” the company said.

Enterprise said the hurricane’s impacts included the limitation of critical services provided by third parties such as nitrogen supplies, plus flooding and limited access to facilities.

“These impacts are exacerbated by the disruptions to energy demand caused by Hurricane Harvey’s effects on refineries and petrochemical facilities on the U.S. Gulf Coast and the closure of all ports on the Texas Gulf Coast, which limit access to export markets,” it said.

The company said the cumulative effect of these issues has caused brine containment issues and a reduction of fractionation capacity ay Mont Belvieu.

It added: “As a result, without relief from these difficulties, Enterprise is evaluating the curtailment of NGL fractionation and storage services.”

The company operates the largest NGL storage caverns on the Gulf Coast, at Mont Belvieu. It furnishes ethane to ethylene crackers on the Gulf Coast. It exports ethane, propane and butane.

It has 50,000 miles of pipelines plus storage for 260 million barrels of liquids and 14 billion cubic feet of natural gas.

Carrizo Bails on Prime Utica Acreage.  Carrizo Oil & Gas announced it has sold “substantially all” of its Utica Shale assets, located primarily in Guernsey County, OH, for a grand total of $62 million. The Carrizo website says the company owns 25,900 acres in the Utica. We know of at least a few wells they’ve drilled in Guernsey. Do the math, and if they sold all 25,900 acres for $62 million it works out to a relatively low $2,394 per acre–essentially a fire sale compared with lease prices in that area which a were   double that amount. Once upon a time Carrizo had big plans for the Utica. They (wisely) sold off their northern Utica acreage and retained their southern acreage in 2012. The company has drilled four Utica wells–all of them in Guernsey County, with three of the four producing gas and oil. But the oily Eagle Ford play caught the company’s eye and in 2015 Carrizo quit drilling in the northeast. Since that time, they have not drilled any new wells in the Marcellus/Utica. In May of this year, Carrizo 
put all of their Marcellus/Utica assets up for sale. So it should be no surprise they’ve found a buyer (unnamed) to pick up prime acreage in the Utica.

If anyone knows the buyer, please let me know.  

Mountaineer Storage Connecting the Pipes.  The president of the company looking to build the Mountaineer NGL Storage facility in Monroe County, Ohio, near Clarington, along the Ohio River says operating the facility close to the Ohio River is safe and “is not rocket science.” Last week West Virginia University researchers released a report that the Marcellus/Utica region needs an ethane storage hub. Most of the talk has been about a massive, $10 billion ethane storage facility to help feed cracker plants and other petrochemical facilities that will locate in our region. At the meeting last week, David Hooker, president of Energy Storage Ventures which wants to build the Mountaineer NGL Storage facility, made the point that his company is already working on what will likely be multiple NGL storage facilities. MDN has been following the Mountaineer NGL project. At last check in June, Mountaineer still needs customers to sign up, and they need more regulatory approvals from Ohio. We got an update last week from 
Hooker, including details new for us: the storage facility will connect with three pipelines running beneath the Ohio River. 

NatGas to South America and Caribbean.  The U.S. Department of Energy is hoping to bypass environmental reviews for some small-volume natural gas exports as a way to serve smaller markets in South America and the Caribbean.

The agency announced its proposal for "small-scale natural gas exports" in Friday's Federal Register, which said the "proposed regulation is intended to expedite (the Energy Department's) processing" of natural gas export applications, "thereby reducing administrative burdens for the small-scale natural gas export market."

The proposal comes after President Trump signed an executive order directing agencies to find ways to streamline the federal permitting and review process when it comes to infrastructure projects, with a focus on reducing the burden of environmental reviews.

Larger shipments of liquefied natural gas (LNG) require specialized tankers, and importing countries need to have import terminals outfitted to handle the heavy ships' cargoes to turn large quantities of liquid natural gas back into gas, Kallanish Energy understands.

But in countries that don't have those resources, smaller shipments on barges, freighters and less technically-sophisticated flotillas are key, according to the agency.

“The emerging small-scale export market involves exports of small volumes of natural gas from the U.S. to countries primarily in, but not limited to, the Caribbean, Central America, and South America,” according to DOE.

“Many of these countries do not generate enough natural gas demand to support the economies of scale required to justify large volumes of LNG imports from large-scale LNG terminals via conventional LNG tankers. The small-scale natural gas export market has developed as a solution to the practical and economic constraints limiting natural gas exports to these countries.”

"DOE's regulations regarding notice of applications and procedures conducted on applications would no longer apply to applications" that satisfy certain criteria, according to the notice.

Those criteria include an application seeking to export natural gas "in a volume up to and including 0.14 billion cubic feet per day."

OH NatGas Production Up; Oil Down.  Natural gas production from horizontal wells in Ohio’s Utica and Marcellus Shales plays year-over-year grew 16.2% in the second quarter, while oil production dropped 17.1%, according to new data from the Ohio Department of Natural Resources.

Natural gas production jumped from 334.43 billion cubic feet (Bcf) in Q2 2016, to 388.56 Bcf in Q2 2017, Kallanish Energy reports.

Belmont County was No. 1 for natural gas production, at 172 Bcf.

Oil production dipped from 4.88 million barrels (MMBbl) in Q2 2016 to 4.04 MMBbl in 2Q 2017. Harrison County was No. 1 for oil production, at nearly 1.5 MMBbl for the quarter.

Ohio reported production from 1,659 horizontal shale wells during the latest quarter, which produced 5.2 MMBbl of brine in the quarter, ODNR said, in a Friday statement.

The typical well averaged 2,438 Bbls of oil and 234 million cubic feet (MMcf) of natural gas in 85 days of production.

Ohio law does not require a separate listing for natural gas liquids or condensate. They are included in natural gas totals.

The production reports for individual wells are available at http://oilandgas.ohiodnr.gov/production

Magellan to Build Pipeline in the Permian.  Magellan Midstream Partners announced Tuesday it is beginning construction of a 60-mile, $150 million Delaware Basin pipeline originating in Wink, Texas to handle crude oil and condensate.

Magellan will build the 24-inch pipeline from Wink in the Delaware Basin, to Crane, Texas, which serves as an origin point for the partnership’s Longhorn pipeline.

The new Wink line will have an initial capacity of 250,000 barrels per day (BPD), with the ability to expand to more than 600,000 BPD if warranted by industry demand.

"Magellan is known in the industry for its independent service provider business model and is ideally situated to meet growing industry demand for a crude oil and condensate pipeline system with access to customers originating from the Delaware Basin," said Michael Mears, Tulsa, Okla.-based Magellan’s CEO.

The project also includes construction of a new terminal at Wink which will offer inbound and outbound pipeline access to parties that connect to the facility.

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Permits

PA Permits August 31 to September 7, 2017

 

               County                                   Township                                          E&P Companies

  1. Allegheny                                    Forward                                             EQT
  2. Beaver                                         Independence                                  Range

 

OH Permits for week September 2, 2017

             County                                   Township                                          E&P Companies

  1. Belmont                                       York                                                    XTO
  2. Guernsey                                    Wills                                                   Eclipse
  3. Noble                                           Beaver                                               Antero

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

Northeast Supply Enhancement