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  Expo/Industry events for the next few months

Appalachian Storage Hub Conference
June 7, 2018
Hilton Garden Inn, Southpointe
Canonsburg, PA
https://www.appastorage.com/

DUG East
June 19-21, 2018
David L. Lawrence Convention Center
Pittsburgh, PA
https://www.hartenergyconferences.com/dug-east

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

Shell Names Its Cracker.  A name from the past is returning to the plastics industry: Shell Polymers.

The Shell Chemicals unit of global oil supermajor Royal Dutch Shell had exited most of its plastics businesses in recent years. But the Shell name is returning to plastics in the form of a massive petrochemicals complex under construction 30 miles northwest of Pittsburgh, Kallanish Energy learns.

The project will be the first U.S. petrochemicals project built outside the Gulf of Mexico Coast of Texas and Louisiana in decades. It will take advantage of low-priced, readily abundant natural gas feedstock that's being produced in the nearby Marcellus and Utica Shale plays.

When completed, the Shell project’s annual capacity will total 3.5 billion pounds of polyethylene resin.

Shell/Shell Polymers was at NPE2018, a major plastics industry conference, held in Orlando, Fla., last week, working to re-establish the brand in the plastics world, according to Plastics News.

"We're looking to develop customer needs and relationships," Michael Marr, business integration lead, told Plastics News, in an interview at the show. "What we like about the project is its closeness to both feedstock supply and the customer base."

He added the location "will give us a competitive advantage vs. competitors." Seventy percent of PE resin buyers and makers of end-use products are within a 700-mile radius of the Pittsburgh site.

Production at the site is expected to begin in the early 2020s. It's expected to produce both high and linear low density polyethylene (PE).

Resin made at the Beaver County, Pa., location primarily will be sold into the domestic market, Marr told Plastics News.

Shell “Goes Big” at the World’s Largest Plastics Trade Show.  There’s a saying “go big or go home” and Shell Polymers (Houston) followed that advice at NPE2018 boasting one of the larger non-machinery supplier booths among the 1.2 million square feet of exhibit space at the sprawling Orange County Convention Center in Orlando. The 5,700 total square feet (4,000 downstairs and 1,700 upstairs) booth impressed in size in footprint and height in addition to its prominent location at the entrance to the South Hall in booth 16001. But what put it over the top were several interactive, attention-getting features that couldn’t be missed:

Two large, interactive video-screen-laden 18 feet x 6 ½ feet wall displays jam-packed with eye-catching visuals and factoids about the company and the new PE resin production facility located outside Pittsburgh;

Interactive 3D map-in-the-round with repositionable display monitors that, when moved to any of 7 discrete positions aligned with the map, provided an augmented reality-enhanced screen full of details about a specific portion of the new site and operations Two female-looking (via face on monitor) and feminine-voiced interactive robots positioned on opposite corners of the booth played a video message by CEO Ben van Beurden and had voice-recognition software that enabled them to respond to attendees’ questions selected from a multiscreen-menu of 30 options.

NPE Shell interactive mapOne of the above would have made it cool, but the combination made it one of the coolest NPE booths that in part and in whole and in form and in function made quite an impression with attendees. For example, the untiring robots were kept busy by inquisitive visitors, answering more than 2,000 questions for the show, according to Joe Minnitte, Shell Polymers’ external relations advisor. And they could scan badges.

The reason for all the multimedia tech-driven edutainment  was that this was a double celebration of Shell Polymer’s first NPE ever as well and the 90-year-old petrochemical giant’s return to polymers production after a 20+ year hiatus. Shell announced in mid-2016 the return to the market aligned with the decision to build a major petrochemicals complex, comprising an ethylene cracker with polyethylene derivatives unit, in Potter Township in Beaver County, about 30 miles NW of Pittsburgh. Site preparation has commenced and shortly main construction will begin, with commercial production expected to begin early next decade.

According to the June 2016 release, “the complex will use low-cost ethane from shale gas producers in the Marcellus and Utica basins to produce 1.6 million tons of polyethylene per year” that would be used in products from food packaging and containers to automotive components. Specifically, the ethane would produce high-density polyethylene (HDPE) and linear-low-density PE (LLDPE) resins.

Minnitte said that announcement to locate the new PE polymer production plant on a 386 acre plot followed years’ of decision. The Northeast location positions the facility in proximity to shale sources in the state and offers nearby access to the Ohio River and interstate highway system.

“It will be within a 700 mile radius of 70% of our customers,” said Minnitte, noting that it is far removed from hurricane paths that can wreak havoc along the Gulf Coast. The operation’s focus will be on markets in North America.

Asked about his review of the booth and show, Minnitte told PlasticsToday  this: “We were pleased with our reception at NPE and the feedback we received on our booth was very positive.  In particular, the value proposition we will offer our customers in shorter shipping times was received exceptionally well.”

Drilling Does NOT Impact Groundwater.  A study by the University of Cincinnati (Ohio) found no impacts from hydraulic fracturing (fracking) on groundwater in eastern Ohio. The report was published last week in the peer-reviewed journal Environmental Monitoring Assessment. What methane was found in the water samples was biogenic and not from Utica Shale drilling, the study said. “We found no relationship between Ch4 (methane) concentration or source in groundwater and proximity to active gas well sites,” said geology professor Amy Townsend-Small and the five other authors of the publication. In addition, “… our data –does - not indicate any intrusion of high conductivity fracking fluids as the number of fracking wells increased in the region,” they added. The results of the study were initially released in March 2016 at a meeting of a grass-roots group, Carroll Concerned Citizens, in Carroll County, Ohio, by the researchers, including Townsend-Small. The researchers and the university were criticized by pro-drilling groups for not releasing more information on the findings over the last two years. That included Energy in Depth, the Ohio Oil & Gas Association and even members of the Ohio legislature. Critics said the researchers and the university were attempting to cover up or downplay the results.

NatGas Exports Provide Long-term Growth. .  A new analysis from LNG Allies, a nonprofit trade group, estimates liquid natural gas (LNG) exporters will add between $716 billion and $1.267 trillion in cumulative “direct, indirect, or induced value added” to the U.S. economy by 2050. Over the same time, the value added to the economy “from supplying natural gas to the liquefaction plants” will be between $948 billion and $1.988 trillion. Using the U.S. Energy Information Administration’s (EIA) 2018 Annual Energy Outlook (AEO-2018) to review the most likely natural gas production and LNG export scenarios, the analysis, prepared for LNG Allies by the strategic consulting firm ICF, also estimates LNG export terminals will support 50,000–100,000 jobs in 2050. LNG exports will also cause upstream job creation in the natural gas industry to grow by 150,000–300,000 jobs over the same period. From 2013 to 2050, the analysis states, “LNG plants would support 2.0 million to 3.9 million job-years of direct, indirect, and induced labor.”

EPIC Pipeline Signing Up Customers.  Houston oil producers Apache Corp. and Noble Energy have signed on as the primary customers for the massive EPIC Crude Oil Pipeline that will traverse Texas from the booming Permian Basin near the New Mexico border to Corpus Christi. EPIC also is building a similar, natural gas liquids pipeline adjacent to the crude oil project. BP is signed on as the anchor customer for the NGL pipeline. Apache and Noble have committed to use 30 percent of the EPIC oil pipeline's planned capacity of 590,000 barrels a day. The pipeline is slated to come online by the end of 2019 to help relieve the bottleneck that's building in the Permian with rising crude production and not enough pipeline capacity to move it out of West Texas.

Permian Rigs Represent 45% of U.S. Rigs.  The Permian Basin rig count continued to climb this week after gaining five rigs for a basin wide total of 463, according to Baker Hughes. All rigs in the nation’s most active play are searching for oil and account for more than half of all oil exploration activity across the nation. Of the nation’s total rig count this week (1,045), about 45 percent are in the Permian. The Texas portion of the Permian (375) accounts for 36 percent of all rigs nationwide and about 45 percent of oil rigs. Reeves County continues to lead all others with 66 rigs, a tally it has held for three straight weeks. Midland County fell to 49 rigs after two went offline. Other counties with double-digit counts this week were Lea, New Mexico (46); Eddy, New Mexico (41); Martin (34); Loving (33); Ward (25); Howard (23); Reagan (22); Culberson (19); Andrews (17); Glasscock (15); Winkler (15); Pecos (15); and Upton (12).

Rover Begins Full Operations in June.  The Rover Pipeline project is nearing completion and looking to begin full operations next month, its overseers say.

The pipeline, which runs from Michigan to West Virginia and western Pennsylvania, crosses the southern portions of Wayne and Stark counties. It is a subsidiary of Energy Transfer Partners, based in Dallas.

Thomas E. Long, chief financial officer for ETP, said in a quarterly earnings conference call Thursday that the finish line is in sight.

“We expect construction of the Rover will be complete this month,” he said, adding that the company will seek approval from the Federal Energy Regulatory Commission to start full operations June 1.

The 713-mile pipeline will transport 3.25 billion cubic feet per day of natural gas from the Marcellus and Utica Shale production areas to markets across the United States and Canada, according to a fact sheet provided by Rover.

The DUC’s are climbing.  The number of drilled, but uncompleted wells in the seven major plays in the Lower 48 U.S. states climbed by less than 1% from March to April, the Energy Information Administration reported Monday.

In EIA’s May Drilling Productivity Report (DPR), a total of 55 so-called DUCs were added from March to April, to 7,677, from 7,622.

Only the Eagle Ford (18) and Permian (111 DUCs) plays recorded growth in DUCs, to 1,494 and 3,086, respectively. The Bakken saw no March-to-April change in DUCs, maintaining status quo at 719.

Four of the plays, including the Anadarko, Appalachia (the Marcellus and Utica Shale plays), Haynesville and Niobrara saw their DUCs decrease by a total of 74 from March to April, DPR reported.

The biggest March-to-April drop was recorded in the Niobrara, down 44 DUCs, to 488 from 532.

Atlantic Sunrise Pipeline Update.  Some 37 miles of 42-inch pipe for the Atlantic Sunrise gas pipeline is being placed in the ground in eight western Lancaster County communities.

All local sections of the pipeline are expected to be underground by the end of July, according to Williams Partners, the Oklahoma-based company building the pipeline.

Currently, about 90 percent of the pipe sections have been put in place above ground and welded together in preparation for burial in trenches.

Hydrostatic testing will then be done by pumping high-pressure water drawn from nearby waterways. Most of that work will be done during the summer months.

Ground-restoration work may continue in the pipeline right of way into late summer or early fall before pipeline crews disappear, according to Christopher Stockton, Williams spokesman.

At its peak, nearly 700 workers were working on the pipeline in Lancaster County.

The construction right of way is up to 125 feet wide, while the permanent maintained right of way will be 50 feet.

After the pipeline is laid, the ground will be restored “as closely as possible to its original condition,” according to Stockton. Trees, however, will not be allowed to grow again in the right of way.

Stockton said that of the 2.3 million man-hours logged in building the pipeline in Lancaster County, there were no injuries resulting in lost work. “For a project this size, that is a significant accomplishment,” he said.

The Atlantic Sunrise project is a shortcut between points on the interstate Transco gas pipeline. It will run for 197 miles between the existing Transco line near Holtwood and a location in Susquehanna County.

Begun in October 2017, the pipeline passes through the PA??? townships of Drumore, Conestoga, Martic, Manor, West Hempfield, Mount Joy and Rapho townships, as well as a small portion of Mount Joy Borough.

The pipeline will carry natural gas from drilling wells in the Marcellus Shale region of northeast Pennsylvania to markets up and down the East Coast, as well as for transport overseas by ships.

Bakken NatGas Production Sets Record.  North Dakota natural gas production set a record in March even as oil production dropped, according to data from the state’s Department of Mineral Resources.

The state produced more than 2.1 billion cubic feet per day (Bcf/d) of natural gas, with companies flaring roughly 12% of gas produced, the Bismarck Tribune newspaper reported Tuesday.

Oil production dropped roughly 1% in March, to 1.16 million barrels per day (MMBPD), preliminary figures show, Kallanish Energy finds.

While oil activity is anticipated to increase this summer, director of Mineral Resources Lynn Helms said he expects crews will be busy building infrastructure needed to keep up with growing volumes of natural gas, the Tribune reported.

“We’re going to see another surge of workers from out of state laying pipelines, and building compressor facilities and building gas plants,” Helms said.

Natural gas production is expected to exceed processing capacity beginning this summer until projects under construction start to come online, said Justin Kringstad, director of the North Dakota Pipeline Authority.

Companies flared a total of 258 MMcf/d in March, similar to the level flared in February. Statewide, companies captured 89% of Bakken natural gas, ahead of the state’s requirement of 85%, the Tribune reported.

The requirement increases to 88% in November, but the North Dakota Industrial Commission recently adopted changes to its policy that give the industry more flexibility.

In February, 12 companies captured less than 85% of natural gas, but none were required to restrict oil production because they met one of the conditions in the policy, the Department of Mineral Resources said.

Spring road restrictions continue to be in place for much of the Bakken, which is expected to dampen May oil production, Helms said.

But drilling and hydraulic fracturing (fracking) activity are expected to increase this summer, with Helms projecting June oil production could exceed the record 1.2 MMBPD set in December 2014, the Tribune reported.

The state has a backlog of 916 wells that have been drilled but are waiting on fracking crews. North Dakota had 59 drilling rigs operating Tuesday, a figure expected to climb by roughly 10 this year, Helms said.

The state saw a slight increase in rail transportation of crude oil in March, with roughly 17% of crude traveling by rail, and 73% moving via pipeline, Kringstad said.

Endangered Species Causing Problems for Atlantic Coast Pipeline.  The Atlantic Coast pipeline suffered a major legal blow last night as a federal court tossed a key Endangered Species Act assessment for the project. The 4th U.S. Circuit Court of Appeals yesterday vacated the Fish and Wildlife Service's review of Atlantic Coast's impacts on threatened and endangered species along its route. The decision could derail construction on the 600-mile Dominion Energy Inc. natural gas project, which stretches from West Virginia to North Carolina. In a short order, a three-judge panel found that the agency's incidental take statement — an estimate of affected species — fell short of the ESA because it failed to set clear limits on how many animals could be affected. The decision's impact on Atlantic Coast could be significant, freezing all or some construction. But environmental attorneys and developers disagree over whether that will happen. Dominion spokeswoman Jen Kostyniuk said pipeline construction will move forward. "We remain confident in the project approvals and the ACP will continue to move forward with construction as scheduled," she said in an email. "This decision only impacts activities directly covered by the Incidental Take Statement in certain defined areas along the route."

Williams Resubmits for NESE.  Williams has resubmitted its application for a water permit to the New York Department of Environmental Conservation for its Northeast Supply Enhancement Project, Kallanish Energy reports..

On April 28, the state agency rejected the company’s application that had been filed in June 2017.

The company said the refiled application will give the state agency more time to complete its review of the project.

The refiling was done with the approval of its customer, National Grid, Williams said, in a statement.

The Federal Energy Regulatory Commission on March 23 issued a draft Environmental Impact Statement for the project.

The project is designed to boost natural gas shipments to the New York City area in time for the 2019-2020 heating season.

It calls for improvements to the Transco pipeline system in Pennsylvania, New Jersey and New York that would boost pipeline capacity by 400,000 cubic feet per day.

National Grid has estimated the project would replace 3.0 million gallons of heating oil and reduce carbon dioxide emissions by up to 2.4 million tons a year.

Shale Industry Invested $63.9 Billion in OH.   The shale industry has invested $63.9 billion in Ohio as of mid-2017, according to a JobsOhio official.

That private sector investment in the Utica Shale in eastern Ohio started in 2011, Dana A. Saucier Jr., senior managing director, Energy and Chemicals, Food & Agribusiness, said in an interview in Smart Business.

The $63.9 billion total includes upstream, midstream and downstream investments, Kallanish Energy reports.

To date, Ohio has permitted 2,830 Utica wells, of which 2,346 have been drilled and 1,890 are producing.

“Those looking to invest in Ohio’s shale opportunity have confidence in the state and the business environment it fosters,” he said. “The prevailing sentiment is that it’s an attractive place to deploy capital.”

Pipelines to move natural gas to market have brought “an uptick in additional investment in the last 12 months of around $10 billion,” he said.

The energy industry has created 12,000 jobs in Ohio and the gross state product is now approaching $100 billion because of those investments, Saucier said.

“When indirect jobs are added in, such as welders and fabricators, maintenance and logistics, that figure exceeds 100,000,” he added.

Ohio is also benefitting from taxes paid by energy infrastructure, according to Saucier.

Ohio is also home to chemical and plastics manufacturers, which can benefit from Utica natural gas, Saucier said. It is also a major feedstock for chemicals, plastics, resins, adhesives, polymers and coatings.

JobsOhio is the state’s private economic development agency that is funded by Ohio’s liquor sales.

FERC Approves Additional Atlantic Sunrise Service.  The Federal Energy Regulatory Commission has approved additional service on the Atlantic Sunrise natural gas pipeline, Kallanish Energy reports.

The action by the agency will allow Williams Partners to expand service by 150,000 cubic feet per day on the new pipeline in Pennsylvania.

Approval was filed Tuesday.

The project includes a new pipeline plus pipeline loops and additional compression stations and pipeline improvements and modifications in Pennsylvania and four other states: Maryland, Virginia, North Carolina and South Carolina.

Last September, FERC allowed the company to move up to 400,000 cubic feet of natural gas per day. Full service is expected in mid-2018.

The $3 billion pipeline by Williams Partners’ Transcontinental Gas Pipe Line Co. (Transco) will stretch 198 miles.

The pipeline will move about 1.7 billion cubic feet per day (Bcf/d) of natural gas. The project is adding bi-directional flow on the existing Transco system. That is enough natural gas to serve 7 million homes.

The pipeline will move Marcellus Shale natural gas from northern Pennsylvania to an existing pipeline in Lancaster County, Pa. It would move the gas to markets in the Mid-Atlantic States and the southeast U.S.

Some of the natural gas may be exported as liquefied natural gas via Cove Point LNG in Maryland.

Rex Energy Seek Bankruptcy Protection.  Appalachian Basin driller Rex Energy is preparing to seek protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, Kallanish Energy reports.  The news came in a Wednesday filing with the U.S. Securities and Exchange Commission.

The Chapter 11 filing was expected. The Pennsylvania-based independent producer failed to make semi-annual interest payments to holders of second-lien notes due April 2, the 166-page report said. That included a 30-day grace period that expired May 2.

Talks with lenders failed to resolve the matter. The company has defaulted under its loan agreement and second-lien indentures.

The company reported it lost roughly $53 million in the first quarter of 2018 and that triggered the Chapter 11 filing.

Its outstanding loan balance is $274 million, as of March 31.

Reports first surfaced in February the company was contemplating Chapter 11 reorganization.

Rex Energy, with headquarters in State College, Pa., is active in the Marcellus and Utica shales in western Pennsylvania and eastern Ohio.

Its overall 2017 production dropped slightly to 184.5 million cubic feet-equivalent per day.

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PA Permits May 10, to May 17, 2018

 

             County                                   Township                                          E&P Companies

  1. Susquehanna                            Lathrop                                              Cabot

OH Permits for week ending May 12, 2018

             County                                      Township                                          E&P Companies

  1. Belmont                                       Wheeling                                           Ascent
  2. Belmont                                       Wheeling                                           Ascent
  3. Belmont                                       Pease                                                 Gulfport
  4. Belmont                                       Pease                                                 Gulfport
  5. Belmont                                       Pease                                                 Gulfport
  6. Harrison                                       Moorefield                                         Ascent
  7. Jefferson                                     Salem                                                 Chesapeake
  8. Jefferson                                     Salem                                                 Chesapeake
  9. Jefferson                                     Salem                                                 Chesapeake

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

Utica Summit