Fitch: Marcellus shale giving boost to US midstream firms

Anticipated growth in Marcellus shale natural gas production likely will mean more long-term business for US midstream companies, Fitch Ratings said in a recent report in which analysts forecast Marcellus production during the next 5 years will grow to more than 10 bcfd from the current 4 bcfd.

Expanding Marcellus production will require midstream companies to expand gathering and processing services and provide pipelines to transport gas and associated natural gas liquids.

Ralph Pellecchia, Fitch senior director, sees robust economics in the Marcellus and increasing regional gas demand despite low gas prices and public concerns about hydraulic fracturing, which might slow the pace of development. He foresees possible producer consolidation.

“Marcellus is a core area for many producers and a high priority for committed capital,” Pellecchia said. “What consolidation in the Marcellus may lead to is improved credit quality for midstream companies. Many smaller entities could be candidates for acquisition by larger, more highly rated and better capitalized companies.”

Marcellus production has begun displacing supplies that traditionally served eastern US markets, and more gas is expected to be produced than the region can consume.

As Marcellus production ramps up, pipeline expansions and flow reversals will enable that gas to reach Canada, New England, the Atlantic states, the Gulf of Mexico region, the Midcontinent, and the Midwest.

Overseas shipments are likely as LNG export capability is developed, Fitch said.

Production in the liquids–rich parts of the Marcellus is resulting in bottlenecked NGL supplies, creating the need for more processing plants and NGL pipelines.

Liquids currently move primarily by high-cost train and truck, and significant blending of dry with wet gas to meet pipeline quality standards.

Plans are under way to move the processed ethane and other NGLs to petrochemical markets in Canada and the Gulf Coast. This will involve both conversions of products pipelines for NGL use and newbuilds.

Development of regional ethane cracking capacity is an alternative option that some companies are considering, Fitch said.

For instance, Shell Chemical LP is studying land near Monaca, Pa., for the petrochemical complex it is considering to use ethane from Marcellus gas (OGJ Online, Mar. 15, 2012).

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

Repairs under way at ORPIC’s Muscat refinery

12/11/2014 Oman Oil Refineries & Petroleum Industries Co. (ORPIC) said it plans to resume operations at its 106,000-b/d Mina Al Fahal refinery near Muscat...

Qatar Shell lets EPCM contract for Pearl GTL operations

12/11/2014 Qatar Shell Ltd., a unit of Royal Dutch Shell PLC, has let a contract to a division of SNC-Lavalin Group Inc., Montreal, to provide long-term engin...

Phillips 66 advances plans for splitter at Sweeny refinery

12/11/2014 Phillips 66 has filed an application with state regulators for a permit to build a condensate splitter at its 247,000-b/d Sweeny refinery in Old Oc...

Chevron Phillips Chemical concludes Sweeny ethylene expansion

12/11/2014 Chevron Phillips Chemical Co. LP (CPCC) has completed installation of a furnace at its Sweeny petrochemical complex in Old Ocean, Tex., that will e...

Samref wraps Yanbu refinery revamp

12/11/2014 Saudi Aramco-Mobil Refinery Co. Ltd. (Samref), a 50-50 joint venture of Saudi Aramco and ExxonMobil Corp. subsidiary Mobil Yanbu Refining Co. Inc.,...

BPCL adds petrochemicals to Kochi refinery expansion

12/09/2014 Bharat Petroleum Corp. Ltd. (BPCL), Mumbai, plans to diversify into petrochemicals production as part of the ongoing integrated expansion and upgra...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected