pipeline from ohio and pa suspended!

http://powersource.post-gazette.com/powersource/companies-powersour...

Anybody want to read between the lines and comment?  My thoughts...The gas is here but committed to the Shell cracker plant?

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Permalink Reply by rhcpfan28 on April 28, 2014 at 5:33am

When I read that, I was also hoping the same thing. 

Question for those who may know.  When a producer agrees to ship gas to a particular plant, are they agreeing to ship a specific amount?  OR are they agreeing to ship all of production?  I suppose the question is whether they are guaranteeing a particular volume.  My concern is that a producer is reluctant to agree to ship X units of gas/oil because they do not know if the volume is there. 

Permalink Reply by mark ondrusek on April 28, 2014 at 5:38am

I am by no means an expert!  looking for same answers.   how about you ron?

Permalink Reply by Mark McGrail on April 28, 2014 at 5:46am

mark,

Here is another theory:

According to the "troll" police on this site, the only reason a company would release this type of information is to depress the value of mineral rights (I hope the sarcasm came through).

But, like you I am no expert and looking for answers as you are.

And, just like you I wonder why companies didn't commit to the project ?

Permalink Reply by Dick James on April 28, 2014 at 6:41am

I don't know what it is like today, but years ago gas contracts were for the "life" of the well. I witnessed good producing Clinton wells in Ohio being plugged because the contracted gas buyer was no longer willing to pay the contracted rate. It seems back then there was little or no renegotiating. You had one buyer for the gas and if they no longer wanted it your well was finished.I don't know if something like this may play in this current situation or not.

Permalink Reply by Gary L on April 28, 2014 at 10:10am

Mark O, This site is a fantastic networking tool for all us to learn from. I, like others, would like to learn as much as I can also. This is what I have understood so far. Pipelines are like Turnpikes. You pay a tariff (fee) to move your product via pipeline per contract. I don't know how many companies are actively producing in PA, OH, and W VA. Currently from what I have researched there are four or more interstate pipelines established from this region.

Rockies Express reversed direction after Tall Grass bought out Kinder Morgan's interest.

Williams is big in PA and upgrading on the east coast for LNG Europe exporting.

Atex Pipeline is shipping to Texas Gulports for exporting.

Utica EMG, Kinder Morgan and Mark West Partners to Texas Gulf port.

Now comes Bluegrass Pipeline with Williams and Boardwalk Partners to run to Louisiana for the Asian Market. Bluegrass Project has met some strong resistance in Kentucky in addition to open season for commitments. With that, they are on the holding pattern for now. I don't know if a producer can sign up with multiple pipeline companies or if they only

commit to one. Seems as though more pipelines would make shipping more competitive

with tariffs. This would be good for those who pay into transportation costs.

Reports show Bluegrass only had to purchase approx. 500 miles of new ROW's and 70 % has already been acquired in PA,OH, W VA and KY. Looks like this Play is going to be around for a long time and they are selectively piecing it all together. Just my opinion.   

Permalink Reply by Gary L on April 28, 2014 at 10:39am

Link on Bluegrass.

http://www.wdrb.com/story/25357718/partner-in-bluegrass-pipeline-su...

A lot of money spent on ROW's, contributions to non landowners, police departments , schools, and charities. I think they will secretly work on this project.

Mike MurphyPermalink Reply by Mike Murphy on April 29, 2014 at 12:27am

companies if commit they  have to sett the amount they commit to ship per day and will be charged that amount even if they dont ship it so the utica being in its infant stag companies are not promising anything right now .......with row thats been bought and payed for and a part of the pipeline layed the investures will be back in do time 

Permalink Reply by JohnL on April 28, 2014 at 9:48am
Utica- you took the words right out of my mouth. Let's hope Mark's theory is also part of the reason for the lack of commitments.

Kinder Morgan's TGP Y-grade pipeline which was in direct competition with the Bluegrass pipeline may also be having trouble soliciting commitments. Does anyone know the outcome of their extended open season that ended in February ?

jl
Permalink Reply by bo boboski on April 28, 2014 at 10:50am

That Rockies express pipe that they reversed to go the other way is a big one. You can walk thru that one!. gotta bend over,though. Point being, a lot of the Marcellus and Utica gases can be shipped out here in it. And with the Atex up n running, There may not be a need for another one just yet. Some of the proucts are going East, also. The Companies presently with producing wells and drilling more probably are already committed to use the present pipelines.

Permalink Reply by Gary L on April 28, 2014 at 12:03pm

Bo, You are correct on the Rockies Express Pipeline.  A 42 inch high pressure line moving 2.8 billion cubic feet of NG per day. The benefit I see with Bluegrass, it has two lines feeding into one near Cambridge, Ohio and Boardwalk has storage facilities in Louisiana near export terminals. 

Permalink Reply by scott peterson on April 28, 2014 at 2:19pm

That big line runs directly parallel to my acreage & I have a dominion line that cuts across my property about mid way. Has to increase the probability of being drilled...at least i hope so....

Permalink Reply by searcherone on April 28, 2014 at 12:38pm

IMHO another contributing factor is a series of costly explosions within the last year is draining funds and personnel to fix these problems.  Williams currently has a site in Wyoming that continues to burn even as I write this.  

Also Williams tries to downplay the Kentucky opposition, but that opposition was successful in getting the legislators to pass laws regarding the issue of eminent domain.  Also a number of miles of pipe was to go through central Kentucky, what were they thinking, one of those was Woodford County and there is no county more dedicated to throughbred horses and those horse farms.  The powers that be keep development in the surrounding counties, but not in Woodford.   

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