Marcellus briefs

Former EQT executive joins Pennsylvania PUC

Andrew Place, formerly EQT Corp. corporate director for energy and environmental policy, was sworn in as Pennsylvania's newest public utility commissioner following his confirmation in late September by the Pennsylvania Senate.

Gov. Tom Wolf nominated Place for the five-member Public Utility Commission during May to replace James Cawley, whose term expired Mar. 31. The Senate confirmed Place with a vote of 48-0.

Place had worked at EQT since 2011. At one point, he held a concurrent role as interim executive director at the Center for Sustainable Shale Development, a Pittsburgh-based partnership between oil and gas companies, foundations, and environmental groups to set industry performance standards.

Pennsylvania county board OKs gas lease

Chevron Corp. won authorization in October from the Fayette County Commission in Pennsylvania for rights to produce Marcellus shale gas from under a 125-acre park, despite objections from residents who wanted to delay the vote pending additional legal review and a public hearing.

Commissioners Al Ambrosini and Vincent Zapotosky voted in favor of the 5-year lease for German Masontown Park in German Township. Angela Zimmerlink abstained.

The lease called for Chevron to pay the county $1,500/acre, or $188,250, up front. In addition, Chevron will pay the county 15% in royalty fees and can renew the lease in 5 years for another $188,250 payment and the same in royalties.

The two commissioners approved a subsequent resolution calling for two-thirds of the lease proceeds to fund county parks and a third to be set aside for the Sheepskin Trail. Zimmerlink abstained.

A Chevron spokesman previously told the board that the company will not drill on the park grounds. Any gas produced will be taken under the park will be via underground horizontal lines.

KMI extends open season for UMTP

Kinder Morgan Inc. has extended its binding open season to continue seeking commitments for the proposed $4-billion Utica Marcellus Texas Pipeline (UMTP) project until Dec. 15. The open season originally was scheduled to end Sept. 15.

The project would transport natural gas liquids and condensate produced from the Utica and Marcellus shale plays to delivery points along the Texas Gulf Coast, including connectivity to a KMI dock along the Houston Ship Channel (See map, UOGR, July-August 2015, p. 28).

Shipments of propane, butanes, natural gasoline, y-grade, and condensate will be transported in batches along the system at a maximum design capacity of 430,000 b/d.

The project would involve the abandonment and conversion of 964 miles of natural gas service on KMI's existing Tennessee Gas Pipeline, the construction of 200 miles of pipeline from Louisiana to Texas, storage in Ohio, and 120 miles of laterals to provide basin connectivity.

Subject to shipper commitments and timely regulatory approvals, the pipeline tentatively is scheduled to be in service by fourth-quarter 2018.

"We continue to receive strong interest from shippers for this opportunity to transport products from the Utica and Marcellus basins to the Gulf Coast," said Don Lindley, president of KMI's natural gas liquids products pipelines.

Stone Energy shuts in output from Mary field in W. Virginia

Mary field also included succcessful 2014 Utica well. Where are Heather and Buddy fields?

Stone Energy Corp., Lafayette, La., shut-in production from Mary field in Wetzel County, West Va., on Sept. 1, citing unacceptable operating margins caused by low commodity pricing and negative differentials in the Marcellus shale.

The shut-in results in production curtailment of 100-110 MMcfd of gas equivalent, leaving 25 MMcfed producing from Heather and Buddy fields in Appalachia.

Despite being above production guidance for the first 2 months of the third quarter, company production for the quarter now is expected to be below the previously stated guidance range of 39-41,000 boe/d, or 234-246 MMcfed, and is being revised to 37.5-38,500 boe/d, or 225-231 MMcfed.

If Mary field remains shut-in, the annual guidance of 42-44,000 million boe/d, or 252-264 MMcfed, will need to be adjusted to account for the curtailed volumes. Given the low margins in Appalachia, the cash flow impact from the curtailed volumes is not expected to be material for the third quarter, Stone says.