04222018Sun
Last updateFri, 20 Apr 2018 5pm

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Oil & Gas Firms to Increase Capital Expenditure in 2018

After three tough years, confidence in oil & gas industry growth has risen globally from 32% in 2017 to 63% this year. Two thirds (66%) of respondents say their company will maintain or increase capital spending in 2018, compared to 39% last year.

DNV GL’s annual report reveals an imminent turnaround in spending on R&D and innovation after three years of cuts and freezes. More than a third (36%) of 813 senior sector players surveyed, expect to increase spending on R&D and innovation in 2018: the highest level recorded in four years. Digitalization (37%) and cyber security (36%) will form the principal areas of R&D investment focus this year. 


Construction of Cactus II Pipeline Proceeding

A subsidiary of Plains All American Pipeline, L.P. is proceeding with construction of a new pipeline system from the Permian Basin to the Corpus Christi/Ingleside area, known as the Cactus II Pipeline. Permitting, right-of-way and procurement activities are underway, and subject to receipt of necessary permits and regulatory approvals, the Cactus II Pipeline is targeted to be operational in the third quarter of 2019.

The Cactus II Pipeline includes a combination of existing pipelines and two new pipelines. The first new pipeline will extend from Wink South to McCamey, TX, and the second pipeline will extend from McCamey to the Corpus Christi/Ingleside area. 

Continued Growth for Texas Oil Output Expected This Year

Last year was an important year of growth and recovery for the upstream oil and gas industry in Texas, according to the Texas Petro Index (TPI), which marked its 13th consecutive increase in December by improving to 188.8, nearly 25% higher than then December 2016 TPI of 151.2.

Noting that predictions of future crude oil prices "are all over the map," economist Karl Ingham said, "at this point, there is every reason to believe 2018 will be another year of general growth and expansion in the Texas upstream oil and gas economy, characterized by increasing rig counts, higher numbers of wells drilled, and continued growth in industry employment.” 

Chemical Activity Off to Strong Start in 2018

The American Chemistry Council’s Chemical Activity Barometer (CAB) expanded 0.5% in January on a three-month moving average (3MMA) basis and 0.7% on an unadjusted basis. This follows an upwardly revised 3MMA gain of 0.7% in December and 0.5% in November. The CAB is up 4.0% compared to a year earlier, indicating a robust economy well into the third-quarter of 2018.

In January, following some weather-related stagnation, production-related indicators showed solid improvement. Plastic resins used in packaging and in other consumer and institutional applications also improved, suggesting continued consumer confidence. A robust stock market rally continued to push equity prices higher, while product prices and inventories were also positive. 

FERC Approves PennEast Natural Gas Pipeline

The Federal Energy Regulatory Commission (FERC) recognized the need for, and public benefit of, the PennEast Pipeline and issued an order under section 7(c) of the Natural Gas Act approving its construction.

The approximately 120-mile pipeline route begins in the Marcellus Shale production area near Dallas, PA, and connects with the existing underground Transcontinental Pipeline near Pennington, NJ. The route includes 24 municipalities in Pennsylvania and six in New Jersey. New Jersey Natural Gas, South Jersey Gas, Elizabethtown Gas, PSEG Power and ConEd are among those contracted to the PennEast Pipeline. 

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