New Pointe LNG Facility in La. Would Export Marcellus Gas
It looks like another new market may open up for Marcellus molecules along the Gulf Coast. Louisiana LNG, which has been renamed Pointe LNG, began life in 2014. The project didn’t initially “gain traction” but is now rekindled. The co-founders of the project have hired Whitehall & Co as their financial advisor to help them locate $4 billion to get it built. What’s that? How does a Gulf Coast LNG plant tie into the Marcellus?
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It’s kind of a mystery. The supply of natural gas produced in the U.S. has been declining over the past few months. Oil drillers are laying down rigs (historic lows for rigs in the oil patch), and companies are shutting in oil wells–all of which means there’s less associated natural gas being produced. M-U drillers like EQT (the largest natgas producer in the U.S.) are curtailing huge quantities of their production (see 
MARCELLUS/UTICA REGION: DRBC case judge told to reconsider standing of senators; New Fortress LNG adjudicatory hearing concludes; GlobalData: natural gas outlook remains bleak through 2020; Cuomo’s shifting gas policy; NATIONAL: Falling global LNG prices keeping U.S. natural gas prices capped; U.S. oil producers to halt 1.75 million barrels per day of production; INTERNATIONAL: Phase one U.S.-China trade deal fails in energy and beyond.
Last week MDN reported about a compressor fire at the Kinder Morgan’s Elba Island LNG export facility in Georgia (see 
Baker Hughes, one of the largest oilfield services (drilling) companies in the U.S. and the world, began keeping records on rig counts starting in 1987. As of May 12, 2020, producers operated 339 rigs in the U.S. That’s the lowest number of operating rigs since Baker Hughes began publishing its venerated rig count. It’s not the kind of record we like to see broken.
We spotted an interesting story by S&P Global Platts about the dramatic increase in the stock price for gas-focused drillers, particularly in the Marcellus/Utica. Did you know that EQT’s stock has shot up 127% in value over the past three months? Range Resources and Southwestern Energy are both up 81% in value. Antero Resources is up 76%. It’s impressive! Then again, the stock price for most of those companies decreased by 90% over the past five years, so we have a lot of ground to make up.
One of the worst overreaches and offenses of the Obamadroids was to redefine what “waters of the United States” (or WOTUS) actually means. As they were getting ready to leave power, the Obama EPA redefined WOTUS as everything down to large mud puddles–no lie (see 
Yesterday a coalition of twenty-three free market, small business, and consumer groups joined the American Energy Alliance (AEA) in warning President Trump not to slap tariffs on imported crude oil from our enemies (Saudi Arabia and Russia) as a means to help the decimated oil and gas industry. We disagree.
On October 3, 2016, landowner James Slamon filed a lawsuit against Carrizo and Reliance Industries in the Susquehanna County (PA) Court of Common Pleas. Slamon alleged Carrizo and Reliance underpaid royalties on oil and gas leases to him and a class of other landowners “exceeding one hundred members.” The drillers got the case moved to federal court on October 31, 2016. Fast forward to this past Monday and a judge in the federal court case has certified (in part) the class-action request. The lawsuit will now move forward.
Big time opposition continues to Pennsylvania Gov. Tom Wolf’s plan to force the state to participate in the so-called Regional Greenhouse Gas Initiative (RGGI), a tax on carbon aimed at coal and natural gas-fired electric power plants, with an eye to driving them out of business (
MDN recently brought you Epislon Energy’s first-quarter 2020 update (see 
According to an S&P Global Platts article, “spending cuts by producers and pipeline operators likely will reshape what and when natural gas midstream infrastructure is developed over the next several years.” The cuts and reshaping will, however, be “uneven.” The experts interviewed say pipeline and other midstream projects in gas-focused plays, like the Marcellus/Utica, are more likely to get built while new gas infrastructure in oil plays like the Permian and Bakken are less likely to get built.
What happens in the oil patch has a direct bearing on the financial health of gas drillers in the Marcellus/Utica, which is why we periodically cover happenings in oil. We’re now beginning to see articles with the theme that the oil price crash is already over. Yesterday West Texas Intermediate (WTI) closed at $32.50/barrel. Still not great, but a lot better than the negative $37.63 we saw a few weeks ago! However, does a higher price for oil automatically mean shale oil drilling will immediately return, and with it more associated gas keeping the price of natgas low?