Headlamp – Big news for Hilcorp. Bad news for tariffs.

Houston’s Hilcorp paying over $1B for San Juan assets from Williams
Chron, Jordan Blum, July 30, 2018

An affiliate of Houston’s Hilcorp Energy will pay more than $1.1 billion to acquire the San Juan Basin gas pipeline and processing facilities in New Mexico and Colorado from Oklahoma-based Williams Partners. Hilcorp’s Harvest Midstream business will buy the system in the nation’s Four Corners region that includes more than 3,700 miles of pipeline, two gas processing plants, and one carbon dioxide treatment facility in an area stretching from New Mexico’s San Juan and Rio Arriba counties to La Plata County in Colorado.

Our Take: Good for Hilcorp! Providing jobs and more affordable energy is something we can all get excited about. “We believe this will be a significant economic benefit for the community. Our focus is on becoming the premier midstream services provider in the San Juan by reliably serving all of our customers,” said Harvest CEO Jason Rebrook.

Governor Walker believes steel tariff issue will get resolved
KTVA, Scott Gross, July 30, 2018

Governor Bill Walker on Monday said he doesn’t feel steel tariffs will have a big effect on Alaska or the oil industry. “All the pipe for the pipeline came from Japan,” Gov. Walker said. “I helped unload it off a ship in Valdez and I saw Nippon steel thousands of times.” Gov. Walker says steel could come from a different country if the tariff issue is not resolved. “I do believe it will be resolved, I really do,” Gov. Walker said. “Both sides want to resolve this issue, so I feel it will get done. In the interim, there are going to be some challenges.”

Our Take: Going into a multi-billion dollar project with a “fingers crossed” approach is an interesting way to handle it. Read story below.

From today’s Washington Examiner, Daily on Energy:

TRUMP’S VISION FOR LNG EXPORT DOMINANCE UNDER THREAT: The Trump administration is facing threats to its ambition to flood the world with cheap natural gas as a key component of its energy dominance agenda. And some of the damage is self-inflicted.

Slow approvals: Most immediately, the U.S. has a shortage of facilities along the coasts to export liquefied natural gas, or LNG — the chilled, liquid form to which gas must be converted for shipment in giant tanker vessels across the sea.

The U.S. has two major LNG export facilities in operation today, with another four set to enter service by the end of 2019. Four others have earned regulatory approval, and their developers are making final investment decisions on whether to build their planned facilities based on whether they can secure contracts for the gas they hope to provide.

But more than a dozen other facilities are awaiting permit approval from the Federal Energy Regulatory Commission (FERC), a backlog that the panel is struggling to meet because of a manpower shortage and other issues. In fact, it’s been three years since FERC approved a new LNG export terminal.

Trade war disruption: In the longer run, President Trump’s trade war with China is threatening to discourage the world’s fastest growing LNG market from signing long-term contracts with American developers, experts say.

ConocoPhillips says steel tariffs increasing drilling, production costs
KTUU, Cameron Mackintosh, July 30, 2018

Energy giant ConocoPhillips says tariffs on steel caused a “fairly significant” rise in drilling and production costs during the firm’s second quarter. “We have been and are going to continue to see some inflation pressure, including the steel tariffs in the U.S., which is turning out to be a fairly significant item for us,” Al Hirshberg, executive vice president of production, drilling and projects, told investors on a conference call last week. Hirshberg said Conoco spends about $300 million a year on pipeline, valves and fittings, all of which are made from steel. The firm expects the price tag to continue rising into next year.

Our Take: The tariffs are having both positive and negative affects throughout the US. Unfortunately, Alaska is seeing mostly negative.

China’s Belt and Road Initiative is falling short
The Financial Times, July 29, 2018

China’s Belt and Road Initiative is commonly seen as a program to fund and build infrastructure in some 78 countries around the globe. It is also Beijing’s bid to reshape the world by offering an alternative developmental vision to the US-led world order. In the Chinese context, it is the linchpin of President Xi Jinping’s grand design to create a “community with a shared future for mankind”. As such, the Belt and Road (BRI) is officially intended to showcase an open, inclusive form of development which benefits all countries that participate. To criticize BRI, therefore, is to censure a rising China’s proposition to the world. Yet there is growing evidence that the infrastructure projects are falling short of Beijing’s ideals and stirring controversy in the countries they were intended to assist.