Page 11 - NorthAmOil Week 28

NorthAmOil PIPELINES & TRANSPORT
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Mountaineer Xpress returns to service, boosting US gas production
WEST VIRGINIA
US natural gas production was reported to have risen slightly in the days a er TC Energy’s Mountaineer Xpress pipeline was returned to service in West Virginia following unplanned maintenance.
TC Energy’s Columbia Gas Transmission, which operates the pipeline, imposed a force majeure owing to the unplanned work on July 7, li ing it on July 11. e work that Columbia carried out required a pressure reduction south of the Mount Olive compressor station in West Virginia’s Jackson County.
“ e hard work of our crews and better than forecasted weather conditions led to the early li ing of the force majeure and return to service,” Columbia said in a notice to customers.
Mountaineer Xpress has a capacity of 2.6bn cubic feet (73.6mn cubic metres) per day. Pipeline data from Re nitiv showed that US gas production had risen to 88.2 bcf (2.50bn cubic metres) per day on July 12, up from a low of 87.0 bcf (2.46 bcm) per day last week, which was mostly attributed to the outage on the pipeline.
Most of the US-wide increase in output came from the region Mountaineer Xpress serves – the Marcellus and Utica shale plays in the Appala- chian Basin. According to Re nitiv, West Virgin- ia’s production was up about 300mn cubic feet (8.5 mcm) per day from last week’s low to 6.9 bcf (195.4 mcm) per day while Pennsylvania saw its output rise by around 700 mmcf (19.8 mcm) per day to 19.5 bcf (552.2 mcm) per day.
US gas production has not been immune to the downturn, despite initial hopes that a drop- o in associated gas output in the Permian Basin would help boost natural gas prices. Instead, Henry Hub benchmark prices fell to record lows in the rst half of 2020, and are only being predicted to recover at the end of this year at the earliest.
As a result, associated gas output is not alone in falling, and dry gas production is su ering too. According to the US Energy Information Administration’s (EIA) latest Drilling Produc- tivity Report, Appalachian gas output is forecast to see the largest monthly drop of any leading shale region in August. Production in the basin is anticipated to fall by 210 mmcf (5.9 mcm) per day in August compared with July. The Ana- darko Basin – which holds both wet and dry gas – and the Haynesville dry gas play are projected to see the next-largest declines. By contrast, gas production in the Permian Basin – where it is primarily a by-product of oil drilling – is only predicted to fall by 52 mmcf (1.5 mcm) month on month.
Despite the large decline, however, the Appa- lachia region is still by far the largest contributor to US shale gas production. e agency fore- casts that the region’s production will be 32.7 bcf (926.4 mcm) in August. Overall, the EIA antici- pates that gas output from the US’ seven leading shale regions will decline from a projected 80.3 bcf (2.27 bcm) per day on average in July to 79.6 bcf (2.25 bcm) per day in August.™
Appalachian gas output is forecast to see the largest monthly drop of any leading shale region in August.
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