EQT & Equitrans Spat Over Hammerhead Pipeline Goes Public
There’s trouble brewing in EQT-land. Once upon a time, EQT was both a producer (drilling) and midstream (pipeline) company. But then so-called activist investors forced the company (after its merger with Rice Energy) to split in two–drilling and pipelines. The split happened in November 2018 (see It’s Here! EQT Midstream Division Now Split into Standalone Co.). The new pipeline company was eventually renamed Equitrans Midstream. The two companies, EQT and Equitrans, have maintained a close relationship with Equitrans doing the lion’s share of gathering EQT’s production and getting it to market. But now the two sides are squabbling over an Equitrans project called Hammerhead, and that disagreement has gone public with Equitrans issuing a pointed warning via press release.
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Yesterday our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The DPR estimates how much oil and natural gas each of the country’s seven largest shale plays produced in the previous (i.e. current) month, and how much each will produce in the coming (i.e. next) month. The September report, which predicts production for the coming month of October, estimates natural gas production in the Marcellus/Utica will decrease by 162 million cubic feet per day (MMcf/d)–the eighth month in a row the M-U has seen a production decrease.
The Pennsylvania Department of Environmental Protection (DEP) has just published its 2019 Oil and Gas Annual Report. This is the fourth year in a row the DEP has published the report in an interactive, electronic (i.e.online) format ONLY. What does the 2019 report show? While permits issued and number of new wells drilled have both gone down (again), gas production has gone up (again)–to a new record high.
Last week MDN brought you the news that the Delaware River Basin Commission (DRBC) had, once again, caved to pressure from radicalized environmental groups by suspending (for now) a permit they previously issued to allow New Fortress Energy (NFE) to build a dock in the Delaware River to load ships with LNG (see 
Encino Acquisition Partners (aka Encino Energy) bought all of Chesapeake Energy’s Ohio assets for $2 billion in 2018 (see 
S&P Global Platts published analysis last Friday looking at supply and demand for natural gas in the Midwestern region of the country. Platts says supplies to the region from places like the Bakken, Midcontinent (SCOOP/STACK), and Rockies will decrease this winter–by a lot. But then, demand in the region will decrease too, given the slumping economy because of the coronavirus pandemic. However, it looks to us like maybe there’s an opportunity for Marcellus/Utica gas, which travels to the Midwest via several pipelines, to make up the difference between supply and demand. The region will still need more gas than supplies available.
MARCELLUS/UTICA REGION: The greatest story Pennsylvanians were never told; OTHER U.S. REGIONS: Nearly 25% of US Gulf oil and gas volumes offline as Hurricane Sally nears; Colorado regulators pursue pseudo fracking ban, understanding the impacts; INTERNATIONAL: Why Nord Stream 2 is back in the spotlight.