MARCELLUS REGION WILL SET PRICE OF NATURAL GAS FOR GULF COAST LNG EXPORTS - GoHaynesvilleShale.com2024-03-28T12:57:50Zhttps://gohaynesvilleshale.com/forum/topics/marcellus-region-will-set-price-of-natural-gas-for-gulf-coast-lng?commentId=2117179%3AComment%3A3511822&x=1&feed=yes&xn_auth=no12 Geologic Formations/800 tc…tag:gohaynesvilleshale.com,2015-07-12:2117179:Comment:35118222015-07-12T20:03:49.516ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>12 Geologic Formations/800 tcf: Marcellus Is A Megagiant Gas Field</p>
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<p>Brendan Gibbons | The Times-Tribune, Scranton, Pa.</p>
<p>The Marcellus Shale put Pennsylvania on the map as a gas-producing state, but other rock layers have the potential to keep it there far into the future.</p>
<p>Drillers have sought unconventional well…</p>
<p>12 Geologic Formations/800 tcf: Marcellus Is A Megagiant Gas Field</p>
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<p>Brendan Gibbons | The Times-Tribune, Scranton, Pa.</p>
<p>The Marcellus Shale put Pennsylvania on the map as a gas-producing state, but other rock layers have the potential to keep it there far into the future.</p>
<p>Drillers have sought unconventional well permits for 12 geological formations other than the Marcellus, according to state records compiled and organized by MarcellusGas.org. The state Department of Environmental Protection has issued permits for about 900 wells, site developer Carl Hagstrom said. Most of those are in the western part of the state; about 520 of those have been drilled.</p>
<p>Other than the Marcellus, which has more than 15,000 well permits, the most popular target formations in Pennsylvania are the Utica Shale with 258 permits, the Burket/Geneseo Shale with 246 permits and the Point Pleasant Shale with 159 permits. Although sometimes listed separately, the Point Pleasant is technically considered part of the Utica, according to a presentation by the Pennsylvania Geological Survey.</p>
<p>“They are all classic formations that have new life due to horizontals with classic hydraulic fracturing,” Lackawanna College School of Petroleum and Natural Gas dean Richard Marquardt said in an email. “They are all basically silty shales.”</p>
<p>These black shales with high organic content were formed over hundreds of millions of years ago when organisms, most likely algae, died then settled to the bottom of the ocean, said Allegheny County petroleum geologist Gregory Wrightstone, who has more than 35 years’ experience with unconventional formations in the Appalachian Basin.</p>
<p>Over millenia, heat and pressure broke down this organic material and formed natural gas.</p>
<p>The amount of oil and gas in a rock layer is dependent in part on how much heat or pressure affected it, a trait known as “thermal maturity.” Gas companies have to drill exploratory wells to learn how thermally mature a formation is in certain sections.</p>
<p>Though the Utica/Point Pleasant and Burket/Geneseo formations lie under most of the state, including all of Northeast Pennsylvania, most of the recent exploration has focused on the west and southwest.</p>
<p>Still, companies such as Seneca Resources Corp. and Shell have drilled into them as far east as Tioga and Lycoming counties.</p>
<p>“The question is how far east can you push the Utica in terms of thermal maturity,” Mr. Wrightstone said. “That’s a multibillion-dollar question.”</p>
<p>Although persistently low gas prices have driven down profits and forced many gas companies to cut back on drilling new Marcellus wells, they may try exploring some of these other formations, Pennsylvania Independent Oil and Gas Association president Louis D’Amico said in an email.</p>
<p>“They would like to see what potential for the future lies with these formations,” he said. “It’s one way to justify not further reducing their staffs during these tough times.”</p>
<p>With massive amounts of gas locked up in the Marcellus, Utica/Point Pleasant and Burket/Geneseo, Pennsylvania has many decades of production to come, Mr. Wrightstone said.</p>
<p>The industry considers the threshold for a “supergiant” gas field to be 30 trillion cubic feet, he said. The Marcellus holds more like 800 trillion cubic feet, he said.</p>
<p>“We should really coin a new term for the Marcellus,” he said. “We should probably call it something like a megagiant.”</p>
<p>The Utica/Point Pleasant is also a world-class reservoir and, while the Burket/Geneseo is like the Marcellus’s “little brother,” it still likely holds more than 30 trillion cubic feet , he said.</p>
<p>“In any other time it would have been this absolutely incredible field, and it’s a yawner,” he said.</p>
<p>One secret to the productivity of East Coast shales relative to others lies in their brittleness, said independent completions consultant Larry Fulmer, who has worked on naturally fractured oil and gas reservoirs for 40 years.</p>
<p>“The East Coast is blessed with ancient, ancient rock,” he said.</p>
<p>While hydraulic fracturing does create new cracks in the target rock, unconventional well production is tied to existing fractures, he said. An old, brittle shale holds more existing fractures than the pliable shales seen in many other parts of the world.</p>
<p>“Shales are barriers in a lot of the rest of the world,” he said. “On the East Coast, shales are formations.”</p>
<p>Searching for wells by formation is now available on MarcellusGas.org. Mr. Hagstrom plans to add new information that will help users compare production from various layers.</p>
<p>(c)2015 The Times-Tribune (Scranton, Pa.)</p>
<p>Distributed by Tribune Content Agency, LLC.</p>
<p>This article was written by Brendan Gibbons from The Times-Tribune, Scranton, Pa. and was legally licensed through the NewsCred publisher network.</p>
<p> </p> You're welcome, cocodrie man.…tag:gohaynesvilleshale.com,2015-06-29:2117179:Comment:35068072015-06-29T17:44:08.060ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>You're welcome, cocodrie man. I'm hoping that financing will be forthcoming ....and a ground breaking for the additional trains. So many of the proposed LNG export facilities still must pass regulatory review. And then they have to find buyers willing to make long term purchase agreements, line up NG supply and get financed. I'm not counting on future NG demand from any that don't make it to a ground breaking. </p>
<p>You're welcome, cocodrie man. I'm hoping that financing will be forthcoming ....and a ground breaking for the additional trains. So many of the proposed LNG export facilities still must pass regulatory review. And then they have to find buyers willing to make long term purchase agreements, line up NG supply and get financed. I'm not counting on future NG demand from any that don't make it to a ground breaking. </p> Skip, Thank you for posting t…tag:gohaynesvilleshale.com,2015-06-29:2117179:Comment:35068812015-06-29T17:35:33.685Zcocodrie manhttps://gohaynesvilleshale.com/profile/charlesjenkins
<p>Skip, Thank you for posting this. I am pleased to read there is someone out there with whom Cheniere can negotiate for the LNG from the sixth train. Let us hope the negotiations go well and are soon concluded. All the components</p>
<p>Skip, Thank you for posting this. I am pleased to read there is someone out there with whom Cheniere can negotiate for the LNG from the sixth train. Let us hope the negotiations go well and are soon concluded. All the components</p> Cheniere gets OK to export fr…tag:gohaynesvilleshale.com,2015-06-29:2117179:Comment:35066702015-06-29T13:40:57.770ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p><b>Cheniere gets OK to export from Sabine Pass expansion</b></p>
<p>fuelfix.com June 26, 2015 | By <a href="http://fuelfix.com/blog/author/rhiannonmeyers/" rel="nofollow" title="Posts by rhiannon.meyers@chron.com (Rhiannon Meyers)">rhiannon.meyers@chron.com (Rhiannon Meyers)</a></p>
<p>A federal agency on Friday granted Cheniere Energy a key export authorization for its Sabine Pass expansion, paving the way for the company to press forward with the project.</p>
<p>The U.S. Energy…</p>
<p><b>Cheniere gets OK to export from Sabine Pass expansion</b></p>
<p>fuelfix.com June 26, 2015 | By <a rel="nofollow" href="http://fuelfix.com/blog/author/rhiannonmeyers/" title="Posts by rhiannon.meyers@chron.com (Rhiannon Meyers)">rhiannon.meyers@chron.com (Rhiannon Meyers)</a></p>
<p>A federal agency on Friday granted Cheniere Energy a key export authorization for its Sabine Pass expansion, paving the way for the company to press forward with the project.</p>
<p>The U.S. Energy Department agreed to let Cheniere ship supercooled gas produced by the two additional production facilities to countries with which the U.S. does not have free trade agreements. The agency said it gave its approval after “extensive, careful review” of the project that took into consideration the proposal’s affects on the economy, energy security and the environment.</p>
<p>The announcement comes days after another federal regulator cleared Cheniere to start construction on the project, which is expected to boost Sabine Pass LNG’s output by 50 percent.</p>
<p>With its major regulatory hurdles out of the way, Cheniere is poised to make a final investment decision on the project which will be built on the same site where the company already is building four liquefaction production facilities.</p>
<p>The company already received approval from the U.S. Energy Department to ship 2.2 billion cubic feet per day of natural gas for 20 years. Friday’s approval clears Cheniere to export an additional 1.38 billion cubic feet per day.</p>
<p><span style="text-decoration: underline;">The first four trains are nearing the finish line, putting Cheniere on track to produce its first batch of LNG later this year, but work can’t start on the expansion project until Cheniere makes a final investment decision.</span> The company has already locked in sales and purchase agreements for at least one of the trains, agreeing to sell LNG to Total Gas & Power North America and Centrica, but it’s still negotiating contracts for the other train.</p> The best information that I c…tag:gohaynesvilleshale.com,2015-06-27:2117179:Comment:35062132015-06-27T20:38:04.043ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>The best information that I can find indicates that Haynesville gas being quite lean has less than 1% ethane on average.</p>
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<p>The best information that I can find indicates that Haynesville gas being quite lean has less than 1% ethane on average.</p>
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<tr><td><font class="fontpoint" color="#515151"><font class="fontpoint" color="#515151">Media Release</font></font><div>27 March 2015</div>
<div><p style="text-align: center;"><span style="font-weight: bold;" lang="EN-ZA">Sasol breaks ground on world-scale ethane cracker and derivatives project</span></p>
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<p><span style="font-weight: bold;" lang="EN-ZA">Westlake, Louisiana</span><span lang="EN-ZA">– Today, Sasol broke ground on its ethane cracker and derivatives mega project near Westlake, a facility that will roughly triple Sasol’s chemical production capacity in the United States.</span></p>
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<p><span lang="EN-ZA">Mayor Bob Hardey, Westlake city council members, Calcasieu Parish Police Jury President Nic Hunter, Speaker of the Louisiana House of Representatives Chuck Kleckley and more than 100 community partners joined Sasol executives today to mark the start of construction for the company’s world-scale facility.</span></p>
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<p><span lang="EN-ZA">"By the time construction is complete in 2018, Sasol’s investment will total almost 9 billion dollars, making it one of the largest investments in our company’s history,” said Steve Cornell, Executive Vice President of International Operations for Sasol. "Along the way, we’ll create more than 5,000 construction jobs and more than 500 full-time positions, 100 of which have already been filled.”</span></p>
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<p><span lang="EN-ZA">The end result will be a state-of-the-art petrochemical complex that uses abundant U.S. ethane to manufacture a diverse slate of commodity and specialty chemicals for markets around the world.</span></p>
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<p><span lang="EN-ZA">Early works activities, site preparation and civil construction work have been under way since 2014. Site aboveground work and heavy equipment deliveries will begin in 2015 and mechanical, electrical and instrumentation work in 2016 and 2017. Sasol expects the facility will achieve beneficial operation in 2018.</span></p>
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<p><span lang="EN-ZA">Ethane "cracking” is the process of converting molecules of ethane extracted from natural gas to create ethylene, one of the building blocks of the petrochemical industry. The facility will produce approximately 1.5 million tons of ethylene per year. The ethylene will be used in six new downstream derivative plants to produce a range of high-value derivatives used in everyday products such as synthetic fibers, detergents, fragrances, paints, film and packaging.</span></p>
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<p><span lang="EN-ZA">For more information about project progress, visit <a href="http://www.sasolnorthamerica.com" target="_blank">www.sasolnorthamerica.com</a></span></p>
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</table> Just as with the LNG export f…tag:gohaynesvilleshale.com,2015-06-27:2117179:Comment:35063632015-06-27T19:32:54.638ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>Just as with the LNG export facilities a number of the chemical plant upgrades and new builds that are on the drawing board, awaiting regulatory approval, or looking for financing will not end up being built. Those that will won't come on line for a few years. The 2018/2019 time frame seems accurate for those projects that will clear all the hurdles and get built. Once it's clear which will go into operation I'm sure plenty of industry pundits will calculate the supply demand and make…</p>
<p>Just as with the LNG export facilities a number of the chemical plant upgrades and new builds that are on the drawing board, awaiting regulatory approval, or looking for financing will not end up being built. Those that will won't come on line for a few years. The 2018/2019 time frame seems accurate for those projects that will clear all the hurdles and get built. Once it's clear which will go into operation I'm sure plenty of industry pundits will calculate the supply demand and make their projections public. My point is that the Marcellus connections will be in place before the ramp up in demand. Adding Marcellus/Utica production to the already plentiful Gulf Coast supply will limit the price of NG until some time in the future when all that new demand is on line.</p> Sasol ain't building that $8.…tag:gohaynesvilleshale.com,2015-06-27:2117179:Comment:35062672015-06-27T19:18:55.463ZTwo Dogs, Piratehttps://gohaynesvilleshale.com/profile/ThomasRScarbrock
<p>Sasol ain't building that $8.4 billion cracker plant in Lake Charles for nothing. They will clean up that wet gas then load the dry gas onto the tanker ships and send the wet stuff to the chemical plants that dot the Gulf coast. Kinder Morgan was going to do the same thing at Mt Belvieu but Sasol beat them to the punch.</p>
<p>Sasol ain't building that $8.4 billion cracker plant in Lake Charles for nothing. They will clean up that wet gas then load the dry gas onto the tanker ships and send the wet stuff to the chemical plants that dot the Gulf coast. Kinder Morgan was going to do the same thing at Mt Belvieu but Sasol beat them to the punch.</p> Guess your headline assumes t…tag:gohaynesvilleshale.com,2015-06-27:2117179:Comment:35061192015-06-27T17:25:01.872Zjffree1https://gohaynesvilleshale.com/profile/jffree1
<p><em>Guess your headline assumes the LNG importers lock in all the core/Tier I Marcellus production before other buyers and therefore do not need to source from HH for their tolling agreements...and that the Marcellus producers are will ignore market pricing in determining what they will sell natgas for.</em></p>
<p>I don't understand all that I read about future price predictions and I certainly don't dabble in the futures market but it seems that none of these articles consider onshore…</p>
<p><em>Guess your headline assumes the LNG importers lock in all the core/Tier I Marcellus production before other buyers and therefore do not need to source from HH for their tolling agreements...and that the Marcellus producers are will ignore market pricing in determining what they will sell natgas for.</em></p>
<p>I don't understand all that I read about future price predictions and I certainly don't dabble in the futures market but it seems that none of these articles consider onshore chemical market demand from companies which might want to lock in cheap NG feedstock. Do you think there will be increased US demand in the near term (3-5 yrs) from chemical plants or manufacturers (don't laugh... we still have a few)? It just seems to me that you would have to give that <em>some</em> weight if you want to predict where the price might go.</p> Incoming! Marcellus Pipelines…tag:gohaynesvilleshale.com,2015-06-27:2117179:Comment:35060452015-06-27T14:33:53.046ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p><b>Incoming! Marcellus Pipelines To Strike The Gulf Coast Spot Price</b></p>
<p><b><a href="http://www.oilandgasinvestor.com/nissa-darbonne-394246">Nissa Darbonne</a> </b> Friday, May 1, 2015 - 5:06pm oilandgasinvestor.com</p>
<p><b><i>But EnerVest’s John Walker expects LNG and other demand growth will absorb the new, natural-gas supply.</i></b></p>
<p>Rusty Braziel spent most of his career figuring out how to get Midcontinent and Gulf Coast gas to the Northeast. “Now these guys don’t need…</p>
<p><b>Incoming! Marcellus Pipelines To Strike The Gulf Coast Spot Price</b></p>
<p><b><a href="http://www.oilandgasinvestor.com/nissa-darbonne-394246">Nissa Darbonne</a> </b> Friday, May 1, 2015 - 5:06pm oilandgasinvestor.com</p>
<p><b><i>But EnerVest’s John Walker expects LNG and other demand growth will absorb the new, natural-gas supply.</i></b></p>
<p>Rusty Braziel spent most of his career figuring out how to get Midcontinent and Gulf Coast gas to the Northeast. “Now these guys don’t need it anymore,” <a href="https://rbnenergy.com/rusty-braziel">Braziel</a> noted in a recent ADAM-Houston meeting. The president and principal energy-markets consultant for RBN Energy LLC began his career in the 1970s in energy-marketing, -trading and -data services.</p>
<p>Marcellus natural gas at price points in Pennsylvania and the region are trading some $2 and $2.50 below that of the Henry Hub price. The Transco Zone 6-New York City price spiked above Henry Hub during the past two winters; however, the summer price has been as much as some $2 below Henry Hub.</p>
<p>“Think about this,” he told the group, which consists of E&P M&A professionals. “This is Henry Hub, Louisiana…and the price in New York City is (some) $1.50 under that. Surely the Lord did not intend this. Something is horribly, horribly wrong.”</p>
<p>Northeast gas shortages had become common, particularly in the 1970s, and pipelines directed Gulf Coast, Midcontinent and other gas to the region. The Rockies Express (Rex) pipeline was built earlier this century to feed gas to the Northeast from Colorado; the flow has been redirected to flow Marcellus and Utica gas, instead, to the Midwest.</p>
<p>“And Canadian gas—we don’t need it anymore,” Braziel added.</p>
<p>Marcellus production was <a href="http://eia.gov/todayinenergy/detail.cfm?id=20612">14.4 Bcf a day in January</a>, according to an EIA report. The output was more than 36% of U.S. shale-gas production and more than 18% of all U.S. production. Range Resources Corp. <a href="http://ir.rangeresources.com/phoenix.zhtml?c=101196&p=irol-newsArticle&ID=2041133">reported this week</a> that one of its Marcellus wells had a 24-hour IP of 43.4 MMcfe—a new record in the play. In the Utica, its Claysville’s Sportsman’s Club Unit 11H had a 24-hour IP of 59 MMcf/d.</p>
<p>More than 40 existing pipelines and newbuilds are under way, Braziel said, to send Marcellus gas into New England (5.8 Bcf/d), Canada (1.2 Bcf/d), Chicago/Midwest (5.3 Bcf/d), the southern East Coast (7.7 Bcf/d) and the Gulf Coast (8.2 Bcf/d). Some of the Canada-bound lines aim to serve Great Lakes-area industries; at least one aims to reach New England via a Canadian route north of the Great Lakes.</p>
<p>“Imagine what the (western) Canadian (gas) producers think about that,” he said.</p>
<p>His slide that showed the number of pipelines under way to take Marcellus and Utica gas to the Gulf Coast drew a gasp from the audience. The 15, bold arrows were reminiscent of <a href="http://images2.static-bluray.com/reviews/6568_1.jpg">missile-strike scenarios</a> of the Cold War days. “It’s headed straight to the Henry Hub…,” Braziel said. “All of them will probably be built; most of them have producer backing already.”</p>
<p>Meanwhile, gas from the Bakken, Midcontinent, Permian Basin and Eagle Ford is being directed to the Gulf Coast as well. “All of that gas has got to go to the Henry Hub (price). It’s going to be an interesting market for the next few years.”</p>
<p>Meanwhile, new Gulf Coast demand is to consume that new supply, John Walker, chief executive officer of EnerVest Ltd. and executive chairman of EV Energy Partners LP, said at a recent reception in Houston.</p>
<p>He expects LNG exports will consume between 8 and 12 Bcf/d by 2020; the first two liquefaction trains are expected to come online this winter. Some of the eight existing pipelines into Mexico are being expanded and nine new projects are planned. First Reserve Corp. and BlackRock Inc. co-invested some <a href="https://twitter.com/Pemex/status/581184429214830592">$900 million</a> with Pemex recently in two of these. Los Ramones North-Phase 2 and South-Phase 2 are to move into Mexico natural gas produced from South Texas, including from the Eagle Ford formation. Construction began last year. The lines are expected to be operating in mid-2016.</p>
<p>“I expect Mexico will take (the current) 2 Bcf/d to more than 8 Bcf/d by 2020,” Walker told attendees at the Texas Alliance of Energy Producers reception.</p>
<p>Exports plus growing, daily demand in power generation (+5.7 Bcf), industrial (+2.7 Bcf), natural-gas-fueled transportation (+2 Bcf), and residential and commercial use (+1 Bcf) could result in overall growth in daily demand for U.S. gas of between 22 and 30 Bcf, Walker said.</p>
<p>–Nissa Darbonne, Author, <a href="http://www.theamericanshales.com/"><i>The American Shales</i></a>; Editor-at-Large, <i>Oil and Gas Investor</i>, <a href="http://www.oilandgasinvestor.com/">OilandGasInvestor.com</a>, <i>Oil and Gas Investor This Week</i>, <i>A&D Watch</i>, <a href="mailto:A-Dcenter.com">A-Dcenter.com</a>, <a href="http://www.ugcenter.com/">UGcenter.com</a>. Contact Nissa at <a href="mailto:ndarbonne@hartenergy.com">ndarbonne@hartenergy.com</a>. </p> Does HH pricing affect or lim…tag:gohaynesvilleshale.com,2015-06-26:2117179:Comment:35058132015-06-26T00:19:34.456ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>Does HH pricing affect or limit direct, long term PSA agreements between operator and end user such as the one negotiated between ECA and Nucor? Marcellus operators will find the most profitable market available. Transportation to the Gulf Coast appears to be far ahead of connections to un-served NE markets where pricing will provide a premium. </p>
<p>Does HH pricing affect or limit direct, long term PSA agreements between operator and end user such as the one negotiated between ECA and Nucor? Marcellus operators will find the most profitable market available. Transportation to the Gulf Coast appears to be far ahead of connections to un-served NE markets where pricing will provide a premium. </p>