Big changes coming to the LNG market will impact shale gas

For years now, the international LNG trade has been based primarily on long-term contracts between buyers and sellers, and those deals have been indexed to oil prices. That long-standing regime is now tottering, however, and a New World Order that would add considerable flexibility to LNG trading – and increase the role of the LNG…

Details

The Who and How of Marcellus/Utica midstream shale gas infrastructure

In the five years since gas production began to take off in the Marcellus, gas processing capacity in the northeast US has expanded nearly 13 times from 600 MMcf/d to 7,600 MMcf/d. Natural gas liquids (NGL) production from those plants began to expand significantly in 2011 and is now over 245 Mb/d. Midstream companies have…

Details

The US shale revolution has not paid investors well

We have all heard of the “shale revolution”. It has been touted as the energy panacea of our time. Given the extreme hype, one would expect that such enthusiasm would translate into above average share performance for shale operators. This has not been the case. Share performance has actually been quite mediocre and in some…

Details

OPEC’s price war seen embedding North American shale’s global advantage

Oil price uncertainty strengthens the global competitive advantages of US and Canadian unconventional oil projects. Both countries offer excellent geology, robust supporting infrastructure, deep local capital markets, stable politics, and favorable legal and regulatory regimes. They will be the markets that see the leading edge of efficiency improvements and cost decreases. In a nutshell, the…

Details

US shale oil & gas productivity improvements, crude production and Moore’s Law

There have been huge improvements in the US oil and gas industry’s productivity over the last few years.  Things are getting better and better.  In fact that is part of the problem.  Producers have just become too productive for their own good. We’ve seen the consequences of this kind of productivity improvement before, not in…

Details

North East gas demand, supply imbalance keeps a lid on future US shale gas prices

The Dominion South Point strip price for the balance of 2015 (March-December) has been settling consistently under $1.90/MMBtu, while Transco Zone 6 in New York is averaging around $2.80/MMBtu in this week’s forwards market. Meanwhile, Northeast and US gas production remain near record levels. The breakeven price environment and looming oversupply leaves producers and the…

Details