Pipelines

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    Serious Concerns about Boardwalk Pipeline Partners Continue

    Two weeks ago MDN told you about the developing story that Boardwalk Pipeline Partners has hit a serious rough patch and their stock price was plummeting (see Boardwalk’s Stock Drops Like a Rock – Trouble in Midstreamland?). The situation has not improved and their stock price is down nearly 50% from where it was just a short time ago. Why do we care?

    Boardwalk is in a joint venture with Williams to build the Bluegrass NGL pipeline from the Marcellus/Utica all the way to the Gulf Coast. The Bluegrass has hit trouble, ironically, in the Bluegrass state of Kentucky with anti-drillers opposing it every step of the way (see the list of MDN’s Bluegrass pipeline trouble stories here). With one of the two Bluegrass pipeline partners in financial straights, what does that mean for the pipeline project? Especially since they have competition and it’s a horse race with a Kinder Morgan/MarkWest joint venture (see “Midstream Knife Fight” – Who Will Have 1st Operational NGL Pipeline to Gulf?). Here’s the latest analysis of how, and why, Boardwalk finds itself in the position they are now in…
    Read More “Serious Concerns about Boardwalk Pipeline Partners Continue”

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    Mass. Anti-Drillers Finally Wake Up, Begin Opposing TGP Project

    About a month ago MDN noted, with some shock, that townships across Massachusetts were reacting to overtures by Kinder Morgan to expand the Tennessee Gas Pipeline across the state (to bring in more abundant, cheap Marcellus Shale gas) with reasonableness and an open mind (see Reaction to TGP’s Planned Pipeline Across Massachusetts). We always thought Massachusetts residents as a whole were slightly left of Vlad Putin. But we were (happily) wrong! We observed it’s funny how a 10x price jump in natural gas had turned New Englanders into a more reasoned, considered bunch.

    However, some of the nutty bugs have now come crawling out of the woodwork to oppose the pipeline because it will bring that filthy, nasty “fracked” natural gas into the state. It just took them a little longer to come out of their fugue and get organized, but now they have–at least a small handful of them…
    Read More “Mass. Anti-Drillers Finally Wake Up, Begin Opposing TGP Project”

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    CONSOL Feeling Heat over Ethane Exports to Europe, CEO Defends

    it's okCONSOL Energy’s CEO Brett Harvey must be getting some heat over the company’s recent announcement that they have signed an agreement to export ethane from the Marcellus to Europe (see CONSOL to Begin Ethane Shipments Next Year–to Europe?!). Why would we say CONSOL is getting blowback? Because Harvey penned an op-ed that appears in The Intelligencer/Wheeling News-Register giving a spirited defense of their decision. The gist of Harvey’s points, if we might summarize, is this: CONSOL has deep roots and is committed to WV; there’s plenty of ethane to go around, including for exports (and exports bring money into WV); CONSOL is also going to sell ethane to the Odebrecht ethane cracker when/if it gets built; in the meantime, selling ethane to Europe means CONSOL will have more money to invest in WV.

    Here’s Harvey’s “it’s OK” op-ed:
    Read More “CONSOL Feeling Heat over Ethane Exports to Europe, CEO Defends”

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

    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”

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    NGPL Launches Open Season to Expand, Carry NE Gas South

    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”

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    KY Natgas Pipeline Explosion Used to Fight Bluegrass NGL Pipeline

    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”

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    The Complex Issue of Ethane – Pipelines, Cracker Plants & Exports

    Ethane–a natural gas liquid (NGL)–is bountiful in parts of the Marcellus and Utica Shale. So bountiful, it’s causing problems. Until very recently, ethane was considered a waste product. You either had to burn it (increasingly hard to do because of regulations), or blend it with methane. It has been a cost center when in fact ethane is normally a profit center–something that makes drillers money. But you can only make money on it if you can get it to market.

    Enter several ethane-specific, and coming soon, NGL pipelines that can carry ethane (and other NGLs) to the Gulf Coast, Canada or Philadelphia for processing and sale. The problem is, if you don’t have a long-term contract on one of those pipelines, you’re hosed. Your competitors are making money on ethane while you’re still spending money on it. That, in a nutshell, is why two regional ethane cracker plants are so desperately needed (Shell’s cracker plant in Beaver County, PA and Odebrecht’s cracker in Parkersburg, WV). The Pittsburgh Tribune-Review took an in-depth look at “the ethane issue” last Friday. It’s a good article providing us with insights into the complex issue of what drillers can/should/are doing with ethane:
    Read More “The Complex Issue of Ethane – Pipelines, Cracker Plants & Exports”

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    CONSOL to Begin Ethane Shipments Next Year–to Europe?!

    CONSOL Energy is a big, important driller in the Marcellus and Utica Shale. Most of their operations are in “wet gas” areas–those locations that produce a lot of natural gas liquids (NGLs), like ethane, along with “dry gas” or methane. Although CONSOL has a lot of acreage in southwestern PA and in WV and eastern OH, the ethane they produce will not be going to a proposed new ethane cracker plant being built by Odebrecht in Parkersburg, WV. Instead, CONSOL is going to send their ethane by pipeline to an export facility in Philadelphia, and from there, on to Europe for processing and use in European petrochemical factories.

    Why in the world ship ethane all the way to Europe for processing instead of selling it in your own back yard? Timing. CONSOL doesn’t want to wait the 4-5 years for an ethane cracker to be built (if it’s built at all). They’ve adopted a “bird in hand” strategy. They’d rather start shipping it next year, when Sunoco Logstics’ Mariner East pipeline is up and running, rather than wait. And so CONSOL, according to their announcement below, has locked in a deal with Ineos Europe AG. But don’t despair, CONSOL also previously signed an agreement with Shell to provide its cracker plant in Beaver County, PA with ethane–when and if that plant gets built…
    Read More “CONSOL to Begin Ethane Shipments Next Year–to Europe?!”

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    FERC: Constitution Pipeline Should Make Changes to Lessen Impacts

    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”

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    Rice Energy Picks Up Pipelines in SWPA in Deal with M3 for $110M

    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”

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    New England Pipeline May Reverse Flow & Pump Marcellus Gas

    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”

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    Boardwalk’s Stock Drops Like a Rock – Trouble in Midstreamland?

    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?”

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    NY Senate Bill Forces Cuomo DEC to Authorize New Propane Storage

    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”

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    FERC Invokes Emergency Power to Force Propane Shipments on TEPPCO

    first time everLast Friday, for the first time ever, the Federal Energy Regulatory Commission (FERC), the agency charged with approving transmission pipelines for oil and gas across the country, invoked its its emergency authority under the Interstate Commerce Act and directed Enterprise Products Partners to prioritize propane shipments on one of its pipelines that runs from the Gulf Coast to the northeast and Midwest (see map below). The Enterprise TEPPCO (TE Products Pipelines Company) pipeline handles various refined products, including gasoline and natural gas liquids like propane. The order directs Enterprise to prioritize propane shipments beginning yesterday or today and continuing for a week. Last Friday Enterprise told shippers it would inject 150,000 barrels of propane into its pipeline on yesterday (Monday) and 350,000 barrels on Thursday. Enterprise later said they are willing to continue prioritized propane shipments until Feb. 21.

    All of this is in response to a developing crisis. More than 20 states have declared a state of emergency due to propane shortages. In some Midwestern states, residents and farms are in danger of running out of propane. Does that justify the federal government stepping in? Did FERC also direct Enterprise to reverse the flow of the newly minted ATEX ethane pipeline that runs from the northeast to the Gulf Coast so it too can carry propane?…
    Read More “FERC Invokes Emergency Power to Force Propane Shipments on TEPPCO”

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    ‘Noise Solutions’ for Drilling/Compressor Plants Locates in NWPA

    Here’s a feel good supply chain story. A privately held Canadian company that in 1997 innovated a way to make industrial operations–like noisy compressor plants–quieter, wanted to build a manufacturing plant here in the U.S.–near the oil and gas industry that will use their innovative products. So where did Scott MacDonald, president and CEO of Noise Solutions, look? The northeast of course–Marcellus and Utica territory. He considered New York, but the taxes are way too high and the shale drilling non-existent. He also considered West Virginia and Ohio, which were good choices. But MacDonald settled on Sharon (Mercer County), PA as the new home for a plant that already employs 35 people and is on it’s way to employing 125 or more.

    MacDonald and Noise Solutions will spend $5 million to renovate the former Winner International warehouse where the company chose to set up shop. That investment along with the ripple effect of full-time employees paying local and state taxes (and spending much of their paychecks in the local community) gives Sharon a big “economic stimulus” courtesy of this Canadian company. Here’s more about Noise Solutions and their new operation in Sharon, PA…
    Read More “‘Noise Solutions’ for Drilling/Compressor Plants Locates in NWPA”

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    NPGA Asks FERC to Reverse Flow of ATEX Pipeline & Pump Propane

    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”