Shale Directories Conferences
7th Annual Utica Summit
October 10, 2019
North Canton, OH
7th Annual Midstream PA 2019
November 12, 2019
Penn Stater Conference Center
State College, PA
Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, and Bakken Shale Plays
Appalachian Storage Hub Conference Report. There was a lot of salty talk Thursday at the Hilton Garden Inn at Southpointe.
Natural gas liquids storage was the focal point of the third annual Appalachian Storage Hub Conference. The proposed hub, focused in the Ohio River Valley, is a $10 billion infrastructure project that would provide a midstream hydrocarbon storage system. It is related to the oil and gas industry.
Raw-material hydrocarbons such as ethane and butane would be placed separately in underground salt or hard rock caverns – 6,000 feet down. Many of the energy and chemical professionals, who were on hand to speak or to observe, seemed to have a preference.
“Salt is best,” one corporate official said from the audience.
“Ethane is not stored in any hard rock caverns today,” said another.
A storage hub feeds ethane to cracker plants, such as the $6 billion facility that Shell is building in Potter Township, Beaver County. The plant “cracks” ethane molecules into petrochemical building blocks that can be refined to create polyethylene, a plastic used for various purposes.
Salt cavern storage, according to the website storengy: “involves a series of caverns leached out of the deep, thick layers of rock salt. The caverns are created by injecting water to dissolve the salt, which is then extracted in the form of brine. There is then room for natural gas, which is injected and stored in gaseous form at high pressure.
“Impermeable and non-porous, these caverns are remarkably waterproof.”
The six-hour session played out before a decidedly pro-industry crowd, and also featured talk about other cracker plant projects being considered across the tri-state, along with pipelines, different energy sources and opportunity zones.
Joe Barone, president of Shale Directories, and Tom Gellrich, chief executive officer of TopLine Analytics, organized the event. Barone’s website, ShaleDirectories.com, connects the oil and gas industry with local businesses. Gellrich’s firm consults with the energy industry on downstream impacts of shale gas.
Gellrich kicked off the program with a list of industry-related predictions for the next 10 years. Among the highlights: the PTTGC ethane cracker, on the verge of approval for Dilles Bottom in Belmont County, Ohio, will get the go-ahead this year; that Shell, out of space, will announce plans to expand the Beaver County cracker in 2023 and again in 2028; and that in 2030, U.S. News & World Report will include the region on its list of the Top 10 Places to Work.
Jason Stechschulte, business development manager for MPLX LP, a partner with MarkWest Energy, touted a full portfolio of energy sources. “All forms are needed and fossil fuels will continue to be the lion’s share,” he said. “Fossil fuels make our lives easier.”
NY Unions Support NESE Pipeline. One of the leading labor unions is pressing New York Democrats over their opposition to a 23-mile-long natural gas pipeline extension project meant to connect New York City to Marcellus Shale gas. In a letter Friday, the Laborers’ International Union of North America (LIUNA) — one of the Democratic Party’s most reliable financial contributors — scolded Judiciary Chairman Jerry Nadler and progressive Rep. Alexandria Ocasio-Cortez, among others, over their opposition to the Northeast Supply Enhancement Project. The tiff between traditional allies shows the growing unease between the two sides over the issues of climate and natural gas — something creating a lack of consensus from labor unions about the Green New Deal, as well.
Let’s Get FESE Project Approved. We Need Your Help. The New York State Department of Conservation (NYSDEC) denied the Clean Water Act Section 401 Water Quality Certification permit for the Northeast Supply Enhancement Project (NESE) last month, shortly after the Federal Energy Regulatory Commission (FERC) issued a certificate of public convenience and necessity authorizing the project.
Williams recently refiled and received a Notice of Complete Application (NOCA) from the NYSDEC that triggered a DEC technical review and comment period until June 14th, which is where we need your continued support. This project could not come at a more crucial time for New York as it experiences significant economic growth. The project is a clear benefit for the region, reducing the region’s greenhouse gas emissions by 200,000 tons per year while ensuring hundreds of billions of dollars of public and private development can access a resilient, cost-efficient and essential energy option.
If NESE is approved, it will provide the additional natural gas supply that is so vital to homes and businesses, the environment and to the region’s economic viability.
We need your help to send another strong message of support to the commission. Time is of the essence. Please take immediate action.
Add your name to our petition we will submit to the NYSDEC, urging the approval of necessary water quality permits.
Trump Support Criminal Crackdown on Pipeline Protests. Politico. The Trump administration is joining calls to treat some pipeline protests as a federal crime, mirroring state legislative efforts that have spread in the wake of high-profile demonstrations around the country. The Transportation Department’s Pipeline and Hazardous Materials Safety Administration released a proposal Monday calling for Congress to expand a law that threatens fines and up to 20 years’ prison time for “damaging or destroying” pipelines currently in operation. The expanded version would add “vandalism, tampering with, or impeding, disrupting or inhibiting the operation of” either existing pipelines or those “under construction.”
Drilling Down Utica Shale Oil, Gas Production on the Rise. Oil and natural gas production from horizontal wells across the Utica shale increased through the first quarter of 2019, according to the Ohio Department of Natural Resources. The agency said Utica wells produced 5.073 million barrels of oil during the quarter, versus 3.942 million barrels during the same period in 2018, or an increase of 28.69% Natural gas production also continued to climb. Wells in the Utica yielded 609.452 billion cubic feet of natural gas in the first quarter compared to 531.954 billion cubic feet a year ago, according to ODNR.
Pennsylvania NatGas Production Shows ‘Significant Jump’. Total natural gas production in Pennsylvania grew by 14.7% in the first quarter of 2019 compared to the same period last year, a report by the Pennsylvania Independent Fiscal Office said. “Despite decelerating from the previous two quarters, production growth continued to show significant strength,” the report said. Pennsylvania remains the second-highest natural gas producing state after Texas, with 6.1 trillion cubic feet of natural gas produced in 2018. Production volume for horizontal wells in the first quarter of 2019 reached 1,653.9 billion cubic feet, the report said. All of the production growth for the quarter was from unconventional wells — i.e., wells requiring horizontal drilling into deep formations and fracturing with fluids — spud in 2017 and 2018.
Trade war with China Highlights Battle for Trade Secrets in Texas, Energy Sector. Houston Chronicle. Trade tensions between the United States and China are focusing company executives and law enforcement on intellectual property theft, one of the key issues in the dispute between the two countries and a growing area of concern for U.S. businesses trying to protect sensitive information. The heightened awareness of economic espionage and the vulnerability of trade secrets in the interconnected business world have both the Department of Justice and corporate executives re-evaluating cybersecurity risks. The federal government, cybersecurity firms and U.S. allies have identified China as the source of cyber-attacks aimed at stealing intellectual property and other trade secrets from corporate computer systems.
Fight Over Northern Access Pipeline Continues. New York’s Department of Environmental Conservation is back in a federal appeals court in the ongoing fight over the Northern Access natural gas pipeline, Kallanish Energy reports.
The state agency last week asked the U.S. Second Circuit Court of Appeals to overrule approval of the project by the Federal Energy Regulatory Commission on Aug. 6, 2018.
It also wants the appeals court to rule Ferc’s refusal to reconsider its approval from April 2, 2019, was “illegal, unreasonable, arbitrary and capricious.”
The 97-mile pipeline is to run from Pennsylvania into New York State.
The appeals court had ruled New York had improperly rejected a water-quality certification for the project by National Fuel Gas. It said the DEC’s decision to not issue the water certification in 2017 was baseless.
On April 7, 2017, New York refused to issue a required water permit, effectively blocking the $500 million pipeline.
The agency issued a similar finding against the proposed Constitution Pipeline. Both projects had been approved by Ferc.
The 24-inch Northern Access Pipeline would run from McKean County, Pennsylvania, to Erie County, New York. Additional compression facilities, pipeline connections and laterals are also planned. A connection to Ontario is also planned. The project was first proposed in 2013.
Ferc has granted National Fuel Gas a three-year extension on completing the Northern Access Pipeline, to Feb. 3, 2022.
Global Demand for Natural Gas Rising 10%. The United States led global growth in natural gas production and natural gas exports last year, and a new international forecast shows the country continuing to play a dominant role over the next five years as global consumption continues to rise. A new analysis by the Paris-based International Energy Agency shows world natural gas demand rising 10% over the coming five years, with 40% of that increase coming from China. The figures represent a slowdown from last year, when natural gas grew 4.6%: The fuel accounted for nearly half of the global energy increase in primary energy consumption. The coming five years will see demand growth moderate to 1.6% per year, IEA expects, due to slower economic growth and less potential for coal-to-gas power switching. But even that rate amounts to a significant overall rise in use of the fuel, from 3.9 trillion cubic meters in 2018 to 4.3 trillion cubic meters in 2024.
New Pipeline in OH. Construction on the Risberg natural gas pipeline has started in Ohio, near the state line. Pipe segments lined an area of clear ground south of Interstate 90 Wednesday, marking the path of the Risberg Pipeline. Construction started at the end of another pipeline in Meadville, Pennsylvania, and work has now entered Ohio, as the $86 million pipeline is getting closer and closer to its end-point in North Kingsville. The pipeline includes 16 miles of new pipeline in Pennsylvania and 12 miles of new pipeline in Ohio. “I don’t think it’s possible to overstate the need (for natural gas),” Conneaut City Manager Jim Hockaday said. Growth Partnership Executive Director Greg Myers has said in the past that the county has lost out on investment and job opportunities because of lack of access to natural gas.
FID Made for Whistler NatGas Pipeline. A final investment decision was made to build the Whistler natural gas pipeline from the Permian Basin in West Texas to the Agua Dulce area of South Texas, Kallanish Energy reports.
The 475-mile pipeline is being developed by Mplx LP, WhiteWater Midstream backed by First Infrastructure Capital, and a joint venture between Stonepeak Infrastructure Partners and West Texas Gas.
The partners said the project has secured sufficient firm transportation agreements with shippers to proceed.
The majority of available capacity has been subscribed and committed by long-term contracts and Mplx and WhiteWater said the remaining capacity will be fully booked in coming months.
The 42-inch line is designed to move roughly 2 billion cubic feet per day. The project is expected to be in service in the third quarter of 2021.
The project with a western terminus at the Waha Hub in West Texas includes connections to gas-processing plants in the Midland Basin via a 50-mile, 30-inch pipeline lateral. The eastern terminus would be near Corpus Christi, Texas, and the Gulf Coast.
There would also be a connection to the Agua Blanca Pipeline that is designed to move 1.4 Bcf/d. It is a joint venture between WhiteWater, Mplx and Targa and runs through the heart of the Delaware Basin.
The gas could also be moved to LNG export facilities on the Texas Gulf Coast and via pipeline connections to Mexico, the companies said.
“The decision to move forward with this project after securing sufficient commitments from shippers demonstrates our disciplined approach to investing,” said Michael J. Hennigan, president of Ohio-based Mplx, in a statement. “Whistler is expected to provide reliable residue gas transportation out of the Permian Basin, which is vital to our growing gas processing position and producers in the region.”
“The WhiteWater team is excited to partner with MPLX and develop incremental transportation out of the Permian Basin, as production continues to dramatically outperform consensus estimates,” added Christer Rundlof, CEO of Texas-based WhiteWater.
Is the Dry Eagle Ford a Sleeping Giant? (Thank you, BTU Analytics.) While much of the US industry is focused on growing crude production and the constraints, we are beginning to field questions on supply sources likely to be tapped when the second wave of LNG comes to fruition. One often overlooked area that factors predominately into our long-term outlook is the contribution of the dry Eagle Ford. Today’s commentary checks in with a region that has fallen out of favor, to get an understanding of resource potential that is likely to be called upon should US LNG exports meet the bullish expectation of some in the market.
This topic came to light as we were examining GPM (gallons per Mcf) trends in the gas stream across the country. Gas-focused plays can produce both wet (high GPM) and dry (low GPM) gas. Oil-focused basins produce an associated gas stream full of NGLs (high GPM). BTU Analytics’ proprietary wellhead level GPM and NGL composition production model allows our analysts to uncover trends in composition and recovery changes that can highlight future opportunities.
The chart above shows the production weighted average natural gas liquids content measured in GPM for Texas, which has been steadily growing from 2.3 in 2010 to 4.9 by the end of 2018. The Western Eagle Ford follows the trend through 2014 and has a higher GPM than the Texas average through 2015, when the GPM in the Western Eagle Ford falls.
Falling GPM levels in the Western Eagle Ford signal that the overall balance of oil-directed drilling versus gas-directed drilling is possibly shifting. Viewing the data on a map shows that much of the activity in central Dimmit and northern La Salle counties has a wellhead GPM in the 6-8 range. Southern Webb and La Salle County have 0-2 GPM gas while northern Webb and southern Dimmit County have gas in the 4-6 GPM range. With the production weighted GPM falling, a greater proportion of the region’s gas is coming from wells with a natural gas liquid content under 4 GPM.
Zooming in on the lower GPM areas, we can see hotspots where wells with IP rates in excess of 12 MMcf/d have been turned to sales.
While producers might not discuss their dry Eagle Ford results much these days, well results to-date do remind us that gas resources are abundant in areas besides the Haynesville or Appalachia. As a point of reference, the average IP rate in the Haynesville is approximately 15 MMcf/d. While, the average IP rates in SW Appalachia are between 8 and 13 MMcf/d.
Wave 2 of LNG will likely bring gas resources back into the market’s focus soon and supplying wave 2 of US LNG exports will be more complicated than the market expects. For BTU’s views on the complications and opportunities, request more information on our natural gas suite of products, including the Upstream Outlook, Gas Basis Outlook and Henry Hub Outlook.
Flaring a problem in Texas. In its relentless pursuit of oil, the shale industry continues to burn more and more gas into the air. The rate of flaring in the Permian basin reached a record high in the first three months of this year, averaging 661 million cubic feet per day (MMcfd), according to Rystad Energy. That is more than double the amount of flaring for the same period from a year earlier. There is little chance of a reduction in the next few months. “We anticipate that basin-wide flaring will stay above 650 MMcfd before the Gulf Coast Express pipeline comes online in the second half of 2019,” Artem Abramov, Head of Shale Research at Rystad Energy, said in a press release. The most productive gas facility in the U.S. Gulf of Mexico – Shell’s Mars-Ursa complex – produces about 260 to 270 MMcfd of gross natural gas. In other words, the most productive gas project in the Gulf of Mexico only produces about 40 percent of the volume of gas that is being flared and vented in West Texas and New Mexico every single day.
Energy Transfer Buys Solar Company. Canadian Solar, a solar generating company based in Canada, announced it signed a 15-year deal to provide solar power to Dallas-based oil and gas pipeline company Energy Transfer, the first time for Energy Transfer to sign a dedicated solar contract. The power purchase agreement made economic sense, said David Coker, vice president of power optimization at Energy Transfer. Energy Transfer relies mainly on natural gas-fired electricity but with the new power purchase contract, more than 20 percent of power on any given day will come from solar and wind sources, he said.
PA Permits May 30, to June 1, 2019
County Township E&P Companies
1. Lycoming Hepburn Inflection
2. Wyoming Washington BKV OPR
3. Wyoming Washington BKV OPR
4. Wyoming Washington BKV OPR
5. Wyoming Washington BKV OPR
OH Permits for June 1, 2019
County Township E&P Companies
1. Belmont Wheeling Ascent
2. Belmont Wheeling Ascent
3. Belmont Wheeling Ascent
4. Harrison Cadiz Ascent