Energy Services

Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream

Magnum Hunter Cuts Deal to Sell Eureka Hunter & 2 New JVs
June 26, 2015June 26, 2015

On Monday, MDN told you that Magnum Hunter Resources (MHR) was having trouble scraping together $9.4 million to meet liquidity demands by creditors (see Magnum Hunter’s Bankers Say Get $65M in Cash by July 10, Or Else). Today we report that one of MHR’s major investors has sold off millions of shares of the company’s stock (see Magnum Hunter Investor Dumps 6.3 Million Shares of MHR Stock). There’s no ignoring that MHR, a mid-sized Marcellus/Utica driller, is a company in financial trouble. So perhaps it was not surprising that at yesterday’s closing day of the Hart Energy DUG East conference in Pittsburgh, MHR CEO Gary Evans announced that the company has a plan to rake in some big bucks. Number one, MHR has cut a deal to sell their Eureka Hunter pipeline subsidiary for $600-$700 million. Number two, Evans said MHR is working on two joint ventures for other companies to drill on or finance MHR’s drilling on MHR acreage in Ohio and West Virginia. The Ohio deal would bring in around $500 million, and the West Virginia deal around $100 million…
Read More “Magnum Hunter Cuts Deal to Sell Eureka Hunter & 2 New JVs”
Accidents | Allegheny County | Energy Services | Industrywide Issues | Pennsylvania | Regulation | Sunoco Logistics | Washington County

PA DEP Fines Sunoco $95K for Mud Spills During Pipeline Drilling
June 26, 2015June 26, 2015

Although there’s been no publicly published notice, the Pennsylvania Dept. of Environmental Protection (DEP) has fined Sunoco Logistics for spilling non-toxic drilling mud (bentonite) at several locations when they were drilling for the Mariner East I pipeline. One of those instances was last September when Precision Pipeline, hired by Sunoco, was drilling under the Little Mingo Creek (see Mariner East Pipeline Drilling Spills Mud in Local Creek). Bentonite is non-toxic and used in products from shampoo to deodorant and toothpaste. It’s also used to lubricate the drill bit and carry drill cuttings out of the ground. While non-toxic, a whole lot of bentonite in the water can, of course, suffocate fish and cause problems for wildlife that happen to drink it. In March of this year, we noted that the DEP was telegraphing that they were about to assess a “significant” fine for the mud spills at Mingo Creek and a few other locations (see PA DEP: Sunoco Facing “Significant” Fine for Non-Toxic Mud Spills). The fine has been levied. The “significant” fine ended up being $95,000. Clipping Sunoco $95K, compared to the $8.9 million fine the DEP recently slapped on Range Resources for methane leaks, seems somewhat trivial and rather insignificant. Which is perhaps why the DEP hasn’t published, as they usually do, an official notice on their website about the fine…
Read More “PA DEP Fines Sunoco $95K for Mud Spills During Pipeline Drilling”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Medina County | NEXUS Pipeline | Ohio | Pipelines | Regulation

Medina County, OH Antis Trot Out Home Rule Ballot Measure
June 26, 2015June 26, 2015

In February the Ohio Supreme Court, once and for all, struck down so-called “home rule” legislation passed by local municipalities where anti-drillers are able to convince enough citizens to vote for it (see OH Supreme Court Strikes Down Home Rule in Gas Drilling Case). When it comes to creating local laws and zoning ordinances that prohibit or otherwise try to control oil and gas drilling, Ohio state law stipulates only the State regulates it–not towns and villages and cities. That’s the law, and that’s the law the Supreme Court upheld. So along comes Sustainable Medina County, a group of virulent anti-fossil fuelers, with a new petition to put yet another so-called home rule “bill of rights” measure on the ballot in November, this time in an attempt to stop the NEXUS pipeline. What would you call this new initiative in light of the Supreme Court’s decision? We’d call it stark, raving mad…
Read More “Medina County, OH Antis Trot Out Home Rule Ballot Measure”
Blue Racer Midstream | Energy Services | Industrywide Issues | Monroe County | Ohio | Pipelines | Processing Plants | Statewide OH

Blue Racer Brings OH Processing Plant Online, Continues to Expand
June 25, 2015June 25, 2015

Blue Racer Midstream, a joint venture between Caiman Energy II and Dominion, shared the good news yesterday that a second 200 million cubic feet per day (MMcf/d) cryogenic processing plant at its Berne Natural Gas Processing Complex in Monroe County, OH (known as Berne II, yes, they name these things) is now online and operating. Berne II doubles the processing capacity at the plant. Blue Racer also operates a processing AND fractionation complex in Natrium, WV. A 30-mile Y-grade (NGL) pipeline connects the two facilities so that Berne can send along its NGLs to Natrium for further processing. Fractionaters like those in Natrium separate NGLs into their component hydrocarbons, including ethane, butane, propane, etc. In addition to Berne II going online, Blue Racer gave us a general update on the expanding health of their operation: They have 14 long-term major Marcellus/Utica drilling customers; 650 miles of gathering pipelines in OH and WV with another 200 miles of new gathering lines under construction; and gathered volumes have doubled, and processed volumes have tripled in just the last year…
Read More “Blue Racer Brings OH Processing Plant Online, Continues to Expand”
Columbia Pipeline Group | Energy Services | Industrywide Issues | Ohio | Pipelines | Statewide OH | Statewide WV | West Virginia

Columbia Pipeline Board Approves 2 Projects from NE to Gulf Coast
June 25, 2015June 25, 2015

In August 2014, MDN told you that Columbia Pipeline Group, a division of NiSource, had decided to move forward with investing $1.75 billion dollars for two new projects: the Leach XPress and Rayne XPress pipeline projects (see Columbia Gas: $1.75B for 2 Projects to Send Marcellus Gas to Gulf). Leach Xpress will begin in Marshall County, West Virginia, cross Ohio and end up in Leach, Kentucky. Rayne Xpress will beef up an existing pipeline from Leach, Kentucky that goes all the way to Rayne, Louisiana with new compressor stations and looping. The two projects together mean up to 2.7 billion cubic feet per day (Bcf/d) of natural gas can move through the entire system–from West Virginia to the Gulf Coast and all point in between. We commented on the funny name “Leach” for a pipeline. Looks like the marketers at Columbia thought twice about it because the name has changed–for both projects. At least we think so. Yesterday Columbia issued a press release to announce the board of directors has signed off on $2.7 billion worth of investment in two projects: Moutaineer XPress and Gulf XPress. Descriptions for the two projects are almost identical to the descriptions for the Leach and Rayne XPress projects. About the only difference is that the price tag went up for the pair of projects by a billion bucks. The key takeaway from the announcement for us? The capacity to move another 2.7 Bcf/d of Marcellus and Utica Shale gas out of the northeast is on the way in the next couple of years…
Read More “Columbia Pipeline Board Approves 2 Projects from NE to Gulf Coast”
Energy Services | Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics

The Landman Cometh – Sunoco Seeks Easements for Mariner East 2
June 24, 2015June 24, 2015

Landmen for Sunoco Logistics have begun knocking on doors and talking to residents in nine municipalities in Chester County and six in Delaware County (Philadelphia area) to sign easements to allow the Mariner East 2 pipeline to be built through their property. Sunoco wants to begin construction in early 2016. Meetings have cropped up for landowners to hear information about the project, and get information about what their rights are and what terms they should seek before signing an easement. What is Sunoco offering in the way of compensation? It varies from landowner to landowner, depending on where the land is located and how much land they must cross. We do know how much the company offered one resident, in Uwchlan Township (Chester County)…
Read More “The Landman Cometh – Sunoco Seeks Easements for Mariner East 2”
Belmont County | Energy Services | Ethane | FirstEnergy | Industrywide Issues | Ohio | Processing Plants

FirstEnergy Confirms Their Site is Future Home of OH Cracker
June 24, 2015June 24, 2015

More cracker plant talk. Yesterday we told you that Shell has received the air quality permit they need from the PA Dept. of Environmental Protection (see Shell Receives Air Quality Permit from PA DEP for Cracker Plant), moving that ethane cracker plant project significantly closer to reality. We also told you that the president and CEO of Odebrecht, the Brazilian company planning to build a cracker plant in WV, has been arrested in a bribery scandal (see Odebrecht CEO Arrested; What Does it Mean for WV Cracker Plant?), making that ethane cracker project less likely, in our humble opinion. The third major ethane cracker in the Marcellus/Utica is planned for Belmont County, OH. PTT Global Chemical, Thailand’s largest integrated petrochemical and refining company, with financial backing from Marubeni Corporation, a Japan-based company conglomerate, plans to build a cracker plant complex in Ohio (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). It has been an “open secret” the site for the plant would be at FirstEnergy Corp’s R.E. Burger power plant site along the banks of the Ohio River. FirstEnergy has, until now, denied they are selling the site. But a FirstEnergy official in a round-about way has just confirmed that yes, IF the cracker plant project gets built, it likely will get built at the R.E. Burger site…
Read More “FirstEnergy Confirms Their Site is Future Home of OH Cracker”
Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Q: Why is ETE Making a Play to Buy Williams? A: Marcellus/Utica
June 24, 2015June 24, 2015

On Monday, MDN brought you what has to be the biggest midstream news in the Marcellus/Utica for 2015: a proposed hostile takeover of Williams by Energy Transfer Equity (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). We’re a bit dubious about the benefits of a proposed takeover/merger because the market loses competition with such mega mergers. But Wall Street loves these kinds of deals. We see jobs lost due to consolidation and price increases due to less competition. Wall Street sees fatter profits from “economies of scale” and other euphemisms they use for lost jobs and less competition. We spotted a Reuters article that evaluates the proposed ETE deal from the perspective of what it means (for ETE) in the Marcellus/Utica. The story says the primary motivator on the part of ETE in pursuing a takeover/merger with Williams is that it would give ETE a “dominant position” in the Marcellus/Utica…
Read More “Q: Why is ETE Making a Play to Buy Williams? A: Marcellus/Utica”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Regulation | Transco

Mass. DPU Rejects Anti Group’s Request to Join Pipeline Hearing
June 24, 2015June 24, 2015

ENOUGH of these anti-pipeline, anti-drilling, dump-all-fossil fuels protesters and their strategies to stop pipelines in New England. That’s essentially what the Massachusetts Department of Public Utilities (DPU) said in refusing to allow the anti-pipeline group Pipeline Awareness Network for the Northeast (PLAN-NE) “full intervenor status” at a series of hearings the DPU will hold today, tomorrow and Friday to consider whether the contracts sought by the local gas distribution companies (local gas utilities) who want to get cheap, abundant and clean-burning Marcellus natural gas from Kinder Morgan’s proposed Northeast Energy Direct pipeline, are in the public interest. The DPU wants to concentrate on the real issues at hand and not be distracted and derailed by the antics of anti-pipeliners, so the DPU turned down PLAN-NE’s request…
Read More “Mass. DPU Rejects Anti Group’s Request to Join Pipeline Hearing”
American Energy Partners | Energy Companies | Energy Services | Traverse Midstream

McClendon’s New Empire Continues to Separate and Leave
June 23, 2015June 23, 2015

Aubrey McClendon’s new American Energy Partners continues to shed its component parts. Just two weeks ago MDN brought you the news that the largest subsidiary of the company in the Marcellus/Utica region, American Energy Appalachia Holdings, is being spun out into a 100% standalone company, changing its name to Ascent Resources (see Big McClendon News: Sells 35K Utica Acres, Creates New Company). Aubrey himself is still on the board of Ascent, but virtually everything about the new company, we’ve been told, has nothing to do with McClendon. It’s as if they’re running as far and fast as they can away from McClendon. Now, a second large subsidiary of American Energy Partners–the midstream part of the company–is doing the same thing. American Energy – Midstream, LLC announced today it is changing its name to Traverse Midstream Partners LLC (Traverse Midstream). Traverse is transitioning to a 100% standalone company, fully independent of the mother ship American Energy Partners. According to the press release, the spin-off into a new company was “contemplated since the company’s founding in June 2014.” The new company will be totally and completely separated effective July 1, 2015…
Read More “McClendon’s New Empire Continues to Separate and Leave”
Braskem | Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | West Virginia | Wood County

Odebrecht CEO Arrested; What Does it Mean for WV Cracker Plant?
June 23, 2015June 23, 2015

Scandal has rocked Odebrecht, the Brazilian company that in November 2013 announced it wants to build a $4 billion ethane cracker plant complex near Parkersburg, WV (see WV Announces Brazilian Company to Build Ethane Cracker Complex). Marcelo Odebrecht, president and CEO of Odebrecht SA–one of the largest construction companies in South America–was recently arrested for being part of a plan that stole “billions of dollars” from Brazil’s state-run Petrobras oil company. His arrest raises legitimate questions about the viability of the proposed Parkersburg ethane cracker project. We can all pretend that the arrest of the CEO of the company proposing to build the plant has little or no effect on the future of the project–but we’re not children. So let’s not pretend. What do you think is occupying Mr. Odebrecht’s attention these days–building a petrochemical plant in far-off West Virginia, or staying out of jail?…
Read More “Odebrecht CEO Arrested; What Does it Mean for WV Cracker Plant?”
Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | Statewide WV | West Virginia | Wood County

WV Gov Tomblin Not Ready to Give Up on Odebrecht Ethane Cracker
June 23, 2015June 23, 2015

West Virginia Gov. Earl Ray Tomblin, the man who has worked hard to land an ethane cracker plant for his state, is still hopeful that WV will get them a cracker. In a wide-ranging talk at the Wheeling Rotary Club on Monday, Tomblin said Odebrecht, the Brazilian company that announced its interest in building an ethane cracker complex near Parkersburg, WV, continues to move forward with the project–“but at a slower pace.” That certainly is a bit of good news. We’ve not heard anything about Odebrecht advancing the ball on their project since the company announced in April, “the original configuration…needs to be re-evaluated, and a final investment decision on the project will require more diligence.” We took that to mean they’ve hit the pause button (see Odebrect Pushes the Pause Button on WV Ethane Cracker). But Tomblin and his administration don’t view it the same way. Instead of hitting the brakes, Tomblin says Odebrecht has simply reduced pressure on the gas pedal a bit…
Read More “WV Gov Tomblin Not Ready to Give Up on Odebrecht Ethane Cracker”
Energy Services | Energy Transfer Partners | Industrywide Issues | Ohio | Pipelines | Statewide OH | Taxation

For the Children: ET Rover Pipeline $91M in School Taxes 1st Year
June 23, 2015June 23, 2015

In the ongoing fracking wars, pipelines are the latest flash point for irrational anti-drillers. It used to be no one thought twice about a new pipeline going in the ground. But fear mongers from Big Green organizations like the Sierra Club claim those pipelines are a connection straight to Lucifer. We’ve seen groups of anti-fossil fuelers oppose pipelines like the PennEast, the Constitution, the Northeast Energy Direct and many others. One of those many others is the ET Rover pipeline, a 711-mile Marcellus/Utica natural gas pipeline that will serve mostly U.S. customers that will cost $3.7 billion to build and run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. ET Rover is a project of Energy Transfer, the company making a play to take over Williams (see our other stories on that topic). This story is about ET Rover’s campaign to overcome opposition in Ohio where the majority of the pipeline (570 miles of it) will run. According to a press release issued yesterday, the ET Rover pipeline will generate more than $135 million in ad valorem tax revenue for Ohio during its first year in operation. Of that $135 million, an estimated $91 million will be directed to more than 36 local school districts. Perhaps the nutters opposing the pipeline should rethink their opposition before they screw their own kids out of $91 million? As you know, it’s always for the chil’ren. Libraries, hospitals, parks and senior centers are among other local entities that will benefit from the tax revenue from ET Rover…
Read More “For the Children: ET Rover Pipeline $91M in School Taxes 1st Year”
Energy Services | Williams

Williams Appoints New Top Attorney
June 23, 2015June 23, 2015

Clarification: The new Williams lawyer, Sarah Miller, was not hired specifically to fend off the hostile takeover bid from ETE. Our original headline and lead sentence for this story may have left that impression (since updated). Ms. Miller, as we point out in the article, has worked for Williams for the past 15 years. Her appointment, according to a Williams official, was already in the works long before the ETE bid. However, we maintain that Ms. Miller will be very busy in the coming weeks and months because of the ETE bid.

Williams has a new top lawyer who will help defend the company in a hostile takeover bid from Kelcy Warren, CEO of Enterprise Transfer Equity. Yesterday MDN shared the news that Warren, after six months of unsuccessfully trying to woo Williams into a merger deal, has dropped that effort and begun a new effort–a hostile takeover of the company (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). We don’t read much into the retirement of the previous top attorney at Williams–Craig Rainey. The press release says he retired. Since he was somewhere around 63 years old by our calculations, it’s not surprising Rainey retired. Replacing him is Sarah Miller who has worked for Williams for the past 15 years in various legal roles. Miller has been the “acting” top attorney at the company since March. Miller now has her hands full with an unwanted effort to take over the company…
Read More “Williams Appoints New Top Attorney”
Energy Services | Summit Midstream

Summit Midstream Gets New Head of HSE, former TCEQ Commissioner
June 23, 2015June 23, 2015

Summit Midstream has a small but growing presence in the Marcellus/Utica region. In 2013 Summit purchased a local pipeline gathering system in Doddridge County, WV from MarkWest Energy for $210 million (see MarkWest Sells Doddridge County, WV Pipeline System to Raise Cash). In June 2014, Summit bought 40% of Ohio Gathering for $377 million, a pipelines and processing plants operation in southeastern Ohio (see Summit Midstream Cuts $377M Check for 40% of Ohio Gathering). And in December 2014, XTO Energy inked a deal with Summit to build a local pipeline gathering network in southeastern Ohio–in Belmont and Monroe counties (see XTO Gets Serious in OH Utica, Hires Summit for Gathering System). Any major personnel changes that potentially affect the company are of interest here on MDN. Such a change has occurred. Summit announced yesterday that Zachary “Zak” Covar, former Commissioner of the Texas Commission on Environmental Quality (TCEQ), has joined Summit Midstream as Vice President in charge of Summit’s Health, Safety, Environmental and Regulatory affairs…
Read More “Summit Midstream Gets New Head of HSE, former TCEQ Commissioner”
Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B
June 22, 2015June 22, 2015

Sunday evening MDN spotted what has to be THE biggest midstream story of 2015: Somebody wants to buy out and take over Williams Companies. The biggest midstream story of 2014 was the buyout of Access Midstream (the former Chesapeake Midstream) by Williams, creating a company that is nearly the size and certainly a worthy rival of the country’s biggest pipeline company Kinder Morgan (see Big News: Williams Partners Buying Access Midstream for $6B). Williams said at the time the “total transaction value” (or TTV) would create a combined company worth nearly $50 billion (see Deal Details for Williams/Access Midstream Merger – TTV of $50B!). Sunday evening Williams said, in a pair of prepared press releases, that somebody (they wouldn’t name who) has made an “unsolicited proposal” (almost sounding like an indecent proposal) to buy Williams for $64 per share, or a total deal worth $48 billion. Williams has rebuffed the offering, hiring some high-powered bankers to help them out of this mess. The guy and company making the offer, it has since been revealed, is none other than Kelcy Warren, CEO of both Energy Transfer Partners and Energy Transfer Equity, the main shareholder of ETP. ETP is very active in the Marcellus/Utica. We have as much as we can gather on Warren, background on ETP/ETE, his indecent proposal to Williams, and what Williams–one of if not THE largest midstream companies in the northeast–is doing in response to Warren’s proposal…
Read More “Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B”