The 2018 Marcellus-Utica Midstream conference opened with keynote speaker Robert Phillips, chairman, president and CEO of Crestwood Equity Partners LP, declaring “2017 was a good year, 2018 is going to be a great year” for his company, which operates diversified midstream assets in active basins across the U.S., including a significant gathering operation in the Marcellus.
Robert Philips of Crestwood Equity Partners
He also told an audience of about 1,000 in Pittsburgh late January that the Marcellus-Utica’s unparalleled natural gas resources have long-term growth potential not only for Crestwood, but also the entire industry. “In our view, it has an endless supply of gas for both the Northeast gas markets and the rest of the U.S.”
Eureka Midstream president Chris Akers said the impact of the Rover Pipeline, starting up early in 2018, was “going to be positive,” but noted it “was just one piece of getting gas out of the basin. With the Atlantic Coast and Mountain Valley pipelines taking gas to the southeast, and other projects going to the west and northeast, I think the basin is now getting well-shaped to be able to get gas and/or NGL out of the basin.”
Steven Woodward (Antero Resources Corp.), Chris Ackers (Eureka Midstream) and Dana Bryant (Eclipse Resources) during the Producer Roundtable
Steve Woodward, senior vice president of business development for Antero Resources Corp., cited a “change going toward demand-driven projects,” with the Atlantic Coast Pipeline as an example. “It was a much-needed project to come in, and we’re excited to see that project move forward,” he said.
As additional infrastructure is built in the basin, “we’re seeing that the cost is exceeding $1, and at current Nymex gas prices, it’s pretty tough for a producer to stomach the takeaway. I used to use the rule many years ago that you don’t want to spend more than 10% of the commodity price on firm transportation. Needless to say, this basin has been a very costly basin, and we’ve all exceeded that parameter,” Woodward said.
As a result, the industry is “trying to look forward, as utilities need more gas, and do some form of sharing mechanism,” he said. “What we’re seeing is that a lot of the people that are in the middle of these long-haul pipelines between the Gulf Coast and Appalachia are stepping up. Because the long-haul transport keeps the gas from one end of the pipe to the other, the guy in the middle sometimes gets left out, and so he really has to create his own destiny and step up and say, ‘I want to be part of this. Let me help sponsor some takeaway.’ We’re excited that we’re having those sorts of discussions with people midway between the Gulf and Appalachia.”
FERC Back in Business
Commissioner Robert Powelson of the Federal Energy Regulatory Commission (FERC) had a vote in determining whether projects moved forward—that anyone had a vote on a panel which lacked a quorum for six months last year.
FERC Commissioner Robert Powelson
“Within the last seven months, this current makeup of Federal Energy Regulatory Commissioners have approved $25.6 billion in pipeline infrastructure in this country,” Powelson said. “As I like to remind people, when you’re a five-member independent agency, you can come up with a lot of solutions to the problems but you can’t buy No. 2 pencils unless you have three votes; it’s that simple.”
Among the recent approvals, Powelson listed:
- Atlantic Coast Pipeline, a $5.1 billion, 600-mile project between West Virginia and eastern North Carolina, scheduled for completion in 2019;
- Mountain Valley Pipeline, EQT Corp.’s $3.5 billion, 303-mile line between northwestern West Virginia and southern Virginia; and
- PennEast Pipeline, a 115-mile line connecting the Marcellus Shale in northeast Pennsylvania to New Jersey.
To read the full report from the 2018 Marcellus-Utica MIDSTREAM conference and exhibition, click here.