Energy Services

Energy Services | Industrywide Issues | Pipelines | Transco | Williams

Williams Plans $2.1B Transco Pipeline Expansion, 100% Sold Already
February 24, 2014February 24, 2014

Amidst the bad news for Williams last week that the company is being targeted by corporate raiders (see Evil Corporate Raiders Double Investment (& Control) in Williams), was a little bright spot of good news. The company announced they plan to expand the Transco pipeline carrying cheap Marcellus Shale gas (mostly from PA) to the Eastern Seaboard–what they call the Atlantic Sunrise Expansion of the Transco. The good news is that nine drillers have signed binding contracts, already sopping up 100% of the planned 1.7 million dekatherms of expansion. The new customers were not named in the announcement.

Williams plans to spend $2.1 billion on the expansion. They will file a request with the Federal Energy Regulatory Commission (FERC) in March to get permission to…file a pre-filing. Yeah, it’s complicated–but that’s life in the midstream. Here’s the announcement from Williams:
Read More “Williams Plans $2.1B Transco Pipeline Expansion, 100% Sold Already”
Energy Services | Industrywide Issues | Kinder Morgan | Pipelines

NGPL Launches Open Season to Expand, Carry NE Gas South
February 21, 2014February 21, 2014

Two days ago Natural Gas Pipeline Company of America LLC (NGPL), a division of America’s largest midstream company Kinder Morgan, announced a 14-day non-binding open season to gauge interest in the potential expansion of its Gulf Coast mainline system. The expansion would increase NGPL’s flow capability up to 750,000 dekatherms per day of incremental volume from the Rockies Express Pipeline (REX) interconnection at Moultrie, IL. I would reverse the flow at several compressor stations, sending Marcellus and Utica Shale gas south on its pipeline system to Texas and Louisiana.

Here’s Kinder Morgan’s announcement of the NGPL open season, which runs through March 4th:
Read More “NGPL Launches Open Season to Expand, Carry NE Gas South”
Crosstex Energy | Devon Energy | Energy Companies | Energy Services | EnLink Midstream

EnLink’s 2014 Crystal Ball: $525M Revenue, $430M Capex
February 20, 2014February 20, 2014

Stockholders will soon vote on the previously announced merger between midstream company Crosstex Energy and driller Devon Energy (see Crosstex Energy Gets a Name Change, Merger with Devon Proceeds). There’s no reason to think the merger will not proceed smoothly. Both companies have operations in the Marcellus and Utica Shale region. The name of the new Devon subsidiary will be EnLink Midstream. As we previously mentioned, Barry Davis, CEO of Crosstex will become (or remain) CEO of EnLink. For us this is a feel-good merger–no one loses their job and Davis, by all accounts, is a really nice guy to work for (see A Peek Behind the Curtain of Crosstex/Devon Midstream Marriage).

Yesterday Crosstex issued their “best guess” as to what revenues and expenses will be for the company for 2014–something financial types call “guidance.” Here is Crosstex/EnLink’s best stab at peering into the crystal ball for 2014…
Read More “EnLink’s 2014 Crystal Ball: $525M Revenue, $430M Capex”
Access Midstream Partners | Energy Services

Access Midstream Execs Tout the Marcellus/Utica on Analyst Call
February 20, 2014February 20, 2014

MDN told you yesterday that Access Midstream had a really good year in 2013, thanks in part to the Marcellus and Utica Shale (see Access Midstream Has a Good Year: Revenue Up 80% for 2013). The executive team for Access held a conference call with analysts yesterday and (no surprise) a lot of the talk revolved around the Marcellus and Utica. We thought it was interesting and thought you might too:
Read More “Access Midstream Execs Tout the Marcellus/Utica on Analyst Call”
Crime | Energy Services | Halliburton | Hydraulic Fracturing | Indiana County | Industrywide Issues | Pennsylvania | Regulation | Wastewater

Halliburton Fined $1.8M for Storing/Treating HCl at W PA Facility
February 19, 2014February 19, 2014

In one of the biggest (perhaps the biggest) fines levied by the Pennsylvania Dept. of Environmental Protection (DEP), Halliburton has been fined $1.8 million for storing and treating hydrochloric acid (HCl) at a facility in Homer City, PA (about 50 miles from Pittsburgh). The HCl shipped and treated at the Homer City site happened over a 13-year period of time from 1999-2011, meaning most of it came from conventional natural gas well sites, although some it likely came from Marcellus Shale sites too (the conventional/unconventional split is not identified in the DEP paperwork). Marcellus drilling in PA didn’t ramp up until around 2006-2007. The DEP says Halliburton had claimed exemption from the state’s Solid Waste Management Act of 1980 for their Homer City facility, saying they were shipping and storing very small amounts of HCl at the facility when in fact that was not the case. Based on their false claim, Halliburton was given a pass on inspections, paperwork filing, signage, and the requirement to use certified hazardous waste haulers on more than 250 truck trips in and out of the facility–hauling HCl. Halliburton was in the wrong, they now acknowledge it (having been caught), and they’ve been levied a steep fine.

Both the DEP and Halliburton stress that there “is no evidence that Halliburton’s handling of the hazardous waste caused any actual harm to the public or the environment.” However, Halliburton violated both the spirit and the letter of the law and have now been caught. Shame on them. Below is the announcement from the DEP, a copy of the consent order signed by Halliburton admitting guilt, and an article providing important details about this story not found elsewhere…
Read More “Halliburton Fined $1.8M for Storing/Treating HCl at W PA Facility”
Access Midstream Partners | Energy Services

Access Midstream Has a Good Year: Revenue Up 80% for 2013
February 19, 2014February 19, 2014

Access Midstream, a pipeline and processing plant company with operations in the Marcellus and Utica Shale, announced financial results for 2013 yesterday. Access had a very good year with revenue (EBITDA) up over 100% for the fourth quarter of 2013, and up over 80% for the entire year.

Here’s the top level numbers from the Access announcement yesterday:
Read More “Access Midstream Has a Good Year: Revenue Up 80% for 2013”
Chesapeake Energy | Elexco Land Services | Energy Companies | Energy Services | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Do PA Drillers have Law on Their Side in Royalty Debate?
February 18, 2014February 18, 2014

A sharp MDN reader, John S., emailed MDN to remind us of how PA landowners ended up in the quagmire they are now in with regard to royalties with drillers (like Chesapeake) deducting post-production expenses from what they pay to landowners. We had forgotten about the Kilmer v ElexCo Land Services case from March 2010 in which the PA Supreme Court ruled that drillers could indeed deduct certain post-production expenses without violating the law that says landowners must be paid a 12.5% minimum royalty (see Breaking News: PA Supreme Court Rules Against Landowner Seeking to Invalidate Lease).

PA Gov. Tom Corbett wrote a letter to Doug “the ax” Lawler at Chesapeake telling him the company’s royalty calculations were unfair at best, and perhaps illegal. Doug just has to point to the 2010 PA Supreme Court case. Here’s more information about the 2010 case and what the decision means, and doesn’t mean:
Read More “Do PA Drillers have Law on Their Side in Royalty Debate?”
Accidents | Energy Services | Industrywide Issues | Pipelines | Public Opinion | Williams

KY Natgas Pipeline Explosion Used to Fight Bluegrass NGL Pipeline
February 18, 2014February 18, 2014

Last Thursday a section of the Columbia Gulf Transmission Line 200 30-inch natural gas pipeline exploded in rural northern Kentucky (Adair County). These kinds of things unfortunately do happen from time to time. Two people were slightly injured (treated and released). Two nearby houses were destroyed. Emergency shut-off procedures worked. The cause is still not known and nearly a week later the story has all but disappeared from the news.

Although an accident and tragedy, the real damage (potentially) is for the Bluegrass NGL pipeline that Williams is trying to build through Kentucky. The Bluegrass is already facing stiff opposition, as we’ve written about a number of times (see Bluegrass NGL Pipeline Hits Brick Wall in the Bluegrass State). Williams felt it necessary to invoke eminent domain because of the problems they’ve faced in Kentucky, a decision that’s still tied up in court (see Bluegrass NGL Pipeline’s Eminent Domain Challenged in KY Court). Those opposed to drilling and the Bluegrass pipeline will no doubt shamelessly use the Columbia pipeline explosion as fuel for their cause…
Read More “KY Natgas Pipeline Explosion Used to Fight Bluegrass NGL Pipeline”
Energy Services | Ethane | Industrywide Issues | Marshall County | NGLs | Processing Plants | West Virginia | Williams

Williams’ Oak Grove, WV Plant (Slowly) Gets New De-Ethanizer
February 17, 2014February 17, 2014

The Oak Grove processing plant in Marshall County, WV is about to get its first de-ethanizer, a huge piece of equipment that strips ethane from “wet gas” so it can be sold, via pipeline. Until recently most ethane in the northeast has been a waste product for drillers–something that’s blended with other hydrocarbons or even burned (flared) to get rid of. However, with two new ethane pipelines up and running–one to Sarnia, Canada (Mariner West) and one to the Gulf Coast (ATEX), ethane is a valuable commodity. And so Williams is adding a de-ethanizer to their still-under-construction Oak Grove processing plant.

The de-ethanizer recently arrived by train at Benwood CSX rail yard along the Ohio River. Now the 123-feet long (and 14 feet wide) piece of equipment will go on a very special “superload” truck and it will take 3 days to go just 30 miles to reach the Oak Grove site. If you live in WV, you might want to reconsider plans to travel along routes WV-88 or US-250 later this week, unless you like moving along at 5 miles per hour…
Read More “Williams’ Oak Grove, WV Plant (Slowly) Gets New De-Ethanizer”
Coterra Energy (Cabot O&G) | Energy Companies | Energy Services | Industrywide Issues | Pipelines | Regulation | Williams

FERC: Constitution Pipeline Should Make Changes to Lessen Impacts
February 14, 2014February 14, 2014

From the beginning when it was first proposed, MDN has chronicled the journey of the proposed 125-mile Constitution Pipeline, a natural gas pipeline that will stretch from the gas fields of Susquehanna County, PA to central New York where it will connect with two major interstate transmission Pipelines–the Tennessee Gas Pipeline and the Iroquois Gas Transmission pipeline. We have an important milestone to report on the Constitution. Wednesday, the Federal Energy Regulatory Commission (FERC), the federal agency in charge of approving these kinds of pipeline projects, issued a Draft Environmental Impact Statement (EIS) for the project (the Executive Summary is embedded below).

In brief, the draft EIS, which is now open for public comment until April, says that the project as proposed does pose some threats to the environment, but that those threats can be reduced to “less than significant levels” if Williams, the builder of the pipeline, makes certain changes and takes certain precautions. FERC also said there’s no better alternative to meeting the energy needs for hundreds of thousands of people–that the Constitution is the best option out there for delivering more natural gas to the northeast in a timely manner. To do nothing is not an option, according to FERC, and there are no other pipelines that can do what the Constitution will do. This EIS was FERC essentially blessing this project–with certain conditions attached…
Read More “FERC: Constitution Pipeline Should Make Changes to Lessen Impacts”
Energy Companies | Energy Services | Greene County (PA) | Industrywide Issues | M3 Midstream | Pennsylvania | Pipelines | Rice Energy | Washington County

Rice Energy Picks Up Pipelines in SWPA in Deal with M3 for $110M
February 13, 2014February 13, 2014

Rice Energy, one of our favorite newer drilling companies, announced yesterday they’ve put some of that IPO money to good use (see Rice Energy IPO Soars, Brings in $84M More Than Expected). Rice has purchased a 28-mile pipeline gathering system already up and running in Washington County, PA from M3 Midstream for $110 million cash on the barrel head. The deal also includes rights of way to build more gathering pipelines in both Washington and Greene counties. Rice Energy owns leases and is conducting active drilling in both counties.

The Marcellus and Utica Shale Databook, Vol. 3 (just out) shows Rice with 28 unique well location permits in Washington County, PA for the last four months of 2013, and 9 unique well location permits in Greene County (via Alpha Shale Resources, which Rice recently picked up in a deal with Alpha Natural Resources). Makes perfect sense Rice would want to buy the pipelines that connect to their wells and get a piece of the midstream action in the white hot Marcellus region of SWPA. Here’s yesterday’s announcement:
Read More “Rice Energy Picks Up Pipelines in SWPA in Deal with M3 for $110M”
Energy Services | Industrywide Issues | Pipelines | Spectra Energy

New England Pipeline May Reverse Flow & Pump Marcellus Gas
February 13, 2014February 13, 2014

If there’s a silver lining to the misery of this long, cold, hard winter, it’s that the energy shortage this winter has precipitated an attitude change in New England–a place with a dearth of natural gas even though there’s plenty to be had. Gone are the snotty, haughty attitudes of anti-fracking New Englanders that they don’t want any of that filthy, nasty, fracked natural gas. Not only do they now want it, they can’t get it fast enough because of price spikes up to 10 times the norm. That’ll grab your attention. Maybe fracking ain’t so bad after all, eh?

The latest about face comes from the State of Maine. They need more natural gas and they need it bad. There’s a pipeline that comes down from Nova Scotia into Maine that’s supposed to carry natural gas produced offshore. Problem is, the offshore wells aren’t producing all that much and the pipeline isn’t delivering all that much. So there’s now talk that Spectra Energy, owner of the Maritimes and Northeast Pipeline, is willing to reverse the flow (which takes equipment and time) so that the pipeline will be bi-directional and can begin to carry cheap Marcellus Shale gas from PA up into Maine. We’re trying not to dance up and down and yell “Love it! Told’ya so!” Well, maybe just a little jig…
Read More “New England Pipeline May Reverse Flow & Pump Marcellus Gas”
Boardwalk Pipeline Partners | Energy Services | Industrywide Issues | Pipelines

Boardwalk’s Stock Drops Like a Rock – Trouble in Midstreamland?
February 12, 2014February 12, 2014

Boardwalk Pipeline Partners, a Houston-based midstream company, suffered a massive stock drop on Monday (down over 40% in one day) after announcing a big drop in revenue and earnings and lowering cash distribution some 81%. Boardwalk’s stock recovered slightly yesterday–something traders refer to pejoratively as a “dead cat bounce”–meaning when something drops so far from such a height, when it hits bottom it’s likely to bounce at least a little. Ouch. To date, Boardwalk has no presence with its pipelines and other operations in the northeastern Marcellus/Utica region–so why is it news here?

Number one, much of the reason for Boardwalk’s woes is precisely because they don’t have infrastructure in the northeast, an area white hot with activity. Number two, because Boardwalk, partnering with Williams, is trying to establish a presence in the northeast by building the Bluegrass mixed NGL pipeline from the Marcellus/Utica to the Gulf Coast. And Boardwalk/Williams is in a horse race with Kinder Morgan/MarkWest to see who builds their pipeline first (see “Midstream Knife Fight” – Who Will Have 1st Operational NGL Pipeline to Gulf?). Will Boardwalk’s stock drop affect Bluegrass plans? And, as one analyst asks, will Boardwalk’s stock drop bleed over and affect similar midstream companies?…
Read More “Boardwalk’s Stock Drops Like a Rock – Trouble in Midstreamland?”
Crestwood Midstream | Energy Services | Industrywide Issues | Inergy | New York | NGLs | Pipelines | Regulation | Schuyler County | Statewide NY

NY Senate Bill Forces Cuomo DEC to Authorize New Propane Storage
February 12, 2014February 12, 2014

MDN has long chronicled the struggle for Inergy (now a part of Crestwood Midstream) to turn a depleted salt cavern along Seneca Lake, NY into a critically important underground propane storage facility–the only such new facility planned for the northeast. We’ve also told you about nutty protesters, like so-called “distinguished scholar in residence” at Ithaca College, Sandra Steingraber, who was arrested for blocking the entrance to the facility last year (see NY Protesters Arrested for Blocking NatGas Storage Facility). We even told you which businesses you should consider boycotting for their agitation against the facility (see Inergy: Boycott NY Businesses that Support ‘Gas Free Seneca’). One of the businesses in the list stands out: Pompous Ass Winery, run by…well, you can imagine.

As MDN noted not long ago, the delay in allowing Inergy/Crestwood to begin using the facility to store propane is partially to blame for why northeasterners are now paying propane rates out the nose (see Northeast Propane Shortage – Andrew Cuomo Partially to Blame). Enough dithering by Can’t-Make-a-Decision Cuomo. NY State Senate Energy Committee Chairman George Maziarz, R-Lockport, has introduced a bill that requires the recalcitrant state Dept. of Environmental Conservation to get off the pot and permit the facility…
Read More “NY Senate Bill Forces Cuomo DEC to Authorize New Propane Storage”
Energy Services | Enterprise Products Partners | Industrywide Issues | Pipelines | Regulation

NPGA Asks FERC to Reverse Flow of ATEX Pipeline & Pump Propane
February 7, 2014February 7, 2014

There is a serious, some would say “dangerous” shortage of propane in the northeast, for a number of reasons. The ongoing, brutally cold winter is partially to blame (oh global warming, where are thou? we need thee now!). In what appears to MDN to be a case of sour grapes, the National Propane Gas Association (NPGA), representing some 3,200 propane companies, has asked the Federal Energy Regulatory Commission (FERC) to force the brand new Appalachia to Texas (ATEX) pipeline to quite pumping ethane from the Utica/Marcellus to Gulf Coast and instead reverse the flow and pump propane from the Gulf to the northeast citing the propane shortage as the reason.

Well, it is an emergency, right? Why do we say sour grapes? Because part of the newly online ATEX was an existing pipeline that used to flow south to north and carry (you guessed it)–propane. The NPGA and its members opposed losing that capacity and challenged Enterprise Product Partners, the builder of the ATEX, in court. They lost. So it appears they’re using the current “crisis,” which is partially brought on by high demand from the cold and partially lack of storage capacity, which is the fault of NY Gov. Andrew Cuomo, as an excuse to get the pipeline turned around, at least for a period of time…
Read More “NPGA Asks FERC to Reverse Flow of ATEX Pipeline & Pump Propane”
Energy Services | Industrywide Issues | Ohio | Pipelines | Regulation | Spectra Energy | Statewide OH

Spectra Energy Files Formal Request with FERC for OPEN Pipeline
February 5, 2014February 5, 2014

When it comes to building a new natural gas pipeline, it’s a loooooong process to get the route planned and approved. Once that’s done, depending on how long the pipeline is, it takes a fair bit of time to actually build it. We started telling you about a proposed new pipeline project from Spectra Energy back in December of 2011 called the Ohio Pipeline Energy Network, or OPEN (see Chesapeake Investing in New 70-Mile Ohio Pipeline). We brought you an update on this interesting project last August (see Spectra’s OH Pipeline Project Advances, Sept 20 Deadline w/FERC).

OPEN is an interesting project because it will build 76 miles of new pipeline that connects to the Texas Eastern Pipeline, and then reverses the flow on the Texas Eastern to carry Marcellus and Utica Shale gas from eastern Ohio to the Gulf Coast. The Texas Eastern will become a bi-directional pipeline, sometimes bringing gas north from the Gulf, other times sending it to the south to the Gulf. The new news about the OPEN project is this: Spectra Energy made their full, official filing with FERC (Federal Energy Regulatory Commission) last week seeking FERC’s blessing to go ahead build it starting the new pipeline in December of this year. Here’s the story as reported by Reuters:
Read More “Spectra Energy Files Formal Request with FERC for OPEN Pipeline”