Many of the speakers at the Shale Insight conference, an annual gathering of natural gas industry representatives held recently in Pittsburgh, referenced the “low-cost” environment that has come with low natural gas prices.
Among the speakers at the event organized by the Marcellus Shale Coalition was Toby Rice, who took over as the chief executive officer of EQT about three months ago and is working to develop a strategy to compete in that environment, even as production has continued to set records in the Appalachian Basin. Rice was previously CEO of Rice Energy, which was bought by EQT in 2017.
“The cure for low gas prices is low gas prices,” said Rice. “With gas prices low, we are building a lot of demand for the product.” However, Rice noted that EQT is facing the same slowdown in drilling as other companies working in the Marcellus and Utica due to those low prices and a market glut.
Among the efficiencies that EQT is implementing to keep costs low is what he called “combo development.” This concept involves developing multiple wells with long laterals on multiple pads in sequence in the same area, so that crews can simply travel from one well to another nearby to continue their work more efficiently.
But Rice also wants to “change the operating model” of EQT, which involves changing the company’s structure, processes and technologies. Rice has already retooled EQT’s leadership, ousting some longtime executives and bringing in former Rice leaders, streamlined the company’s operation and cut more than 20 percent of its workforce.
Rice and other speakers frequently talked about the need to use more and better technology to drive results and reduce costs. Digital technology, electric fracking fleets and a digitally connected work environment to improve communication are among the ideas he hopes to deploy.
Opening up new markets for locally produced natural gas is also important. “Natural gas is able to compete on the global stage,” said Rice, who hopes that increased exports of liquefied natural gas will help increase global demand. LNG is natural gas that is super-cooled until it reaches a liquid state and can then be transported in large quantities using specially designed tanker ships.
Continuing to build out a pipeline network to transport natural gas products to export hubs and cracker plants that make the building blocks of plastic products from it is also a priority.
As large amounts of natural gas continue to be produced, finding new markets and driving demand will be important to determine its future success as renewable energy also makes a push for market share.