Global Energy News Briefs for the Final Week of April

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News highlights gathered by Industrial Info and IIR Energy (Sugar Land, Texas) over the past week.

OIL & GAS PRODUCTION
Crude Rises on Cushing Drawdown, but Traders Worry About Permian Glut - Both West Texas Intermediate (WTI) and Brent crude traded at their highest level in 2015 last week for a number of reasons. Continued Saudi action in Yemen suggested possible disruptions in oil flow from the Middle East. According to the U.S. Energy Information Administration, U.S. crude oil reserves rose only 1.9 million barrels for the week ending April 24, lower than most analysts had expected. That week also brought the first drawdown in reserves at the oil storage hub in Cushing, Oklahoma, since November. Prices fell Friday due to a stronger dollar and news that Iraq had exported a record 3.08 million barrels per day in April. In addition, traders are concerned that two pending maintenance projects on pipelines carrying oil from the Permian Basin, which is expected to produce 2 million barrels per day in May, to the Gulf Coast, will cause oil to be diverted to Cushing, increasing stocks there again.

OPEC Continues High Crude Output - OPEC reported little change in its April crude oil production, which remained essentially unchanged since March at 31.295 million barrels for the month. March's 31.296 million was the highest production for OPEC since November 2012.

Oil & Gas Companies Slash Capital Budgets, Payrolls - Two recent surveys provide quantitative evidence of the difficult conditions facing oil & gas producers and their employees. Five producers operating in the Marcellus Shale will trim their 2015 capital spending by $1.5 billion, according to a recent survey by the Pittsburgh Business Times. And a survey from the Federal Reserve Bank of Kansas City (Kansas City, Missouri) showed oil & gas producers operating in its six-state region plan to sharply reduce capital spending and cut employment by more than 12%. Employment at supporting industries was expected to fall much further--19%, respondents told the bank.

PIPELINES & MIDSTREAM
Occidental and Enterprise to Build Gas Processing Facility in Delaware Basin - Occidental Petroleum (NYSE:OXY) and Enterprise Products Partners (NYSE:EPD) have announced an agreement to construct a 150 million-cubic-foot-per-day cryogenic natural gas processing facility in the Delaware Basin. The plant will be linked to one of Enterprise's NGL pipelines, providing customers access to Enterprise's storage and fractionation facility in Mont Belvieu, TX. The plant is expected to begin operations in mid-2016.

Enterprise to Build New Crude & Condensate Pipeline from Midland to Houston - Enterprise Products Partners (NYSE:EPD) has announced plans to construct a 416-mile pipeline to transport crude oil and condensate from Midland, TX, to its storage facility in Sealy, TX, west of Houston, from which product will have pipeline access to Gulf Coast refineries and terminals.

Global Investors Sue Norway for Reducing Pipeline Tariffs - Global investors including UBS Group (NYSE:UBS), the Canada Pension Plan Investment Board and Allianz SE are suing the government of Norway for reducing pipeline tariffs on its Gassled natural gas pipeline network. The government, which is the majority owner of the pipeline network, says that the return of 10% was well above the targeted 7% return, and was discouraging offshore drilling investment.

POWER
Construction Begins on First U.S. Offshore Windfarm - U.S. offshore wind energy took a big step forward April 27 when construction began on the nation's first offshore windfarm, to be built off the coast of Rhode Island. Jeffrey Grybowski, chief executive of Deepwater Wind LLC (Providence, Rhode Island), was joined by Rhode Island Governor Gina Raimondo, members of Rhode Island's congressional delegation, and state business and labor leaders in marking the start of construction of the Block Island Offshore Windfarm.

Vattenfall Shutting Two Nuclear Reactors Early in Sweden - Falling profits and rising costs have been blamed by Sweden's state-owned power utility Vattenfall AB (Stockholm, Sweden) for its decision to shut two nuclear reactors early.

Clean Path Energy Center Could Bring 750 Megawatts to New Mexico - Western Energy Partners LLC (Littleton, Colorado) is in the early site-study phase for the Clean Path Energy Center, a planned power plant. If the project proceeds, it could generate up to 750 megawatts (MW) through a combination of natural gas and solar power.

LNG
Freeport LNG Secures Financing for Third LNG Train - On Tuesday last week, Freeport LNG announced that it had secured approximately $4.56 billion in financing for the construction of the third train of its Quintana Island LNG export facility in Texas. The company said it had issued a full notice to proceed with construction of third train to CB&I, Zachry Industrial, and Chiyoda International Corporation. The facility is expected to LNG production in 2018.

FINANCIALS
Big Oil Profits Sink, but Many Beat Expectations - Big Oil companies, including Royal Dutch Shell (NYSE:RDS.A), BP plc (NYSE:BP), Exxon Mobil Corporation (NYSE:XOM), ConocoPhillips (NYSE:COP) and others, reported first-quarter earnings last week. Companies with strong refining segments such as Total SA (NYSE:TOT) and BP fared better than those who had exited the upstream market, such as Hess Corp. (NYSE:HES). Many companies, including Hess and ConocoPhillips set new production records. For example, Hess, which posted a quarterly loss of $389 million compared to profit of $389 million last year, increased year-over-year production 14% to 361,000 barrels oil equivalent per day (boe/d), while ConocoPhillips set a first-quarter production record of 1.61 million boe/d. Two of the largest drops in earnings came from giants Shell and ExxonMobil. Exxon's net profits were down 46% to $4.9 million, compared $9.1 million a year ago. Shell's adjusted earnings plunged 56% to $3.2 billion, compared to $7.3 billion a year ago. Despite the declines, both companies seem to have beat Wall Street's expectations. High refining margins led to Valero (NYSE:VLO) posting record-high first-quarter profits of $664 million, an increase of 16% from last year.

Energy Transfer, Regency Energy Complete Merger - Energy Transfer Partners (NYSE:ETP) and Regency Energy Partners last week announced the completion of their merger, which was announced in January. The move increases Energy Transfer's footprint in the Marcellus and Utica shale region and makes Regency a wholly owned subsidiary of Energy Transfer.

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