TransCanada Revives Plan to Lowball M-U Gas Using Canada Pipeline

You may recall that TransCanada, one of Canada’s leading midstream/pipeline companies, cooked up a deal last year to pipe natural gas from Canada’s West Coast to the East Coast in order to fend off cheap supplies of Marcellus/Utica gas that will flow into Canada when/if the NEXUS and Rover pipelines get built (see TransCanada Pipe Drops Price 42% to Compete with Marcellus/Utica). TransCanada dropped their pipeline price to lure drillers by (theoretically) making it less expensive to get gas from Western Canada, some 2,400 miles away, than from the Marcellus, just 400 miles away. In October TransCanada launched an open season to lock up customers for the new, lower-priced option (see TransCanada Launches Open Season to Lowball Marcellus/Utica Gas). The open season was a flop because TransCanada insists on a 10-year commitment (see TransCanada Plan to Lowball M-U Gas Using Canada Pipeline a Bust). We thought that was the end of it, but it wasn’t. The Federal Energy Regulatory Commission (FERC) approved the Rover pipeline earlier this month (see ET Rover Pipeline Gets Final Approval by FERC). That lit a fire under TransCanada because they perceive Rover as a direct, competitive, threat. So TransCanada has revived their plan to make it cheaper to pipe gas from western Canada to eastern Canada. Last time the deal was a 10-year term with a long-term tolling rate between C$0.75/GJ to C$0.82/GJ. Now the deal is a 10-year term at a simplified single rate of C$0.77/GJ. Huh? Looks almost like the same deal all over again–same 10-year term, about the same price. The difference appears to be that TransCanada has dropped a minimum amount to be shipped, hoping they can attract a bunch of small fry and create enough volume that way…
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Atlantic Sunrise Files 13 Eminent Domain Cases in 4 Counties

There’s always a few holdouts, no matter how hard you try to be reasonable. We’re talking about landowners who refuse to negotiate in good faith with pipeline companies. Earlier this month amidst a flurry of activity, the Federal Energy Regulatory Commission (FERC) handed Williams a final final final approval for its Atlantic Sunrise Pipeline project–a $3 billion, 198-mile pipeline running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from PA with the Williams’ Transco pipeline in southern Lancaster County (see Atlantic Sunrise Pipeline Gets Final Approval by FERC). There have been a committed small number of protesters against the project (what’s new?), including some of the landowners along the pipeline route. Although Williams has been attempting to negotiate with them for the past two years, some (very few) landowners have refused. So now Williams, via its Transco subsidiary, has sued 13 landowners in Columbia, Lebanon, Northumberland and Schuylkill counties using eminent domain. Meanwhile, the only thread antis are left hanging by is a lawsuit against a single landowner who they say illegally signed with Williams…
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Anadarko Indicted for Killing 165 Salamanders in Lycoming County

BREAKING NEWS, BREAKING NEWS: Anadarko well pad site leaks wastewater and kills 165 salamanders. Funeral services are being arranged. This would almost be funny, if it wasn’t real. No, not funeral services for salamanders (although it’s not beyond believable in this day and age). In 2014 Anadarko drilled a shale well in Lycoming County, PA. In February 2015, a storage tank at the well pad–used to temporarily store produced water coming from the well (wastewater storage happens at ALL shale well sites)–either experienced a leaky valve, or was overfilled, depending on whom you ask. About 1,000 gallons of produced water leaked out of the tank and subsequently out of containment and into a drainage ditch (i.e. “unnamed tributary”) and found its way into a local creek, killing 165 (or 169, depending on the source) salamanders. And now (no lie), the Environmental Crimes Unit of the PA Attorney General’s office is hauling Anadarko and their contractor into court, charging them with environmental crimes. A PA Fish and Boat Commission biologist estimates the dead salamanders were worth $6,156–or ~$37 each. Careful where you step! If you step on a salamander in PA and accidentally kill it, the state will charge you $37 and somebody from the AG’s office will pay you a visit. It can get expensive walking along a creek in PA….
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Fracker Superior Energy Saying Goodbye to PA, Hello to TX

Earlier this week Superior Energy, a Houston, TX-based oilfield services company specializing in completions and fracking with operations in the Pennsylvania Marcellus, issued its 2016 update. In addition, yesterday Superior’s muckety-mucks hopped on a conference call with analysts to discuss 2016 (and fourth quarter) results. Of particular note and interest to MDN is that Superior said in the later half of 2016 they transitioned away from fracking wells in Pennsylvania, moving the equipment and expanding their fracking operations in the Permian Shale instead. It’s possible Superior still has, and will continue to maintain, some operations in the Marcellus (although they shut down a facility in PA). But the new operating strategy for Superior is, judging by both the update and the conference call, quite clear: the Marcellus is out and the Permian is in…
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Sunoco LP Building 2 Pipelines for Mariner East 2 Project

We’ve known for the past couple of years that Sunoco Logistics Partners, owner and builder of the Mariner pipeline projects, wanted to build not one, but two Mariner East 2 pipelines–ME2 and ME2X. We wrote about their hope to build two pipelines back in June 2015 (see Mariner East 2 Giving Birth to Twin Pipelines). At the time, Sunoco said the plan to add two more Mariner 2s was still tentative–that they would need to conduct an open season to be sure they can sell contracts for the second pipeline before they would fully commit. True to their word, Sunoco ran an open season for the second Mariner East 2 pipe in September 2015 (see Sunoco LP Launches Open Season for Second Mariner East 2 Pipeline). Since that time, we’ve not head much about the second Mariner East 2 pipeline (2X). Last week the PA Dept. of Environmental Protection (DEP) issued the final permits needed to begin construction on the ME2 project (see Finally! PA DEP Issues Final Permits for Mariner East 2 Pipeline). The new news is that on a conference call yesterday to discuss the latest earnings report, Sunoco’s top brass said that yes, they ARE building TWO pipes for Mariner East 2–and they’re doing it right now, from the beginning of construction…
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Sunoco LP 2016 Update: Revenue Nearly Doubles

In addition to the great news that Sunoco Logistics Partners is building not one but two pipelines as part of the Mariner East 2 project (see today’s companion story, Sunoco LP Building 2 Pipelines for Mariner East 2 Project), we don’t want to overlook the other good work being done by Sunoco. The big news about two ME2 pipelines came as part of a Sunoco LP’s fourth quarter and full year 2016 update. The company reports making a $705 million profit in 2016, nearly doubling from the $393 million they made in 2015. Life is good in the midstream. They also report establishing a $1 billion line of credit in December, to help with cash flow during this year’s construction of ME2 and other projects. Below is the 4Q16 & full year 2016 update, along with the latest PowerPoint slide deck…
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Radicals Try to Pressure NY DEC into Delaying Northern Access Pipe

About 150 individuals masquerading as “organizations” have sent a letter to the New York Dept. of Environmental Conservation (DEC) requesting the DEC add an extra couple of months to a comment period for National Fuel Gas Company’s Northern Access 2016 pipeline project. A few weeks ago the Federal Energy Regulatory Commission (FERC) approved the long-delayed project (see NFG’s Northern Access Pipe in NY/PA Gets FERC Approval). The $455 million project includes building 97 miles of new pipeline along a power line corridor from northwestern Pennsylvania up to Erie County, NY. The project also calls for 3 miles of new pipeline further up, in Niagara County, along with a new compressor station in the Town of Pendleton. Although FERC has now given permission to build it, the State of New York, specifically the DEC, must issue stream crossing permits. Sound familiar? The DEC faced a similar task with the FERC-approved Constitution Pipeline and ultimately, under political pressure from Gov. Andrew Cuomo, made the decision to refuse granting Williams the permits it needs to build the Constitution. Anti-drilling fruitcakes hope to get lightning to strike twice, repeating the process with this project as they did with the Constitution. So, right out of their playbook, a bunch of radicals pretending to represent thousands of people (in reality 153 people) have sent a letter to the DEC attempting to pressure the DEC into extending a one-month comment period by an extra 60 days…
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Ultra Petroleum 2016 Update – Will Exit Bankruptcy by April

Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres–no small amount. They aren’t currently drilling on their Marcellus acreage, but if prices change, they likely would. At the end of April Ultra filed for Chapter 11 bankruptcy (see Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy). Shareholders tried to get an official equity committee approved to protect their interest (see Update on Ultra Petroleum Bankruptcy). That effort failed–the trustee denied the motion. So equity holders (stockholders), with the aid of Ultra’s management (who happen to be stockholders themselves) adopted a new strategy: wait them out. Management asked for an extension to file their bankruptcy plan, which would put a plan filing date out to spring 2017 (see Ultra Petroleum Trying to Force Debtholders to Deal re Bankruptcy). It seems that management is using time against debtholders as a tactic to force them to the table to deal–and they did it. Ultra announced in November it has a deal supported by a full two-thirds of outstanding debtholders and plans to move forward (see Ultra Petroleum Gets 67% Debtholders to Agree to Bankruptcy Plan). Yesterday Ultra issued an update for 2016 and regarding the bankruptcy–they are on track to emerge from bankruptcy by early April…
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Moody’s Says Global LNG Prices to Remain Flat “Beyond 2020”

Two days ago MDN brought you Shell’s very first LNG Outlook report, which says demand for LNG around the globe will increase by a very brisk 4-5% per year from now until 2030 (see Shell Launches LNG Outlook 2017 – Rapid Growth Ahead). Shell out to know a thing or two about LNG, since they paid a staggering $69.7 billion last year to purchase BG, basically to get BG’s LNG business (see LNG Love Story: Shell Makes Play to Buy BG in $69.7B Megamerger). Someone else that watches the markets closely is Moody’s Investors Service. Moody’s has just issued a report that says demand for LNG over roughly the same period (“after” 2020), is weakening, not growing. And because of weaker demand and more supply coming online in the U.S. and elsewhere, Moody’s says the price for LNG will remain flat. Shell says demand will be strong, Moody’s says it won’t. Who do we believe?…
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EIA: US Will Become Net NatGas Exporter by 2018

According to the U.S. Energy Information Administration (EIA) and their just-issued Annual Energy Outlook 2017, the United States will become a net exporter of natural gas beginning in 2018. A big reason for the change from being a net importer to net exporter is shale gas (of course). A further big reason why is almost solely due to one company: Cheniere Energy, and their Sabine Pass LNG export facility in southern Louisiana. However, joining Cheniere soon will be the Cove Point, Maryland LNG export facility, now nearing completion. When Cove Point gets rockin’ and rollin’ along with Cheniere, the U.S. will become a net exporter…
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Marcellus & Utica Shale Story Links: Thu, Feb 23, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: ODNR issues 11 permits in Utica; Belmont, Noble counties get most permits in OH in Jan; more funding for PA DEP requested; Dawood Engineering moves to bigger office; Elba Island LNG; Tallahassee City advanced frack ban ordinance; Cheniere Energy gets a new board member; solar jobs aren’t what they’re cracked up to be; Trump targets PHMSA overregulation; China’s LNG imports rocket up 40% in Jan; and more!
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