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NewsLetters

Expo/Industry events for the next few months

PetroChemical Update
June 18-19
Westin Convention Centre
Pittsburgh, PA
http://www.petchem-update.com/northeast/

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

Midstream PA 2018
September 25, 2018
Penn Stater Conference Center
State College, PA
http://midstreampa.com/

Utica Summit
October 10, 2018
Walsh University
North Canton, OH
http://www.uticasummit.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

We Have Confirmation! PTTGC Selected Bechtel. It’s not a RUMOR!  I have heard from two individuals this week that confirms that Bechtel has been awarded the contract.  The first person said that he heard from a CM at Bechtel they have been selected for the PTT project and are working through the contract currently.

The second person informed me that Bechtel was making big equipment orders that were not related to the Shell cracker plant.

Big Jump in PA NatGas 1st Qtr. 2018.  Natural gas production in Pennsylvania jumped 9.9% from first-quarter 2017 to first-quarter 2018, according to a new report.

Pennsylvania produced 1.44 trillion cubic feet (Tcf) of natural gas in Q1 2018, up from 1.31 Tcf in Q1 2017 -- an all-time high for Pennsylvania gas production, Kallanish Energy reports.

That production came mainly from the Marcellus Shale in the Appalachian Basin. There is also drilling in the Utica and Upper Devonian shales in the state.

It was the sixth consecutive quarter of production growth, the report said. The data comes from a report released by the state’s Independent Fiscal Office.

The most productive counties in Q1 2018 were Susquehanna, Washington, Bradford, Greene, Wyoming, Lycoming, Tioga, Butler, Sullivan and Fayette.

The top four counties accounted for 67% of the state’s natural gas production.

Susquehanna County produced 24.3% of Pennsylvania’s natural gas production in Q1 2018. It jumped from 319 billion cubic feet (Bcf) in 2017, to 349.3 Bcf in 2018, an increase of 9.5%.

Washington County showed the biggest production increase: 32.4%. It jumped from 213 Bcf in 2017, to 281.9 Bcf in 2018. It accounted for 19.6% of the state’s gas production.

Production dipped 5.3% in Bradford County, and rose 3.1% in Greene County. Bradford’s production dropped from 183.8 Bcf in 2017, to 174.1 Bcf in 2018. Greene’s production increased from 163.7Bbcf in 2017, to 168.7 Bcf in 2018.

The number of wells also increased in the top 4 counties. The Susquehanna well count jumped from 1,083 in 2017, to 1,214 in 2018, a 12.1% increase. In Washington, the total jumped from 1,210 to 1,375, a 13.6%. In Bradford, the number of wells grew from 1,024 in 2017, to 1,089 in 2018, a 6.3% increase.

In Greene County, the number of wells jumped from 789 to 874, a 10.8% increase.

The report said horizontal wells account for nearly all Pennsylvania gas production. Pennsylvania has 11,117 wells, of which 8,402 are producing. That includes 7,913 producing horizontal wells.

A total of 197 wells were spud in Pennsylvania in Q1 2018, down slightly from the 210 wells spud in Q4 2017.

Pennsylvania is No. 2 in the U.S. for natural gas production, behind only Texas. In 2017, Pennsylvania produced 5.46 Tcf; Texas produced 7.92 Tcf.

The other top states in order were Alaska, Oklahoma, Louisiana, Ohio, Wyoming, Colorado, West Virginia and New Mexico.

Eclipse Resources – Penn Energy Merger?  Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA, announced in March the company is looking for another company to buy, or (more likely) for another company to buy them. We have some new news to report, about a potential sale of Eclipse. Or more properly, a potential merger. EnCap Investments is a private equity/investment firm headquartered in Houston. EnCap owns a majority of Eclipse’s common stock. Put another way, Eclipse is considered a “portfolio company” of EnCap–because he who owns the most stock controls the company. EnCap has a number of portfolio companies–other energy companies in which they invest. One of them is PennEnergy Resources, an active driller in the southwest PA Marcellus. According to sources who have spoken to the Pittsburgh Business Times, EnCap is actively pursuing a combination/merger between Eclipse and Penn Energy.

WV Methanol Plant Opening Delayed.  A methanol plant being re-assembled in Institute, W.Va., after being relocated from Brazil, will open more than a year later than expected.

US Methanol CEO Frank Bakker told the Charleston (W.Va.) Gazette-Mail newspaper the company's facility is expected to start production in late 2019. When ground was broken on the plant last September, officials expected it to open later this year.

Bakker says a new compressor must be ordered for the plant, Kallanish Energy understands.

The US Methanol facility will convert natural gas to methanol for use by existing chemical plants.

Bakker has said the company will provide methanol as feedstock for the chemical industry in the mid-Atlantic and Northeastern states.

PA Gets Behind the Storage Hub.  This week, members of the Pennsylvania General Assembly, led by Sen. Camera Bartolotta (R-Greene/Washington) and Rep. Jim Christiana (R-Beaver), demonstrated their commitment to maximizing the potential of the Marcellus and Utica Shale formations by introducing a resolution to support the establishment of an ethane storage hub in the Appalachian region.

The resolution calls for the expedient passage of several pieces of federal legislation and policies to support the storage hub’s development.

“Pennsylvania has the assets to be a strong player in the global plastics market, and the Shell Polymers plant investment is a signal to industry that Pennsylvania is open for business,” Bartolotta said. “This resolution demonstrates our support for continued momentum in capitalizing on the commonwealth's energy resources long term and ensuring we’re putting natural gas to work for the people of Pennsylvania. The development of an ethane storage hub in the Appalachian region would build a strong foundation for future investments.”

Distillate Fuel #1 Export.  Distillate fuel continued to be the most exported U.S. petroleum product in 2017, averaging 1.4 million barrels per day (MMBPD) of gross exports, the Energy Information Administration reports.

U.S. distillate exports went to 79 different destinations in 2017, particularly to markets in Central America, South America, and Europe, Kallanish Energy reports.

The proximity of U.S. Gulf Coast refineries to Mexico and to Central and South America combined with high demand in these regions led to higher U.S. distillate exports to these locations.

In 2017, the U.S. exported 27% of total domestic distillate production, continuing years of increasing exports and relatively flat U.S. consumption growth, EIA reported.

Because domestic distillate demand is highest in the winter months, U.S. distillate exports tend to be highest in the summer months.

In February 2017, however, warmer-than-normal U.S. temperatures, coupled with colder-than-normal European temperatures led to above-average winter exports of distillate, especially to markets in Europe.

Distillate fuel exports from the U.S. set consecutive record highs in May, June and July 2017, reaching 1.7 MMBPD in July. In August, exports of distillate fell to 1.4 MMBPD, partly because of the effects of Hurricane Harvey, which temporarily disrupted shipments of distillate and other fuels from the U.S. Gulf Coast.

Unlike motor gasoline, used almost exclusively for transportation, distillate fuel has a variety of uses, including as a heating fuel in homes and businesses, as a fuel for certain industrial processes, and as a transportation fuel for both light- and heavy-duty vehicles.

The U.S. Gulf Coast (Petroleum Administration for Defense District, PADD, 3) is the largest petroleum refining region in the country, accounting for roughly half of total U.S. refining capacity in 2017, according to EIA.

Distillate production on the U.S. Gulf Coast exceeds regional demand, making the region a net supplier to other U.S. regions and foreign markets. In 2015, refineries in the region produced 2.8 MMBPD of distillate, while regional demand was roughly 800,000 BPD. The Gulf Coast accounted for 87% of U.S. distillate exports in 2017.

Chemistry Council Projects Strong in Appalachian Basin.  Strong global growth prospects, rising exports, increased manufacturing, balanced inventories, healthy demand, and sufficient, inexpensive shale gas combined suggest positive growth this year for the U.S. chemical industry, the American Chemistry Council’s mid-year outlook states.

“The U.S. chemical industry continues to enjoy a competitive advantage from robust supplies of shale gas and natural gas liquids (NGLs), leading to significant investment in new capacity and capital spending that will continue to grow through 2023,” ACC reported.

"During 2018, output gains are expected to be strongest in agricultural chemicals, consumer products, coatings and bulk petrochemicals and organics," the Mid-Year 2018 Chemical Industry Situation and Outlook states.

"In addition, production of plastic resins is set to grow at the fastest pace since 2012, as new capacity comes online and demand firms for domestic customers and those abroad. The specialty chemicals segment is also set to grow as industrial activity improves."

Broad gains in U.S. manufacturing, construction and export markets bode well for growth, according to ACC. U.S. chemical production is expected to expand 3.4% in 2018, and 3.6% in 2019, Kallanish Energy reports.

“Over the next 18 months, we expect solid growth across multiple chemical sectors, especially fertilizers, crop protection, coatings, consumer products, and petrochemicals,” the Outlook states.

Longer-term, America's chemistry industry continues to expand, ACC believes. The economics of shale gas has fostered new investment and growth in capacity, which is beginning to come online.

Chemical production is expected to continue to increase across all regions of the U.S. during 2018, with the most dynamic growth occurring in the Gulf Coast region, followed by the Midwest and Ohio Valley regions. American chemistry revenues will exceed $700 billion by 2023.

"Due to the U.S. chemical industry expansion and strong demand from foreign markets and domestic manufacturers downstream, total two-way U.S. chemicals trade is expected to grow 6.2% this year, to $241.0 billion following a 6.0% gain in 2017," the report notes.

"Driven by the basic chemicals sector, U.S. chemicals exports will grow 7.2% this year, to $139.2 billion. At the same time, imports are projected to rise 4.9%, to $101.8 billion by the end of this year. The trade surplus in chemicals is projected to reach 71.4 billion by 2023."

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PA Permits May 31, to June 7, 2018

County                                   Township                                          E&P Companies

  1. Clinton                                         Chapman                                          XTO
  2. Clinton                                         Chapman                                          XTO
  3. Clinton                                         Chapman                                          XTO
  4. Lycoming                                     Hepburn                                            Inflection
  5. Lycoming                                     Jackson                                             Rockdale Marcellus
  6. Susquehanna                            Franklin                                             SWN
  7. Susquehanna                            Franklin                                             SWN
  8. Tioga                                            Liberty                                                Rockdale Marcellus
  9. Tioga                                            Liberty                                                Rockdale Marcellus
  10. Tioga                                            Liberty                                                Rockdale Marcellus

OH Permits for week ending June 2, 2018

County                                   Township                                          E&P Companies

  1. Belmont                                       Pultney                                              XTO
  2. Jefferson                                     Wayne                                               Ascent
  3. Jefferson                                     Wayne                                               Ascent

Joe Barone jbarone@shaledirectories.com 610.764.1232

Vera Anderson vera@shaledirectories.com 570.337.7149

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