Mountain Valley Pipe Gets FERC Approval to Begin WV Construction

MVP Map – click for larger version

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, has just received permission from the Federal Energy Regulatory Commission (FERC) to begin tree clearing and construction of access roads and construction yards in five West Virginia counties–Wetzel, Harrison, Doddridge, Lewis and Braxton counties. The work will be allowed only where MVP has already obtained leases from landowners. This is the first actual construction to be authorized for the project, a milestone! MVP was approved last October (see FERC Approves Atlantic Coast, Mountain Valley Pipeline Projects). However, five national anti-fossil fuel groups filed a lawsuit two weeks ago to try and stop the project (see 5 Radical Green Groups Sue to Stop Mountain Valley Pipeline). Let ’em try! Here’s the great news that even as you read this, it’s quite likely the chainsaws are up and running…
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Southwestern Energy Offers $5/Acre for Seismic Testing in WV

In 2014, Southwestern Energy cut a massive deal to buy 413,000 Marcellus/Utica acres from Chesapeake Energy, most of it in northern West Virginia, for $5.375 billion (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Southwestern has done some drilling on that acreage since, but all the signs are now visible that the company intends to really ramp up their WV drilling program. In August, Southwestern nailed down some missing acreage in the Wheeling area by leasing 66 acres from the Wheeling Park School District for $231,000 (see Wheeling Park HS Signs Lease with Southwestern for $3500/Acre). Just last week we reported that midstream giant Williams has cut a deal with Southwestern to provide gathering and processing for over 200,000 acres in Marshall and Wetzel counties (see Williams Launches Major WV Expansion to Serve Southwestern Energy). And now, further evidence: A contractor working for Southwestern plans to begin seismic testing covering 260 square miles–stretching from Donegal (Westmoreland County), PA through northern WV all the way to Shadyside (Belmont County), OH–next year. The contractor, in speaking with members of the Bethlehem Village Council (Wheeling, WV area), said Southwestern is offering the “standard” price of $5 per acre for seismic testing…
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Williams Launches Major WV Expansion to Serve Southwestern Energy

Yesterday Williams announced a new, major deal with Southwestern Energy to expand its network of gathering pipelines and processing facilities in West Virginia, to serve Southwestern’s increasingly aggressive drilling program in the state. Williams will expand its its Oak Grove processing plant to handle extra wet gas that will flow into it from Southwestern’s 135,000-acre wet gas (i.e. NGL) drilling program in Marshall and Wetzel counties. Southwestern targets wet gas in the Marcellus and Upper Devonian in those two counties. The expansion will give the Oak Grove plant the capability to process an additional 1.8 billion cubic feet per day of wet gas. But wet gas isn’t the only focus. Williams is also expanding its pipeline network to an additional 71,500 dry gas acres, again in Marshall and Wetzel counties, targeting Southwestern’s dry gas Utica program. In the same announcement, almost as an afterthought (but for us is a really big deal), Williams announced it will connect its system to Columbia Pipeline’s (now TransCanada) Leach XPress and Mountaineer XPress pipelines, “to boost market access and diversify gas pricing opportunities.” Leach XPress, which is part of a project including Rayne XPress, will send gas all the way to the Gulf Coast (see Columbia Gas: $1.75B for 2 Projects to Send Marcellus Gas to Gulf). Leach XPress began construction earlier this year. Mountaineer XPress will send gas to Leach, Kentucky (as will Leach Xpress), and from there on to a variety of other markets in the Midwest and South–as well as the Gulf Coast (see Details on Columbia Pipeline Mountaineer XPress Pipeline Project). Mountaineer Xpress received a favorable final environmental impact state from the Federal Energy Regulatory Commission in July of this year, but is still waiting on other permits before it begins construction. Here’s the news about Williams expanding in the Mountain State…
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LOLA Energy Sells Out to Rice Energy, Deal Kept Hush-Hush

NGI’s Shale Daily has done it again. Ace reporter Jamison Cocklin has unearthed news that (so far) no one else has: Rice Energy has quietly, confidentially, hush-hush purchased all of the assets of LOLA Energy. The sale raises a lot of questions. But first, who is LOLA? No, not the show girl in Barry Manilow’s 1978 hit song Copacabana. LOLA Energy was birthed near the end of 2015, by former EQT executives using $250 million of private equity money from Denham Capital (see New Marcellus/Utica Drilling Company is Born – LOLA Energy). The name LOLA comes from the phrase Locally Owned, Locally Accountable. LOLA didn’t waste any time. They leased land in Greene County, PA–a prime location highly prized by both Rice Energy and EQT–and also in West Virginia, land in Monongalia, Wetzel and Marion counties. Shale Daily reports that rumors have been swirling for weeks, but NGI now has the goods–copies of transfer records going from LOLA to Rice. For some reason, perhaps related to EQT’s impending purchase of Rice Energy, Rice and LOLA have kept the deal hush-hush. But the lid is off now! Here’s what we know about the deal, sprinkled with some MDN speculation…
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XcL Midstream Building New Dry & Wet Gas Gathering Pipes in WV

It doesn’t happen often, but every now and again we read about driller or (in this case) pipeline company operating in the Marcellus/Utica we had never heard of before. Such is the case today. A new (to us) midstream company, XcL Midstream, has formed and is already building a dry gas gathering pipeline system in West Virginia, with plans to build a wet gas gathering system in WV too. According to its website, XcL “operates in the premier region of the Appalachia basin in Marshall and Wetzel Counties, West Virginia. XcL Midstream’s Appalachia Connector Pipeline is strategically located at the intersection of every major long-haul interstate pipeline system in Southwest Appalachia and provides shippers with market price optionality.” XcL plans to gather and process dry gas, wet gas (i.e. natural gas liquids), and transport water for its customers. XcL has its headquarters in Canonsburg, PA, near Pittsburgh. The reason that the company popped up on our radar is because Platts ran an article announcing that XcL has signed a customer–THQ Appalachia I, an affiliate of Tug Hill–to use 600 million cubic feet per day (Mmcf/d) on the dry gas pipeline, 200 Mmcf/d on the wet gas pipeline system, and to use a forthcoming water pipeline to boot. Here’s the thing: both XcL and THQ/Tug Hill are backed by private equity company Quantum Energy Partners. So apparently this is one of Quantum’s portfolio companies doing business with another of Quantum’s portfolio companies. In essence, one cousin helping out the other cousin. Perhaps we can call them kissin’ cousins?…
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Statoil WV Tax Overpayment Court Case – Money “Already Gone”

Statoil, based in Norway, is a big player in the West Virginia Marcellus Shale. Statoil paid property taxes to Brooke, Marshall, Ohio and Wetzel counties (all in WV) in 2015 and later found, during an audit/review, that they had overpaid those counties. They overpaid Brooke by $1.8 million, Ohio by $2.9 million, Wetzel by $1.6 million and Marshall by $342,000 (see Statoil Wants Millions in Refunds from Tax Overpayments in WV). The WV Tax Department argued that Statoil “acted negligently” and exercised “poor judgment” in not finding the mistake sooner. All four counties voted to deny Statoil’s request, so Statoil took them to court, asking the West Virginia Supreme Court of Appeals to hear the case. However, the Appeals court ruled that the cases are not “complex” and don’t require “special treatment,” so back to county court the cases went (see Statoil’s Tax Overpayment Cases Bounced Back to WV County Courts). A hearing was held last Friday in the case. There’s not much in the way of new news to report, other than Statoil wants the cases combined and the counties would prefer to keep the cases separate. The other bit of information is that the overpayments were spent about as quickly as they were received, and the counties are expressing angst over where they will find the money to issue a refund check, should the court case(s) go against them…
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Antero Forms JV with MarkWest to Service Combined 360K WV Acres

Marathon Petroleum subsidiary MarkWest Energy and Antero Resources’ midstream subsidiary Antero Midstream have announced a 50/50 joint venture focused on gathering and processing natural gas and natural gas liquids in northern West Virginia (Tyler, Wetzel and Richie counties). Antero Midstream will contribute its gathering operations for 195,000 acres in WV, boosting MarkWest’s total WV Marcellus gathering operation to a huge 360,000 acres. In addition, the JV will add three new processing plants to MarkWest’s Sherwood Complex in Doddridge County, WV. And get this: the JV contemplates building another eight (!) processing plants at Sherwood and a new/second location. Antero expects to invest “up to $800 million” through 2020, and has already made an initial $155 million investment. We think it’s no coincidence that on the same day Antero Midstream announced the deal (yesterday), they also announced a new round of units (i.e. shares of stock) they hope to pedal to raise $198 million. Here’s the details on the JV deal between Antero and MarkWest…
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FERC Gives Atlantic Coast Pipeline Thumbs Up, Antis Pitch a Fit

On the last business day of 2016, the Federal Energy Regulatory Commission (FERC) issued a favorable final environmental impact statement (EIS) for the Williams Atlantic Sunrise Pipeline (see today’s companion story). Not to be confused with that project, also on the last business day of the year, FERC issued a favorable draft (not final, but draft) EIS for the $5 billion, 594-mile Dominion Atlantic Coast Pipeline project. This is a huge milestone and an indication that FERC will later issue a favorable final EIS, and then a certificate to allow the project to get built. FERC cautioned there is still more work to be done by Dominion to complete field surveys and submit proposals on certain issues that need to get resolved. However, the draft EIS says based on what they see so far, FERC has confidence that Dominion can minimize damage to the environment in building the pipeline. Of course the childish antis came out of the woodwork to begin bleating and blatting, as they so often do, that they pipeline will kill everyone and everything in its path. Typical…
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WV Social Worker Claims Marcellus Drilling Causes Homelessness

Lisa Badia, executive director of the Greater Wheeling Coalition for the Homeless “can’t be certain how many homeless people dwell in Hancock, Brooke, Ohio, Marshall and Wetzel counties,” but she is certain that part (much?) of the homeless problem is caused by Marcellus/Utica Shale drilling. Yep, sinking a hole in the ground causes homelessness. How? According to Badia, when drilling came to town 4-5 years ago, a bunch of out-of-staters showed up to work on drilling rigs (and for pipeline companies, etc.). Those out-of-staters began paying sky-high rental rates for apartments and trailers, driving up the price of rental housing throughout the region. And when that happened, folks on welfare could no longer afford to pay the rent (with our taxpayer money). If it’s a decision between booze and cigs or rent, you know what goes! So those po’ folk ended up sleeping on heating grates–because of that nasty, awful fossil fuel drilling…
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Statoil’s Tax Overpayment Cases Bounced Back to WV County Courts

StatoilStatoil, based in Norway, is a big player in the West Virginia Marcellus Shale. Statoil paid property taxes to Brooke, Marshall, Ohio and Wetzel counties (all in WV) in 2015 and later found, during an audit/review, that they had overpaid those counties. They overpaid Brooke by $1.8 million, Ohio by $2.9 million, Wetzel by $1.6 million and Marshall by $342,000. The WV Tax Department argues that Statoil “acted negligently” and exercised “poor judgment” in not finding the mistake sooner. All four counties voted to deny Statoil’s request, so Statoil took them to court, asking the West Virginia Supreme Court of Appeals to hear the case. However, the Appeals court has just ruled that the cases are not “complex” and don’t require “special treatment,” so back to county court the cases will go…
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Primus Green Energy’s WV Methanol Plant Online in 2018

Primus Green EnergyIn March MDN brought you the news that Primus Green Energy, a gas-to-liquids (GTL) technology company announced they would build a 160 metric tons per day (MT/day) methanol plant using the company’s proprietary technology at “a manufacturing site in the Marcellus shale region” in 2017 (see Primus Building GTL Methanol Plant in Marcellus Region in 2017). The plant will convert abundant and cheap Marcellus Shale gas into methanol. In May MDN told you the main customer buying the methanol from the plant will be Tauber Oil (see Customer Announced for Primus Green Energy’s GTL Methanol Plant). We have an update on the Primus methanol plant. MDN reader and friend Charles Winslow, owner of The Wells Inn in Sistersville, WV, has written an update indicating where the plant will be built, and providing a status report on progress with the plant…
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EQT Buys Trans Energy + 60K Marc/Utica Acres in 2 Deals for $683M

EQT logoYesterday EQT announced a pair of deals that will net the company another 60,000 Marcellus/Utica acres including 44 Marcellus wells producing a collective 44 million cubic feet equivalent per day (MMcfe/d) of natural gas. Most of the acreage (42,600) is in three West Virginia counties, with another 17,000 acres in three Pennsylvania counties. EQT is paying a total of $683 million for the two deals. In the first deal, EQT is buying Trans Energy, Inc., which will become a wholly-owned subsidiary of EQT. EQT is also buying Trans Energy joint venture partner Republic Energy’s share in their Marcellus jv. The land is located in Marion, Wetzel and Marshall counties (WV). In the second deal, EQT is buying 17,000 acres from an unidentified third party in southwestern PA, in Washington, Westmoreland and Greene counties. EQT describes the purchases as adding acreage to their “core development area.” You may recall that EQT closed a deal in July, just three months ago, to purchase 62,500 acres from Statoil in WV for $407 million (see Statoil Completes Sale of WV Marcellus Assets to EQT). So why is EQT once again spending money? Analysts speculate it’s because of EQT competitor Rice Energy’s recent deal to buy Vantage Energy with its 85,000 acres in Greene County (see Vantage Energy is No More – Rice Energy Completes $2.7B Buyout). Here’s the particulars about EQT’s latest acquisitions…
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FERC Tells Ohio Valley Connector Project to Open the Valves

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OVC Project – click for larger version

10/4/16 UPDATE: EQT Confirms the gas began flowing on Oct 1, the day after this post. See EQT’s statement below.

The Ohio Valley Connector (OVC) project is a proposed natural gas pipeline system approximately 37 miles long running from northwestern West Virginia into southeastern Ohio. Equitrans, a subsidiary of EQT Midstream which is itself a subsidiary of EQT the driller, is building the pipeline. We reported in July 2014 that the project was green lighted. At that time, EQT CEO David Porges said the pipeline will interconnect with both the Rockies Express Pipeline and the Texas Eastern Pipeline and will provide about 1 billion cubic feet (Bcf) per day of capacity (see EQT Midstream: 2 Major Pipeline Projects Advance, 1 Doesn’t). In July 2015 we ran a story disclosing that the main customer for the new pipeline is one of EQT’s biggest competitors, Range Resources (see EQT Midstream Building $250 Million Pipeline – for Range Resources!). Fast forward to today. The pipeline’s project cost has gone up, to $415 million. But the really good news is that the pipeline is now built, and the Federal Energy Regulatory Commission (FERC) has just given EQT permission to turn it on…
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FERC Gives WV to VA Mountain Valley Pipeline Provisional Thumbs Up

thumbs-up.jpgThe Federal Energy Regulatory Commission (FERC) has given a preliminary thumbs up to the Mountain Valley Pipeline, a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The project, which filed an official application with the Federal Energy Regulatory Commission last October, is being built by EQT, NextEra Energy and several other partners (see Mountain Valley Pipeline Files FERC Appl, Now Just Matter of Time). The project has faced stiff opposition from landowners in West Virginia (see Mountain Valley Pipeline Sues 103 WV Landowners for Survey Access). The project has also faced opposition from landowners in Virginia (see Mountain Valley Pipeline Wins Right to Survey in VA w/o Permission). Last Friday FERC issued a Draft Environmental Impact Statement (DEIS) for both the Mountain Valley Pipeline and an associated project called the Equitrans Expansion Project. FERC’s DEIS runs a mammoth 781 pages (full copy below) and says the pipeline “would result in limited adverse environmental impacts, with the exceptions of impacts on forest.” In other words, FERC is giving the project a thumbs up…
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MarkWest Sues Contractor for Shoddy Work at WV Processing Plant

lawsuitOver the years, MarkWest Energy, now a part of MPLX, has built a number of natural gas processing plants in Wetzel County, WV, collectively called the Mobley plant. In September 2014 MarkWest signed a contract with paving and construction company J.F. Allen to design and build a retaining wall so MarkWest could then build the Mobley V plant (in Smithfield). MarkWest says, in a lawsuit they’ve filed against J.F. Allen and other subcontractors, that they didn’t do the job right and it resulted in long delays and millions of dollars in extra costs for MarkWest. Which MarkWest is now trying to recover, requesting a jury trial…
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4 WV Counties Refuse to Grant Statoil $6.6 Million in Tax Refunds

lawsuitBrooke County, WV makes it four for four in denying Statoil’s request to refund tax overpayments made by the company. Statoil, based in Norway, is a big player in the West Virginia Marcellus Shale. Statoil paid property taxes to Brooke, Marshall, Ohio and Wetzel counties (all in WV) in 2015 and later found, during an audit/review, that they had overpaid those counties. They overpaid Brooke by $1.8 million, Ohio by $2.9 million, Wetzel by $1.6 million and Marshall by $342,000. We previously reported on Marshall’s refusal to refund the money (see Statoil Wants Millions in Refunds from Tax Overpayments in WV). The WV Tax Department argues that Statoil “acted negligently” and exercised “poor judgment” in not finding the mistake sooner. With Brooke’s refusal, all four counties have now voted to deny Statoil’s request. Statoil is (so far) taking Marshall and Ohio counties to court, suing them for refunds. They are “assessing…options” with respect to suing Wetzel and Brooke. You can bet your bottom dollar they will…
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