Two data points from EIA:
- US crude oil production averaged 7.7 mil b/d in Oct, exceeding crude oil imports for 1st time since Feb '95.
- US 2014 crude oil output to rise to 8.49 mil b/d, according to EIA.
Update On Dakota Plains Pioneer CBR, Newtown, North Dakota
An expansion of Dakota Plains Holdings' Pioneer crude-by-rail terminal in Newtown, North Dakota, is expected to be completed in mid-December as the company gears up to rebound throughput volumes from low levels experienced during the summer, executives said Tuesday.In addition to this there is a lot more information at the link, including:
"We've been through a couple of challenging quarters, while the spreads worked against us," CEO Craig McKenzie said Tuesday during a quarterly earnings call. "Our focus this year has been to prepare for 2014 and beyond. 2013 has been a build-out year."
The Pioneer Terminal, he said, is a flagship in the Bakken Shale.
The 30,000 b/d terminal's volumes and profit margins suffered as a result of the narrowing of the benchmark spread between Brent and West Texas Intermediate. A wide Brent/WTI spread, a key indicator of netbacks for moving crude around the US, allows for healthy profit margins for the crude-by-rail shipments.
McKenzie explained Tuesday that sending crude by rail from the Bakken becomes profitable on average when the spread is wider than $7/b. If the spread narrows to below that level, pipelines are sometimes preferred, McKenzie said.
"The Brent to WTI spread worsened early in the third quarter," McKenzie said in an earnings statement. "With our marketing operating margin reduced, we chose with our joint venture partner to limit the throughput volumes in July and August that affected both our transloading and marketing financial results for the quarter."
During the fourth quarter, the company expects throughput volumes to reach about 27,000 b/d, the highest number in three quarters, McKenzie said. After the expansion in December, the terminal's throughput could reach into the low 40,000 b/d range, he said.
The expansion will increase the terminal's capacity to 80,000 b/d, Mackenzie said in a statement released in October.
In addition, Dakota Plains is developing an inbound oilfields products business at the terminal, including a $15 million frac sand -- sand used in hydraulic fracturing -- facility scheduled for completion in May 2014.
Rail derailments could enter Keystone XL debates
The recent CBR derailments/spills could give President Obama the top cover he needs to approve the Keystone XL; he could use the opportunity to impose stricter pipeline rules in exchange for approving the pipeline; he could suggest an ObamaCare-like website exchange that pipeline companies must use during "open season."
The Oil & Gas Journal is reporting:
Some US officials raised greenhouse gas concerns as increasing amounts of Alberta’s heavy crude oil move by rail while approval of the Keystone XL pipeline’s cross-border permit continues to be delayed, Premier Allison Redford said after concluding her fifth Washington visit to lobby for the project.
“A lot of that product is being transported by rail at the moment, and that is something that is receiving quite a bit of attention in the United States, partly because we know that transportation by rail leads to higher greenhouse gas emissions than a pipeline would,” The Financial Post reported Redford as saying.
The premier met with officials at the US Department of State, which is expected to conclude its environmental impact statement early in 2014 on TransCanada Corp.’s revised application for a cross-border permit, as well as US Senate and House leaders.
The proposed 1,179-mile pipeline would move diluted bitumen from Alberta’s oil sands to US Gulf Coast refineries for processing. It also would provide capacity to transport lighter crude from the Bakken shale in North Dakota and Montana.
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