X

Sign Up To Our Free Newsletter

Join Now

Thanks for subscribing to our free newsletter!

ERROR

  • 3 minutes Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Scientists Warn That Filling The Sahara With Solar Panels Is A Bad Idea
  • 11 minutes United States LNG Exports Reach Third Place
  • 15 minutes Joe Biden's Presidency
  • 5 hours Retired RAF pilot wins legal challenge over a wind farm
  • 6 hours U.S. Presidential Elections Status - Electoral Votes
  • 12 hours Speaker Pelosi, "Tear Down This Wall"
  • 1 hour Interest article about windmills and waterwheels in Europe
  • 23 hours NYT:  The Supreme Court’s order (Re:  Trump’s tax returns) set in motion a series of events that could lead to the startling possibility of a criminal trial of a former U.S. president
  • 2 hours Chance for (Saudi)Arabian peninsula having giant onshore Gas too?
  • 17 hours Disaster looming in UK offshore wind power
  • 1 day Wednesday Nikki Haley reached out to Trump for meeting at Mar-a-lago. Trump said No ! You blew it Nikki . . .
  • 1 day “Cushing Oil Inventories Are Soaring Again” By Tsvetana Paraskova
  • 2 days Minerals, Mining and Industrial Ecology
  • 1 day Scientist clone endangered Black Footed Ferret from Ferret that died 30 years ago . It's a 100% exact genomic match.
  • 1 day Pipeline vs Train vs Ship to Transport Crude Oil.
  • 1 day NG spot prices hit triple digits for weekend delivery

Apache Shuts In Permian Gas Production As Prices Crash

Apache Corporation said on Tuesday that it had temporarily started to delay natural gas production at its Alpine High play in the Permian in late March to mitigate the impact of the extremely low prices at the Waha hub in West Texas.

Currently, the company is deferring around 250 million cubic feet (MMcf) per day of gross gas production.

Natural gas prices at the Waha hub plummeted to record low negative levels in early April, as pipeline constraints and problems at compressor stations at one pipeline stranded gas produced in the Permian.

Spot prices at the Waha hub plunged to a record low of minus $4.28 per million British thermal units (MMBtu) in the first week of April.

Gas production in the Permian has been rising in lockstep with crude oil production, and even though gas takeaway capacity has attracted less media attention, pipeline constraints for natural gas are similar to those of crude oil pipeline capacity.

The natural gas takeaway capacity constraints have resulted in more gas flaring in the Permian on the one hand, and in a record-high spread between the Waha gas hub price and the U.S. benchmark Henry Hub in Louisiana, on the other hand.

“We will closely monitor daily pricing and return our gas to sales when it is profitable to do so. We are carefully managing these actions so there is no adverse impact on long-term wellbore integrity or reservoir productivity and look forward to returning this production to market as soon as practical,” John J. Christmann IV, CEO and president of Apache Corporation, said in a statement today.

Apache contracted two years ago more than 1 billion cubic feet (Bcf) per day of long-term, firm takeaway capacity from the Permian Basin on Kinder Morgan’s pipeline projects Gulf Coast Express and Permian Highway, Apache said, noting that Gulf Coast Express is expected to be in service later this year, while Permian Highway is set to start operations next year.

“We anticipate relatively wide and volatile natural gas price differentials in the Permian Basin until the Gulf Coast Express pipeline enters service. As a long-term returns-focused company, we know that production deferrals such as this will improve financial performance despite the impact on near-term volumes. This is the proper approach from both an environmental and economic perspective relative to other industry practices such as flaring or selling associated gas at a negative or unprofitable price,” Apache’s Christmann said.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Tripp Mills on April 26 2019 said:
    Smart move and I hope ENLC follows suit in their ways - ENLC stock price up i'm losing REAL PATIENCE with seeing Natural Gas at sub 2.50 when it can go as high as 8-10-12+ (anyone who does not believe me run the numbers historically (accurate ones and learn how forward curves work which are CLEARLY not taking into account some things).

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News