PA One of Two Finalists for “Massive” Ethane Storage Hub

The Appalachia Development Group (ADG) is leading an effort to build a ~$3.3 billion NGL storage hub in Appalachia. From the start, the thinking has been the storage hub would be located somewhere in West Virginia (see WV’s US Senators Lead the Charge to Build $10B NGL Storage Hub). But what’s this? ADG Chairman and CEO Steven Hedrick, speaking at a conference last week, confirmed potential sites for the project have been narrowed down to two. And one of those sites, according to “sources” (not Hedrick), is located in southwestern Pennsylvania.
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NatGas in Storage Triples from April 1 to October 31

On April 1 of this year the U.S. exited natural gas consumption season (“winter”) with a relatively low value of 1,155 billion cubic feet (Bcf) in storage. Fast forward to October 31 and the end of the injection season, when gas is stored away for the winter months, and that number had soared more than 3X to 3,724 Bcf. Underground storage of natgas as of October 31 was 37 Bcf higher than the previous five-year end-of-October average. The U.S. Energy Information Administration, our favorite government agency, calls this year’s injection season ramp-up pace a “near-record.”
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PA DEP Fines Equitrans $650K for SWPA Gas Storage Field Violation

Equitrans (nee EQT Midstream) owns a natural gas storage field in Greene County, PA, in the southwest corner of the state, called Swarts Field. Natural gas storage fields are an important, but often overlooked, part of the natgas ecosystem. Last December the state Dept. of Environmental Protection (DEP) threatened to shut down Swarts Field because of coal mining in the area, saying Equitrans had not properly mapped old/abandonded conventional gas wells in the area (see PA DEP Threatens to Close Equitrans Gas Storage Field in SWPA). The good news is the DEP threat is now over. The bad news is that Equitrans has to pay a $650,000 fine.
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NatGas in Storage Goes Above 5-Yr Average Pressuring Prices Lower

click for larger version

Storage isn’t as sexy as “fracking” when talking about the natural gas industry. But storage, the amount of gas stored during summer months for use during winter months, is a closely watched number. Last year storage numbers ran below the 5-year average (see EIA: Underground Natural Gas Storage Declined in 2018). If there’s less of a commodity (like natgas) available, given the same or increasing demand, prices will go up. Prices didn’t really go up all that much over the last year because, as we’ve pointed out, the ability of drillers to quickly open the spigots any time they want and let it flow is now a new kind of “storage” (see Utilities Now Depend More on Pipelines, Less on NatGas Storage).
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MPLX VP Says We Need NGL Storage, and We Need it NOW

Some interesting comments by Jim Crews, vice president of northeast business development for MPLX (formerly known as MarkWest Energy), during a presentation he gave at the Independent Oil and Gas Association of West Virginia’s (IOGAWV) Summer Meeting last week. Crews said lack of natural gas liquids storage is a crisis (our words, reflecting his sentiment). And we need storage not only here in the Marcellus/Utica region–but across the country. “We’re out of storage,” he said, and “Cargoes are just being given away.”
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Trump Admin “Full Court Press” re Appalachian NGL Storage Hub

Steven Winberg, the U.S. Dept. of Energy’s assistant secretary for fossil energy, spoke to West Virginia lawmakers on Tuesday. His message? The Trump Administration is prioritizing building out a petrochemical industry in Appalachia. Among Winberg’s comments, on the matter of establishing an NGL storage hub in Appalachia, he said: “At DOE we have a full court press on this.” For those who don’t follow basketball, the term full court press means aggressive pressure against the opponent in the back court. Winberg’s meaning: DOE is doing everything it can to make the NGL storage hub project happen.
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PA Landowners Seek Class Action Against EQT re Gas Storage

Last July a group of 100+ southwestern Pennsylvania landowners sued EQT for failure to pay them rental fees for storing natural gas under their properties (see 100+ PA Landowners Sue EQT re Gas Storage Field Payments). That same group has just filed a request in U.S. District Court to upgrade the lawsuit to class action status, potentially including thousands of affected landowners.
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Marcellus/Utica Ethane Supplies at Tipping Point – Action Needed NOW

Last week Shaledirectories.com and TopLine Analytics hosted the one-day Appalachian Storage Hub Conference in Canonsburg, PA. Charles Zelek, a senior economist with the U.S. Dept. of Energy’s Office of Fossil Energy was one of the speakers. According to our friends at Kallanish Energy who attended, Zelek “implored” the audience to establish an ethane storage hub in the Tri-State area. Like now, before it’s too late.
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Dominion Investigating Condensate Tank Fire in Tyler, WV

On May 25, lightning struck a 1 million gallon condensate tank near Friendly (Tyler County), WV on a Saturday afternoon (see Lightning Strikes Huge Condensate Tank in Tyler, WV – Fire Now Out). At least, that’s the theory. The strike (if that’s what it was) ignited the tank, creating a “massive” fire according to news accounts. Dominion Energy, owner of the tank, is still investigating to see how the fire began (was it really lightning?), and how such accident can be avoided in the future.
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Nova Scotia Indians Illegally Shut Down NatGas Storage Site

MDN recently brought you news that two different large LNG export plant projects in Nova Scotia had agreed to pay an undisclosed amount of money to the The Mi’kmaq (pronounced mic-mac) indigenous peoples of Nova Scotia (i.e. Indians) to leave them alone so they can build their facilities (see Pieridae Energy Pays Off Nova Scotia Indians to Allow LNG Plant and Nova Scotia Indians Shake Down a 2nd LNG Export Project). Now we know why.
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PA DEP Threatens to Close Equitrans Gas Storage Field in SWPA

Natural gas storage fields are an important, but often overlooked, part of the natgas ecosystem. Equitrans (nee EQT Midstream) owns a natgas storage field in Greene County, PA, in the southwest corner of the state. The state Dept. of Environmental Protection (DEP) is threatening to shut down that storage field, because of coal mining in the area.
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EIA Says NatGas in Storage Below Average Rest of Winter

Where natgas is stored underground (click for larger version)

Heading into winter 2018/2019, gas bulls believed low storage numbers + weather (hot or cold) = high natgas prices. It didn’t work out that way. Although it sounds mundane, how much natural gas in “working storage” (i.e. gas stored and available to draw upon during winter) does, or rather did, have a great deal to do with the price of natural gas. But a direct correlation between storage and price does not seem to exist any more.
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Utilities Now Depend More on Pipelines, Less on NatGas Storage

A recurring theme (broken record) over the past few months has been, “Natural gas storage is too low, far lower than last year and far below the five-year average–prices will have to skyrocket any day now!” That’s been the meme by traders and industry watchers. We keep saying things have fundamentally changed–that drillers can open the spigots any time they want and let it flow. Don’t believe us? Then maybe you will believe the American Gas Association.
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100+ PA Landowners Sue EQT re Gas Storage Field Payments

According to Washington County, PA landowner Joe Raposky, EQT has been storing natural gas under his property in Finleyville without permission and without compensation since at least 2007. Last year Raposky asked EQT to compensate him and they refused. So Mr. Raposky has organized over 100 of his neighbors along with landowners who sit over top of other similar underground storage fields in the region, and on July 30 they filed a lawsuit against EQT. PA has some 60 gas storage fields spread across 26 counties in the state. The fields are used to temporarily store and then retrieve natural gas. Storage, which is not something we write about very much, is in fact a big deal when it comes to the natural gas market. Not all gas is used as soon as its extracted and sold along a pipeline. There are two main “seasons” in the natural gas industry–injection season, from April 1 through October 31, when a surplus is stored underground, and withdrawal season, from November 1 through March 31, when more gas is used than is produced. Storage fields like the one in Finleyville are an important part of the natgas puzzle. In some cases, landowners are only now becoming aware of the existing fields under their feet and they (rightly) want to be compensated for the use of their property. Is storage the next big bone of contention between landowners and drillers?…
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