More on that Massive $83.7B Chinese Investment in WV Shale/Petchem
We’re still reeling after yesterday’s announcement that China has agreed to invest $83.7 billion in the State of West Virginia–largely in shale and shale-related petrochemical projects (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). Let’s put China’s promised investment in perspective. The GDP (gross domestic product, or the value of all of the state’s economic activity) for WV last year was $73.4 billion. One expert calculates the entire investment by the Marcellus/Utica industry in WV so far has been about $35 billion. The investment by China, which will be spread out over 20 years, is larger than all of the economic activity in WV for a single year, and 2.5 times the investment made by the shale industry so far! That’s massive. It’s huge. It’s mind-blowing. There really aren’t words big enough for this investment–IF it comes to be. You see, what was signed in China yesterday is a Memorandum Of Understanding (MOU). It’s a handshake–a gentleman’s agreement. And sometimes those agreements disappear. So this is far from a done deal. However, we’ll take it. If even half of the promised investment becomes reality, it’s game-changing. It is, according to WV Gov. Jim Justice, the single largest private investment in the state’s history. Now that we’ve had 24 hours to digest the news, a number of people are talking. While we still don’t have specificity about the projects that will get funded with this money, we do have more insight. The first couple of projects to get funded will be electric generating power plants–powered by Marcellus/Utica gas. And we know where those plants will most likely be located: “one in Harrison County and one in Brooke County” according to head of the WV Chamber of Commerce. Cracker plants (plural) are also being talked about for WV. We’ve been monitoring the news since yesterday’s announcement and have collected a number of excerpts below of what people (in the know) are saying about this historic deal…
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The “Art of the Deal” is still alive and well for Donald Trump. Trump along with an entourage of various state officials are currently on a trade mission in Asia. This morning (our time) a flurry of announcements were issued about Trump (and others) convincing China to invest $250 billion (a staggering number!) in various projects in the U.S. A whopping $83.7 billion of that (a full third!!) will be invested in one state–West Virginia. And the WV investment, according to the announcement, will be in “shale gas and chemical manufacturing projects.” The investment will come over the next 20 years, so yes, we’ll believe it when we see it. However, we cannot overstate how big and how good this news is for our friends in the Mountain State. While no specific projects are mentioned, we get this enticing tidbit from the announcement: “The projects will focus on power generation, chemical manufacturing, and underground storage of natural gas liquids and derivatives.” Sounds to us like we now know where the $10 billion NGL storage facility will be located (see 
The International (non-U.S.) Baker Hughes rig count for October 2017 was 951, up 20 from the 931 counted in September 2017, and up 31 from the 920 counted in October 2016. The U.S. rig count for October 2017 was 922, down 18 from the 940 counted in September 2017, but up 378 from the 544 counted in October 2016. Notice that we have almost as many rigs operating in the U.S. as the entire rest of the world (minus Canada). Canada’s rig count has improved a lot since earlier this year. However, Canada’s October rig count drooped a bit–204 in October (down 4 from September) but up 48 from October 2016. What about rig counts in the Marcellus/Utica? Pennsylvania lost one rig and ran an average of 32 rigs during October, versus Ohio running 29 rigs and West Virginia running 15 rigs, the same as September…
In August MDN told you the West Virginia Oil & Natural Gas Association (WVONGA) plans to push, once again, for what MDN calls forced pooling lite in the next session of the legislature scheduled for early 2018 (see 
Hold on or you might get whiplash. In March, the West Virginia Dept. of Environmental Protection (WVDEP) issued a federal water crossing permit for the Mountain Valley Pipeline (MVP)–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA (see 
Last week the The Independent Power Producers (IPPs) of Ohio, Pennsylvania, and West Virginia wrote an official letter to the Federal Energy Regulatory Commission (FERC) detailing their objection to a proposed plan by the Dept. of Energy (DOE) to give special treatment to electric power generating facilities powered by coal and nuclear plants. The DOE recently ordered FERC to devise new market rules favoring coal and nukes on the premise they contribute to “grid resiliency.” The IPPs writing the letter in opposition represent at least 26 shale gas-fired electric plant projects across the three states, which will contribute $21 billion to those state economies and generate 20,000+ jobs. Below we have the letter sent to FERC by the IPPs. That letter prompted our friends at Energy in Depth to produce a list of the projects the IPPs are building (or have built) in the tri-state area. It is an impressive list. We liked it and grabbed it to share with the MDN audience…
EQT’s Equitrans (pipeline) Expansion Project is on track to begin construction by the end of this year–likely sometime in November. We first covered this project in 2015 (see 
In March, the West Virginia Dept. of Environmental Protection (WVDEP) issued a federal water crossing permit for the Mountain Valley Pipeline (MVP)–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA (see 
Great news delivered late Friday afternoon: The Federal Energy Regulatory Commission (FERC) issued final, full approvals for both the Atlantic Coast and Mountain Valley pipeline projects. Atlantic Coast is a $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina. Mountain Valley is a $3.5 billion, 303-mile natural gas pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. Both projects still face an uphill battle before they get built. The North Carolina Dept. of Environmental Quality (DEQ) issued a rejection letter for Atlantic Coast last week (see 
It’s been a few months since we’ve brought you news about the monthly average for Baker Hughes’ venerable rig count–largely because after GE completed it’s merger with Baker Hughes they quit issuing monthly press releases from their website! We spotted a story in the Pittsburgh Business Times that talks about Ohio coming close to parity in their rig count with Pennsylvania–which is a really big deal–and the reasons for it. That story sent us looking for the latest rig count numbers and indeed, it’s true. As of September, PA averaged 33 shale rigs in operation, while OH averaged 29–the closest we’ve ever seen it. If you look at the counts for last week (BH does a weekly rig count too), the numbers are even closer: PA with 31 rigs, OH with 29. We don’t typically monitor the weekly counts as they always fluctuate up and down–better to look at monthly averages. But the fact remains that PA has been pretty steady, operating between 32 and 34 rigs per month since January of this year, while OH has gone from operating an average of 20 rigs in January to 29 last month, and West Virginia has gone from operating an average of 8 rigs in January to 15 rigs last month (nearly doubling). Yet PA is static. Is there an explanation? Some experts think there is, and it can be explained in a single word: pipelines…
When MDN editor Jim Willis attended the Shale Insight conference in Pittsburgh two weeks ago, one of the recurring themes he heard from West Virginia officials is that the state urgently needs to pass “mineral efficiency” laws. What they meant by mineral efficiency is another name for co-tenancy and joint development. We’ve written a fair bit about the topic–what we call “forced pooling lite.” In August the West Virginia Oil & Natural Gas Association (WVONGA) announced its intention to push, once again, for co-tenancy and joint development (see 
Carbon Natural Gas Company, through its affiliate Carbon Appalachian Company, announced earlier this week that the company has purchased another 780,000 acres of conventional (non-shale) leases, along with 3,100 miles of gathering pipelines located “predominantly” in West Virginia–for $41.3 million. You may recall Carbon Natural Gas picked up all of Cabot Oil & Gas’ conventional assets in WV for $21.5 million back in August (see 
MDN is once again attending the Shale Insight event–in Pittsburgh. Yesterday was the first day of the event. The crowd was definitely smaller than last year when then-candidate Trump spoke to attendees. However, Day One saw a number of heavy-hitting speakers, including Secretary of Labor Alexander Acosta, Deputy Secretary of Energy Dan Brouillette, XTO Energy President Sara Ortwein, Chevron Appalachia President Stacey Olson, and People’s Natural Gas CEO Morgan O’Brien. Marcellus Shale Coalition President Dave Spigelmyer served as master of ceremonies and seemed to be everywhere-present during the event (how does he DO that?). From the opening session to the exhibit floor to attending the breakout sessions, MDN editor Jim Willis made the rounds–and took lots of notes. In the coming days he will write up those notes and share them. For now, we have links and extracts of articles from other publications attending and reporting on this year’s Shale Insight…
District 5 Investments, an energy-focused private equity firm based in Texas, has formed a new subsidiary called Pathfinder Resources in order to invest in the Marcellus/Utica region. According to an announcement yesterday, Pathfinder will focus on acquiring “producing and non-producing oil and gas mineral interests, royalty interests and non-operated working interested” across the U.S., but starting first in the Marcellus/Utica. Investment sizes range from $5 million to $35 million. Here’s the latest investor to grab a piece of the Marcellus/Utica pie…