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Editor's Notes

1. Read off two top bullets PRA – PRICE REPORTING AGENCY
2. Read top three bullets “Plus you get quality daily news reporting from the natural gas reporting team, including myself”
3. Marcellus shale production experienced a dramatic upward climb amid the increased use of hydraulic fracturing in the shale since 2010. Production there peaked at 16.2 Bcf/d in June 2015 and has since fallen off as natural gas prices have fallen by half. But 2015 production averaged 16 Bcf/d, up by 11pc from the year earlier. Rising production outpaced pipeline capacity, creating bottlenecks. But a handful of key projects put in place over the past few years have loosened those bottlenecks, and combined with overall lower weather-related demand and an increase in LNG and heating oil use in times of cold weather, have put downward pressure on Mid-Atlantic region prices. This is adding even more incentive to ship the gas out of Appalachia and towards higher demand markets to the west, south and far northeast. Utica production, on the other hand, shows no signs of slowing down so far. In December it averaged 3.1 Bcf/d and climbed by 2pc to 3.2 Bcf/d in January is expected to reach nearly 3.3 Bcf/d in February. It was the only field in the US to see output growth in January. As of July, the Marcellus and the Utica accounted for 85pc of shale gas production growth in the US. And shale basins now account for more than half of the US’ dry natural gas production. Most prolific well in the Utica to date is EQT’s 72.9mn cf/d well there. Consol drilled its first well in the dry-gas portion of the shale in early 2015, which reached flows of 61mn cf/d (17mn m³/d), making it the second most prolific.
4. With prices so low, some projects may be in danger. National Fuel has postponed its 473mn cf/d Northern Access expansion project for a full year, or until November 2017. That project includes a 96mile pipeline from Pennsylvania to Erie County, NY and was quite costly.
5. Kinder Morgan’s official word is that they’re advancing with the Northeast Energy Direct project, or NED, at 1.3 Bcf/d. But when asked pointed questions about NED by analysts on their earnings and analyst day calls, they said they are reevaluating every project in their backlog to determine viability and consider options such as JVs.
6. And the project is in competition with Algonquin’s 900mn cf/d Access Northeast, scheduled to come on line in November 2018, just like NED. NED has had issues getting commitments, while Spectra’s project recently executed electric distribution contracts in Massachusetts equaling more than 40 percent of the 0.9 Bcf/d capacity designed for generators, and progress is being made in other states. Spectra anticipates state approvals for contracts later this year. Another project expected to have an impact on New England prices is 330mn cf/d Algonquin’s Incremental Markets project coming on line in November of this year. Last week in a FERC filing Algonquin said some facilities on that project are already ready to go, including a new compressor unit in Cromwell, Connecticut, and some looping pipelines so Algonquin Citygates prices may come under a little pressure from that soon. Nexus Gas Transmission would ship 1.5 Bcf/d of Appalachia gas from eastern Ohio to Canada. Planned in service in mid-2017. Spectra, DTE are developers. Significant public comment.
7. Spectra’s Gulf Markets expansion would increase capacity to the Gulf Coast by 630mn cf/d. Phase 1 would provide 242mn cf/d in service this November and phase 2 would provide 386mn cf/d in service in August 2017. The project is backed by long-term agreements with five shippers. Nearly two-thirds of the capacity is connected to agreements for capacity at the Cameron LNG project on the coast of Louisiana, while the remaining capacity is contracted by Marcellus producers seeking new markets: Range Resources and EQT. The project is part of Spectra's effort to transform the long-haul Tetco system into a bi-directional gas conduit that can meet new demands of gas consumers and export terminals on the Gulf coast and provide an outlet for growing production in the northeast. And Texas Gas’ Northern Supply Access project would increase capacity from Ohio to Louisiana by 384mn cf/d. That project is targeted in service in April 2017.
8. Atlantic Coast Dominion’s 1.5 Bcf/d pipeline would transport Marcellus and Utica gas from West Virginia south through central North Carolina, expected to come on line in the fourth quarter of 2018.
9. Access South Tetco’s 601mn cf/d Access South pipeline would provide takeaway capacity from southwestern Pennsylvania to a delivery point in Attala County, Mississippi. Atlantic Sunrise Williams’ 1.7 Bcf/d Atlantic Sunrise pipeline should begin adding bi-directional flows and installing facilities to take gas out of Appalachia and into the southeast in the summer of 2017, and Cabot mentioned that as a line it is particularly expecting to improve its realized price this year. The producer intends to ramp up production when it comes on line.
10. Sabal Trail FERC just approved this earlier this month. Spectra’s 516-mile, 1.1 Bcf/d project from a connection with Transco in Alabama to Orlando, Florida. Even though it’s not specifically connected to Appalachia, growing population and demand in Florida will take a lot of gas off of Transco, and this project will be fed primarily by onshore production from Transco.