Pipelines

Energy Companies | Energy Services | Gulfport Energy | Industrywide Issues | M&A | MarkWest Energy | Ohio | Ohio Gathering | Pipelines | Processing Plants | Statewide OH | Summit Midstream

Summit Midstream Closes Deal to Buy 40% Stake in Ohio Gathering
January 29, 2014January 29, 2014

Last December MDN told you that Summit Midstream was buying out Gulfport Energy’s share of the Ohio Gathering pipeline and processing system (see Summit Midstream Buys Gulfport’s Interest in Ohio Gathering). As we said at the time, the deal appears complicated on paper with multiple names (like Blackhawk Midstream), but the bottom line was/is that Summit will be the 40% owner and MarkWest Energy will remain the 60% owner of the Ohio Gathering system.

Yesterday, in an announcement by Summit that’s equally dense with details (likely written by lawyers), Summit announced they’ve closed the Ohio Gathering deal. That’s the sum total of this announcement–that the deal is now done:
Read More “Summit Midstream Closes Deal to Buy 40% Stake in Ohio Gathering”
Energy Services | Industrywide Issues | Pipelines | Processing Plants | Williams

Williams Changes Up Leadership for Northeast Gathering Operation
January 28, 2014January 28, 2014

A reshuffling of leadership for Williams’ operations in the northeast Marcellus/Utica region. Previously, Frank Billings ran the show for the Northeast Gathering & Processing operating area. Billings has been reassigned/promoted to corporate HQ. Taking over for Billings as head of Northeast Gathering is Jim Scheel. What does it all mean? We don’t know–so we’re left to read between the lines.

It seems from the statements by Williams’ CEO Alan Armstrong that Billings blazed the trail and got things rolling in the northeast, and now the northeast region has turned into more of an ongoing, operational kind of thing–and Scheel is an operations guy, good at focusing on the details of turning the northeast area into a well-oiled machine. At least that’s our read. What do you think? Here’s the announcement…
Read More “Williams Changes Up Leadership for Northeast Gathering Operation”
Commodity Price | Electrical Generation | Industrywide Issues | Pipelines | Regulation

Blue State Blues: 6 New England States Want New Natgas Pipeline
January 28, 2014January 28, 2014

Wonders never cease. The governors of six New England states (5 Democrat governors, 1 Republican governor) have sent a letter, or more properly the heads of their state utility commissions have sent a letter, to ISO New England (the regional cooperative transmission organization), requesting that a new natural gas pipeline be built to get more Marcellus Shale gas into New England. Oh, and they want to charge electric customers to get it built. Why? Not enough pipeline capacity now. Electric generating plants are using more and more natural gas to produce electricity. Not enough supply of natural gas in New England means those generators are paying nosebleed rates to produce electricity, and consequently electric rate payers are paying out the nose to cover the cost. Eventually those rate payers will toss their overlords out of office is something isn’t done–so by golly they’re doing something.

Even the fossil-fuel hating, tree hugging anti-frackers in New England have hit the brick wall of reality: so-called renewable sources of electricity can’t and won’t (for the foreseeable future) provide enough electricity to meet our needs. The remarkable request letter (embedded below) doesn’t specify how or where the pipeline should go, just that they need it and they need it in place by winter of 2017. Of course, that doesn’t stop some of the nuttier anti-drilling organizations from opposing the idea…
Read More “Blue State Blues: 6 New England States Want New Natgas Pipeline”
Energy Services | Industrywide Issues | Litigation | MarkWest Energy | Pennsylvania | Pipelines | Processing Plants | Regulation | Sunoco Logistics | Washington County

PA Judge Hears Mariner East NGL Pipeline Eminent Domain Case
January 22, 2014January 22, 2014

Sunoco Logistics–and for that matter, MarkWest–have a lot riding on a single court case in Washington County, PA. It might be a bit melodramatic to say the future of the Mariner East NGL (natural gas liquids) pipeline hangs in the balance, but it certainly is not inaccurate to say the case could cause an extended delay–if it goes the “wrong” way (for Sunoco). What’s the case about?

Sunoco’s Mariner East “refined products” pipeline spans the entire state of Pennsylvania. In order to connect to that pipeline to ship propane and ethane to the Marcus Hook refinery near Philadelphia, Sunoco first has to build a 50-mile feeder pipeline from the MarkWest processing plant in Houston (Chartiers Township) to Delmont (see the Sunoco map below). The problem is, a group of landowners in Washington County won’t play ball and lease their land to Sunoco to bury the pipeline. Sunoco got tired of negotiating with the recalcitrant landowners, and changed tactics to declare it (Sunoco) has eminent domain power under PA state authority. They sue the 25 landowners for force them to allow the pipeline. The landowners sued back arguing the 50-mile pipeline should come under federal, not state, authority. One of the 25 cases is being used as a proxy for the others and that case was just argued yesterday before a PA judge. A decision, according to the judge, will be “prompt”…
Read More “PA Judge Hears Mariner East NGL Pipeline Eminent Domain Case”
Economic Impact | Hydraulic Fracturing | Industrywide Issues | Pipelines | Processing Plants | Research

Deloitte’s View: 2014 Spending Shifts from Upstream to Midstream
January 21, 2014January 21, 2014

From time to time it’s helpful to zoom out to the “40,000-foot view” of the oil and gas industry, because understanding the bigger picture helps us understand the smaller picture that MDN concentrates on–the Marcellus and Utica Shale. One of the better analysts of the bigger picture (in our humble opinion) is consulting powerhouse Deloitte. John England, Deloitte’s U.S. Oil & Gas leader, recently posted a 40,000-foot view of what’s happening in the oil and gas sector in the U.S.–and where he believes it’s headed in 2014.

England, quoting the Oil & Gas Journal, says E&P (exploration and production) spending in the U.S. was $354.8 billion in 2013. However, spending on the midstream–the pipelines and processing plants that get all of that production to market–was only $46.4 billion in 2013 (although that’s up 360% from the $12.8 billion spent on midstream in 2012). England says as we head into 2014, look for investments to continue shifting from the upstream sector (E&P) to the midstream sector–to infrastructure like pipelines and processing plants, refinery operations, and petrochemical facilities. MDN concurs. Just reference our massive list of 111 midstream/infrastructure projects underway or planned in the Marcellus/Utica (see MDN’s 2013 Databook Vol 2 Finds Staggering $40B in NE Midstream Projects). Here’s England’s take on where we’ve been, and where we’re headed in 2014…
Read More “Deloitte’s View: 2014 Spending Shifts from Upstream to Midstream”
Energy Services | Ethane | Industrywide Issues | NOVA Chemicals | Pipelines | Processing Plants | Sunoco Logistics

Why Wait for a Cracker to be Built? Canadian Plant Cracking Now
January 20, 2014January 20, 2014

Although both WV and PA are in a race to build the northeast’s first ethane cracker plant, such a plant will not be operational for at least another 4-5 years–if all goes well. The problem is, what do you do with all of the ethane being produced now in the Marcellus and Utica Shale? Ethane is a valuable commodity that can be sold for a lot more than regular methane (or “dry gas”)–unless there’s no way to get it to a cracker. Then ethane becomes a waste product and actually costs money. The three ways to deal with ethane in the northeast right now are: (1) blend it with methane and other hydrocarbons, (2) flare it, i.e. burn it off, or (3) ship it out of the northeast via pipeline to a cracker plant. Option #3 is, of course, the preferred option for drillers–and an option that is now, as of a few months ago, a reality.

Although ethane has been flowing through the Mariner West pipeline (owned and operated by Sunoco Logistics) to the Corunna cracker plant in Sarnia, Ontario, Canada for the past few months, it has only been fully operational for a short time. Last Thursday, officials at the Corunna plant held a ceremony to commemorate full operation of receiving and processing Marcellus and Utica Shale ethane at the plant…
Read More “Why Wait for a Cracker to be Built? Canadian Plant Cracking Now”
Energy Services | Industrywide Issues | Ohio | Pipelines | Portage County | Sunoco Logistics

Sunoco Logistics Answers NGL Pipeline Concerns in Portage, OH
January 20, 2014January 20, 2014

Sunoco Logistics personnel were treated last week to a variety of silly concerns about an NGL pipeline they’re proposing through Portage County, OH–concerns like people keeling over dead because of undetected leaks in the buried pipeline and mass contamination of water aquifers. The anti-drillers are so good at distributing lies and distortions it’s no wonder average folks are concerned. You’d think a pipeline was the equivalent of an environmental holocaust.

Even though pipelines are the safest form of transportation in existence, people turned out last week and packed the local county commissioner’s office to express their unfounded concerns. Here’s how it went:
Read More “Sunoco Logistics Answers NGL Pipeline Concerns in Portage, OH”
Crosstex Energy | Devon Energy | Energy Companies | Energy Services | EnLink Midstream | Industrywide Issues | Pipelines | Processing Plants

Crosstex Energy Gets a Name Change, Merger with Devon Proceeds
January 15, 2014January 15, 2014

In October, Devon Energy (a major shale driller in several plays with midstream assets) and Crosstex Energy (a sizable midstream company) announced they will merge their midstream operations into a new company (see Devon Energy & Crosstex Energy Form New Midstream Company in JV). Both companies have major operations in the Marcellus/Utica. At the time of the announcement the new company was unnamed. No longer. Yesterday Devon and Crosstex announced that Crosstex would change its name to the name of the newly combined venture (which is majority owned by Devon). The new name is EnLink Midstream. Barry Davis, CEO of Crosstex will become (or remain) CEO of EnLink.

May we net-net this? Essentially Devon has purchased Crosstex and turned it into a semi-autonomous subsidiary, keeping the Crosstex management team in place. Here’s the statement issued yesterday with details of the legal structure for the new company, which on paper will be two companies for investment purposes–an LLC and an LP (master limited partnership)…
Read More “Crosstex Energy Gets a Name Change, Merger with Devon Proceeds”
Bradford County | Energy Services | Greene County (PA) | Industrywide Issues | Lycoming County | Pennsylvania | Pipelines | Preston County | PVR Midstream | PVR Partners | West Virginia | Wyoming County (PA)

PVR Partners Marcellus Pipeline Flows Increase 60% in 1 Year
January 14, 2014January 14, 2014

Midstream company PVR Partners issued an update yesterday to brag about their Marcellus operations–and well they should. Average throughput on the PVR “Eastern Midstream Systems” increased 60%, from 1.1 billion cubic feet per day average in December 2012 to 1.8 Bcf/d in December 2013. They also completed a total of 101 well connections in 2013 for the Eastern Midstream area.

PVR’s Eastern Midstream includes operations in Lycoming, Wyoming, Bradford and Greene counties in Pennsylvania, and Preston County in West Virginia. Here’s the full PVR update with more details:
Read More “PVR Partners Marcellus Pipeline Flows Increase 60% in 1 Year”
Belmont County | Blue Racer Midstream | Economic Impact | Energy Services | Industrywide Issues | Jobs | Marshall County | Ohio | Ohio County | Pipelines | Processing Plants | West Virginia | Williams

Utica/Marcellus Construction Spending Rockets in Wheeling Area
January 14, 2014January 14, 2014

According to McGraw Hill Construction, the Wheeling, WV Metropolitan Statistical Area, which includes Ohio and Marshall counties in WV and Belmont County in Ohio, saw construction explode from $60.3 million in 2012 to $1.57 billion in 2013–a 29-fold increase. The vast majority of that explosion in construction came from–you guessed it–the Marcellus and Utica Shale. Midstream companies Williams and Blue Racer spent the majority of that on new processing plants and pipelines in the area.

This is incredibly good news for that area of the Ohio Valley. The even better news? Ironworkers Local No. 549 predicts this kind of spending by the drilling industry will go on for at least another 5-10 years. Wow!…
Read More “Utica/Marcellus Construction Spending Rockets in Wheeling Area”
Alternative Energy | Anti-Drilling/Fossil Fuel | Industrywide Issues | Pipelines

Natural Gas’ “Unfair Advantage” over Wind and Solar
January 14, 2014January 14, 2014

Yet another novel argument is being trotted out by the militant green left–natural gas an an “unfair” advantage. You see, it’s just too darn easy to build a pipeline–compared with putting up an electrical transmission line. That’s the cockamamie argument now being made by renewable energy zealots like Jaafar Rizvi, writing in Grist Magazine.

As MDN has shouted for years now–the shale drilling debate is not really about water contamination, truck traffic and “fugitive” methane–it’s really about a few misguided people who want to pick your energy source for you–and for everyone else too. They irrationally hate fossil fuels because fossil fuels, including natural gas, threaten to slow the adoption of so-called renewable sources of energy, like wind and solar. How do wind and solar energy get to market? Via high voltage electricity transmission lines. According to Mr. Rizvi, it’s not a fair playing field between natgas pipelines and electric transmission lines…
Read More “Natural Gas’ “Unfair Advantage” over Wind and Solar”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Pipelines | Regulation

Sierra Club, LWV Chooses Coal over NatGas in South Jersey
January 13, 2014January 13, 2014

Hey, the next member of the New Jersey Sierra Club or NJ League of [Liberal Democrat] Women Voters you meet, shake their hand–pump it up and down hard–and congratulate them on damaging the environment in South Jersey, which is what they’ve just done. South Jersey Gas wanted to run a 22-mile natural gas pipeline that would power an electric generating plant–replacing coal that powers the plant now–and also bring natural gas to residential homes in beautiful Cape May County, NJ. But so-called environmental groups like the Sierra Club and members of the LWV objected and pressured regulators to reject the proposal because the pipeline would run through an area of scrub pine trees that happen to grow in sandy soil. It was rejected even though the pipeline would mostly follow roadways and existing rights-of-way and would largely not disturb the so-called forest.

Nah, this one was far to easy to demagogue with talk about “pristine this” and “undeveloped that.” Throw in some magic phrases, and nag the *#$@ out of regulators, and you have yourself a rejection. So now, residents in Cape May will continue to breathe dirtier air and continue to heat their homes in winter with oil instead of clean-burning natural gas. Thanks Sierra Club and LWV! You’re real champs of the environment…
Read More “Sierra Club, LWV Chooses Coal over NatGas in South Jersey”
Economic Impact | Hydraulic Fracturing | Industrywide Issues | Jobs | NGLs | Pipelines | Processing Plants | Research

Must-Read IHS Report: Midstream/Downstream Spending Hits $90B/Yr
January 8, 2014January 8, 2014

Information Handling Services, or IHS, is the publisher of choice for the American Petroleum Institute (API). A new API/IHS study was published in December, but apparently just released to the public yesterday by the API. The study is titled “Oil & Natural Gas Transportation & Storage Infrastructure: Status, Trends, & Economic Benefits” (full copy embedded below).

We previously told you the API/IHS estimates each year drillers in the U.S. spend on the order of $150 billion to drill new oil and gas wells (see US Spending $150B+ to Drill New Oil & Gas Wells Each Year). MDN editor Jim Willis heard at the recent Platts Global Energy Outlook Forum that midstream-specific spending is only $15 billion per year (see Energy Industry Leaders Gather at Platts Forum in NYC). This new IHS report provides further clarification on spending in the midstream and downstream. If you lump new yearly spending together for all midstream (pipelines & processing plants) and downstream (refineries and distribution), IHS says the number was actually $53 billion in 2010, and had rocketed to nearly $90 billion in 2013. IHS researchers believe spending will remain around $90 billion in 2014 and something close that, per year, until 2020. Truly astonishing numbers. And that’s not the only revelation contained in this “must read” report. Like, there are 1 million new jobs on the way because of all this spending…
Read More “Must-Read IHS Report: Midstream/Downstream Spending Hits $90B/Yr”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream | Industrywide Issues | Ohio | Pipelines | Statewide OH | Statewide WV | West Virginia

Eureka Hunter Boasts 360% Yearly Increase in Marcellus/Utica Flow
January 8, 2014January 8, 2014

Eureka Hunter, the wholly-owned midstream (pipeline) subsidiary of driller Magnum Hunter, published their month by month flow numbers yesterday for how much gas they pumped through their pipelines in West Virginia and Ohio during 2013. It was an impressive year for Eureka Hunter. The average daily flow or “throughput” in 2012 was 23,291 million Btus (or MMBtus), which equates to 23.3 million cubic feet per day (or MMcf/d). If the “average” well is producing, say, 3 MMcf/d, that’s the equivalent of having 8 wells connected to the pipeline. The average daily flow in 2013 was 83,828 MMBtus, or 83.4 MMcf/d, or 28 wells hooked up and flowing. That’s a 360% year over year increase–nearly quadruple the volume!

What the average doesn’t tell you, however, is that by the end of the year, Eureka Hunter’s pipeline flowed nearly 160,000 MMBtus, or 160 MMcf/d, which is production from an average 53 wells. They predict in 2014 the daily flow rate will hit 206,500 MMBtus. Somewhere between 40-50% of the gas they flow is from Triad Hunter, another Magnum Hunter subsidiary (sister company to Eureka Hunter). Below is the press release with Eureka Hunter’s monthly flow numbers. With our explanation above, you now know how to view it!…
Read More “Eureka Hunter Boasts 360% Yearly Increase in Marcellus/Utica Flow”
Energy Services | Industrywide Issues | Luzerne County | Pennsylvania | Pipelines | UGI Energy Services | Wyoming County (PA)

UGI Wins! Auburn Pipeline with Marcellus Gas in NEPA Goes Live
January 7, 2014January 7, 2014

It’s been a loooong uphill battle for utility company UGI with their Auburn Pipeline system, but by persisting, they’ve finally won against staggering odds. We’re happy to report that the Auburn Pipeline is now fully operational and Marcellus gas is flowing through it. The final leg of the Auburn, which connects the Tennessee Gas Pipeline with the Transco pipeline, is now done. Initially UGI proposed a compressor station in Luzerne County, but that was scrapped (see Luddites of Luzerne: UGI Scraps Plan for PA Compressor Station). The compressor was later built in Wyoming County.

Next up was opposition to a simple “gate station” or metering station. Even though another gate station had been in the area for 50 years, UGI still had to battle the forces of anti-drilling to build a new one (see Back to Kindergarten: UGI Explains NatGas Gate Stations). The gate station got built. Once all the court battles were fought, and won, UGI prevailed and the Auburn is now complete, which is very good news for consumers who will benefit from cheap, regionally extracted Marcellus Shale gas…
Read More “UGI Wins! Auburn Pipeline with Marcellus Gas in NEPA Goes Live”
About MDN | Anti-Drilling/Fossil Fuel | Commodity Price | Crude Oil | Economic Impact | Ethane | Health Impacts | Hydraulic Fracturing | Industrywide Issues | Litigation | MDN Resources | NGLs | Pipelines | Regulation

MDN’s Top 10 Most Important Stories of 2013 – Our View
December 31, 2013December 31, 2013

Yes it’s trite and certainly overdone, but hey, it’s the last day of 2013 and a slow news day. So MDN editor Jim Willis thought he would put together a list of what he considered to be the top 10 Marcellus and Utica Shale stories from 2013. It’s a look into what we believe, based on your input and feedback, to be the most relevant and important stories from this year. Enjoy!…
Read More “MDN’s Top 10 Most Important Stories of 2013 – Our View”