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Rice Energy Wants to Supply Ohio NatGas Customers Directly

A Rice Energy Inc. subsidiary has filed an application with the Public Utilities Commission of Ohio to be certified as a competitive retail natural gas supplier.

Rice Energy Marketing LLC (REM) filed the application last month to supply residential, commercial and industrial customers in Dominion East Ohio's (DEO) service territory. The company said it would like to begin supplying customers directly in April.

REM currently manages 1.4 Bcf/d of natural gas in the wholesale market through operations that include trading, nomination and scheduling and working with its upstream and midstream affiliates. The company said in its application that it sources a large amount of supply to marketing companies that then offer it as part of DEO's Energy Choice program. The choice program lets customers buy natural gas from another supplier and have it delivered by DEO.

"It is our intent to provide all ancillary services and functions to be able to do this directly with Dominion in order to reach these customers directly," REM said in its application. "This may or may not include the need for purchasing third-party supply in order to deliver gas volumes directly to DEO citygates."

Rice has grown rapidly since it went public in 2014. It operates in Washington and Greene counties, PA, where the Marcellus Shale accounts for most of its production. The company also holds 59,000 net acres in Belmont County, OH, where the Utica has increasingly helped its volumes. It produced 747 MMcfe/d in 3Q2016, or 23% more than in the year-ago period. The company's midstream operations have also expanded, especially in Ohio, where Rice Midstream Holdings LLC (RMH) provides gathering and compression in Belmont and Monroe counties.

Through September, RMH's gathering volumes averaged 642,000 Dth/d, a 190% increase over the same time last year, with 63% attributable to third-party volumes. Rice Midstream Partners LP serves the company's production in Pennsylvania.

REM said in its application that as production grows it is "actively seeking out new markets and ways to maximize the value of our gas." It said the company intends to share the "cheap and abundant supply" with local markets. DEO, a subsidiary of Dominion Resources Inc., serves about one million gas customers in northern, western and eastern Ohio.

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