We already know that unconventional natural gas is produced from shale formations deep within the Earth by utilizing horizontal drilling and hydraulic fracturing technology. Once the drilling and fracing process is completed and the surface facilities are constructed, the gas flows through gathering lines and is dehydrated to meet interstate pipeline specifications. Gas then flows into compressor stations and is discharged at higher pressures into interstate pipelines and ultimately delivered to its final destinations which can be hundreds of miles from our wells.
But where exactly are those final destinations for our natural gas? Today’s blog post will explain what happens to Cabot’s natural gas once it’s out of the ground. To better understand this phase of our gas’ life, I turned to Ben Witt. Ben is an Account Executive in Cabot’s Gas Marketing Department. Ben has 15 years of experience in energy and has worked for Cabot the past four years.
Ben explained that there are a few steps we need to take before moving our gas to its final destination. First, our scheduling team coordinates with our operations team and our gathering company, Williams Field Services. They forecast how much volume we actually have available to sell for a given day. Once they have that information, they pass it on to account executives like Ben and Ryan Scureman, who begin to structure the actual deals. There are a few ways that Ben and the gas marketing team put deals together. They rely heavily on long-standing relationships with pipelines, utilities, power generators, and industrials to transport the volumes to their destination. After a transaction is made, we shift back to the scheduling team. They schedule the volumes on multiple electronic pipeline bulletin boards to ensure the gas transactions are fulfilled timely.
I understand that we still haven’t answered the big question here: Where does the gas actually go? Let’s get into that now. Our gas is delivered to multiple states along the East Coast to be consumed in facilities like power plants and utility companies. In fact, Cabot’s gas supplies approximately 10% of the total gas demand on the East Coast.
A few different things can happen with our natural gas once it reaches its final destination. The primary use of all natural gas production is residential and commercial heating/cooling and power generation. Gas can also be used as industrial and petrochemical feedstock or converted into liquefied natural gas (LNG). Amazingly, about 15% of Cabot’s natural gas production is liquefied and shipped over 8,000 miles to Tokyo, Japan every day!
Cabot’s natural gas may be spread across the entire East Coast and around the globe, but we’re proud that it also supports the energy demand in Northeast PA. It’s truly something special to see our employees working hard every day to produce an energy source that directly impacts their communities.