The Saudi Conference Was A Dud! TransCanada Plans Another Pipeline In Western Canada -- October 26, 2018

The beginning of the end? From twitter:

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Back to the Bakken

One well coming off confidential list today:

• 34451, SI/NC, MRO, Greybull USA 31-18TFH, Van Hook, no production data, 

Active rigs:

$66.57↓	10/26/2018	10/26/2017	10/26/2016	10/26/2015	10/26/2014
Active Rigs	68	53	36	68	194

RBN Energy: the low-cost gas supply driving the LNG Canada project, part 2.

LNG Canada, the newly sanctioned liquefaction/LNG export project in British Columbia, is an entirely different animal than its operational and under-construction counterparts in the U.S. The Shell-led LNG Canada project is being developed without any of the long-term offtake contracts that financed Sabine Pass, Cove Point and the projects now being built along the Louisiana and Texas coasts, and it requires the construction of a new, long-haul pipeline — Coastal GasLink. What’s also different is that the BC project’s co-owners have been developing their own gas reserves to supply the project, though they may also turn to the broader Montney and Duvernay markets for the gas they will need. Today, we conclude a two-part series with a look at how the project expects to undercut its U.S. competitors.

The initial phase of LNG Canada that achieved final investment decisions (FIDs) by Shell and its four project partners will consist of two 7-million-tonne-per-annum (MMtpa) liquefaction trains, each demanding about 900 MMcf/d of gas. The project site is near the mouth of the Douglas Channel in Kitimat, a town about 400 miles up the BC coast from Vancouver.

Natural gas to supply the liquefaction trains will be transported from northeastern BC via TransCanada’s planned 420-mile, 2.1-Bcf/d Coastal GasLink pipeline.

The LNG export project is a long-term boon to Western Canadian gas producers, but it won’t come online until at least 2023 or 2024. That’s an eternity for producers in the region’s Montney and Duvernay shale plays, who through much of 2018 have been enduring profit-crushing price discounts for their gas relative to Henry Hub. We’ve chronicled the challenges faced by these producers in a number of blogs; an overriding theme is that while producers in the Montney and Duvernay have competitively low production costs, they are being squeezed out of many of their traditional markets — especially the U.S. Northeast and Midwest, plus Eastern Canada — because of soaring gas output in the Marcellus/Utica.