Midstream Executive Speaks Candidly About Strategy, Growth Prospects And Safety

By Jeff Share, Editor | May 2012, Vol. 239 No. 5

P&GJ: Do you see the majors continuing to assert themselves in the shale plays, and is this good or bad for midstream operators?
Opportunities in shale plays will continue to attract the majors. The abundance of reserves, low geologic risk and relatively low finding and development costs will continue to motivate E&P companies, large and small, to pursue these developments. Of course, midstream companies will be required to build the necessary infrastructure to bring these resources to market.

P&GJ: Overall, do you see the new market dynamics dictating where future pipeline development and expansion is most likely?
Market dynamics will always have an impact on midstream activities, as will the movement toward liquids. Current developments are within regions where significant new infrastructure is required to meet the growing supply of natural gas, oil and natural gas liquids.

P&GJ: Do you feel there is a lack of NGL infrastructure for transport and fractionation? If so, what do you perceive as the key for continued NGL development?
Infrastructure will need to keep pace with emerging and existing shale plays. Chesapeake’s joint venture in the Utica Shale is an excellent example of how the industry is developing the much-needed infrastructure to manage NGL transport and fractionation.

P&GJ: What is your strategy regarding natural gas-fueled vehicles and how are you helping to move this forward?
Chesapeake is a leader when it comes to natural gas vehicles. We were the first in the industry to start converting our corporate fleet to compressed natural gas (CNG). We have converted more than 1,300 vehicles to date and are on track to convert our entire fleet of approximately 6,000 vehicles to natural gas over the next three years. Chesapeake will realize more than $11 million in savings annually once the entire fleet is converted to CNG.

When fleet administrators hear real-life, bottom-line savings numbers like ours, they want to investigate converting their fleets to natural gas. And many, like UPS and AT&T, have already moved to CNG. Chesapeake is also moving the CNG movement forward by working with local fuel retailers such as Love’s Travel Stops & Country Stores and OnCue Express to increase the number of natural gas fueling stations available to fleet drivers and the general public. And, through our newly created Chesapeake NG Ventures, we have invested $150 million to accelerate creation of a natural gas infrastructure on America’s highways.

P&GJ: How successful is the industry being at getting the message out to the public about the rebirth of our resources?
Chesapeake has always been vocal about the benefits of clean, affordable and abundant natural gas. This past year, Chesapeake announced the creation of a new affiliate, Chesapeake NG Ventures, to invest in new infrastructure and technologies to create demand for natural gas and lower energy costs for American consumers.

P&GJ: How did you become involved in the energy industry?
I began my career in the midstream industry as a roustabout before moving into an engineering role and later into management. My entry into the industry was simply designed to leverage my training as a chemical engineer in college.