Kinder Morgan Canada Ltd. said April 18 that its Trans Mountain oil pipeline expansion project was facing “unquantifiable risk” due to the British Columbia government’s continued opposition and reported a 5.1% drop in first-quarter earnings. British Columbia said April 18 that it would file a legal challenge in the province to determine whether it has the jurisdiction to stop the C$7.4 billion (US$5.9 billion) expansion, which was approved by the federal government in 2016. Kinder Morgan Canada, which was spun off from parent Kinder Morgan Inc. (NYSE: KMI) in May last year, reported a net income of C$44.4 million (US$35.17 million) for the first quarter ended March 31, down from C$46.8 million for the same period last year.


17d9481.jpg?resize=75%2C85Jim Willis
Editor & Publisher, Marcellus Drilling News (MDN)


The first real shipment of Marcellus Shale LNG leaves Cove Point, launching a future of US energy dominance and sustained rural Northeast economic revival.

Finally. Finally! Finally!!! The very first cargo of Marcellus Shale gas has been liquefied, loaded and as of Sunday night, set sail from Dominion’s Cove Point LNG plant, heading for we’re not sure where yet. We’ve waited YEARS for this day! Let’s pop the cork on a bottle of the bubbly and celebrate.


Last week MDN told you that a ship called the Patris was due to dock at Cove Point and load the first shipment of Marcellus molecules. It appears that information was incorrect. It was correct at the time! Either the Patris was redirected somewhere else, or we’re not sure what happened.

But, news has just broken that late Sunday night, close to midnight, a ship by the name of Adam departed Cove Point loaded with the very first Marcellus shipment. Several more ships are said to be headed for Cove Point now.

International shipping isn’t our specialty, so we won’t quote chapter and verse for which ships and when. This first shipment that left Sunday belongs to Japan, but there’s no indication it will actually go to Japan.

As we’ve noticed and have been reporting, both Japan and India (which will take all of the LNG Cove Point can produce) are in the game of swapping cargoes they own, sending Cove Point cargoes to customers closer to the point of origin in return for receiving cargoes that originate closer to their own shores.

When we hear where the first Marcellus cargo lands, we’ll let you know. In the meantime, here’s the information we can find about the very first load of Marcellus Shale gas to get exported from Cove Point.

From Reuters:

The first contractual liquefied natural gas (LNG) cargo from Dominion Energy Inc’s newly constructed Cove Point LNG export plant in Maryland in the United States left the facility on Monday, Thomson Reuters Eikon ship tracking data showed.

The cargo is expected to act as a drag on spot LNG prices as it coincides with the resumption of exports of the fuel from the Papua New Guinea LNG plant, which had been shut following a powerful earthquake.

The 160,000-cubic meter LNG tanker Adam LNG left Cove Point on Monday with a draft of 91 percent, suggesting it was full, according to the data. Its destination was not immediately clear.

The facility has exported two commissioning or test cargoes already, which were sold to Royal Dutch Shell. The first cargo from the facility left the terminal in early March heading for Britain’s Dragon LNG terminal.

Dominion Energy was not immediately available for comment outside operating hours.

But the company said last week the terminal had entered commercial service for natural gas liquefaction and exports.

After completing a planned outage for maintenance, the facility has been ramping up to full production of LNG from natural gas provided by its export customers since late March, the company said.

The 177,000-cubic meter tanker LNG Sakura and the 163,000-cubic meter tanker Meridian Spirit are heading to the Cove Point terminal, according to Eikon data.

Cove Point is the second LNG export plant in the lower 48 U.S. states after Cheniere Energy Inc’s Sabine Pass terminal in Louisiana, which exported its first cargo in February, 2016.

Dominion sold the project’s capacity for 20 years to a subsidiary of GAIL (India) Ltd and to ST Cove Point, a joint venture of units of Japanese trading company Sumitomo Corp and Tokyo Gas Co Ltd.

Some of the LNG for ST Cove Point will go to Tokyo Gas and some will go to Kansai Electric Power Co Inc, according to Sumitomo’s Pacific Summit Energy (PSE) unit.


From Platts:

Dominion Energy has exported what appears to be the first commercial cargo from its Cove Point terminal in Maryland, S&P Global Platts vessel tracking software cFlow shows.

The Oman Shipping-owned Adam tanker departed Cove Point about 11:30 pm local time Sunday (0330 GMT Monday) with a nearly full load, en route toward the Suez Canal with the destination unspecified, vessel tracking data shows.

A Dominion spokesman did not immediately respond to a request for comment Monday. The company said last week that commercial service had started, though it did not disclose when the first cargo under long-term contracts with Gail India and a joint venture of Sumitomo Corporation and Tokyo Gas would be exported. Shell had a deal to export all of Cove Point’s commissioning cargoes, suggesting the cargo that left aboard the Adam was a commercial delivery.

The Adam moored at Cove Point’s export platform early on Saturday with a draught of 9.0 m and left a little over 36 hours later with a draught of 11.4 m, just short of the vessel’s maximum draught of 11.8 m, cFlow data shows. The draught is the depth of the vessel below the waterline. Vessels sink lower as more LNG is loaded.

Cove Point feedgas flows have rebounded to a high of 616 MMcf/d for Monday from the recent low of 163 MMcf/d on Thursday and an average of 535 MMcf/d over the last four days, S&P Global Platts Analytics data shows. As of now, the Adam is heading back to where it came from, the Suez Canal. Cove Point is still expecting two more unladen vessels in the coming week as the Kawasaki Sakaide and the Meridian Spirit continue to travel toward the plant with an estimated arrival of April 19 and 21, respectively.

Editor’s Note: And, off we go into a bright new future for Marcellus Shale and the communities benefitting by it. Hail to the future!

For more great articles on natural gas development every single business day, subscribe to Marcellus Drilling News using this convenient link.

The post Anchor’s Away: Marcellus Shale Leaves Cove Point, Future Arrives appeared first on Natural Gas Now.

Like the song, everything old is new again for oil and gas. The business is re-entering an age of energy abundance much like the 1950s and 1960s and that’s good news for the midstream, according to the chief economist of Houston-based Phillips 66 Co. (NYSE: PSX). Horace Hobbs, speaking April 16 at the 97th annual convention of the GPA Midstream Association, said energy executives “need to change the way they think” as production swells from unconventional shale plays. He said the switch “is a whole new phenomenon” for nearly everyone in oil and gas because for 45 years the industry has been focused on supply following the OPEC embargo during the 1973 Yom Kippur War. That spans the careers of nearly everyone in the business today. Now, the question is finding demand. “We have been exploring for oil in the Arctic and deepwater offshore, we don’t need to do that anymore,” Hobbs said. “It’s a substantial change in the way we think.” Development of the shale plays has become predictable “mining” in comparatively easy-to-reach, land-based plays, he noted. The shales’ abundance means swelling proved reserves that go out 30 to 40 years, even with no additions.

IER-light-noletters-75x38.pngInstitute for
Energy Research


Have we lost our minds? A Rhode Island offshore wind project will cost $10,000 per kilowatt, roughly 10 times the cost of a modern natural gas power plant.

Off of the shore of Block Island on the Rhode Island coast, five wind turbines are operating and supplying power to the island. It took years of state and federal policymaking, environmental impact assessments, and town hall meetings for the 30-megawatt wind farm to come to fruition due to its cost and degradation of vistas. It cost $300 million—$10,000 per kilowatt—about 10 times more than the cost of a new natural gas combined cycle unit. Further, it is 55 percent more costly than what the Energy Information Administration (EIA) expects a first-of-a-kind offshore wind unit to cost—$6,454 per kilowatt.

In terms of generation costs, EIA expects a new offshore wind farm to be 3 times more expensive than an onshore wind farm.


And now, fishermen are indicating that the wind farm poses serious threats caused by scattering massive metal shafts and snaking underwater cables across prime fishing grounds. Electricity from the turbines is routed via submarine cables to Block Island and to the mainland.  Fishermen complain that the area where the cable lines extend to the mainland is completely devoid of fish, which used to be fruitful fishing grounds. Fishermen also complained that their lines have caught on the concrete casings that cover portions of cables that are not buried.

Other Offshore Wind Projects Being Considered

Officials are about to announce the winners of bids to develop much larger wind farms 14 miles south of Martha’s Vineyard.  Those offshore wind projects are expected to span hundreds of thousands of acres and generate 1,600 megawatts of turbines within a decade.

Fishermen across the region have been pressing officials for answers to their concerns about where the turbines will be located, how far apart they will be built, and the placement of the cables to the mainland. Commercial fishermen urged regulators to study the potential impact of the proposed wind farms on marine mammals, spawning grounds of herring and squid, and other species that inhabit the area.

The fishermen also raised questions about the impact of electromagnetic waves pulsing across the seafloor on species such as sharks, which navigate and hunt in part by sensing electrical currents, and how rotating turbine blades could impede their ability to navigate with radar.

One company (Vineyard Wind),proposing to build a $2 billion, 800-megawatt wind farm, is considering a different placement of the turbines. Instead of placing turbines in an irregular pattern, which would produce the most energy, the company would position them in rows, eight-tenths of a mile apart that would allow two fishing vessels to drag their nets through the area at the same time.

In 2016, to protect valuable scallop and squid grounds, the fishing industry filed a lawsuit against the Bureau of Ocean Energy Management (BOEM) to stop the development of a 26-mile wind farm off Long Island, New York. Besides scallops and squids, the site for the proposed wind farm includes ocean habitats for loggerhead sea turtles, right whales, black sea bass and summer flounder. Fishermen claim that the government never adequately addressed their concerns and failed to consider alternative locations.


Loggerhead Sea Turtle

They assert that BOEM’s process for awarding the lease failed to properly consider the planned wind farm’s impact on area fish populations and habitats, shore side communities, safety, and navigation, which violates the National Environmental Policy Act, requiring an assessment of these impacts before issuing the lease, a full Environmental Impact Statement, and an evaluation of alternative locations.

BOEM’s failure to consider the impacts to fisheries, safety, navigation and other natural resources prior to moving forward with the leasing process also violates the Outer Continental Shelf Lands Act, which charges BOEM with considering and providing for existing ocean users. And BOEM’s actions violate the Administrative Procedure Act, which prohibits agencies from acting in ways that are arbitrary, capricious, and contrary to law.

The Bureau of Ocean Energy Management is the federal agency located in the Department of Interior that oversees the development of offshore wind projects as well as other offshore projects. Officials at the Bureau indicate that they are conducting studies to address fishermen’s concerns.

Statoil, which is two-thirds owned by the Norwegian government, won the bid to develop 79,000 acres of ocean off Long Island through a federal auction, bidding $42.5 million. Their plan is to erect 80 to 100 turbines 14 miles south of Long Beach, extending south-eastward with a capacity of up to 1,000 megawatts.


States considering offshore wind energy (e.g. Massachusetts, Maryland, New York) need to be aware of the ramifications of constructing and operating wind turbines off their coasts. Not only is the technology expensive, but fishermen believe that the turbines pose a real threat to their livelihoods. The opposition of the fishing industry could prove a hindrance for developers of proposed offshore wind farms.

Editor’s Note: Not only is the capital cost of offshore wind many multiples higher than a modern combined cycle natural gas power plant, but fixed operation and maintenance costs of offshore wind are 13 times higher than those of the latter and the final levelized cost  of energy for offshore wind are more than 2.5 times those of the modern gas-fired power plant. The ratio is still more than two to one after the subsidy value of Federal tax credits are considered and is projected to stay at about that same ratio in 2040. Offshore wind, in other words, is a mind-boggling boondoggle.


The post Green Insanity: Offshore Wind Project Cost Mind-Boggling $10K Per KW appeared first on Natural Gas Now.

Former independent producer Breitburn Energy Partners has successfully completed its Chapter 11 of the U.S. Bankruptcy Code, emerging as newly formed Maverick Natural Resources LLC, Kallanish Energy reports.

The Los Angeles-based firm, majority-owned by EIG Global Energy Partners (EIG), is ready to start fresh with a debt significantly smaller. After the restructuring process, Maverick has a debt of roughly $105 million, compared to Breitburn’s $2.96 billion debt balance prior to the restructuring process.

Breitburn filed for bankruptcy in May 2016. Maverick started operating on April 6, 2018.

“Today marks a new beginning for our company and all of our stakeholders and the end of a difficult period managing through the steep and sustained decline in oil and natural gas prices,” Maverick’s CEO Halbert Washburn, said Thursday, announcing the new company.

During the “extended” restructuring process, Washburn said focus remained on managing production, reducing costs and achieving a consensual plan of reorganization among key creditor groups.

“We are pleased to close this chapter and focus on generating value for the Maverick platform,” said Clayton Taylor, managing director of EIG. He added the new firm “will emerge with low leverage, a simple balance sheet, and sufficient liquidity to remain adaptive to the ever-changing market conditions.”

“Following a judicious review of the asset portfolio and cost structure, we believe Maverick is well-positioned to capitalize on cost reduction initiatives, to deploy capital to high growth prospects and to potentially build the platform through strategic acquisitions,” he added.

Maverick’s asset portfolio includes an average production of 39,742 barrels of oil equivalent per day (BOE/d) in 2017, estimated proved reserves of 152.2 MMBOE/d and roughly 7,600 net oil and gas wells. The assets are located across the U.S., in regions such as Midwest, Midwest, Ark-La-Tex, Rockies, California, Permian Basin, Southeast and the Mid-Continent.

Joseph Barone

The following information is provided by EnergyNet. All inquiries on the following listings should be directed to EnergyNet. Hart Energy is not a brokerage firm and does not endorse or facilitate any transactions. Eagle Oil & Gas Co. is selling its Permian Basin leasehold position covering 50,531.49 gross (43,042.54 net) acres, plus its operated working interest in one horizontal and one saltwater disposal well, all located in Cochran and Hockley counties, Texas.

Tom.jpg?resize=75%2C95Tom Shepstone
Shepstone Management Company, Inc.


Pennsylvania DCNR is making a lot of phony claims and using PennVest dollars intended for water and sewer projects to grab land for a wilderness preserve.

The DCNR land grab scandal I wrote about here a few weeks ago, is getting worse. As I noted then, this poorly executed scam to ripoff the taxpayers offers a perfect demonstration of the special interests behind the type of fractivism funded by the Rockefellers and the William Penn Foundation. They aim to create wilderness playgrounds for the enjoyment of the rich and famous while profiting handsomely. Pennsylvania DCNR, in fact, is precisely following the model established by the Rockefeller family’s Open Space Institute, which used Empire State Development money intended for economic development to fund a wilderness land grab in New York. People are starting to notice the DCNR deal, though. They’re asking questions and the answers aren’t good.


The truth about why smug well-connected Cindy Dunn wants this bad deal so badly is, as I explained earlier:

…found in the talk about a “conservation gap” and a “land bridge.” She’s determined to make a Northwest PA wilderness on the backs of taxpayers and residents of that county and its neighbors for the sale of those many wealthy visitors who want a wilderness experience uncluttered by real people and their enterprises; people who have to get their hands dirty making a living and don’t have the luxury of trips from Philly or Pittsburgh for weekend hikes. They know there’s little or no money in selling organic granola bars to those folks.

Cindy Dunn, before she was DCNR Secretary, was the Executive Director of PennFuture, an anti-gas, anti-development group doing the bidding of Pennsylvania’s elites. PennFuture, in fact, is primarily funded by the Heinz Endowments and the William Penn Foundation, the same benefactors behind fractivist shill StateImpactPa, the Clean Air Council, the Delaware Povertykeeper a/k/a Riverkeeper, et al. PennFuture’s agenda is her agenda. She’s an arm of the Heinz and Haas families, the latter, acting as the William Penn Foundation, being in business with the Rockefeller’s Open Space Institute to grab land in the Delaware River Basin.

It’s always the same people and it’s always the same game; using the taxpayers to finance the land grabs so the supposed “development rights” can be sold back to the state at a profit to pay the huge salaries at the non-profits involved in the deals, while leaving the land available for wilderness playground activities not to be disturbed by economic activities such as gas drilling (and, later, timbering, no doubt).

They justify breaking open the taxpayer piggy bank for sewer and water projects in this case on the basis of 50 jobs, which is clearly an OTTWAG (“over-the-top-wild-assed-guess”) but, assuming its real, amounts to over $1,000,000 of taxpayer money per job. Compare that to the $13,000 per job cost of these state grants or the $36,000 per jobs for these $290 million in state loans. Using the latter as an appropriate criteria (it roughly matches HUD Section 108 community development loan requirements of $35,000 per job), this PennVest loan of $50 million plus should have generated almost 1,400 jobs, not 50. It’s not about the jobs, it’s about the wilderness Cindy Dunn and her erstwhile wealthy PennFuture patrons want.

Among those patrons is a proxy group for the Heinz Endowments and the William Penn Foundation. It’s the Foundation for Pennsylvania Watersheds, headed by R. John Dawes, who also serves as Chair of the Rockefeller-connected Environmental Integrity Project (which is fighting the Shell Cracker) and the FracTracker Alliance (funded by the Heinz Endowments and the William Penn Foundation). He has influence across the entire spectrum of big fractivist funders. Cindy Dunn and he jointly signed a letter opposing oil and gas development on state land, so they’re kindred spirits.


R. John Dawes

Cindy Dunn also absolutely loves the guy for his work on abandoned mine drainage, as this PennFuture article by her and about him demonstrates. That’s odd, isn’t it? One of the other phony excuses used for this PennVest giveaway of more than $50 million 1% loan money intended for water and sewer projects is that it will include a relative pittance of $500,000 to be invested in an acid mine drainage project, even though Pennsylvania already has a program for this which is funded by gas drilling. Why not just use that?

Perhaps the answer is to be found in this intro by R. John Dawes to a “Breeds of Cattle” publication where he offers the following (emphasis added):

It was through conservation practices implemented here on the farm and the notoriety of the breeding program that I was asked to participate in a year-long visioning session (1993) for the Heinz Endowments Environment Program. Following the death of Senator John Heinz in 1991, his widow, Teresa Heinz Kerry (This Moment on Earth) contacted environmental leaders from different disciplines—Amory Lovins (Rocky Mountain Institute), transportation; Bill McDonough, architecture and design; Paul Hawken (The Ecology of Commerce and Blessed Unrest), environmental enterprise; David Orr (Ecological Literacy), environmental education; John Oliver, The Western Pennsylvania Conservancy and subsequently Secretary of the Department of Conservation and Natural Resources; Patrick Noonan, The Conservation Fund and others; to provide guidelines for the newly-formed Heinz Endowments Environment Program.

This is how PennFuture and the Heinz Endowments program of opposition to development of any kind in Pennsylvania were born and both R. John Dawes and The Conservation Fund, which finessed this PennVest land grab, were integrally involved. They worked for Teresa to set up the whole apparatus of the job-killing, wilderness playground creating, aristocratic land grabbing machine that is the legacy of the Heinz Endowments and William Penn Foundation.


Heinz Endowments offices

Pennsylvania, though, is not New York, where graft and back-room gentry class deals are the order of the day. The Open Space Institute template can’t be implemented as easily here. We still have some politicians with principles and they’re noticing what is an erupting scandal. Senator Scott Hutchinson, for example, has written to Brion Johnson, PennVest’s Executive Director, asking him to scrap the taxpayer giveaway (emphasis added):

I am writing to formally request that you put an immediate end to the two loan transactions totaling approximately $5O million involving Lyme Timber in rural Northwest PA. I believe that there are serious policy concerns regarding making PENNVEST loans at very low interest rates available to a private company to assist them in purchasing vast acreage in Pennsylvania, as well as potential legal questions that cloud these transactions. ln addition to the numerous points raised at last week’s House Agriculture and Rural Affairs Committee Hearing, I was shocked to read in The Derrick newspaper this morning that although it was stated by PENNVEST that local County Planning Commissions (including Venango County where I live) had been contacted about the Lyme Timber Project, most say they were never contacted at all, let alone had they expressed support. How misleading!

Since the actual funds have not been transferred out to Lyme Timber and the settlements have not been finalized, I believe it is time to nix this proposal, and reject further deals of similar projects. Basing these transactions on a premise that this “protects those areas from being over developed” shows how out of touch somebody is to think Pennsylvania’s Northern Tier is somehow threatened with overdeveloprnent. Corporate welfare for out of state companies should not override the need for sewer and water infrastructure projects for our poor Pennsylvania communities. lf PENNVEST has excess funds, I would rather that our communities can have more favorable terms for their expensive sewer and water infrastructure projects.

Senator Hutchinson has always been a stand-up guy, even when he was a Western Pennsylvania House member commenting on DRBC regulations eight years ago, but this is unusually frank letter for a State Senator to be sending a state agency from whom he can be expected to want some favorable attention for future projects in his district. He’s telling them he sees what is potentially a scandal and he wants it stopped.


Hutchinson has every right to be upset with what The Derrick newspaper back home exposed (article is behind a paywall but well worth paying for). It turns out officials from several counties, supposedly behind the project according to Brion Johnson of PennVest, knew nothing of it until others told them, for example, and some were directly opposed. That was Falsehood No. 1.

Falsehood No. 2 is the idea, pushed by Brian Johnson, that the land involved, which is clearly undevelopable due any number of environmental constraints, was somehow threatened with “over development” when, in fact DCNR simply wants a land bridge. The area is, in reality, threatened by a loss of population and being overtaken by forests, anything but “over development,” which is the excuse for the land grab.

Falsehood No. 3 is the idea this about promoting timbering for purposes of economic development, promoted by DCNR as their “marching orders” from Governor Tom Wolf. It is not. Not only is $50 million an outrageous price for creating 50 jobs, but the real economic activity to be generated is not in the timber but in the harvesting of DCNR money for the purchase of conservation easements from Lyme Timber.

PennVest is investing slightly over $800 per acre in taxpayer loans with Lyme so it can later sell the development rights, such as they are, back to the state. My own research for another government agency in 2014 suggests the typical price of forestland that year in those counties was $1,870 per acre. So why is Lyme paying roughly $2,350 per acre? Well, one reason could be that it hopes to sell those development rights back to Pennsylvania for a minimum of the $480 per acre and, very likely, much more. if it can secure wildly favorable appraisals, which is how the Open Space Institute does it.

There are other falsehoods as well, the ludicrous claim of transparency by all, being there most obvious, but the way the land grab works is really at the heart of this scandal. If this deal is allowed to be completed it will send Pennsylvania down the New York road of corruption. It will lead communities needing help with real infrastructure to have to go to other higher-priced sources of money and delay real water and sewer progress (which is happening despite PennVest’s claim it’s funding everything proposed). It will further empower Pennsylvania’s elite “haves” who want no more development and only desire to create playgrounds for themselves while getting richer doing it.

There’s also this from The Derrick expose; Lyme says it’s already purchased the property with all rights in place without any help from PennVest. This is why Brion Johnson is so desperate to conclude the deal. He’s made a commitment to what is apparently a refinancing of debt. The deal, in other words, at least appears to have been promised before the purchase was made. Johnson, therefore, knows his agency could be sued by Lyme for damages for not following through on the loans. This is the situation this orchestrated double-dip raid on taxpayers has produced for the sake of making a wilderness playground and feathering the nest of “conservation” leaders. It’s a mess and ought to be cleaned up now, before it gets worse, by squelching this land grab and making sure it can’t happen again.

The post Pennsylvania DCNR Land Scandal Gets Worse As PennVest Dissembles appeared first on Natural Gas Now.