CNX Update: Shut-in 375 MMcf/d, Central PA Utica the Future
CNX Resources, one of our favorite Marcellus/Utica drillers, issued an operational update yesterday with some interesting new information. Chief among the tidbits is the fact that CNX, beginning May 1, shut-in some of its production. Specifically around 375 million cubic feet per day (MMcf/d). The company expects that number to decline to 300 MMcf/d by July. After that, they’ll play it by ear.
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Equitrans’ 303-mile Mountain Valley Pipeline (MVP) project from West Virginia to southern Virginia is now 92% in the ground and complete. That final 8% is frustratingly delayed because of lawsuits and regulatory actions brought on by Big Green groups. But have no fear. In an announcement released yesterday by the builder Equitrans Midstream, MVP will be 100% done and operational in “early 2021.” The end is in sight.
Two of the largest not-yet-completed pipeline projects in the Marcellus/Utica, Mountain Valley Pipeline (MVP) and Atlantic Coast Pipeline (ACP), are currently on hold with no construction activity due to various legal challenges by Big Green (see today’s story, Mountain Valley Pipe Update: Done and In-Service Early 2021). However, there are several other large and small M-U pipeline projects where construction continues, even with restrictions from the coronavirus pandemic. Which pipelines?
With EQT shutting in one-third of its production, Cabot shutting in some of its production, and today’s news that CNX has shut in production (see CNX Update: Shut-in 375 MMcf/d, Central PA Utica the Future), the cumulative effect of those three (plus other M-U drillers) is that our region now produces at least 2 billion cubic feet per day (Bcf/d) less of natgas than it did just a few months ago. That decrease is helping to “balance” gas flows and help prices to not drop further than they already have.
The U.S. onshore rig count continues to collapse, hitting a historic new low of 299. Over the past week, another 12 rigs disappeared from the count, mainly located in oil plays (like the Permian). Since the beginning of March, the Marcellus had (as of last week) lost 11 rigs in total. The Marcellus gained back one of those rigs. Since the beginning of March the Utica has stayed consistent with 10-11 rigs operating. Last week the Utica lost two rigs, now down to 9 rigs operating.
The International Energy Agency (IEA) released a report Wednesday titled, “Gas 2020: Analysing the impact of the COVID-19 pandemic on global natural gas markets.” IEA says the global gas market will experience its “largest demand shock on record” in 2020, with demand for natural gas worldwide decreasing by 4% this year. That’s a bit better than IEA’s previous estimate of a 5% decrease in 2020.
MARCELLUS/UTICA REGION: New natural gas service begins in Centre Hall; Delaware River Basin Commission faces pressure to reject PennEast pipeline; NATIONAL: North American 2020 upstream spending down 42%, back to pre-shale era; ‘Sold!’ Auctioneers race to unload oil equipment as U.S. drilling dries up; The unique ways oil companies are looking to avoid bankruptcy; US weekly LNG exports drop to just five cargoes; From standstill, America’s oil frackers plot a slow, careful return; INTERNATIONAL: Can the U.S. Senate stop Germany’s gas pipeline from Russia in a post-coronavirus world?