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Energy Transfer LP Races to Carry Permian Basin Gas to Gulf Coast Hubs

The Permian Basin's abundance of resources — given that it's the largest shale field in North America —, quickly became the driving force behind Energy Transfer LP's plans for a natural gas pipeline from West Texas and eastern New Mexico to export hubs on the Gulf Coast. The project under consideration would combine new and existing pipelines to serve coastal gas hubs.

A 260-mile new build pipeline would extend eastward from the Midland sub-basin along existing rights-of-way, interconnecting with Energy Transfer’s existing 36-inch pipeline near Fort Worth, Texas.

Given the proposed route and Energy’s ability to utilize existing assets, construction could be completed in two years or less once the parties involved have reached FID (final investment decision). The company's Co-CEO Thomas Long also corroborated this timeline.

A race to build pipelines in the Permian Basin has been triggered due to the increasing quantity of natural gas production under the Permian and the ever-increasing demand for natural gas exports from the Gulf Coast. Various companies, including Kinder Morgan Inc. and MPLX LP, are looking at building new pipelines in the region due to the demand spike.

Energy Transfer likely edged past Kinder Morgan and others into the lead for building the next Permian pipeline since the project strikes as the most economical option for the basin outside of capacity expansions on existing pipelines and could essentially add 1.5-2 Bcf/d of transport capacity with just 260 miles of new pipe.

Additionally, Energy Transfer announced that work had started on the Gulf Run Pipeline, which will connect Louisiana to the rest of the nation and international markets for natural gas transmission. To help meet growing global energy demand, existing assets will also be modified to complete the project.

Approximately 135 miles of the pipeline would run between Westdale and Starks. Enhancing and repurposing some underutilized infrastructure in northern Louisiana will be accomplished by modifying Line CP.

QatarEnergy and Exxon Mobil Corporation both have signed a 20-year agreement under which a $10 billion Golden Pass LNG export plant for this project is going to be built in Texas, and will provide 1.65 billion cubic feet of natural gas daily.

As a result of all those strings being pulled, Gulf Run should be completed by the end of 2022. At least according to Energy Transfer’s Top management statements.

But not all of Energy’s programs have “ongoing” or “underdevelopment” statuses. While management boasted about future prospects, there was also an announcement that the company had finally completed the last phase of its long-delayed Mariner East NGL pipeline expansion in Pennsylvania. A fine boost to the company's trust ratings. After all, actions speak louder than words.

On that note, If you are interested in learning more about the gas infrastructure and prospects of its development, connect with our Houston sales office to see the intelligence for yourself or SCHEDULE A DEMO with us to learn how Rextag can help you leverage the energy data in your business.

Tel. +1 713-203-3128

Email: treitmeier@hartenergy.com

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Evolution Acquires Non-operated Wyoming Natural Gas Interests

Evolution Petroleum just spend a fortune on Jonah’s Field right after acquiring Hamilton Dome Field in Wyoming. The price of the transaction is $29.4 million. The Houston-based company aims to diversify into natural gas assets, providing access to the western markets through the Opal market hub, with the optionality to flow to the east. That transaction took effect on February 1. We anticipate closing on or about April 1.

The crux of the matter is rather simple: productivity gains of local energy operators have been stable not only because they are drilling better acreage, but also because players finally realized capital efficiency gains. And even if some new obstacles impede Appalachia's growth at the same rate as the Permian or Haynesville, it does not detract from the value of the Marcellus and Utica basins. The Appalachians will still be the top producers at a very competitive pace as long as commercial inventory exists. After all, as long as there is commercial inventory, somebody will have to drill.

Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.

The EIA forecasts that total output in the main U.S. shale oil basins will increase 142,000 bbl/d to 8.761 million bbl/d in June, the most since March 2020. Oil productivity in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. In the largest shale gas basin, the productivity in Appalachia in Pennsylvania, Ohio and West Virginia will grow up to 35.7 Bcf/d in June, its highest since beating a record 36 Bcf/d in December 2021. Gas output in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Speaking of the Permian future output, putting hands on upcoming changes in production has recently been made easier with the new Rextag's service - Pad Activity Monitor. Thanks to satellite imagery and artificial intelligence, customers are able to monitor the oil and gas wells and are provided with near real-time activity reports related to drilling operations. However, it is noticed that productivity in the largest oil and gas basins has decreased every month since setting records of new oil well production per rig of 1,544 bbl/d in December 2020 in the Permian Basin, and new gas well production per rig of 33.3 MMcf/d in March 2021 in Appalachia.

No sooner had the crude prices soared above $100/bbl than the industry professionals believed in an incredible growth of drilling activity in North America’s largest shale patch. Analysts speculate that additional output of 500,000 barrels of oil daily would become a significant part (4%) of overall U.S. daily production. That is going to flatter oil and gasoline prices. Drilling permits in the Permian Basin are persistently growing, averaging approximately 210 at the beginning of April. Moreover, the permits trend is noticed as an all-time high as a total of 904 horizontal drilling permits were awarded last month. Nowadays, learning and analysing the current situation and predicting the future development become easier with early activity tracking, a new service recently launched by Rextag. Rextag's Pad Activity monitor (PAM) allows you to see well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days with the help of satellite imagery and artificial intelligence. While the increase in drilling will result in higher production, U.S. shale producers will have to overcome several hurdles including labor shortages and supply constraints.

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