Boardwalk Pipeline Parent Taking Co. Private, Dissolving MLP
We write about Boardwalk Pipeline Partners every now and again. They don’t have a lot of pipelines in the Marcellus/Utica region–but what they do have is important. One of the pipelines operated by Boardwalk is the huge Texas Gas Transmission (TGT)–originally built from the Louisiana Gulf Coast to the upper Midwest to supply Illinois, Indiana and Ohio with natural gas. But then the Marcellus/Utica Shale happened and TGT needed to change strategies. Through a series of projects, TGT made the pipeline system bidirectional, so it could flow gas from the Marcellus/Utica to points south, going as far as the Gulf Coast. In May 2016 TGT began to flow up to 626 million cubic feet per day of Marcellus/Utica gas as far away as the Gulf Coast (see 626 Mmcf/d of Northeast Shale Gas Begins Flowing to Gulf Today). Little known fact: About half of that gas, some 300 Mmcf/d, goes to Cheniere’s Sabine Pass LNG export plant, where it’s super-cooled into LNG and shipped to other countries. Boardwalk is in a multi-year process of expanding TGT by another 384 MMcf/d of capacity. In April 2017, the company asked FERC for an extension to complete the project, until 2020 (see Texas Gas Asks FERC for Extra 2 Yrs on Northern Supply Access Proj). We bring you all of that information to point out Boardwalk’s importance to our region, and to introduce the news that the parent company that owns most of Boardwalk, Loews Corp., is in the process of “buying out” the MLP (master limited partnership) units it doesn’t already own, and then removing all MLP units (i.e. shares) from public trading. In other words, it’s going private. Why? Due to the Trump tax cut and subsequent FERC ruling that makes MLPs much less attractive as a form of organization than they once were…
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The Goldboro LNG export facility in Nova Scotia continues its march (shuffle?) toward construction. As we reported in February, Pieridae Energy (the builder) has enlisted the help of Morgan Stanley and Société Générale to help raise $10 billion to build it (see 
Oil and gas giant BP recently released its annual Statistical Review of World Energy–the 67th edition! (Full copy below.) A number of big energy companies, like Exxon Mobil, as well as government agencies, publish similar reports that characterize current and future world energy trends. However, one analyst we read says BP’s report is the best: “I have relied upon the BP World Energy report for years. It is not a report to be viewed with a partisan eye, but as merely one of the best, if not the best, energy trend device available anywhere. In comparison to government agencies like the U.S. Energy Information Administration (EIA) the global International Energy Association (IEA) or OPEC’s own World Oil Outlook, the BP report has proven itself to be far more valuable in finding investable trends. I would never recommend any oil sector without having the statistical evidence of the BP World Energy Report behind me.” This year’s report finds that oil and natural gas consumption increased significantly in 2017. It also finds the U.S. best-positioned to meet that increasing demand, thanks to the shale miracle. Below we have some of the key highlights from the report, followed by a full copy…
The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Cabot pays a visit to Loudonville Council to discuss Ohio drilling; cracker plant takes shape in Beaver, PA; with pressure from corp. raider Carl Ichan, SandRidge looks to sell; Rhode Island stupidly sues major oil companies for global warming; natgas shortages coming this winter?; US Chamber continues drumbeat against Trump tariffs; Canada competes with Gulf Coast for petchems; and more!
Last Thursday, Ascent Resources, a company founded by Aubrey McClendon after he left Chesapeake Energy, announced it is buying 113,400 Utica Shale acres along with 93 operating wells located in eastern Ohio for $1.5 billion. The new acreage tips Ascent over the 300,000 Utica acre line and catapults the company into one of the largest privately owned drillers (exploration and production) in the U.S. The companies doing the selling are CNX Resources and Hess (selling a joint venture they co-owned, each selling their share for $400 million each, for a total of $800 million), Utica Minerals Development (a subsidiary of First Reserve, a private equity firm headquartered in Greenwich, CT, and EMG), and a fourth, unnamed mystery seller. The CNX/Hess acreage (78,000 net acres of the 113,400 acres) is located in the wet gas window of Belmont, Guernsey, Harrison and Noble counties. We’re not sure about the location of the other acreage. The CNX/Hess jv sale marks Hess’ total exit from the Utica Shale. So how will Ascent pay for all of their new shiny new assets? 
Rover Pipeline has violated one of the sacrosanct rules of life (and of pipeline construction): “Say what you’ll do, then do what you say.” Rover told the Federal Energy Regulatory Commission it would restore areas previously dug up to lay the pipeline by certain dates (primarily June 30th). In return, based on those promises from Rover, FERC allowed the company to begin service on certain sections of the $3.7 billion, 711-mile natural gas pipeline that runs from PA, WV and eastern OH through OH into Michigan and on to Canada via the Vector Pipeline. Rover has been pressuring FERC to allow two of the laterals–the Burgettstown and Majorsville laterals, that reach into western Pennsylvania–to begin service (see 
MDN told you last week that Sierra Club lawyers are attempting to bamboozle a court into halting construction of the Mountain Valley Pipeline (MVP) in Virginia, as they were able to do in West Virginia (see 
MDN exclusively brought you the news, on June 19, that Diversified Gas & Oil had purchased EQT’s Huron Shale assets in Kentucky, Virginia and West Virginia for $575 million (see 
Sunoco Logistics Partners was drilling horizontally underneath Snitz Creek in Lebanon County, PA for its Mariner East 2 Pipeline project when it experienced yet another “inadvertent return”–nontoxic drilling mud leaking out of a place where it shouldn’t. Sunoco spilled five gallons of nontoxic drilling mud. This is the third time it’s happened in June, and the sixth time it’s happened at the Snitz Creek location in total. Predictably, antis were hysterical. Hysterical, not as in funny, but hysterical as an insane, out-of-control overreaction. Theatrics. Drama. That kind of hysterical. The reaction from antis is organized by “green” groups–in particular by one person from a local green group calling itself Concerned Citizens of Lebanon County. Five gallons of nontoxic drilling mud (the same stuff used to make kitty litter and lipstick) is, quite literally, NOTHING. We’ve seen 5 gallon spills of very toxic gasoline at the local gas station that went unnoticed. Gasoline is far more “toxic” to the environment than what’s happening at Snitz Creek. Why do drilling mud spills keep happening at the Snitz Creek location? Obviously the ground in that area is porous. Every time Sunoco drills under the creek another few feet, drilling mud pops out and drilling activity gets shut down, yet again. This is a recurring situation. We don’t know what the solution is, but not building the pipeline (which is 99% done) is not one of the options. Hopefully Sunoco can find a solution quickly so we can put this ongoing, manufactured, and tiresome drama queen theatrics behind us…
Events related (or of interest) to the Marcellus and Utica Shale, primarily pro-drilling events. To have your event included (or if you are aware of a worthy event you believe should be on this page), please send the details and/or a link to have it included to the calendar@marcellusdrilling.com email address.
Below is an audio recording (“podcast”) featuring the Top 5 stories most read over the past week on MDN. Just click on the green button to listen. Below the recording is a list of the Top 5 with links to click to read the full stories (available only for subscribers). This list is meant as a way for folks to quickly catch up on the most essential news of the week–“essential” as determined by MDN’s audience of readers. Enjoy!
The PA Independent Fiscal Office (IFO) does a pretty good job of guesstimating how much impact fee revenue will get generated in the coming year, based on permit and producing wells activity this year. How good? Last year the IFO predicted that impact fee (equivalent of a severance tax) revenue would be $222 million for 2017 (see