Power Up: The US pipeline push

June 30 - By Liz Hampton

U.S. energy markets editor

Hello Power Up readers! Oil prices are steady at the start of the week as the market is weighing potential OPEC+ output increases for August against the global demand outlook. Both benchmarks had posted their biggest weekly declines since March 2023 last week as tensions eased somewhat in the Middle East. Still, they are on track for their second consecutive monthly gain of more than 5%.

Brent crude futures are trading at $67.63 a barrel, down 14 cents, while U.S. West Texas Intermediate futures are down 36 cents at $65.16 a barrel. Henry Hub natural gas futures are at $3.465 per million British thermal units, down 7.3%.

U.S. natgas pipelines get a shot in the arm​

U.S. energy firms are looking at fresh opportunities to build pipelines out of the natural gas-rich Northeast, buoyed by pro-energy policies from the Trump administration.

That region – which produces about a third of the gas in the U.S. and has the largest gas reserves – has long suffered from lack of egress, which has limited production and prompted customers in the region to rely more heavily on heating oil.

Output from the Appalachian region – which covers the Marcellus and Utica shales – has increased each year since 2009, when it was only producing about 1.7 billion cubic feet per day of gas. Between 2015 and 2019, growth averaged about 15% a year, but slowed to 2% a year between 2020 and 2024, Scott DiSavino reports.

Production is anticipated to grow by just 1% a year in 2025 and 2026 – even as U.S. power and gas demand is expected to reach record highs both years amid a boom in liquefied natural gas exports and data center demand.

New and revived pipeline projects could change that. Williams is again looking at building the Constitution Pipeline to New York and the Northeast Supply Enhancement project to New Jersey and New York. Both were canceled after years of fighting for permits with state regulators.

Millennium Pipeline has started negotiations for binding commitments to add pipeline capacity in the region, while EQT and partners are looking at extending the Mountain Valley Pipeline from West Virginia into Virginia and North Carolina. Other projects are also in the works.

Mountain Valley encountered years of legal battles and delays before entering service last year. Environmental groups, including the Sierra Club, have still voiced concern for these projects, setting up potential hurdles despite Trump's pro-energy policies.

Still, many operators would rather buy than build new projects, Reuters deals reporter David French wrote earlier this year. Labor shortages, trade tensions, lower energy prices and the risks of legal battles make acquisitions a more efficient way to grow, he said.

In the first quarter of this year, there were 15 U.S. midstream deals, the highest quarterly number in the first months of the year since 2021.

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Iranian oil imports into China surged in June, buoyed in part by better refiner demand. China - the world's top oil importer and biggest buyer of Iranian crude - bought more than 1.8 million barrels per day from June 1-20, according to ship-tracker Vortexa.

French energy company TotalEnergies has purchased a 25% stake in offshore Suriname from Spanish firm Moeve, in a bid to expand its position in one of the world's hottest exploration spots. The block is adjacent to Total's $10.5 billion gran Morgu development, which is estimated to hold more than 700 million barrels of resource.

Singapore used a record amount of renewable resources in May, according to an analysis of market data, as it ramped up renewable imports and boosted solar power generation. Singapore expects to meet 6 GW - or roughly a third - of its power demand from clean electricity imports by 2035.

The United States has postponed sanctions against Serbia's NIS oil firm for a fourth time, its energy minister said on Friday. NIS is majority owned by Russia's Gazprom Neft and Gazprom, and operates Serbia's only oil refinery. That facility has a capacity of 4.8 million tons and covers most of the country's needs.

A Texas company co-founded by former U.S. Energy Secretary Rick Perry plans to build the largest energy and data complex of its kind, powered by nuclear, natural gas and solar energy. The company, Fermi America, plans to partner with the “Hypergrid” project at Texas Tech University.

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