December 2019, Vol. 246, No. 12

Global News

Global News

EIA: U.S. Set Records for Natural Gas Production, Consumption, Exports in 2018

The United States set new records in natural gas production, consumption, and exports in 2018, the U.S. Energy Information Administration (EIA) reported in its updated annual report.

Dry natural gas production increased by 12%, reaching a record-high average of 83.8 Bcf/d, in 2018, marking the highest percentage increase since 1951 and the largest volumetric increase in the history of the series, which dates back to 1930, EIA said.

U.S. natural gas production growth was concentrated in the Appalachian, Permian, and Haynesville regions. Pennsylvania and Ohio, states that overlay the Appalachian Basin, had the first- and third-largest year-over-year increases for 2018, increasing by 2.0 Bcf/d and 1.7 Bcf/d, respectively.

Texas remained the top natural gas-producing state, with a production level of 18.7 Bcf/d, as a result of continued drilling activity in the Permian Basin of western Texas and eastern New Mexico. Louisiana had the second-largest vol-umetric increase in dry production, increasing by 1.8 Bcf/d as a result of in-creased production from the Haynesville shale formation.

Natural gas gross exports totaled 10.0 Bcf/d in 2018, 14% more than the 2017 total of 8.6 Bcf/d. Several new LNG export facilities came online in 2018, allow-ing for more exports.

U.S. natural gas consumption increased by 11% in 2018, driven by increased natural gas consumption in the electric power sector.

U.S. natural gas consumption grew in each end-use sector. Demand for natural gas as a home heating fuel was greater in 2018 than in 2017 because of slight-ly colder weather during most of the winter. Similarly, the summer of 2018 saw record-high temperatures that increased demand for air conditioning and, therefore, electricity – much of which was fueled by natural gas. U.S. electric power sector consumption of natural gas grew by 14% in 2017, more than in any other end-use sector. The electric power sector has been shifting toward natural gas in the past decade because of favorable prices and efficiency gains.

TC Energy Declares Force Majeure after Keystone Leak 

The Keystone crude oil pipeline resumed partial service in mid-November after a 9,100-barrel leak in North Dakota forced a shutdown of the 590,000-bpd system on Oct. 29.

Calgary-based TC Energy declared force majeure prior to the restart, after the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) ordered Keystone to remain shut down until the company determined the cause of the breach.

As part of the restart plan, TC Energy said it would operate the pipeline at a reduced pressure with a gradual increase in the volume of crude oil moving through the system.

“We continue to work closely with PHMSA and the North Dakota Department of Environmental Quality as we investigate the cause of the incident and analyze the impacted segment of removed pipe,” the company said.

PennEast to Appeal Rejection to Supreme Court

The PennEast Pipeline Company said it will file a U.S. Supreme Court appeal before a February deadline after its big to build a natural gas pipeline through parts of Pennsylvania and New Jersey was rejected by a federal appeals court.

In September, that appeals court in Philadelphia sided with New Jersey officials who argued the company cannot use eminent domain to acquire state-owned properties that are preserved for farmland or open space. The judges wrote that the ruling could change how the natural gas industry operates.

PennEast announced in November that it would appeal to the Supreme Court, contending that the ruling disregarded Congress’ intent when it enacted laws governing natural gas. It said delayed pipeline construction in several states has forced small businesses to close and disrupted major development projects.

Energy Transfer Expects Supertanker Facility in Service by 2023

Dallas-based Energy Transfer said discussions with potential shippers to build an offshore crude export facility in Texas capable of handling supertankers were progressing on schedule, with the project expected to be in service by late 2022 or early 2023. 

Plans call for the facility to be connected to Energy Transfer’s Nederland, Texas, crude terminal, though a final investment decision has not yet been made, Chief Financial Officer Thomas Long said.

Energy Transfer said the Permian Express 4 crude pipeline expansion, which added 120,000 bpd of capacity to its Permian express pipeline system from Colorado City, Texas, to Nederland, is operating at full capacity after entering full service on Oct. 1.

The company has also announced plans to buy smaller rival SemGroup Corp for $1.35 billion and build a new pipeline between the Houston Ship Channel and Nederland. That pipeline, named the Ted Collins, is expected to have an initial capacity of more than 500,000 bpd and begin commercial operations in 2021.

Cheniere Targets Early Start of Texas LNG Exports

Cheniere Energy said it expects to reach substantial completion of the third liquefaction train at its Corpus Christi LNG export plant in Texas sooner than previously forecast, in the first half of 2021.

Earlier, the company said it expected to complete the train in the second half of 2021. This would continue a pattern for Cheniere and Bechtel, the engineering firm building the trains, of completing units ahead of schedule and on budget.

Cheniere also said it expects to complete the sixth train at its Sabine Pass LNG export plant in Louisiana in the first half of 2023. 

Japan Marks Half-Century of LNG Imports

Global LNG trade might seem like a recent phenomenon, but that’s certainly not the case for Japan, which celebrated its 50th anniversary of LNG imports from the United States on November 4.

On that date in 1969, Tokyo Electric Power Company (now JERA) and Tokyo Gas started receiving LNG from the Alaska LNG Project.  Phillips Petroleum was the seller, and Mitsubishi acting as buyer’s agent. The companies hosted a ceremony last month to commemorating the event.

“With rising demand for LNG in emerging economies and its anticipated utilization in new areas such as transportation, the importance of LNG is expected to grow further in the future,” said JERA Chairman Toshihiro Sano.

Looting Attempt Causes Fatal Oil Pipeline Fire

An oil products pipeline caught fire in Egypt when thieves tried to tap into it to siphon off gasoline in the Nile Delta province of Beheira, killing at least seven people, Egyptian officials said. A health ministry spokesman, Ahmed Megahed, said the fire in the Itay el-Barud district also injured at least 16 other people, who were taken to nearby hospitals for treatment

The looters caused a leak when they tapped into the pipeline, spilling gasoline into the nearby area, including down a drain, Egypt’s petroleum ministry said. The fuel then caught fire, it said.

Police arrested one person on suspicion of trying to siphon from the pipeline, which moves fuel from the Mediterranean city of Alexandria to Egypt’s capital, Cairo.   

INGL, Poseidon Sign MoU to Study Israel Gas Pipeline to Europe

Israel Natural Gas Lines (INGL) confirmed it is evaluating the construction of a natural gas pipeline to Europe under a memorandum of understanding signed with IGI Poseidon. The EastMed pipeline could carry about 10 billion cubic meters of gas a year from the eastern Mediterranean to Cyprus, Greece, Italy and other European markets.

INGL and IGI Poseidon will form a joint team to examine technical, regulatory and other issues involved in constructing the pipeline, INGL said in a regulatory filing.

IGI Poseidon is a joint venture between Greek natural gas firm DEPA and Italian energy company Edison. It has promoted the project for several years with the backing of Israel and a number of European countries.

Hungary Expects Gas from Russia’s TurkStream by Late 2021

Hungary plans to be able to get natural gas from the TurkStream pipeline by the end of 2021, Prime Minister Viktor Orban said after hosting a meeting with Turkish President Recep Tayyip Erdogan.

Hungary depends greatly on natural gas from Russia. It now arrives through Ukraine, but Hungary wants to diversify transit routes for its energy supplies.

Orban, who has focused on anti-immigration policies since 2015, also said that “without Turkey, migration toward Europe cannot be stopped,” which made Turkey Hungary’s strategic partner in security and migration issues.

Kinder Morgan Completes Southcross Acquisition

Kinder Morgan Tejas Pipeline has completed its $76 million acquisition of Southcross Energy natural gas pipeline assets, including the Corpus Christi Pipeline Network and Bay City Lateral. 

“We continue to focus on opportunities to increase our natural gas connectivity to meet LNG facilities, Gulf Coast power, industrial and petrochemical demand,” said Kinder Morgan Natural Gas Midstream President Sital Mody.

A U.S. Bankruptcy Court approved Southcross’ sale of its natural gas pipeline network in Corpus Christi, Texas, to Tejas for $76 million and its pipelines and related assets in Mississippi and Alabama to Magnolia Infrastructure Holdings for $31.5 million. The Magnolia deal is expected to close by year-end.

National Grid’s New York Showdown

After rejecting a pipeline that could deliver more gas to New York residents, Gov. Andrew Cuomo doubled down by threatening to revoke utility National Grid’s operating license unless it accepted more natural gas customers, regardless of supply constraints.

It was enough to raise the ire of the American Gas Association, whose president and CEO, Karen Harbert, fired back at Cuomo after his latest swipe at National Grid: “By vetoing pipelines and denying access to natural gas, Gov. Cuomo is forcing families to use more expensive and dirtier fuels to heat their homes.” 

“With winter bearing down on us, residents of New York need affordable, reliable energy and after Gov. Cuomo denied permits for access to natural gas to supply these communities it seems that he is looking to add insult to injury by taking punitive measures against National Grid,” she said.

National Grid has been at odds with Governor Cuomo over the construction of the Constitution pipeline, a $1 billion natural gas pipeline being built by Williams. The pipeline would carry 400 MMcf/d of natural gas from New Jersey to New York.

The 2017 U.S. Census American Housing Survey shows 57% of New York state’s 7.4 million households use natural gas for space heating, an increase of more than 475,000 since 2009.