Mountain Valley Pipeline seeks to begin gas service
The 300-mile Mountain Valley Pipeline has completed construction, its developer said in a filing asking for federal authorization to begin flowing natural gas to its customers.
The 2 Bcf/d (57mn m³/d) natural gas project is now "mechanically complete" after crews finished welding, testing, cleaning and drying the pipeline, the company said Monday in a filing with the US Federal Energy Regulatory Commission (FERC). The company has asked the federal agency to issue an order for in-service authorization by Tuesday.
"Multiple shippers have executed agreements to commence transporting volumes using the project facilities beginning the day after the project declares in-service, which further heightens the need for prompt authorization to meet market demands," the filing said.
Equitrans Midstream, which is developing the $7.85bn pipeline, has been targeting an in-service date of "early June." The company today declined to provide a specific date when it intends to start service of the pipeline, which is being built to transport shale gas from West Virginia to southern Virginia, where it will interconnect with Williams' Transcontinental pipeline.
"Final preparations are underway to begin flowing gas," Equitrans said.
The Mountain Valley Pipeline was initially scheduled to start service in 2018. That timeline was pushed back repeatedly because of permitting lawsuits and, more recently, difficulties building the pipeline through mountainous terrain. Equitrans recently had aimed to start commercial service before 1 June before another delay last month.
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Brazil signs decree to increase natural gas sales
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Rio de Janeiro, 26 August (Argus) — Brazil's federal government adopted a decree today to increase natural gas deliveries to the market, hoping to reduce prices. President Luiz Inacio Lula da Silva and mines and energy minister Alexandre Silveira signed the decree during a national energy policy council CNPE meeting. The decree is based on Lula's gas for jobs program and would allow hydrocarbon regulator ANP to order companies to increase natural gas production for sale to the market. Many companies working in Brazil's pre-salt fields choose instead to re-inject gas to optimize oil recovery. By Betina Moura Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US shale firms boost output goals on efficiency gains
US shale firms boost output goals on efficiency gains
New York, 26 August (Argus) — The efficiency gains that were one of the key drivers behind last year's surprise jump in US crude output are now back, and are spurring shale producers to increase 2024 targets just as Opec is gearing up to unwind its supply cuts. Upward revisions from publicly-traded US operators including Diamondback Energy, Devon Energy and Permian Resources are modest for the most part, but they may still be enough to ruffle some feathers in Vienna as Opec+ prepares to start reversing a combined 2.2mn b/d of production cuts in the coming months. "With domestic energy production a key topic in the 2024 US presidential election and Opec+ perhaps having prematurely expected lower shale oil volumes, [second-quarter] earnings serve as a reminder that shale will continue to be a growing, albeit perhaps more predictable, supply source on the global stage," consultancy Rystad senior analyst Matthew Bernstein says. Overall US crude production growth is still expected to slow in 2024 after last year's 1mn b/d gain defied all expectations. But improved techniques that have sped up the drilling process are helping operators get more bang for their buck, and are leaving more cash on the table for shareholder returns. Such gains are also bolstering the case for further consolidation in the shale patch as firms benefit from lower costs for oil field services. "What was unexpected is the scale of efficiency gains that have helped deliver lower [capital expenditure] as operators drop rigs and hydraulic fracturing (frac) spreads," analysts at bank Jefferies say. The gains have come from drilling three-mile lateral wells along with the adoption of electric fracking fleets, which has increased pumped hours and led to faster cycle times when it comes to well completions. Diamondback typifies the new industry spirit after boosting its full-year production outlook despite reducing drilling activity to 10 rigs from 12 and its frac fleet count to three from four. "We are clearly doing more with less and becoming more operationally efficient each quarter," chief executive Travis Stice says. Frac competition Healthy competition among crews is driving productivity gains, Devon Energy says. The producer has 16 rigs and three frac crews active in the prolific Permian basin of west Texas and southeast New Mexico. "We rack and stack all 16 rigs every day on how they're doing," chief operating officer Clay Gaspar says. "There's a first place and there's a last place... and those companies know, those engineers know exactly where they stand." The US majors are also getting in on the act, with Chevron upping its full-year production growth outlook for the Permian to about 15pc from 10pc, after flagging new techniques such as the ability to frac three wells at the same time. "We're one of the first operators to deploy triple-frac, delivering cost reductions of more than 10pc and shortening completion times by 25pc," chief executive Mike Wirth says. The downside to efficiency gains can be seen when it comes to natural gas, where production remains robust even as activity slows in response to lower prices. "But the industry appears ready to respond by pulling the curtailment lever again," bank Citigroup analysts say. US independent EOG Resources expects oil output from the lower 48 states will exit this year the same as at the end of 2023, with limited gains expected for total US supplies from offshore operations. "Activity levels, as reflected in the rig count, indicate continued lower oil production growth through to at least mid-2025," EOG chief executive Ezra Yacob says. Yet that did not stop the company from increasing its own full-year output guidance while keeping spending unchanged. By Stephen Cunningham US tight oil production Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
‘Time has come’ for rate cuts: Fed chair Powell
‘Time has come’ for rate cuts: Fed chair Powell
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Court endorses Maduro win amid warnings, violence
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