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Dominion Sells Its 50% Share in Blue Racer Midstream for $1.5B
In September, MDN told you that Dominion Energy had sold two “merchant” (non-regulated) natural gas-fired electric generating plants for $1.23 billion to Starwood Energy. And at the same time, Dominion announced it was shopping its 50% ownership stake in Blue Racer Midstream (see Dominion Sells 2 Gas-Fired Plants; Blue Racer Midstream For Sale). The sale of the power plants and potential sale of Blue Racer is aimed at helping Dominion pay down debt. The Blue Racer sale is no longer a potential, but a reality. Yesterday Dominion announced it is selling its share in Blue Racer to private equity investment firm First Reserve for $1.5 billion.
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Dominion Energy shared two bits of big news yesterday during their third quarter 2018 update. The first is that they’ve agreed to sell their 50% stake in Blue Racer Midstream (see Dominion Sells Its 50% Share in Blue Racer Midstream for $1.5B). The second bit of news, big news (for us), is that Atlantic Coast Pipeline (ACP) is now officially delayed–from late 2019 to “mid-2020” for a full startup. The price tag for ACP is going up too: $7 billion (up from $6.5 billion). But it’s not all bad news for ACP. Some pieces of the project will still go online in 2019, just not all of it. Dominion is taking a “phased in-service approach” to bringing the project online. The delays are due to the “FERC stop work order and delays obtaining permits necessary for construction.” We put it this way: The delays due to a myriad of frivolous lawsuits from Big Green groups means everyone will now pay more. Thanks Big Green.
Antero Resources, one of the biggest drillers in the Marcellus/Utica, passed an important milestone last month: Producing more than 3 billion cubic feet equivalent per day (Bcfe/d) in natural gas (and related hydrocarbons). All of that production is in the Marcellus/Utica. Looking strictly at the third quarter–July through September–Antero’s production averaged 2.7 Bcfe/d (29% of it liquids), which is a 17% increase over 3Q17 and an 8% increase over 2Q18. We’re pretty sure we are on solid ground in saying the only company that produces more is EQT, with an average of 4.1 Bcfe/d in 3Q18. Watch out EQT, Antero is catching up!
Transcontinental Gas Pipe Line Co. (Transco) is the crown jewel of Williams. Transco is a 10,200-mile pipeline system with 53 compressor stations extending from South Texas to New York City. The recent Atlantic Sunrise Pipeline project in northeast PA that went online Oct. 6 is part of Transco, feeding more Marcellus gas into the Transco system to flow that gas south. During yesterday’s Williams third quarter update, CEO Alan Armstrong hinted that yet another new Transco project, “Project #1,” is in the works and will be announced during 4Q18. Project #1 will expand Transco’s capacity in Zones 3-6, allowing more Marcellus/Utica gas to flow south–perhaps all the way to the Gulf Coast.
The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Steve Gray appointed to Range Resources board of directors; MPLX names Timothy J. Aydt vice president, business development; Feds open criminal probe into natural gas explosions; The oil and gas situation: volatility, trade wars beginning to take a toll; Energy Secretary heads to Europe on natural-gas exports push; GN released VIST vacuum shale shaker screen for drilling fluids recovery; U.S. monthly crude oil production exceeds 11 million barrels per day in August; Iran’s worst nightmare is coming true; China, India reported set to keep buying Iranian oil as U.S. sanctions loom; Always-evolving global oil technologies and demand.
Huntley & Huntley, with some 100,000 acres leased in southwestern Pennsylvania, has kicked its shale drilling program into high gear this year. Yesterday we told you that a former Range Resources veteran in charge of Range’s Marcellus drilling program has joined up with H&H (see 
Williams’ Transco Pipeline has just won a major eminent domain court case for its Atlantic Sunrise Pipeline project that will have implications for all pipelines. Yes, Atlantic Sunrise is now in the ground and flowing natural gas (see 
We previously highlighted Virginia Natural Gas’ (VNG) “Southside Connector” project, a 9-mile pipeline from Norfolk, VA to Chesapeake, VA that VNG says will fill a gap between two main supply lines, essential to meet growing natural gas demand in the Chesapeake area. The final 2,000 feet of pipeline needs to be laid, but will run under a river and shipyard located on the bank of the river. The shipyard owner adamantly opposes the pipeline and has launched an all-out campaign to stop it (see 
Cleveland State University and Case Western Reserve University have floated a bold plan to build a $100 million microgrid to power the city of Cleveland, OH’s central business district in downtown, a 2-3 square mile area. At the heart of the microgrid would be a Utica gas-fired combined heat and power system (CHP). The CHP plant would produce up to 48 megawatts of electricity and act as a backup and/or alternative to the grid. The cost per kilowatt-hour would higher than electricity from the regular grid, but hey, it would mean virtually 100% up-time, providing electricity when grid demand is extreme (hot summers, cold winters). It’s all about reliability.
The Laborers’ International Union of North America (LIUNA) is ramping up to begin training local Virginia residents as construction workers for Dominion Energy’s Atlantic Coast Pipeline (ACP). The initial training will start in Buckingham County. LIUNA’s training includes both classroom and hands-on training. Folks have been pestering LIUNA for months, asking why they have not already begun training. The reason is simple: You don’t begin training until you’re ready to put people into the field to use that training. You don’t train them and then wait for months on end–while they forget what they just learned. LIUNA’s training program launch means that construction on ACP in Virginia is about to ramp up in a big way.
CNX Resources, formerly CONSOL Energy, issued its third quarter 2018 update yesterday. The company reports producing an average of 1.3 billion cubic feet equivalent per day (Bcfe/d) of gas, NGLs and oil, up 18% from 3Q17. They made $35 million in profit, up from a loss of $41 million for the same period last year. CNX drilled 23 Marcellus/Utica wells in 3Q18 using four rigs, and brought 35 wells online. Three frac crews completed 27 wells during the quarter. The 23 wells drilled over the past three months included: 15 Marcellus wells in Greene County, PA; 3 dry Utica wells in Westmoreland County, PA; 3 dry Utica wells in Monroe County, OH; and 2 Marcellus wells in Tyler County, WV. The company expects to produce close to 500 Bcfe for all of 2018. CEO Nick DeIuliis boasts, “the team is firing on all cylinders.”
Chesapeake Energy has just blown the minds (and confidence) of investors by plunking down $4 billion in cash and stock to buy WildHorse Resource Development Corp, a driller with big-time assets in the oily Eagle Ford Shale play in Texas. Investors didn’t like the news, punishing the stock by sending it 12% lower. Chesapeake Energy today is definitely not the same company it was even five years ago. Chessy was co-founded by the flamboyant Aubrey McClendon (God rest his soul). Aubrey, a landman by profession, founded the company as a natural gas driller–building it into the largest onshore natural gas-drilling company in the U.S. Today Chessy’s focus on gas is pretty much gone. While they still drill and maintain wells in both the Marcellus (in PA) and Haynesville (in Louisiana), most of the talk in Chessy’s 3Q18 update, which was issued yesterday, was oil, oil, oil.