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Natural Gas Roundup

December 3, 2015

NATURAL GAS INVENTORY (Week Ended 11/27/15)

Current: 3,956 Bcf
Actual Injection/(Withdrawal), per EIA: (53) Bcf

Economist Average Estimate, per Bloomberg: (43) Bcf
Previous: 4,009 Bcf

Click here for the chart with five year averages.

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*Anatomy of a Bad Deal – Oil & Gas 360®

MarkWest Energy:  Sold.  “For Pennies on the Dollar.”  Unitholders Say “No” on Management Bonus Payments. MarkWest Energy Partners (ticker: MWE) distributed a news release announcing that unitholders approved the merger with MPLX (ticker: MPLX), an MLP created by Marathon Petroleum (ticker: MPC).  From the MarkWest news release:  “Based on the voting results, approximately 80 percent of the units voted at the special meeting were in favor of the merger agreement.” That math is misleading… – Read More

*COP21 Means More Natural Gas and the U.S. Must Help – Forbes

When representatives convene at the UN 2015 Paris Climate Conference (COP21) this week, they must become much more aware of two undeniable realities that will NOT change no matter what happens:  1) coal, oil, and natural gas are irreplaceable at scale and will remain dominant for decades to come and 2) 6 in every 7 humans live in undeveloped nations, deprived of the massive energy supply that the Western representatives who flew to the COP21 conference in oil-fueled jets (yes, the hypocrisy is palpable) enjoy. – Read More

*America’s biggest gas field finally succumbs to downturn – Reuters

The drilling rigs are gone from the hills surrounding this Pennsylvania town of 30,000. The hotels and bars are quieter too, no longer packed with the workers who flocked in their thousands to America’s newest and biggest gas field. The drilling boom of the past seven years is over, even though thousands of existing wells in the Marcellus region still produce a fifth of U.S. natural gas supply. Now, exclusive data made available to Reuters points to a slump in drilling that could hit production next year, defying government and industry expectations of a further rise in output. – Read More

*Alaska’s $64.6 Million Purchase of TransCanada’s Interest in Alaska LNG is State’s “Number-One Get Well Card” – Oil & Gas 360®

Last week Alaska Governor Bill Walker said that the decision to purchase TransCanada’s share of the project was the “number-one get-well card” for Alaska’s $3.5 billion budget deficit. “Today is a historic day,” said Walker. “By gaining an equal seat at the negotiating table, we are taking control of our destiny and making significant progress in our effort to deliver Alaska gas to the global market.” The State of Alaska announced that it will officially buy TransCanada’s (ticker: TRP) share of the Alaska LNG (AKLNG) project for approximately $64.6 million. – Read More

*The EU’s Largest Gas Producer Is Now Its Latest Importer – Bloomberg

The European Union’s biggest natural gas producer has joined most of the rest of the 28-nation bloc and become reliant on others. The Netherlands brought in more fuel than it exported in the third quarter, with imports rising to a record in September, Statistics Netherlands said Wednesday. The nation of almost 17 million has capped gas extraction from Europe’s biggest field, Groningen in the north, by more than a third because of tremors linked to production. It now has to turn to other producers such as Norway and Russia to meet some of its demand as it honors contracts to supply customers in Germany, Belgium and France with gas from Groningen. – Read More

*Carbon-Tax Debate Brings Together Unusual Allies – The Wall Street Journal

Several big oil companies have fallen into unlikely alignment with environmental groups calling for new taxes on air polluters like coal-burning power plants. One key reason: Those taxes are probably good for their natural-gas businesses. Energy giants including Royal Dutch Shell PLC and BP PLC hope a so-called carbon tax—which would force companies to pay for their emissions and likely increase oil producers’ costs—also would increase demand for natural gas, an increasingly significant part of their output. – Read More

*$717 Million Expansion Makes the Shell Geismar Plant Largest AO Production Site in the World – Oil & Gas 360®

Royal Dutch Shell’s (ticker: RDS.B) Shell Chemical LP announced today that it received a final investment decision to increase alpha olefin (AO) production at its chemical manufacturing site in Geismar, Louisiana. The expansion consists of a fourth AO unit, which will add 425,000 tons of capacity, making the plant the largest in the world, according to the Shell press release. The new project will require a $717 million capital investment and create 20 direct jobs, with an average annual salary of $104,000, while retaining the 650 existing jobs at the plant. – Read More

*Japan set to get more LNG than it needs – The Japan Times

The nation is probably set to receive more LNG than it needs, potentially forcing some purchasers in the world’s biggest user of the fuel to resell cargoes and add to a glut. Liquefied natural gas volumes contracted by Japanese buyers may exceed their combined demand from 2017 to 2021, according to a report compiled by the Ministry of Economy, Trade and Industry. The report, obtained by reporters, was distributed at a closed meeting attended by officials of the government and 14 companies including Royal Dutch Shell PLC, Jera Co. and Tokyo Gas Co. – Read More

*U.S. Gasoline Prices Hit Seven-Year Low Ahead of Thanksgiving – Oil & Gas 360®

The cost of gasoline across the United States is averaging $2.09 per gallon, as of November 23—that’s 73 cents lower than a year ago, and the lowest level ahead of Thanksgiving since 2009, according to the Energy Information Administration (EIA). Over the course of the last six Thanksgiving holidays, U.S. retail gasoline prices averaged $3.07, nearly a dollar more than the average price this year. The Thanksgiving holiday (November 25-29) is typically one of the heaviest travel seasons in the U.S., according to information from AAA. – Read More

*Natural gas outpaces coal in electricity generation – Columbus Business First

Natural gas has again risen over coal as a nationwide fuel source. Government data for September shows natural gas as the main source for U.S. power generation. It’s the fourth time this year – and ever – that gas has been top fuel source in a month, according to SNL Energy. Gas in September edged out coal 35 percent to 34 percent, although coal has still been used more for the first nine months. U.S. Energy Information Administration data show a 15.6 percent increase in natural gas electricity generation compared with September 2014, while coal generation fell 6 percent. – Read More

*The Natural Gas Industry Is In Very Healthy Condition – Forbes

The Hennessy Gas Utility Fund has been around for 26 years and invests in the natural gas distribution business. It follows an index approach using the AGA Stock Index, which is maintained by the American Gas Association (AGA). The AGA is the industry’s nonprofit representative in Washington, D.C. The Index is comprised of AGA’s publicly traded members and currently consists of 61 companies that trade on an American exchange. Again, the focus of the Fund and the AGA is on the distribution versus the exploration and production side of the natural gas business. – Read More

*$3.7 Billion Dakota Access Oil Pipeline Greenlighted by South Dakota – Oil & Gas 360®

The South Dakota Public Utilities Commission (PUC) announced this week that it has decided to approve Energy Transfer Partner’s (ticker: ETP) Dakota Access Pipeline project through the state in a 2-to-1 vote. The 1,134 mile pipeline travels through 50 counties in four states. The pipeline line is designed to transport 450 MBOPD of crude oil from the Bakken/Three Forks formations in North Dakota to a terminus near Patoka, Illinois. The project will have the potential to eventually carry as much as 570 MBOPD from the region, which could represent approximately half of Bakken current daily production. –Read More

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