​​Cheniere CEO cites ‘exciting progress’ of Oklahoma STACK/SCOOP producers in new pipeline launch

Image: Flickr/Roy Luck

Cheniere Energy has launched an open season for a new pipeline to connect growing gas production in Oklahoma’s emerging STACK and SCOOP plays to the U.S. Gulf Coast and southeast markets—including LNG takeaway capacity, the company said on Friday.

Cheniere subsidiary Midship Pipeline Company is seeking additional shippers to join the heavyweight-rich trio that has already signed on: Devon Energy, Marathon Oil and Gulfport Energy.

IHS Markit recently stated that with promising economics and comparatively low acreage prices, SCOOP and STACK could be “the next growth wedge” for U.S. operators.

Devon, which plans to spend US$750 million on STACK resource development this year, calls it “one of the best emerging development plays in North America.”

Marathon plans to spend at least one-third of its $2 billion US capital budget this year on STACK development, with Oklahoma’s strategic objectives occupying its first call on capital.

Gulfport entered the SCOOP play in late 2016 with the US$1.85-billion acquisition of 46,400 acres of access.

The new Midship pipeline would carry up to 1.4 billion cubic feet per day across 200 miles, including a 36-inch diameter mainline, several laterals, compressor stations and interconnects.

STACK and SCOOP have contributed to Oklahoma’s oil production growing from 5,818 bbls/d in March 2012 to 12,789 bbls/d in October 2016, and natural gas production growing from 1.85 mmcf/d in 2013 to 2.3 mmcf/d in 2015, according to data from the U.S. Energy Information Administration.

"We are pleased to help facilitate a market solution to STACK and SCOOP producers as they continue to make exciting progress in this important resource basin," Cheniere CEO Jack Fusco said in a statement.

"Not only will the Midship Project help meet the Anadarko Basin's need for additional natural gas takeaway and serve demand along the Gulf Coast, it also demonstrates the uniquely integrated market solution Cheniere can provide by leveraging our LNG platform along the entire value chain."