March 2018, Vol. 245, No. 3

In The News

In the News

Maryland Weighs Special Conditions for Proposed Pipeline

A Maryland official said special conditions may be justified for a proposed natural gas pipeline, as opponents to the project rally at the governor’s residence.

In a letter sent to the Maryland Department of the Environment, Ben Grumbles, head of the a letter to the U.S. Army Corps of Engineers, said the department identified potential water-quality factors, according to the Associated Press. He asks the agency to withhold its determination on the application until the department has a chance to propose special conditions to be included in the Corps’ recommendations.

The 3.4-mile project would connect a TransCanada pipeline in Pennsylvania to Mountaineer Gas line in West Virginia. It would run through Maryland and under the Potomac River. Opponents say it could affect drinking water for millions.

TransCanada Keeps LNG Pipeline to Northwest B.C. Alive

TransCanada continues to keep alive its $6 billion Prince Rupert Gas Transmission Project to transport natural gas from northeast B.C. by pipeline to the coast despite uncertain market and economic conditions.

The mega-project received approval from the B.C. Environmental Assessment Office for an amendment to its project certificate for two additional main construction camps, and a standby compressor unit at each of its eight proposed compressor stations.

The proposed 900-km pipeline was meant to feed the Petronas-led $11.4 billion Pacific NorthWest LNG project on Lelu Island near Prince Rupert that was previously cancelled.

Keystone XL Concludes Successful Open Season

TransCanada successfully concluded the Keystone XL open season, securing about 500,000 bpd of firm, 20-year commitments, positioning the proposed project to proceed. Interest in the project remains strong and TransCanada will look to continue to secure additional long-term contracted volumes.

The approved route was based on a comprehensive review of the evidence submitted by all parties in the hearing process as well as state agencies to ensure it has a minimal impact to the public and to Nebraska’s natural resources.

Construction preparation has commenced and will increase as the permitting process advances throughout 2018, with primary construction expected to begin in 2019.

The project faces opposition from environmental groups, property owners along the route and Native American tribes, who view it as a threat to groundwater and property rights.

U.S. Upholds Denial of Constitution Natural Gas Pipeline

U.S. energy regulators rejected Williams Companies’  request to overturn New York’s denial of a water permit for the company’s proposed Constitution natural gas pipeline from Pennsylvania to New York, according to a recent filing.

Williams said in a statement it was disappointed with Federal Energy Regulatory Commission’s (FERC) decision and said it would seek a rehearing and, if necessary, appeal of this decision.

If built, the 125-mile pipeline would transport up to 650 MMcf/d of shale gas from Pennsylvania to New York.

Trans Mountain Behind Schedule

Kinder Morgan Canada’s Trans Mountain pipeline expansion has encountered further delays, the company said, citing ongoing permitting issues.

Kinder Morgan expected the $7.4 billion project, which will carry 590,000 bpd from Alberta to Burnaby, B.C., to be in service by late 2019, but now is targeting December 2020 for start-up.

Major oil sands producers including Suncor Energy Inc. and Canadian Natural Resources Ltd. have committed to ship barrels on the pipeline, which the Calgary analysts believe is necessary for Canadian producers to get a higher price for oil.

Environmentalist groups in British Columbia have opposed the project, saying it will contribute to climate change. Additionally, they are concerned that bitumen would sink if spilled into the ocean or in the province’s waterways.

Whale of a Discovery in Gulf of Mexico

Shell announced one of its largest U.S. Gulf of Mexico exploration finds in the past decade from the Whale deepwater well. Evaluation of the discovery is ongoing, and appraisal drilling is underway to further delineate the discovery and define development options.

Whale is operated by Shell (60%) and co-owned by Chevron U.S.A. (40%). It was discovered in the Alaminos Canyon Block 772, adjacent to the Shell-operated Silvertip field and 10-miles from the Shell-operated Perdido platform.

The discovery in a Shell heartland adds to the company’s Paleogene exploration success in the Perdido area. Through exploration, Royal Dutch Shell has added more than 1 billion barrels of oil equivalent resources in the last decade in the Gulf of Mexico.

North Dakota Pipelines Filling Up

North Dakota’s director of mineral resources says the state needs more pipelines to keep up with oil and gas production.

Lynn Helms said North Dakota, with its existing crude oil and natural gas pipelines, could run out of space in four to seven years. Helm told county officials that every cubic foot of natural gas produced goes into one of two pipelines. And after 2022, those pipelines will be full.

According to AP, Helms says because it can take four to five years to get permits for a large pipeline project, that process needs to begin now. He says the Dakota Access Pipeline, exporting crude oil, will be full by 2025.

Competition for limited pipeline space keeps natural gas prices low, eroding the economics necessary to reduce flaring, he said. State regulations restrict the amount of allowed flaring, which remains high on Fort Berthold Reservation.

WildHorse Resource Development Picked by DOE

WildHorse Resource Development Corporation (WRD) has been selected for a Department of Energy (DOE) study alongside the Texas A&M Engineering Experiment Station to develop a new field laboratory in the Eagle Ford formation.

The team, which has been awarded an $8 million grant for research and development of unconventional oil and natural gas recovery, will test next-generation monitoring solutions for hydraulic fracturing and enhanced oil recovery.

WRD will contribute three wells for testing, one existing well for re-fracturing and two new wells during the life of the study.

Enbridge Looks to Divest $6.4 Billion in 2018

Enbridge plans to divest assets worth $6.4 billion this year, which is more than double the company’s initial divestment plan for the period, sources told Canada’s Globe and Mail. In November, the company announced it would divest some $2.4 billion in non-core assets under pressure from shareholders and rating agencies to do something about its debt.

According to some analysts, Enbridge will now likely try to use improved appetite for oil assets resulting from the recent positive price developments to shrink its $49.2-billion long-term debt pile, part of which it accumulated because of its merger with Spectra Energy.

Last year, the company identified non-core assets worth $8 billion that it could sell to reduce its debt load. Among these are $1.6 billion worth of renewable energy assets and $3.2 billion in midstream assets. P&GJ