INEOS

The uncertainty and angst spurred by the ongoing trade war doesn’t seem to have dampened foreign companies’ interest in acquiring upstream and midstream energy assets in the U.S. The recent rumor — still unconfirmed — that Mitsubishi Corp. is in talks to acquire Aethon Energy Management’s massive holdings in the Haynesville for a reported $8 billion is only the latest indication that overseas interest may be stronger than ever. In today’s RBN blog, we’ll discuss the latest round of foreign investments in U.S. energy and what’s driving those deals. We’ll also look at the Aethon assets on the block. 

The wave of M&A activity in South Texas apparently hasn’t crested yet. Over the past couple months, Chesapeake Energy announced two deals totaling $2.825 billion that will almost complete its planned departure from the Eagle Ford — and signal UK-based INEOS’s arrival in the basin and a more than doubling of WildFire Energy’s production there. Just as important, Western Canada’s Baytex Energy a few days ago unveiled a $2.5 billion plan to acquire Ranger Oil, a pure-play Eagle Ford E&P, and thereby triple its South Texas production and gain its first operating capability in the U.S. And international interest in the basin doesn’t end there — Spanish energy giant Repsol, which had previously acquired the share of an Eagle Ford partnership held by Norway’s Equinor, recently bought basin assets held by Japan’s INPEX. (How’s that for multi-national M&A?) In today’s RBN blog, we discuss the latest round of E&P acquisitions and sales in South Texas, where production has been on the rebound.

Just a few years ago, the possibility of overseas ethane exports was almost incomprehensible. Lack of infrastructure, high handling costs, no suitable ships and minimal market demand made ethane exports seem extremely unlikely.  But then the shale gas boom transformed the ethane market.  Now U.S. ethane production greatly exceeds demand and each day hundreds of thousands of barrels of ethane are being rejected into the natural gas stream.  Consequently a few pioneers are hammering through the challenges associated with overseas ethane exports, including the construction of specialized tankage, loading facilities, ships and unloading facilities.  And international chemical companies are spending hundreds of millions of dollars to modify olefin crackers to use the cheap feedstock.  Now the first of those pioneers has made it to the new ethane frontier. In today's blog we examine the impact of imminent ethane exports from the Energy Transfer/Sunoco Terminal at Marcus Hook, PA.

It is a familiar refrain in the shale era.  The U.S. produces more of a hydrocarbon commodity than it can use.  This time we are talking ethane, a natural gas liquid that is experiencing production constraints mostly due to the inability of U.S. petrochemical plants to use more of the feedstock. So why not just export the surplus?  Unlike crude oil there are no legal constraints on exports.  Unlike natural gas, you don’t need a $10 billion plant to convert it to a liquid (LNG) – ethane is already a liquid.   Unfortunately for many ethane wannabe exporters, ethane has its own infrastructure and market issues that must be resolved before it can be shipped overseas in significant quantities. Today we continue our blog series on the feasibility of overseas ethane exports.