Deals in US onshore natural gas play grow in scope

The ways in which foreign companies can benefit from the boom in US onshore natural gas is growing beyond those drilling and producing the energy. StatoilHydro, the Norwegian oil and gas company, has already done a deal to get into the exploration and production side of things. And on Tuesday it said it had entered into deals to deliver gas produced in the Marcellus shale field to New Jersey and New York.

Statoil did these latest deals with Tennessee Gas Pipeline and Texas Eastern Transmission. Its earlier deal was with Chesapeake, one of the top exploration and production companies in the shale. Companies such as Statoil not only want to get in on the boom, which has raised projections of US gas supplies from 30 years worth at current usage rates to 100 years worth, but to learn from the US independents how to take the experience and expertise they have developed to get gas from shale rock and apply that overseas.

Indeed, Statoil already has signed a global partnership with Chesapeake for the two companies to work together, prospecting for new shale opportunities in 14 different areas around the world. If shale gas can be developed internationally, Statoil will not only know how to tap into it but have the expertise transporting it. The upside on this play continues to grow.

In its latest deal, Statoil has secured the right to transport up to 2bn cubic metres (bcm) per year/200,000 mcf/day directly from the Northern Marcellus production area to New York City and the surrounding areas. In the words of Rune Bjornson, Statoil executive vice president for natural gas:

This is an important breakthrough for Statoil’s gas marketing position in the US. These agreements secure access to some of the main pipeline systems for gas in the New York City area and thereby help maximize the value of our gas produced in the Marcellus shale. We expect that this will create attractive sales opportunities in New York City, New Jersey and surrounding areas in what is regarded the most attractive gas market in the US.

Even if the US Congress has yet to recognise the importance of the US shale boom, it is clear foreign energy companies are on the case.

Related links:

Shale boom leaves US industry considering gas exports (FT Energy Source)
How healthy is Barnett Shale? (FT Energy Source)

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