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ONEOK to become sole owner of ONEOK Partners; CNX nearly sold out for 2017 coal

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Essential Energy Insights, April 2021


ONEOK to become sole owner of ONEOK Partners; CNX nearly sold out for 2017 coal

Top News

ONEOK to acquire remaining units of ONEOK Partners for $9.3B

ONEOK Inc. agreed to acquire all of the 171.5 million outstanding common units of ONEOK Partners LP in a unit-for-unit transaction valued at $9.3 billion. ONEOK will buy the units it does not currently own at a fixed exchange ratio of 0.985 ONEOK share for each unit of ONEOK Partners, representing a 22.4% premium to the ONEOK Partners closing price on Jan. 27.

Settlement in DP&L case could signal Ohio utility's exit from coal generation

Once hopeful and confident about the prospects of receiving an income guarantee for more than 2,000 MW of coal-fired generation in Ohio, Dayton Power and Light Co. pivoted to retiring and selling coal capacity to advance its new, six-year electric security plan.

Jordan Cove asks FERC to start new review of rejected LNG project

Jordan Cove Energy Project LP and Pacific Connector Gas Pipeline are restarting the FERC process for the Jordan Cove LNG export project and associated pipeline after the commission previously rejected the Veresen Inc.-led venture in their first application.

CNX Coal nearly sold out for 2017 coal, executives say

CNX Coal Resources LP has sold 98% of its coal targets for 2017 and is now moving into the following years, according to company executives. Speaking on a Jan. 30 earnings call, CEO Jimmy Brock said the company had a "solid position" of approximately 66% of 2018 coal sold.

Power

* President Donald Trump nominated Judge Neil Gorsuch to the Supreme Court. If confirmed, Gorsuch would succeed Justice Antonin Scalia, who died Feb. 13, 2016.

* The Maryland House of Delegates has overridden Gov. Larry Hogan's veto of H.B. 1106 to boost the state's renewable energy mandate to 25% by 2020. The bill seeks to increase Maryland's renewable portfolio standard to 25% by 2020 from its current target of 20% by 2022, as well as boost its solar carve-out to 2.5% by 2020.

* Guggenheim Securities LLC initiated coverage of independent energy service companies Just Energy Group Inc. and Spark Energy Inc. with "buy" ratings and price targets of C$10 and US$30, respectively. "Independent energy retailers generally have an attractive, asset-light and high FCF business model — provided that their risks are managed effectively — despite the high fragmentation and competitiveness of the market," Guggenheim analysts said.

* Mississippi Power Co. again delayed when its controversial integrated gasification combined-cycle generation project in Kemper County will enter service, pushing the date to "late February." The Southern Co. subsidiary had previously planned for the IGCC facility, formally known as Plant Ratcliffe, to begin commercial operation in January.

* Hawaiian Electric Co. Inc. signed power purchase agreements to purchase 60.6 MW of electricity from two NRG Energy Inc.-owned solar projects on O'ahu. The company will buy 14.7 MW from the Lanikuhana project at 11.4 cents/kWh and 45.9 MW from the Waipio project at 10.4 cents/kWh. The companies also are working to execute a PPA for the 49-MW Kawailoa solar project. The three projects are expected to enter operation in 2019.

* The Los Angeles Department of Water and Power is ramping up its utility-scale energy storage development to achieve its goal of reaching 178 MW by 2021. The utility has preliminarily identified 145 MW of new energy storage projects of its goal. Upon reaching this target, LADWP plans to reach 404 MW of energy storage by 2025.

* Construction work has started at Entergy Louisiana LLC-owned St. Charles Power Station, a 980-MW, combined-cycle power project in Louisiana. Chicago Bridge & Iron Co. NV is providing engineering, procurement and construction services for the planned natural gas-fired project that will help meet the Entergy Corp. subsidiary's need for up to 2,100 MW of capacity by 2020.

* Pacific Gas and Electric Co. will pilot multiple earthquake early warning, or EEW, technology as part of its seismic response efforts. In the long-term, the PG&E Corp. unit hopes to achieve operational automation with EEW technology, so it could mitigate or eliminate hazards to employees, the public and the electric and gas grids, according to a company release.

Natural gas/midstream

* North Dakota Sen. John Hoeven revealed that acting Secretary of the Army Robert Speer directed the U.S. Army Corps of Engineers to allow the Dakota Access Pipeline project to cross under Lake Oahe, The Associated Press reports. In response to the news, the Standing Rock Sioux tribe said it will challenge any such move in the court.

* Eagle LNG Partners has formally asked FERC to approve its plan to build and operate its Jacksonville LNG project in Jacksonville, Fla. The proposed project consists of three liquefaction trains that will be capable of producing up to 1.65 million gallons of LNG per day, or about 1 million tonnes per annum, according to a news release. Eagle LNG is a subsidiary of Ferus Natural Gas Fuels LP and privately held by Energy & Minerals Group.

* BlackRock Inc. agreed to acquire First Reserve Energy Infrastructure Funds for undisclosed terms. With the addition of the energy infrastructure team, BlackRock's infrastructure investment platform will manage approximately $14 billion in client assets when the transaction closes.

* Commercial demand for gas may be a growth opportunity for local distribution companies if they can take advantage of economic expansion and state initiatives, the American Gas Association said Jan. 31.

* First Nations are expected to be part of a committee that will monitor the development of the proposed Pacific NorthWest LNG project as part of an agreement with the Canadian government, according to a news release.

Coal

* In the latest round of an ongoing legal battle over a proposed coal export terminal in Oakland, Calif., the city has asked a federal judge to dismiss a breach of contract lawsuit filed by the developer.

* Deutsche Bank and its subsidiaries have decided to stop granting new financing for greenfield thermal coal mining and new coal-fired power plant construction, according to a news release. The bank also intends to gradually reduce its existing exposure to thermal coal mining sector.

* The National Mining Association has filed a complaint against the Obama administration over its Stream Protection Rule. The complaint, filed in the U.S. District Court for the District of Columbia, alleges the rule imposes requirements that will be difficult or impossible for underground mines to meet.

* BP plc slashed its 2035 global coal demand forecast by 5.6% relative to its 2016 outlook, attributing the decline to the rebalancing of economic growth within China along with stringent climate and environmental policies.

Commodities

* Over-the-counter prices for California carbon allowances continued to climb during the week that ended Jan. 30. The spot California carbon allowance contract was eyed in a bid-and-offer range of $13.50/tonne to $13.55/tonne, gaining 24 cents from the week before.

* After extending 11.5 cents lower to finish at $3.117/MMBtu in the prior session, March natural gas futures ticked higher overnight ahead of the Wednesday, Feb. 1, open, in bargain hunting with little in the way of fundamental support, as predominantly milder weather in store spells diminished heating demand that should allow a further step down in rate of storage erosion.

* Power prices at the daily markets could advance Wednesday, Feb. 1, as expectations for stronger demand across the bulk of the country in the latter part of the workweek conspire with a renewed uptick at the natural gas futures arena at midweek.

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New from RRA

* In 2016, SCANA Corp. shares gained 21%, besting the average performance of the RRA utility group, as investors embraced the Summer project cost estimate and construction settlement.

Quoted

* "The two big uncertainties on oil in the next 20 years: electric cars … and low-cost producers responding to this abundance of oil," BP plc Group Chief Economist Spencer Dale said as BP forecast a future drop in global oil consumption in the next two decades.

The day ahead

* ONEOK and ONEOK Partners will hold a conference call at 8:30 a.m. ET to discuss the transaction and 2017 guidance.

* The U.S. Senate Committee on Environment and Public Works will hold a business meeting at 10:45 a.m. ET to consider the nomination of Scott Pruitt as administrator of the U.S. EPA.

* The following companies will hold their fourth-quarter 2016 earnings conference calls today: PPL Corp. at 8:30 a.m. ET, Dominion Resources Inc. and Dominion Midstream Partners LP at 10 a.m. ET, MPLX LP at 11 a.m. ET and WEC Energy Group Inc. at 2 p.m. ET.

* Spire Inc. will hold its first-quarter fiscal 2017 earnings conference call at 9 a.m. ET.

* Early morning futures indicators pointed to a higher opening for the U.S. equity markets. To view more SNL equity market indexes, click here. To view more SNL Energy commodities prices, click here.

The Daily Dose is updated as of 7:30 a.m. ET. Some links may require registration or a subscription.