Midstream Monitor

Shell Oil's president takes on the "keep it in the ground" movement, explaining that no fossil fuels means no energy. Also, a Deloitte survey shows a midstream tendency toward consolidation; Centurion CEO Tom Ramsey compares the Eagle Ford Shale to the Delaware Basin in the latest Midstream Connect video; and the damage wrought by the shale boom on the NGL-to-crude ratio is examined.
Midstream Business named Jim Teague, CEO of Enterprise Products Partners LP, its executive of the year. Teague received the award at the Midstream Texas conference in San Antonio, where he urged oil and gas executives to better educate the public on the industry's contributions. Other winners included MPLX for deal of the year for its purchase of MarkWest, and Frontier Energy Services and Concho resources for project of the year, the Alpha Crude Connector.
Calgary-based Enbridge has agreed to buy Houston-based Spectra Energy in a $28 billion all-stock deal that will combine the Canadian company's largely crude-based pipeline system with Spectra's extensive natural gas system. Also, protests against the Dakota Access Pipeline turned violent; Excelerate Energy celebrated an LNG milestone as Australian producer Santos cut output at its new Gladstone LNG facility; and the numbers confirm that NGL prices struggled through the summer.
The legal fight to prevent construction of the federally approved Constitution PIpeline could be costly for New Yorkers if their state government prevails. Also, the U.S. Chamber of Commerce expressed concern over a moratorium of hydraulic fracturing on federal lands that is backed by Hillary Clinton; Wärtsilä Corp. is moving to expand its footprint in the LNG sector; and Eagle LNG is moving forward on its Jacksonville, Fla., project. In the Frac Spread feature, NGL prices rise during the week, but market fundamentals for oil and gas have shifted.
Boosted by a global recovery in oil prices, the Bakken Shale will surpass the Eagle Ford Shale as the leading U.S. tight oil formation by 2040, the U.S. Energy Information Administration projects. Also, Mexico's energy reforms offer opportunities to U.S. firms and investors; the world's leading LNG importers have cut back on their demand; and a former member of The Williams Cos. Inc. seeks to take over the company's board of directors.
Analysts tell Hart Energy, however, that the worst is past, at least for the bulk of upstream companies. For those in the oilfield services realm, on the other hand, the next several months could be rough. Also, Elizabeth Ames Coleman, former chairman of the Texas Railroad Commission, said she believes three “missing pieces will bring equilibrium to the market going forward”; Debbie Conway discusses regulatory challenges in a Midstream Connect video; and NGL prices are slogging through the summer.
The Lone Star State is a big land of contrasts and surprises. Like the state’s topography, its multiple unconventional plays vary widely and midstream rises up to all of these challenges. If the proposed Sandpiper Pipeline Project is canceled, the result could actually brighten the outlook for the Bakken's supply and demand balance; also, the Middle East and North Africa—an energy producing powerhouse—is primed to become one of top importers of LNG; and the oilfield service sector is facing a $110 billion debt wall in the next five years.
The Williams Co. Inc. chopped its dividend by 69% and investors approved, providing a 13.9% lift over three days of trading. Also, captains of very large LNG carriers might want to be wary while sailing through new lanes of the Panama Canal, lest they literally hit the wall; Alerian offers insight to investors worried about MLPs; and LyondellBasell is planning a new polyethylene plant on the Gulf Coast.
  There is both broad agreement among federal regulators and industry trade groups on their commitment to improve natural gas pipeline safety, and a sharp divergence on whether the Notice of Proposed Rule Making (NPRM) introduced in March and known as the Natural Gas Mega Rule, represents the correct approach. Recently, both the American Petroleum Institute (API) and the Interstate Natural Gas Association of America (INGAA) have voiced displeasure with aspects of the proposal from the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA). Also, midstream M&A activity plunged in the second quarter, PwC reports; Shell and Phillips 66 expanded their interest in the Explorer Pipeline; and Tesoro's Gregory Goff called for an easing of federal regulations.
There are no shortages of changes to commodity markets as a result of increased unconventional gas and oil, many of which are tied to long-time hydrocarbon-importing countries like the U.S. becoming net exporters. That and more on the LNG export market from the recent EIA conference in Washington, as well as a midyear report how The Midstream 50 companies are performing in the stock market, an analysis by Bracewell attorneys on the changing tax burden for pipeline MLPs and an ethane recovery comparison of Targa Resources and ONEOK.

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