Category Archives: Shale

Crosstex to build 3rd natural gas compressor station in Utica shale region

Crosstex Energy, which in March said it would invest $50 million in two natural gas compressor stations in Noble and Monroe counties, will spend another $25 million for a third facility in eastern Ohio, Youngstown’s Business Journal reports.

Crosstex, a midstream energy firm in Dallas, said it would make the investment in its E2 company. The facility, like the others, is supported by a long-term, fee-based contract with Denver-based Antero Resources.

The compressor stations are the sort of midstream facilities needed to move oil and gas from well sites to end users such as chemical plants, requisite infrastructure still needed in Ohio’s Utica shale play.

MATCOR is a leading provider of ISO 9001:2008-certified cathodic protection products that product compressor stations and many other infrastructure needs within the Utica Shale. Learn more about our services and cathodic protection installation that carry a 10 year guarantee. MATCOR offers the latest insights on anodes for cathodic protectioncathodic protection equipment and more.


Gas pipeline connections start on Transco expansion

Written By Renée Kiriluk-Hill/Hunterdon Democrat at

Steps have been completed as work proceeds on the Transco pipeline expansion project in Franklin and Union townships in Hunterdon County.

In this area Williams Co. has completed pre-construction surveys, cleared and graded land, trenched — moving topsoil to separate mounds in agricultural areas — strung pipe near the trench.

According to the company, once pipe sections are welded together they are “placed on temporary supports along the edge of the trench. All welds are then visually and radiographically inspected. Line pipe, normally mill-coated or yard-coated prior to stringing, requires a coating at the welded joints. Prior to the final inspection, the entire pipeline coating is electronically inspected to locate and repair any coating faults or voids” before the pipe is placed in the trench and backfilling begins.

That is followed by testing the pipeline and restoration of the work area.

The pipeline is intended to supply the New York-area market with natural gas from the Marcellus Shale, primarily in Pennsylvania


Marcellus Shale Gas Impact Fee Proceeds Above $400M

HARRISBURG – Gov. Tom Corbett has announced that the Marcellus Shale Impact Fee, part of Act 13, signed into law in February of 2012, has brought in more than $400 million dollars in its first two years.

“Act 13 is a law that has helped bring Pennsylvania forward both economically and environmentally,” Corbett said. “In addition to enacting some of the most rigorous environmental standards in the nation, we’ve brought in more than $400 million for our communities directly impacted by unconventional drilling, along with other environmental efforts across the state.”

“As this industry grows, benefitting all Pennsylvanians with thousands of new jobs, lower energy prices, and increased energy independence, Act 13 has played a key part in our role making sure that it grows safely and responsibly,” Corbett said.

Collections for 2012 were due to the Pennsylvania Public Utility Commission (PUC) by April 1.

Nearly $198 million is expected to come into the state from the 2012 collections. This is in addition to the $204 million collected during the first round of collections. The 2012 amounts were released yesterday.

The collections this year are slightly lower than last year due mainly to the lower price of natural gas.

Information on the amount of money expected for 2012, as well as the amount of money collected to date, can be found on the Act 13 page on the PUC’s website,


Expansion of Anadarko’s Natural Gas Plant – Eagle Ford Shale


MATCOR has learned that Anadarko is close to completing its new $100 million natural gas processing plant in Texas.

The Cathodically Protected Brasada plant will process natural gas produced from the company’s Eagle Ford shale wells.  Components like methane, ethane, propane and butane will be separated before they they are transported through the cathodically protected pipeline for further processing.

Anadarko’s plant is designed to process 200 million cubic feet of gas per day but can expand to process up to 400 MMcf/d.  This could lead to capacity expansion if Anadarko undertakes processing of third party gas at some point.

Although the Eagle Ford Shale region has a lot of potential for company’s such as MATCOR it cannot be optmized until the supporting midstream infrastructure comprising of gathering systems, pipeline and processing plants are developed to move oil and gas to to market.

Anadarko’s Eagle Ford Operations

Anadarko explores for shale oil and gas in a gross area of 400,000 acres in the Dimmit, LaSalle, Maverick and Webb Counties in the Eagle Ford region. Its current resources are estimated at over 600 million barrels of oil equivalent (MMBOE), 65% of which is estimated to be liquids. In 2012, the company achieved a gross processed production record of approximately 152,600 BOE per day. With its higher-margin oil and natural gas/condensate, the Eagle Ford shale region is among the most capital-efficient shale plays in Anadarko’s U.S. onshore portfolio.

Anadarko currently operates approximately 380 miles of oil and natural gas pipelines throughout the southwest Texas region, with additional gathering facilities that support more than 50% of its Eagle Ford shale production. In March 2012, Anadarko and Western Gas Partners began construction of the Brasada gas processing plant. The Brasada plant and the construction of an additional 200 miles of gathering lines will enhance the value of Anadarko’s Eagle Ford assets.

The Brasada Plant

All of Anadarko’s Eagle Ford acreage is located to the west of the Brasada plant, and a pipeline network will bring natural gas into the facility as well as move it off site to market. The pipeline will enable the company to eliminate its dependence on trucks. This will speed up transportation of its gas as there are too many trucks on the road in the region which causes a slowdown in the overall movement.

The Brasada plant also will also reduce flaring of methane in the field because Anadarko will be able to move it directly to market through pipelines. Flaring of methane is a common industry practice in cases where transportation is not viable.

From the plant, natural gas liquids will travel further through a pipeline to a plant in Yoakum and to fractionation facilities in Mont Belvieu, east of Houston. Gas also will go south to Corpus Christi, where it can be used in refining or fed into the existing network of interstate pipelines

Pipeline Construction Expansion Expected – LNG

New oil and gas gathered at shale plays already has had a significant impact for pipeline construction companies — and if the U.S. government permits more companies to export liquefied natural gas, pipeline construction companies could hit new highs.

A report from consulting firm within the energy industry, estimates that between 2013 and 2017, companies are expected to spend $216 billion on onshore pipeline projects.

The new estimate is an increase of 12 percent compared to onshore pipeline expenditures during the past five years.

Due to the rising global energy demand, oil and gas production is expected to increase, the report said.

Because of this increase in production, companies around the U.S. are already investing in more pipelines to transport oil and gas from shale plays to refineries on the Gulf Coast. For example, Tenaris SA (NYSE: TS), a Luxembourg-based steel pipe manufacturer that has its North American headquarters in Houston, just reveled Feb. 15 that it would spend up to $1.5 billion on a new steel pipe plant just outside of Houston. The driving force behind this plant was increased oil and gas production in areas such as the Eagle Ford Shale play in south Texas.

However, other countries besides the U.S. are hankering for natural gas produced in U.S. shale plays. If the U.S. approves more permits for LNG to be exported to these areas, this could increase the demand for pipelines even more than the current demand.



Natural gas-fueled power plant in Lawrence County gets site approval

A $750 million plant in Lawrence County, powered by Marcellus shale gas, could begin generating electicity by 2016, officials said.

LS Power Development LLC received North Beaver supervisors’ approval this week to build a 900-megawatt plant along the Mahoning River at the site of a former American Cyanamid Co. explosives manufacturing plant. Construction could begin early next year.

The New Jersey-based company needs state and federal permits, and the state Department of Environmental Protection is reviewing several requests, project manager Casey Carroll said on Wednesday.

“We’re trying to respond to the large number of proposed retirements — some 3,000 megawatts” of power generation capacity in northwest Pennsylvania and northeast Ohio, he said, addressing how the company chose the location. One megawatt can power about 800 homes.

The proposed Hickory Run Energy Station also needs access to high-voltage lines, interstate natural gas pipelines and a water supply source.

LS Power’s project is moving forward as electric generation companies are closing less efficient coal-fired plants or converting them to run on cheaper natural gas before tougher federal air pollution standards take effect in 2015.

FirstEnergy Corp. of Akron, American Electric Power of Columbus and GenOn Energy Inc., which NRG Energy of Princeton, N.J., acquired for $1.7 billion in December, along with other operators announced closings of dozens of plants last year.

Natural gas plants account for 95 percent of generation planned in grid operator PJM Interconnection LLC’s territory covering 13 states and the District of Columbia, spokeswoman Paula DuPont-Kidd said. Wind used to be the fastest-growing sector, she said.

Pending deactivations of coal-fired plants add up to more than 16,000 megawatts of generating capacity, PJM documents show.

Carroll said LS Power, with offices in East Brunswick, N.J., and St. Louis, has a contract to buy the Hickory Run site off Route 551, about 45 miles northwest of Pittsburgh.

Tennessee Gas Pipeline Co. owns and operates the gas lines that would supply the plant, and has a system that runs from the Gulf Coast to the Northeast.

Carroll said 500 workers would be needed to build the plant, with an estimated payroll of $100 million. The completed power station will employ 25.

LS Power owns or is developing power plants that run on natural gas, coal or renewables such as wind and solar, and is building high-voltage transmission lines, its website said. In Pennsylvania, the company has a natural gas-fired plant under development in Berks County.


Natural-gas royalties could top $1.2 billion in Pennsylvania

Private landowners are reaping billions of dollars in royalties each year from the boom in natural gas drilling, transforming lives and livelihoods even as the windfall provides only a modest boost to the broader economy.

In Pennsylvania alone, royalty payments could top $1.2 billion for 2012, according to an Associated Press analysis that looked at state tax information, production records, and estimates from the National Association of Royalty Owners.

For some landowners, the unexpected royalties have made a big difference.

“We used to have to put stuff on credit cards. It was basically living from paycheck to paycheck,” said Shawn Georgetti, who runs a family dairy farm in Avella, about 30 miles southwest of Pittsburgh.

Natural gas production has boomed in many states over the past few years, as advances in drilling opened up vast reserves buried in deep shale rock, such as the Marcellus formation in Pennsylvania and the Barnett in Texas.

Nationwide, the royalty owners association estimates, natural gas royalties totaled $21 billion in 2010, the most recent year for which it has conducted a full analysis. Texas paid the most in gas royalties that year, about $6.7 billion, followed by Wyoming at $2 billion and Alaska at $1.9 billion.

Exact estimates of natural gas royalty payments aren’t possible because contracts and wholesale prices of gas vary, and specific tax information is private. But some states release estimates of the total revenue collected for all royalties, and feedback on thousands of contracts has led the royalty owners association to conclude that the average royalty is 18.75 percent of gas production.

“Our fastest-growing state chapter is our Pennsylvania chapter, and we just formed a North Dakota chapter,” said Jerry Simmons, the director of the association, which was founded in 1980 and is based in Oklahoma. “We’ve seen a lot of new people, and new questions.”

Simmons said he hasn’t heard of anyone getting less than 12.5 percent, and that’s also the minimum rate set by law in Pennsylvania.

By comparison, a 10 percent to 25 percent range is similar to what a top recording artist might get in royalties from CD sales, while a novelist normally gets a 12.5 percent to 15 percent royalty on hardcover book sales.

Before Range Resources drilled a well on the family property in 2012, Georgetti said, he was stuck using 30-year-old equipment, with no way to upgrade without going seriously into debt.

“You don’t have that problem anymore. It’s a lot more fun to farm,” Georgetti said.


Hess Exits Refining as Elliott Seeks Board Seats

Hess Corp. (HES) will sell its fuel storage terminal network and exit the refining business as Paul Singer’s Elliott Associates LP fund said it plans to buy more than $800 million shares and seek board seats.

Hess will close its Port ReadingNew Jersey, refinery by the end of February and seek a buyer for its 19 storage terminals, the New York-based company said in a statement today. Hess rose 5 percent to $61.84 at 10:24 a.m., the highest intraday gain on the Standard & Poor’s 500 Index.

Singer is the founder and president of Elliott Management Corp. which oversees two funds, Elliott Associates and Elliott International LP, that have $21.5 billion of assets under management. Elliott Associates notified Hess that it may seek board seats at the annual shareholder meeting this year, according to a separate release from Hess. Elliott last year added two new board members to BMC Software Inc. (BMC)after pushing BMC to consider a sale.

Peter Truell, a spokesman for Elliott, declined to comment when reached by phone today.

Hess’s terminals business may sell for as much as $1 billion, said Fadel Gheit, a New York analyst with Oppenheimer & Co. The moves also will free up about $1 billion in working capital “for future growth opportunities,” the company said. The Port Reading closure culminates a process that last year included shutting down another money-losing refinery Hess co- owned in the U.S. Virgin Islands known as Hovensa LLC

Gradual Transformation

“They’ve been doing this gradually,” Gheit said today in a telephone interview. “Hess has turned a corner and the company is executing the right strategy.” Gheit rates Hess the equivalent of a buy and doesn’t own shares.

Hess joins companies including ConocoPhillips (COP) and Marathon Oil Corp. (MRO) in exiting the refining business, which rallied in 2012 in areas where operators have had access to cheaper U.S. crude. East Coast refineries, which pay more for imported oil, have been shut as their profit margins narrowed.

“We have transformed Hess into a predominantly exploration and production company, which is part of a multi-year strategy to grow shareholder value,” Chairman and Chief Executive Officer John Hess said in the statement.

Hess has exploration and production assets around the world, from the Bakken and Utica plays in the U.S. to Equatorial Guinea and Norway. The company has tripled its revenue from exploration and production in the past decade, while continuing to generate 75 percent of sales from marketing and refining. Production in the third quarter climbed 17 percent from a year earlier to the equivalent of 402,330 barrels of oil a day, according to data compiled by Bloomberg.

Shale Emphasis

Of the $6.7 billion Hess plans to spend this year on exploration and production, 40 percent of it will go towards its unconventional shale resources in the U.S., the company said Jan. 9. Hess, which was founded by John Hess’s father, began as a fuel oil delivery business and expanded into retail, refining, and oil storage.

The company is retaining its gas station business, which includes more than 1,350 Hess-branded sites in 16 states along the East Coast, the statement said. The company is the leading gasoline convenience store retailer in the region, according to the company’s website.

Retail Exit?

“The next potential move for them could be to exit the retail side,” Brian Youngberg, an analyst with Edward Jones & Co. in St. Louis, said in a telephone interview today. “Retail is a lower-margin business, so exiting could potentially unlock further value.”

Valero Energy Corp. (VLO), the largest independent fuel processor in the world, is in the process of spinning off its convenience store business.

Founded in 1977, Singer’s Elliott Management is one of the oldest private investment firms of its kind under continuous management. The Elliott funds’ investors include large institutions, college and charitable endowments, family offices, and friends and employees of the firm.

Singer is among a group of creditors seeking payment from Argentina for bond defaults. Ghana detained an Argentine navy ship in October on the bondholders’ request and Argentine President Cristina Fernandez de Kirchner took a chartered flight to Indonesia this month to avoid creditors seizing the nation’s plane.

Hess has retained Goldman Sachs Group Inc. as its financial adviser on the terminal sales.


New Pipeline carrying Marcellus Shale gas

The impact of the Marcellus Shale natural gas boom is about to reach a corner of South Jersey.

Surveyors have started several months of work in Gloucester County as part of a planned major pipeline expansion project to carry gas from northern Pennsylvania to the country’s Northeast and Mid-Atlantic markets.

Dubbed the East Side Expansion project, it is expected to cost $210 million and it had not yet received approval of the Federal Energy Regulatory Commission.

Most of the work would be on right-of-way owned by Columbia Gas Transmission L.L.C., a subsidiary of Houston’s NiSource Gas Transmission & Storage, said Chevalier Mayes, a NiSource spokeswoman.

Construction would begin in early 2015 and end in the fall of that year, the company said.

In Gloucester County, Woolwich Township Administrator Jane DiBella said the pipeline would run along the Columbia Gas right-of-way parallel to Center Square Road, which extends from Logan Township into Swedesboro.

The Gloucester County leg is just a small segment of a project covering four states. The main line is to run from Milford, in Pennsylvania’s Pike County, to Loudoun County, Va.

The Gloucester branch would connect to the main north-south pipeline in Chester County and cross the Delaware River to bring gas to Columbia Gas’ existing redistribution facility in West Deptford, according to a map accompanying a solicitation of bids for the pipeline project.

 A planned Nov. 5 presentation by Columbia Gas officials to the Woolwich Township Committee was canceled because the company was involved in recovery operations related to Hurricane Sandy, DiBella said. The public session is expected to be rescheduled.


Natural Gas to Be Most-Used Fuel in U.S. by 2030, IEA Says

Natural gas will overtake oil as the most-used fuel in the U.S. by 2030 as the country’s supplies balloon, the International Energy Agency said.

So-called unconventional gas, extracted from sources including shale rock and coal beds, will account for almost half of the increase in global output of the fuel by 2035, the Paris- based adviser to 28 industrialized nations said today in its World Energy Outlook. U.S. production will rise 23 percent and supply most of the growth along with China and Australia.

A boom in supplies of natural gas trapped in shale has reduced prices to a 10-year low of $1.902 a million cubic meters in April on the New York Mercantile Exchange. U.S. producers including Cheniere Energy Inc. (LNG)have proposed liquefied natural gas export terminals to meet demand in Asia.

“The place that’s going to be cheapest for gas exports is the U.S. and Canada,” Thierry Bros, an analyst at Societe Generale SA in Paris, said today by phone.

The U.S. will begin exporting around 2018, Fatih Birol, the IEA’s chief economist, said today at a press conference in London. Its external shipments will reach 19 billion cubic meters in 2020, compared with imports in 2010 of 76 billion cubic meters, the agency estimated in the report. North American exports will be 35 billion cubic meters, it said.

U.S. production will rise to 800 billion cubic meters in 2035 from an estimated 650 billion this year, the IEA said.

“The U.S. Department of Energy is waiting to review the results of a price impact study before dealing with the pending export applications,” the IEA said.

U.S. Exports

The agency assumes 93 percent of the U.S. gas remains available to meet domestic demand, with prices reaching $5.50 per million British thermal units by 2020. Front-month gas was at $3.52 per million Btu in New York today.

Diversifying sources of supply, can “accelerate movement toward more diversified trade flows, putting pressure on conventional gas suppliers and on traditional oil-linked pricing mechanisms for gas,” the IEA said.

Asia will ultimately seek lower prices for LNG, which is currently linked to oil in some sales contracts, and that pressure will be felt by the end of the decade, the IEA said.

The margin achievable by U.S. exporters to Japan in 2020 will shrink to $4.30 per million Btu, from $6.10 per million Btu in 2011, according to the report.

Global gas consumption may rise 19 percent by 2017 from 2010 levels as demand surges in Asia and the U.S. while Europe’s usage drops 1.6 percent, the agency said in June. China’s gas consumption will more than quadruple from last year’s level by 2035, boosted by regulatory reforms and policy support, the IEA said. Demand will also rise in India and the Middle East while growth in Japan is limited by higher prices and a focus on renewable sources and energy efficiency.