The Akron Beacon Journal has profiled the proposed Bluegrass Pipeline, a proposed pipeline that would deliver gas from the Utica and Marcellus gas fields to processing facilities on the gulf coast. The pipeline would be constructed by Williams and Pipeline Partners under a partnership known as Bluegrass Pipeline, LLC. If approved by federal regulators, it would pass through Ohio and Kentucky to reach parts of Pennsylvania and West Virginia. Producers hope the pipeline will help alleviate infrastructure constraints that are limiting production in the Utica and Marcellus gas regions.
MarketWatch reports that XTO Energy Inc., a subsidiary of ExxonMobil, announced on June 17th the startup of a natural gas liquids recovery facility in Butler County, Pennsylvania. Located on 340 acres, the facility is the first of its kind for XTO in the Appalachian region. Containing 40 miles of connecting pipeline and 2 gas compressor stations, the facility is designed to treat approximately 125 million cubic feet of natural gas per day. In the past four years, XTO has drilled 50 wells over 46,000 net acres in Butler County.
Crosstex Energy has announced that it is constructing a third natural gas compressor station in Ohio. Crosstex previously announced in March that it would make a $50 million investment to build two compressor stations in Noble and Monroe counties. Now, Crosstex is spending another $25 million for a third facility in Youngstown area. The facility will be supported by a long-term fee based contract with Antero Resources.
DTE Energy, Spectra Energy Corp. and Enbridge Inc. are jointly developing the proposed Nexus Gas Transmission Project, a proposed 250-mile natural gas pipeline which would connect production in eastern Ohio to the existing pipeline grid in southeastern Michigan. The proposed pipeline would serve distribution companies, industrial energy consumers and natural gas-fired power generators in the Ohio, Michigan and Ontario areas. Construction would follow existing utility corridors and 50-foot wide easements already acquired by the partners. Pending market demand and the necessary permitting and approval process, the project is expected to be operating as early as November 2016. For more information, click here.
Chesapeake Energy Corp. remains poised to take advantage of the Utica shale once the infrastructure is in place for gas transportation and processing. Chesapeake currently has 66 wells in production in Ohio, with 183 more awaiting either pipelines or completions. By year end, the company hopes to be producing 330 million cubic feet of gas per day. There are currently 14 Chesapeake rigs operating in Ohio.
NiSource Midstream Services expects that the first oil and gas well servicing its Hickory Bend gas gathering and processing facility will be in production in the next few weeks. NiSource is also accellerating the construction of their gathering system’s cryogenic plant in southern Mahoning County. The area being developed will allow for multiple plants to be sited so that future expansion can be accomplished with very little impact. According to its COO, NiSource’s initial investment of $300 million could grow to $1 billion in the next few years.
Typically, midstream or infrastructure investments by oil and gas companies follow drilling. But in Ohio billions of dollars are currently being poured into pipelines and facilities, including those currenlty under construction in Kensington and Scio, in anticipation of production of the Utica Shale formation. Given the estimated ultimate recovery projected for wells drilled in the Utica, and the recent surge in natural gas and oil production around the United States, experts predict that such investments will occur for the next twenty years. The midstream projects include laying more than a thousand miles of pipeline and the construction of processing facilities and compressor stations. In each kind of midstream project there are dozens of business opportunities that are providing jobs to local companies, ranging from biologists, arborists and chemists to construction specialists, mechanics, manufacturers and laborers.
PDC Energy Inc. will be sending its Utica production to MarkWest Utica EMG for processing. Under the terms of a new agreement, liquids-rich gas from Guernsey county will be processed in the Seneca complex in Noble County. PDC joins Antero Resources Corp., Rex Energy Corp. and Gulfport Energy Corp. as partners of MarkWest.
Williams and Boardwalk Pipeline Partners announced that they have entered into a letter of intent to form a joint venture to build new pipelines and upgrade existing ones to provide a pathway for natural gas liquids (NGLs) like ethane to move from the Marcellus and Utica shale plays to petrochemical and export facilities in the U.S. Gulf Coast and the Northeast U.S., the Post-Gazette reports. The proposed “Bluegrass Pipeline” would provide producers with 200,000 barrels per day of mixed NGLs take-away capacity in Ohio, West Virginia and Pennsylvania, and such capacity could be increased to 400,000 barrels per day to meet market demand. Williams and Boardwalk hope that by combining new construction with existing pipelines the Bluegrass Pipeline can be placed into service and begin serving customers by the second half of 2015. The plan requires approvals from the companies’ boards and from regulators, which Williams and Boardwalk hope to receive this year.
Kinder Morgan is reportedly eyeing Tuscarawas County for a natural gas processing plant and a fractionation plant. The reports surfaced when EV Energy Partners referenced a “recent announcement” by Kinder Morgan on the two plants. Kinder Morgan has since denied that it made any such announcement. However, other reports revealed that Kinder Morgan was planning to build natural gas processing plants to handle up to 300 million cubic feet of natural gas per day. Industry estimates indicate that there has been $6 billion invested in pipelines in the Utica Shale play to date.
Following a speech at the Marcellus Utica Midstream Conference in Pittsburgh this morning, Pennsylvania Governor Tom Corbett said that Royal Dutch Shell’s recent decision to delay a final commitment to building an ethane cracker plant in Beaver County does not mean that Shell is considering alternate locations for the plant. The Pittsburgh Post-Gazette reports that Gov. Corbett said “[i]f they’re going to build it, they’re going to build it here,” and that the extension can be attributed to “dotting I’s and crossing T’s.”
The Scranton Times-Tribune is reporting that Houston-based Tennessee Gas Pipeline Company, LLC, has filed a federal-court complaint seeking to block attempts by two environmental groups to interfere with the operator’s Northeast Upgrade Project. Specifically, Tennessee Gas seeks to preclude the Pennsylvania Environmental Hearing Board from considering petitions and an appeal filed by the Delaware River Network and the Responsible Drilling Alliance. Tennessee Gas seeks to prevent the groups from delaying construction of the 41-mile pipeline project, which would travel across New Jersey and Northeast Pennsylvania. It argues that, because the Federal Energy Regulatory Commission approved construction of the pipeline, the EHB is preempted from taking any action on the petitions and appeal, which are scheduled to be argued before the EHB on Jan. 14, 2013. Pursuant to its contractual obligations, Tennessee Gas must complete the project by Nov. 1, 2013.
On December 28, 2012, Crestwood Marcellus Midstream LLC (CMM) completed the $95 million acquisition of four natural gas compression and dehydration stations from Enerven Compression LLC (Enerven). Crestwood Midstream Partners LP, the operator and 35% owner of CMM, first announced the deal on November 26, 2012. The acquired stations are connected to CMM’s low pressure gathering systems in Harrison County, West Virginia and serve the Marcellus Shale development of Antero Resources Appalachian Corp. (Antero), CMM’s largest producer in the region. The current capacity of the compressor stations is approximately 300 million cubic feet per day (MMcf/d), which is fully utilized by Antero’s Marcellus Shale production. As part of the deal, Enerven agreed to complete station expansions and unit replacements to support additional Antero production requirements. CMM will retain Enerven’s Marcellus operations personnel to support its gathering and compression business in the area.
On December 20, 2012, Dominion and Caiman Energy announced they are forming a $1.5 billion joint venture to provide midstream services to natural gas producers operating in the Utica shale in Ohio and portions of Pennsylvania. The infrastructure to be developed and the services that will offered include gathering, processing, and fractionation, which are critical to meet the demands of increased production in the Utica. Dominion is also contributing its Natrium Extraction Plant and related facilities that are already under construction in Marshall County, West Virginia.
Williams announced late on Tuesday that it closed on its public offering of 46,500,000 shares of common stock priced at $31 each and that underwriters elected to exercise in full their option to purchase an additional 6,975,000 shares of the company’s common stock. According to Tulsa World, Williams will use the net profit to purchase a 25 percent interest in Oklahoma City-based Access Midstream Partners, L.P and a 50 percent interest in Access Midstream Partners GP. Global Infrastructure Partners LP is the other primary stakeholder in the Access deal. Access owns and operates pipeline and processing assets in shale formations such as the Marcellus, Utica, Eagle Ford, Haynesville, Mississippi Lime and Granite Wash.