Price of NatGas Spikes to Highest Level in 4 Years – $4.84/Mcf

From even a cursory glance at news over the past 24 hours it would be hard to miss the stories blaring the trumpets that the price of natural gas closed at a 4+ year high yesterday (NYMEX futures price closed at $4.84/Mcf), and that the price jumped an amazing 18% in a single day–the biggest jump in 14 years! The primary reason, according to news reports and interviews with traders, is low stockpiles (low storage) combined with short-term weather forecasts for colder weather in the northeast. Indeed, as we write this (sitting in Binghamton, NY), we await the arrival, in a few hours, of an early winter snowstorm of proportions usually not seen until the dead of winter. Some 3-7 inches of snow on the way, more in the higher elevations. The system will affect most northeastern states. Crank up the gas heat! The bazillion dollar question is: How long will the price of gas stay “high”–by which we mean over $3.25/Mcf?
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NatGas Prices in PA Catching Up with Rest of Country

Since our lead story today is about the spike up in the price of natural gas (see Price of NatGas Spikes to Highest Level in 4 Years – $4.84/Mcf), we thought it fitting to bring you a related story that caught our eye–on the price of natgas in Pennsylvania. For years PA, especially the dry gas northeast, has been plagued with some of the lowest natural gas prices in the U.S. Why? Prolific production and not enough pipelines to get all that production to higher-paying markets. The situation is changing, rapidly. Prices in the northeast Marcellus are catching up with the Henry Hub price in southern Louisiana, thanks to multiple pipelines coming online. What does it all mean for Pennsylvanians?
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EnCap Looks to Sell Royalty Stake in “Core” of Ohio Utica

EnCap Investments is a venture capital investor that funds independent companies in the U.S. oil and gas industry. EnCap has its fingers in a number of pies in the Marcellus/Utica. EnCap is the major investor behind Eclipse Resources and was instrumental in Eclipse selling itself to and merging with Blue Ridge Mountain Resources (see Eclipse Resources Merging with Former Magnum Hunter). EnCap is also a major investor in (i.e. owner of) PennEnergy Resources, which recently cut a deal to buy Rex Energy (see Rex Energy Sells Itself to PennEnergy Resources for $600M). Another way EnCap invests in our region is by funding drilling programs in return for royalty payments (or more properly, for a thin slice of the royalties). EnCap has put their royalty interests in several “core” Utica Shale counties up for sale.
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FERC Approves Rest of Columbia WB XPress Pipe for Startup

In early October the Federal Energy Regulatory Commission (FERC) granted TransCanada permission to begin service on part of its Columbia WB XPress pipeline project, the “Western Build” portion of the project (see FERC Approves Columbia WB XPress Pipe for Partial Startup). The good news is that yesterday FERC granted permission to start up the rest of WB XPress, the “Eastern Build.” The $900 million WB XPress project is located in West Virginia and Virginia and expands capacity along the Columbia Gas Transmission (CGT) pipeline system by 1.3 billion cubic feet per day (Bcf/d), linking Marcellus gas supplies to new markets. The whole WB XPress enchilada is now ready to let it flow.
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NY State Court Denies Northern Access Pipe Eminent Domain

Another bump in the road for National Fuel Gas Company and their Northern Access Expansion pipeline project. Not a major hurdle. Not an apocalypse. Not the end of the line. A bump. The Appellate Division of New York State Supreme Court (in NY, Supreme Court is a low court, one step up from county court), overturned the decision of the lower Supreme Court granting NFG the power of eminent domain to build Northern Access, a project not scheduled to get built until 2022. The attorney who won the case against NFG proclaimed without eminent domain, “The pipeline is dead.” We say he’s dead wrong.
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The War to Build PennEast Pipeline Continues

It’s been almost a year since the Federal Energy Regulatory Commission (FERC) granted final approval for the PennEast Pipeline project, a $1 billion, 120-mile natgas pipeline that will stretch from northeast PA to the Trenton area of New Jersey (see FERC Grants Final Approval for PennEast Pipe – Real Battle Begins). DTE Energy’s NEXUS Pipeline, a 255-mile pipeline from Columbia County in Ohio to Southern Michigan, received its FERC approval around the same time. NEXUS is already built and flowing, PennEast hasn’t turned the first shovelful of dirt yet. What’s going on?
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Virginians Save $11B in 10 Years Thx to Fracked Shale Gas

Residents of Virginia have benefited in a major way from an abundance of cheap, clean-burning shale gas. How much benefit? Try $11 billion of money went directly into the pockets of Virginia residents and businesses over the past 10 years thanks to low-priced natural gas–fracked gas, coming from the Marcellus/Utica. Industry group Consumer Energy Alliance (CEA) has just published a new report that shares the good news (full copy below). You may recall not long ago CEA published a similar study for Pennsylvania (see PA Consumers Save $30B Over 10 Years Thx to Marcellus Shale), and West Virginia (see WV Consumers Saved $4B Over 10 Years Thx to M-U Shale). Now it’s VA’s turn. Even though VA doesn’t extract shale gas, they still enjoy its benefits!
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Energy Stories of Interest: Thu, Nov 15, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: US LNG player Cheniere fires up Corpus Christi production; Haynesville’s gigantic gas resurgence could be a winner in LNG export race; Think oil has been volatile? Watch natural gas; Firmer Henry Hub natural gas price, high shipping rates pressure US LNG margins; Cheniere bets $15 billion on world gas demand despite tariff; U.S. crude oil and natural gas production increased in 2017, with fewer wells; Why new rail car specs are creating obstacles for crude-by-rail; Climate contrarian uncovers scientific error, upends major ocean warming study.
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