UTOPIA Ethane Pipeline Faces Virtually No Opposition in OH
This is not a story you often hear these days: A natural gas liquids (NGL) pipeline slated to be built in Ohio is facing virtually no opposition. Last month we updated you on Kinder Morgan’s UTOPIA (Utica To Ontario Pipeline Access) ethane pipeline (see Kinder Morgan Ready to Move Forward with UTOPIA East Pipeline). The 12-inch ethane pipeline will run 240 miles and will only be built in Ohio–therefore the Federal Energy Regulatory Commission (FERC) won’t be involved in permitting the project. The pipeline will connect to another pipeline (in Ohio) and that pipeline will carry ethane all the way to Ontario to a cracker plant. Perhaps lack of FERC involvement is the secret to limited opposition? Who knows! Construction won’t begin on the project until 2017 and UTOPIA won’t be online until early 2018. But before that can happen, Kinder Morgan has to secure easements from approximately 900 landowners in Ohio. A full one-third of the deals are ALREADY DONE. Some 98% of landowners granted permission for Kinder Morgan to survey their property. Seems to us like a textbook case of how to build a pipeline! Now if Kinder could only duplicate that success with their Northeast Energy Direct pipeline running through New England (sigh). Here’s an update on UTOPIA’s rapid progress…
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The number of active drilling rigs worldwide, in North America and in the Marcellus/Utica continued to tumble in January. Baker Hughes released their average rig count data for January last Friday. The news, as we expected (but nevertheless hoped wouldn’t be the case) was not good. Worldwide the number of active oil and gas rigs fell by 78. In North America the rig count went down by 28 rigs, but that’s not the full story. Rig counts in the United States fell by a whopping 60 while the rig count in Canada went up by 32. So here at home the story was bloodier than the top level numbers indicate. What about in the Marcellus/Utica? Once again MDN brings you the exclusive chart for Marcellus/Utica rig counts over the past 12 months. Region-wide rigs went down another by seven in the Marcellus/Utica. All three states that we track–PA, OH, WV–had rig count losses in January…
Hess Corporation released their 2016 capital and exploration budget yesterday. Last October Hess said they would spend $2.9-$3.1 billion during 2016. Throw that out the door. They’ve now dropped the capex budget to $2.4 billion, which is 40% less than they spent in 2015. Hess has maintained an active drilling program in the Ohio Utica Shale. What part of that $2.4 billion do you suppose they plan to spend in the Utica this year? The number is $45 million, which will be spent on drilling five new wells and bringing a total of 14 wells online–all in the first quarter. After that? They’re releasing the single rig they now have under contract. So Hess is spending 1.9% of their budget on the Utica for 2016…