American Energy Partners LP and private equity manager The Energy & Minerals Group have formed American Energy-Midstream LLC to focus on investing in and developing oil and gas infrastructure in basins across the country. The new company said it will focus on building a portfolio of gathering and processing systems and long-haul pipelines aimed at serving American Energy affiliates in the Appalachian Basin, the Permian Basin and the Midcontinent. The move comes after months of American Energy acreage acquisitions since it was founded by Aubrey McClendon in April 2013, including a buying spree earlier this month in which it spent $4.25 billion to expand its Utica Shale footprint and enter both the Permian Basin and southern Marcellus Shale in West Virginia (see Shale Daily, June 9). The deal also marks the latest in a series of investments, mergers and initial public offerings in the midstream sector (see Daily GPI, June 16; Feb. 14).
Kinder Morgan Energy Partners LP (KMP) has expanded its contract with General Dynamics NASSCO for the design and construction of an additional 50,000 deadweight ton liquefied natural gas fueled-conversion-ready petroleum products tanker with a 330,000 bbl cargo capacity. Construction is scheduled to begin in the fourth quarter of 2015 with delivery slated for the second quarter of 2017. The tanker will be constructed as a sister tanker to the four Jones Act tankers KMP currently has under construction at the NASSCO shipyard in San Diego. Construction of the new tanker is supported by a long-term charter with a major shipper and is evidence of its commitment to transporting domestic crude oil, condensate and refined products for the domestic market, KMP said.
Canyon Midstream Partners LLC has struck a gathering and processing agreement with what it said is one of the Permian Basin's largest producers. Services will be provided by Canyon's James Lake System. Phase I of James Lake is under construction and is expected to begin interim service in this month. When completed in the fourth quarter, Phase I will consist of a 105 MMcf/d cryogenic gas processing plant in Ector County, TX; 60 miles of 12-inch diameter trunkline; and six field compressor stations providing low-pressure gathering services in Ector, Andrews, Winkler, Martin, Dawson and Gaines counties, TX. Canyon has begun development of James Lake Phase II, which will add a second 100 MMcf/d cryogenic processing plant in Martin County and 60 miles of 12-inch diameter trunkline, expanding the system's service territory into Howard and Borden counties, TX. Canyon expects Phase II to begin operations in the first half of 2015.
Sanchez Energy Corp. plans to begin an underwritten public offering of 5 million shares of the company's common stock, with the proceeds going in part to fund its pending "Catarina" acquisition in the Eagle Ford Shale (see Shale Daily, May 22). Meanwhile, Moody's Investors Service assigned a B3 rating to Sanchez's proposal to issue $700 million in unsecured notes due in 2023, the proceeds from which would also be used to finance the $639 million deal with two Royal Dutch Shell plc subsidiaries for Catarina acreage and associated production.
ExxonMobil Chemical Co. has begun construction of an ethane cracker at its Baytown, TX, complex as well as associated product facilities at Mont Belvieu, TX. The steam cracker will have a capacity of up to 1.5 million tons per year and provide ethylene feedstock for downstream chemical processing, including processing at two new 650,000 ton-per-year high-performance polyethylene lines at the company's Mont Belvieu plastics plant. "The project is made possible in large part by abundant, affordable supplies of U.S. natural gas for energy and chemical feedstock," said Steve Pryor, president of ExxonMobil Chemical. "The chemical industry and other industrial sectors account for nearly 30% of U.S. natural gas demand. Shale development has provided U.S. chemical producers a double benefit as an energy source and as a key raw material to make plastics and other essential products, creating jobs and economic activity across the value chain." Filings for the project were made starting two years ago (see Shale Daily, June 4, 2012).
FERC should pay close attention to the potential impacts of increased natural gas production in its decision-making process for the Cove Point Liquefaction project, and it should also focus on potential environmental justice impacts from the Calvert County, MD, facility, according to the U.S. Environmental Agency (EPA). "Both FERC [Federal Energy Regulatory Commission] and DOE [U.S. Department of Energy] have recognized that an increase in natural gas exports will result in increased production," EPA said in comments filed at FERC Monday. "However...FERC concludes that the nature of natural gas supply and pipeline system in the U.S. makes it difficult to predict accurately where the additional gas development activity will occur and thus concluded that it is not feasible to more specifically evaluate localized environmental impacts." The agency recommended that FERC consider two recently released studies from the National Energy Technology Laboratory as it reviews Dominion Cove Point LNG LP's proposal to export 5.75 million metric tons per annum of LNG from a liquefaction facility on the Chesapeake Bay.
Goodrich Petroleum Corp.'s latest Tuscaloosa Marine Shale (TMS) well results, announced Wednesday, were a bit of a disappointment after a string of successes in the emerging play. The company completed its Nunnery 12-1H-1 [93.3% working interest (WI)] well in Amite County, MS, which achieved a peak 24-hour average production rate of 815 boe/d, comprised of 785 bbl of oil and 185 Mcf of gas on a 17/64-inch choke from a 6,000-foot lateral. The well, which is near the Pike County line along the northeastern boundary of the company's acreage block, landed in the lower target and was completed with 22 frack stages. The previous news from Goodrich out of the TMS was about its C.H. Lewis 30-19H-1 well, also in Amite County. That well had a peak 24-hour average production rate of 1,450 boe/d (1,387 bbl of oil and 377 Mcf of natural gas) on a 16/64-inch choke from a 6,600-foot lateral (see Shale Daily, June 2).