Midstream Monitor

Midstream Monitor December 22 2017
Investors in power generation infrastructure will take a long, wild ride before the sector stabilizes. Also, Permian midstream deals may be pricey, but passing them up may be more costly in the long run; Jarl Pedersen of the Port of Corpus Christi discusses the sunny outlook for U.S. crude oil exports; and propane seems well-positioned for a price spike in coming weeks.
Eversource Energy, a New England utility, demands that the Environmental Defense Fund stop citing a study that asserts that the utility limited natural gas supplies to the region to profit from price spikes. Also, oil and gas prices rose sharply in the United Kingdom after the Forties Pipeline System was shut down; warmer than expected winter weather has clobbered natural gas futures; and Cove Point moves closer to operating as the second-largest U.S. LNG export facility.
Greylock Energy, backed by a $400 million equity commitment from Arclight Capital Partners, closes on a deal for ECA. Also, Kinder Morgan Canada is struggling to gain permit approvals for its Trans Mountain Expansion pipeline; and some analysts are questioning the accuracy of the EIA's ethane production data.
Industry titan Harold Hamm offers his insights on exports, the outlook for LNG and other topics during an exclusive interview with Hart Energy's Leslie Haines and Paul Hart. Also, the long-despised Jones Act could actually benefit oil and gas companies seeking to partner with the offshore wind sector; experts see 2017 as a good one as far as rising global oil and gas demand; and NGL prices climb to a 37-month high.
The U.S. energy industry will benefit from the alignment of global economic growth, a corporate economist told executives at the Pipeline Leadership Conference in Plano, Texas. Also, Tom Hutchins of Kinder Morgan Inc. reminded conference attendees that management must focus on people as much as assets; and the hypothetical NGL barrel reached another three-year high.
New pipeline capacity has come online in time for the upcoming winter in the Northeast, but it is unlikely that producers can respond fast enough meet rising gas demand.
Has energy investing conventional wisdom been turned on its head? Does debt trump equity? Sharam Honari of BlackGold Capital Management and Jim Hanson of Duff & Phelps explain what the numbers mean and what you might want to do about it. Also, a combination of solar and LNG could be a plausible option for many island nations, says Wood Mac; and the hypothetical NGL barrel reaches its highest price point in three years.
Oil deals are easy; gas deals are like a "knife fight," attorney James Holmes told executives in Dallas. Also, India wants its own version of the Henry Hub natural gas trading exchange; NGL prices dip slightly; and EagleClaw Midstream Ventures has drawn private equity in its Permian Basin activities.
Even with commodity prices in a prolonged slump, the industry can expect production growth, DrillingInfo's Maria Sanchez told the A&D Strategies Conference. The question, she said, is about demand. Also, two studies agree that LNG exports can be a long-term support for natural gas producers but the process is complicated; cooler expected temperatures than last winter could lead to more price spikes for NGL in coming months.
Was the cancellation of TransCanada's Energy East pipeline project a result of market forces or government obstruction? Contributor Markham Hislop digs behind the scenes to find out. Also, propane prices aren't expected to fall much anytime soon; and oil and gas companies are expected to play key roles in the development of wind energy.
The Federal Energy Regulatory Commission finally has a quorum and is ready to tackle its backlog, Commissioner Cheryl LaFleur told the North American Gas Forum. Also at the conference, a Shell executive urged attendees not to let the LNG market moment pass; and NGL prices hit both monthly and quarterly highs for the year.
EnLink's Mike Burdett discussed midstream challenges in Oklahoma at the DUG Midcontinent Conference. Also, a Q&A with Mike Noack of Tristate Midstream; propane prices hit their highest point in almost three years; and Tellurian bought acreage in the Haynesville play.
Gov. Mary Fallin told the crowd at the DUG Midcontinent conference that legislation passed in Oklahoma was paying off both for the oil and gas industry and the citizens of the state. Also, the EIA's high oil price projection sees crude at $226/bbl by 2040; and DCP and MarkWest land atop the rankings of Midstream Business's annual natural gas processor survey.
Hoping for a more streamlined process to gain federal permit approval for your pipeline project? Keep hoping. Industry experts say they will believe Washington's promises when they see them. Also, the EIA forecasts record crude oil production in 2018, despite setbacks from Hurricane Harvey; the NGL "barrel" reaches a seven-month high; and a banker tells energy executives that her sector is ready to lend again.
Kinder Morgan Canada will begin construction of the Trans Mountain Expansion pipeline this month, despite a lawsuit filed to halt the project by the government of British Columbia. Also, producers and refiners on the Gulf Coast have hit the reset button after Hurricane Harvey; and the price of butane hits a seven-month high.
Harvey devastated the Gulf Coast and its oil and gas industry infrastructure and left us wondering, how long will it take to recover? Also, the impact from a D.C. Court of Appeals ruling that ordered FERC to consider greenhouse gas emissions in the pipeline permitting process is troubling to many industry experts.
Which strategies will the oil and gas industry need to adopt to deal with the influx of electric vehicles and other mobility trends? Deloitte has some suggestions. Also, Canadian gas producers are feeling the pinch from U.S. shale; and the price of ethane reaches a high for the year.
E&Ps may look to divest their midstream assets to fund growth, says Cowen & Co. in a new report. Also, the president's infrastructure plan was hailed by the oil and gas industry, but the announcement was overshadowed by his comments about events in Charlottesville, Va.; Midstream Connect focuses on the export discussion at the Midstream Texas conference; and ethane prices hit their highest point since the first week of January.
A new report from KPMG recommends that LNG operators adopt a diverse approach to dealing with a wave of geopolitical challenges facing the industry. Also, shale pioneer Harold Hamm has focused his strategy around natural gas; and NGL prices continue to rally, reaching their highest levels in almost six months.
Could Venezuela's troubles be exactly what Alberta's oil sands industry needs? Also, Rangeland Energy has brought its skill set to plays other than the Bakken Shale; Stratas Advisors assesses changes on the horizon in the global LNG market; and Jackson Walker attorneys analyze the recent lawsuit involving Enterprise Products Partners and Energy Transfer Partners. In the Frac Spread column, NGL prices hit their highest level in five months.
The expanded Panama Canal has enabled expansion of U.S. LPG exports as well. Also, the industry continues to grapple with how to best convey its message following the Dakota Access Pipeline construction protests; and the Midstream Business website unveils its new look.
The Midstream 50 index, composed of the sector's leading public companies, provided a stock price rally as the first half of 2017 ended but the first six months were challenging, nonetheless. Also, Stratas Advisors forecasts that third-quarter crude oil production will come up short of expectations; Midstream Connect visits Remote Operations Center, a company that provides asset monitoring to small and midsize companies.
Coal has overtaken natural gas to regain the title of top U.S. fuel for electric power generation but the chances of holding onto the top spot for long are not good. Also, how can oil and gas companies recruit and hold onto Millennial employees? And a summer full of storms will likely increase demand for gas.
Two developers of proposed ethylene export terminals on the U.S. Gulf Coast Coast near decisions on their projects. Also, Stratas Advisors assesses how the change in succession to the Saudi throne will impact oil markets; NGL prices enjoy a good week; and pipeline constraints are resulting in a surge for the Canadian crude-by-rail business.
"It's not you, it's the Eagle Ford." Funny things can happen in a relationship, even a sustainably profitable joint venture. Sidley Austin's Cliff Vrielink lays out guidelines to best manage the stressors that may come up. Also, U.S. Energy Secretary Rick Perry describes the administration's "energy dominance" agenda; the fate of the Kemper plant in Mississippi appears to be cautionary tale of the risks of clean coal; and Hart Energy's Leslie Haines interviews Steve Schlotterbeck, CEO of EQT Corp.
In its annual assessment of the Appalachian shale industry, law firm Babst Calland found plenty of upside, along with challenges for companies operating in the Marcellus and Utica shales. Also, the $8.2 billion merger of Rice Energy and EQT creates a Northeast natural gas powerhouse; and Garry Banda of Stratas Advisors examines how the effect of the Dakota Access Pipeline on production in the Bakken Shale in the latest Midstream Connect video.
Sluggish growth in global energy consumption for the third year in a row signals a world in transition. That's the conclusion reached by BP's team of economists in the recent release of its annual "BP Statistical Review of World Energy 2017." Also, an analysis of EagleClaw's $2 billion sale in April; and an assessment of how well the energy industry is handling employee retention by GPA Midstream.
The Delaware Basin may have taken over as the star of the Permian, but the Midland Basin is still a great place to be, says midstream operator Lucid Energy Group. Also, the Waha Hub will be one to watch as the Mexican gas market develops; and the midstream buildout has been met with a buildup of legal challenges.
The alliance of British Columbia's Green Party and New Democratic Party could spell trouble for Kinder Morgan Inc.'s Trans Mountain Expansion Project, despite support from Canadian Prime Minister Justin Trudeau. Also, President Trump announced that the U.S. would withdraw from the Paris climate change agreement; NGL markets wobble; and Stratas Advisors assesses midstream capacityin the Permian Basin.
Midstream Monitor
Solving the problem of a lack of takeaway capacity in the Permian Basin may also provide export opportunities, Magellan Midstream's Robb Barnes told a Midstream Texas conference crowd. Also at the conference, TransCanada, Enbridge and Howard Energy were honored for their accomplishments.
Kinder Morgan Inc. is still king of The Midstream 50 ranking of the sector's best-performing public companies based on EBITDA. The big story this year, however, is how MPLX LP vaulted over 13 companies to take its place among the top 10. Also, Midstream Connect features KPMG's Regina Mayor discussing opportunities for U.S. companies in Mexico, and ethane crackers coming online prime that sector for a push in demand.
The results of British Columbia's election could mean more challenges for Kinder Morgan Inc.'s Trans Mountain Expansion project. Also, industry representatives are pleased with the nominations of two Republicans to the Federal Energy Regulatory Commission and the bearish market for crude oil prices may soon turn bullish.
The ethane oversupply issue may resolve itself over the next few years, says a white paper by Petrochemical Update. Also, new regulations have been issued following the explosion of a home near a Colorado gas well; a contract has been sign to build the first regasification terminal in India's West Bengal state; and Baker Botts weighs in on President Trumpl's executive order on financial services.
A study by the U.S. Chamber of Commerce describes the result if the Northeast continues to be deficient in natural gas pipelines. It's not good. Also, Enterprise Products Partners CEO Jim Teague explains his company's focus on demand; the Political Sidetrack podcast explores fracking bans in several states; and Bernstein explores the future of ethane prices as the Permian Basin's production continues to soar.
Blackstone Energy Partners LP agreed to spend $2 billion in a deal to acquire EagleClaw Midstream Ventures LLC and bolster its position in the Permian Basin. Also, Brad Iles of Brazos Midstream discusses the challenges of the Permian in transition, and a new report predicts a resurgence in crude by rail in Western Canada with the expectation that pipeline projects will not be able to keep up with increased production.
NuStar Energy LP will enter the Permian Basin with its $1.5 billion purchase of Navigator Energy Services LLC. Also, SAP's Bill McDermott discussed the value of employees at the recent GPA Midstream Association convention; volume trade in LNG set another record in 2016; and NGL prices enjoyed a springtime rally.
Tim Dove, CEO of Permian Basin powerhouse producer Pioneer Natural Resources, praised his midstream partners at the recent OGIS conference in New York. Also, Haynes and Boone released its spring survey; and the Political Sidetrack podcast focuses on government regulations and the president's recent executive order to pull back on Obama administration climate change rules.
President Trump's executive order rolls back six executive orders and presidential memorandums from the Obama administration on climate change and other issues, like hydraulic fracturing. We talk to experts about what it means for the industry. Also, soaring land prices in the Permian won't hinder oil and gas production too much; long-term demand makes short-term difficulties for the Keystone XL Pipeline worth it; and the industry's message to the public has improved but still needs to get better.
"We are poised for a rebound," the head of Hart Energy's Stratas Advisors said during a recent event in Midland, Texas. Also, California's Air Resource Board was poised to approve the nation's toughest methane emissions rules and hackers are forcing the industry up its cybersecurity game.
You’ve seen the footage from Standing Rock. You’ve heard the news reports. But do you really understand the legal dynamic that was at play during the months-long Dakota Access Pipeline standoff in North Dakota? Our podcast details lessons learned.
If you build it, the natural gas will flow. Problem is, getting infrastructure built, particularly to the Northeast, is not easy and delays threaten to curtail production growth in the U.S., panelists at CERAWeek by IHS Markit said. Sen. Dan Sullivan, R-Alaska, and Enbridge CEO Al Monaco echoed those concerns. Also, the latest IEA report predicts a tight oil market unless investment is increased.
Former Vice President Dick Cheney suggests that the U.S. use LNG exports to Baltic states to apply political pressure to Russian President Vladamir Putin. Also, Canadian midstream majors Enbridge and TransCanada are attracting investor attention and building up capital stockpiles; and the warm winter resulted in a first: injection of natural gas into storage in February.
The environmental movement has been more effective than the oil and gas industry in conveying its message to the general public. A NAPE panel explored the issue and discussed what the industry needs to do. Also, an S&P Global Platts analysts warned against adopting an overly optimistic outlook for 2017; the Midstream Connect video touches on ethane demand doubling and midstream companies ponder capex strategies for the year.
As many as six new ethane crackers could find a home in the Marcellus-Utica region, speculated panelists at Hart Energy's recent conference. Also, North America is enjoying a petrochemical manufacturing boom; transactions surrounding the Dakota Access Pipeline are now being completed; and KPMG's Regina Mayor comments on opportunities for the midstream in Mexico on the latest installment of the Political Sidetrack podcast.
East Daley's new "Dirty Little Secrets" report takes a granular approach to investing in the midstream sector. Also, the Dakota Access Pipeline gets the final go-ahead from the U.S. Army Corps of Engineers; new markets have emerged for Marcellus-Utica natural gas; and NGL prices are up but don't expect them to stay that way in the short term.
The funding is available for Marcellus and Utica pipeline projects, but will the public support these needed natural gas conduits? Also, the second installment of the Political Sidetrack podcast features an interview with Keith Coyle, Washington-based attorney and shareholder with Babst Calland; Spectra has big plans in the Northeast and the president's choice for the vacant seat on the Supreme Court has shown a leaning toward deregulation.
The Marcellus-Utica region is rich with natural gas, but will the infrastructure be ready to take it to market? Alan Armstrong, president and CEO of The Williams Cos., expressed both doubt and optimism at the recent Marcellus-Utica Midstream Conference & Exhibition in Pittsburgh. Also, President Trump issued executive orders to revive two major pipeline projects; and the EIA expects natural gas prices to strengthen this year and next.
Are you smack dab in the middle of the intersection between energy and politics, not sure which direction either is going, or supposed to go? We hear you. Now hear this: a new podcast, Political Sidetrack, that will provide insight on where the industry stands in the corridors of power and what to expect. Also, Tillerson's hearing; "Pipeline Purgatory"; and can President Trump make NGL prices great again?
Natural gas prices are primed for recovery, thanks to LNG plants coming online and the prospects for piping gas into Mexico, partners at Sidley Austin LLP said. Also, Texas Lt. Gov. Dan Patrick said he was happy that the state would no longer have "an enemy in the White House;" a study contends that renewables are adding to the value of gas storage; and the industry can expect a 32% hike in NGL prices this year.
There were struggles and disappointments, but from a stock price point of view, midstream companies rebounded nicely in 2016. Also, there could be complications if the next president ends up supporting a border-adjustment tax; an activist investor is encouraging a merger of EQT and Range Resources or Antero Resources; and NGL prices ended the year on a 25-month high.
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