Page 12 - NorthAmOil Week 38

NorthAmOil INVESTMENT NorthAmOil

EQT reportedly bids for Chevron’s

Appalachia assets

APPALACHIAN SHALE gas producer EQT has reportedly put in well before this year’s industry downturn, while
BASIN a bid for gas properties and a pipeline stake in various properties had failed to live up to their
the Appalachian Basin, both of which are being initial promise. Chevron’s Appalachia assets were
sold by Chevron. Citing a source familiar with acquired through its purchase of Atlas Energy for
the matter, Reuters reported that EQT – the US’ $4.3bn including debt in 2010, when a rush to
largest natural gas producer by volume – has buy up shale properties and companies – often at
offered $750mn for the properties. large premiums – was underway. Indeed, a year
Chevron is selling about 800,000 acres earlier, ExxonMobil had agreed to pay $30bn for
(3,237 square km) in the Appalachian Basin’s shale driller XTO Energy, which was then a large
Marcellus and Utica shale plays, as well as a Appalachian Basin operator.
31% non-operating interest in Laurel Moun- The fact that a buyer has now emerged at a
tain Midstream. The pipeline company owns time when many shale producers are keeping a
intrastate and gathering lines servicing the tight lid on spending is perhaps surprising. How-
Marcellus shale area. ever, EQT’s CEO, Toby Rice, described Appala-
The super-major said in December 2019 chia shale as “a buyer’s market” in July and said
that it was exploring the possibility of selling the consolidation could present an opportunity for
assets. This came after it reported that its Appa- the company.
lachian shale operations would account for more Chevron confirmed to Reuters that bids for
than half of a $10-11bn impairment charge in the the properties had been received on August 12
fourth quarter of last year. and were being evaluated, but it declined to
Chevron was not the only company to be comment on their details. There is no guaran-
struggling with unprofitable shale gas assets, as tee that they will lead to a sale to EQT or any
natural gas prices had remained stubbornly low other company.™

PERFORMANCE

Cameron LNG begins restart operations

as US LNG exports rebound

US GULF COAST SEMPRA Energy, the operator of the Cam- expected to resume around October 8-10. This
eron LNG export terminal in Louisiana, said is in line with comments by the US Army Corps
on September 18 that it had begun restart oper- of Engineers, which has said it plans to finish
ations at the facility. This followed the partial dredging the Calcasieu Ship Channel in the sec-
restoration of power to the site on the same day ond week of October, allowing passage to and
by electricity provider Entergy, after Hurricane from Cameron LNG.
Laura cut power supplies to the region in late The restart of Cameron comes as US LNG
August. exports rebound after a slow summer marked
The partial restoration allowed Sempra to by cargo cancellations and a turbulent few weeks
initiate the testing of systems at Cameron, as of severe weather since late August. As well as
well as beginning the restart process on the first Cameron, Hurricane Laura disrupted opera-
liquefaction train. Sempra’s CEO, Jeffrey Martin, tions at Cheniere Energy’s Sabine Pass terminal.
said on September 17 that he expected Cameron And while no disruptions to liquefaction facili-
LNG to be fully operational again in roughly six ties were reported from Hurricane Sally, feed gas
weeks – around the end of October. flows to these plants dropped to a two-week low
Entergy said this week that it had restored of 3.9bn cubic feet (110mn cubic metres) per day
power to most of its customers in south-west on September 22. This came as Tropical Storm
Louisiana, with around 2,176 outages in Calca- Beta hit the region, subsequently weakening to a
sieu and Cameron parishes as of September 24, tropical depression that day.
down from a peak of around 93,000. By September 24, however, gas flows to LNG
Some of Cameron LNG’s customers were plants were on track to rebound to 5.7 bcf (161
reported as saying last week that loadings were mcm) per day.™

P12 www. NEWSBASE .com Week 38 24•September•2020