In what could be a stunning one-two punch, Pittsburgh-based natural gas giant EQT looks to score two big prizes that would mark CEO Toby Rice’s first deals since being named to his post in July last year. The 38-year-old Rice already presides over the largest supplier of natural gas in the nation. With more than 1 million gross acres in the Marcellus and Utica, EQT is the undeniable juggernaut in Appalachia producing 4.1 BCFD and holding 15.1 TCF of proved reserves. Reese Energy Consulting today is following the latest news from EQT, which has announced it will acquire Chevron’s upstream and midstream assets in the Appalachian Basin for $735 million. EQT’s first offer was $750 million. The bolt-on deal includes 335,000 net acres in the Marcellus, 100 wells, a 31% interest in Laurel Mountain Midstream, and two water systems. Current net production is 450 MMCFD. But wait, there’s more. EQT also has made a takeover offer for CNX Resources that would make EQT the largest price setter in the region. With a market cap of $2.6 billion, CNX produces 1.38 BCFD. Can’t wait to watch this prize fight.
When Berkshire Hathaway in early July purchased 7,700 miles of natural gas pipelines owned by Va.-based Dominion Energy, the investment group handed the utility giant a new path forward to incorporate more renewable energy in its operations with a goal to generate 100% carbon-free electricity by 2045. The acquisition of Dominion’s pipe, which transports gas from the Marcellus and Utica basins, has added to Berkshire’s existing 16,000-mile pipeline network in a sure-fire bet that natural gas will be the primary bridge fuel for the next 50 years as coal takes its final bow.
The push to transform the fossil fuels industry is now a shove on steroids, no doubt accelerated by COVID-19. As more regulators and the forces behind them halt new-build pipeline projects, and oil and gas majors reinvent themselves, midstream finds itself at a crossroads to get on board or get off the track. Shareholders and investors are demanding it. But what might the nation’s energy infrastructure look like in a future without crude oil, natural gas or NGLs coursing through its veins?
The majority of U.S. gathering, transportation and distribution pipelines is primarily used for fuels, which includes everything from onshore and offshore crude oil and natural gas, to water, hydrogen, coal slurry, biofuels, NGLs, and other fluids. For Smithfield Foods, the nation’s largest pork producer, sending renewable natural gas (RNG) flowing through pipelines has turned its industry upside down, and in a good way.
RNG comes from a variety of sources, including solid waste landfills, wastewater treatment plants, livestock farms, food production facilities, and organic waste management operations. It’s not a pleasant thought, but pigs produce more methane gas per pound of live weight than any other livestock. That’s a lot of greenhouse gases when you consider Smithfield manages millions of pigs every year. Smithfield in July partnered with Dominion to market that gas from the company’s capped lagoons that trap the methane. Dominion will siphon the methane from Smithfield’s anaerobic digesters and inject it into interstate pipelines to generate electricity. (You can read the tea leaves here.)
Tulsa-based Williams recently announced adding solar installations to power its natural gas assets, with sites under consideration in nine states. Will wind and solar farms soon become part of the midstream space? Whatever lies ahead, natural gas for the foreseeable future will enable the latest innovations that require electricity (a shout-out to Tesla), in addition to heating, cooking, vehicle fuels, manufacturing, industrial processes, and more. Transporting, processing and storing that gas will still require a midstream conduit. That is, until Elon Musk figures out how to SpaceX it right here at home.
Was this article helpful? Let us know your thoughts?
You Might Also Like…
North American pipeline giant TC Energy announced its U.S.-based Columbia Gas Transmission subsidiary filed a rate case July 31 to recoup $3 billion in capital and operational expenses on the company’s Columbia Gas Transmission system. The filing marks the subsidiary’s first Section 4 rate case in more than 20 years and would enable Columbia to move forward on Phase III of its ongoing modernization program. TC says it will have invested more than $2.5 billion in Columbia system enhancements by year end since acquiring it in 2016. The third leg of the program is expected to take place over the next seven years without the need to file additional rate cases.
TC Energy Corporation is a major North American energy company, based in Calgary, Alberta, Canada, that develops and operates energy infrastructure in Canada, the United States, and Mexico. The company operates three core businesses: Natural Gas Pipelines, Liquids Pipelines and Energy.
Columbia Gas Transmission transports 3 BCFD of natural gas through more than 12,550 miles of pipeline that extend from N.Y., to the Midwest and Southeast, and includes 30 storage locations in four states with nearly 630 BCF of capacity. TC Energy’s natural gas pipelines in Canada, the U.S., and Mexico represent the company’s largest business segment. Other interests include liquids pipelines and power generation.
Despite decades-long starts and stops on its embattled Keystone XL pipeline extension, Alberta-based TC Energy wrapped up the first half of 2020 declaring a total net income of $2.4 billion in Q1 and Q2, compared to $2.1 billion at the same time last year. Following the most recent halt of Keystone XL, the Trump Administration now has approved a 29% increase in shipments of Canadian crude along the existing Keystone Pipeline to feed Midwest and Gulf Coast refineries.
Was this article helpful? Tell us what you think.
You Might Also Like…
In what could be among the strongest mandates in the nation to dramatically reduce emissions from oil and gas production and midstream operations, the state of N.M., has announced new proposed standards to capture at least 98% of methane by 2026. This comes following plans already underway in Colo., and Pa., as well as the latest methane rules in Texas and N.D. The planned regulations in N.M., would give operators flexibility to choose the emissions-reduction technology of their choice while encouraging new innovations to rein in greenhouse gases.
DCP Midstream Partners, LP is a Fortune 500 company for midstream petroleum services, headquartered in Denver, Colorado. As a publicly traded partnership, the company does not have directors, officers, or employees of its own, but relies on its general partner for managing its operations.
For Denver-based DCP Midstream, finding the right emissions-reduction technology for its widespread operations began nearly two years ago. DCP is among the nation’s leading processors of natural gas. The company produces on average 400,000 BPD of NGLs, and transports and stores both hydrocarbons in the nation’s largest oil and gas basins. The company in 2019 began piloting a sophisticated airborne methane monitoring and advanced data analytics system from Calif-based Kairos Aerospace. With testing now completed, DCP has announced it will deploy the technology across its operations in Texas, N.M., and Colo., in what will be the largest industry-led methane survey to date.
Founded in 2014, Kairos has emerged as a leading provider of large-scale aerial monitoring of methane emissions. Last year, the company flew more than 135,000 miles in the Permian, completing the largest aerial survey of methane emissions ever conducted.
Was this article helpful? Tell us your thoughts.