Marcellus Shale Threatens to Bankrupt European Petchem Industry
In reading a fascinating story about European chemical plant giant Ineos, the article took an unexpected turn when it said Ineos, indeed all of Europe’s petrochemical industry, is “vulnerable as never before because of the shale oil and gas boom in the US, which has made energy costs there just a fraction of those in Europe.” The article specifically names and credits the Marcellus with producing feedstock that is far cheaper than can be found in Europe–and chemical plants are now choosing to relocate and manufacture their products in the U.S. rather than Europe. The inescapable conclusion: if the United Kingdom (and Europe) refuses to frack, they’re hosed. Ineos, which has figured this out, has “quietly” purchased “some interesting onshore fracking licences” in the UK, and they intend to use them…
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Just last week MDN told you that Pieridae Energy has signed a labor agreement to build the Goldboro LNG export facility along the shore of Nova Scotia, Canada (see 
Yesterday midstream and utility giant Dominion issued its first quarter 2017 update. Along with the update Dominion held an earnings call. On that call we learned new information about both the Atlantic Coast Pipeline (ACP) project, Dominion’s Cove Point LNG export project, and a plethora of other projects, including natgas-fired power plants and more pipelines in the works. Dominion CEO Tom Farrell shared the exciting news that Cove Point is now 89% complete and will be “in service” later this year. As for Atlantic Coast Pipeline, Dominion has now purchased 80% of the materials they will need to build it. Farrell said the pipeline will be online in the second half of 2019. Another six pipeline projects are underway (at a cost of $700 million)–with five of the six due to be done THIS YEAR. Dominion is a happening company. Below are extracts from the earnings call, the 1Q17 update (with financials), and the newest PowerPoint slide deck used during the earnings call…
Big Chemical–companies like Dow Corning, BASF, Eastman Chemical and others, via their trade association, have launched a war to try and block American-made natural gas from getting exported to other countries. The reason? They want the natural gas they buy (in very large quantities) to be as cheap as possible. They recently sent a letter (copy below) to Secretary of Energy Rick Perry asking Perry to create barriers to exports of natural gas, ’cause you know, it’s “America First” now baby, and we want that gas all to ourselves. Strumming the patriotic heartstrings, the the Industrial Energy Consumers of America (IECA) says keeping all the gas here will grow more American jobs–and The Donald loves jobs for Americans. These are the same companies that, at the drop of a hat, left our shores and built plants in other countries. To play the patriotic “keep it all home” card is disgustingly hypocritical…
Since early 2013 all of the LNG export capacity at the coming Cove Point LNG facility (on the shore of Maryland) has been spoken for–by India and Japan (see 
A Bloomberg article caught our eye. It says natural gas being exported by Cheniere Energy (in southern Louisiana) is being sold to counties like Mexico, Japan and Jordan for over $7 per thousand cubic feet (Mcf). Why is that significant and how is it related to the Marcellus/Utica? It’s significant because gas right now is selling in the U.S. for an average of around $3/Mcf. In some places, like the Marcellus/Utica region, it sells for much less. Yesterday gas sold at the Tennessee Gas Pipeline Zone 4 Marcellus trading hub sold for $2.61/Mcf. If producers can sell their gas overseas at double the price–happy days are here again! How does that relate to the Marcellus/Utica? Some of the gas being sold by Cheniere comes from the Marcellus/Utica. And later this year, Dominion will have finished and will power up their massive LNG export facility in Cove Point, Maryland. When that happens, 100% of the gas exported will go to two countries: Japan and India. And it will likely be sold for prices like Cheniere is seeing–around $7/Mcf. That is really good news for the producers who have signed contracts with Cove Point…
For some time we’ve tracked the progress of an LNG export plant planned for the eastern shore of Nova Scotia, the Bear Head LNG project. Of all the Canadian LNG export projects, Bear Head seems to have the most momentum. The project has received most of the necessary permits it needs to proceed. But it’s not been without its bumps along the way (see 
According to the U.S. Energy Information Administration (EIA) and their just-issued Annual Energy Outlook 2017, the United States will become a net exporter of natural gas beginning in 2018. A big reason for the change from being a net importer to net exporter is shale gas (of course). A further big reason why is almost solely due to one company: Cheniere Energy, and their Sabine Pass LNG export facility in southern Louisiana. However, joining Cheniere soon will be the Cove Point, Maryland LNG export facility, now nearing completion. When Cove Point gets rockin’ and rollin’ along with Cheniere, the U.S. will become a net exporter…
The U.S. Department of Energy’s Office of Fossil Energy has just released a full report of LNG (liquefied natural gas) imports and exports for all of 2016. The history books will look back at 2016 as the year when the world of LNG changed. Although it seemed like it took forever, in February 2016 Cheniere Energy shipped its first LNG export cargo from its Sabine Pass facility in southern Louisiana (see Cheniere Finally Ships First Sabine Pass LNG Export – to Brazil //marcellusdrilling.com/2016/02/cheniere-finally-ships-first-sabine-pass-lng-export-to-brazil/). From February through the end of December, Sabine Pass, which (we believe) included some Marcellus/Utica gas, exported an astounding 60 cargoes of LNG, moving nearly 184 billion cubic feet (Bcf) of American-made natural gas to other countries. Prices ranged from $3.72 to $6.21 per thousand cubic feet (Mcf). Cheniere (and others) are just getting started! Below is the full report from the DOE Office of Fossil Energy…
Fossil fuel haters did their best to stop Dominion’s Cove Point LNG export facility in Lusby, Maryland. They sued (see 
In October 2014 Dominion announced they had officially broken ground on the Cove Point LNG export plant, a project that will inject between $3.4 and $3.8 billion in Calvert County, Maryland and pump upward of 1.8 billion cubic feet per day of cheap, abundant Marcellus and Utica Shale gas (see