Wednesday, May 7, 2014

Tioga Gets State's First LNG Production Facility; Encana Buys Into The Eagle Ford, Price Suggests Bakken Way Undervalued; Encana Will Double Oil Output With Purchase; To Stop Global Warming, A War On Allah?

Updates

May 17, 2014: this was from a discussion board elsewhere, minimally re-edited, provides some update on the project:
The CEO of both Prairie and NDLNG in Tioga named Pat Hughes. I was pleased to see the company is local to ND, headquartered in Watford City and began as a housing company. 
Pat's presentation (references a video, no linked) is clear and well organized. It lasts about 15 minutes followed by a question and answer session. 
Of significance to me is that the equipment for the first 10,000 gals per day is already being installed for cooling gas to minus 260 degrees Fahrenheit (I assume). Another unit is being manufactured (I think they said by Hess) to be delivered this summer and to produce another 66,000 gals per day.  
Compared to the 20,000 barrel per day capacity (input I think) of the MDU refinery producing diesel, it is pretty minor. I don't really know how many gals per day of diesel will come out of the refinery--but could be as much as 800,000 gals per day (assuming almost all the input were converted to diesel--I don't think that is possible or anywhere near possible--but it gives me some idea of the relative scale of the two projects.
Then too, Hughes says that the planned 76,000 gals per day of LNG would be able to replace up to 44,000 gals of diesel per day. 
I am impressed by how "turnkey" this project sounded. Prairie has about 150 employees now and will employ about 30 more in Tioga with the plant as I recall the interview. Prairie is largely a trucking company as I understood him, so transport, storage, and delivery of product will also be a goodly part of the whole project.
Original Post

Rigzone is reporting:
North Dakota LNG, LLC, the newest member of Prairie Companies, LLC’s, portfolio of oil and gas service businesses, joined North Dakota Governor Jack Dalrymple and other state officials at an event Wednesday in the State Capitol Building to announce the arrival of a liquefied natural gas (LNG) production facility. Located in Tioga, North Dakota, the plant will be the first-to-market in the state to produce 10,000 gallons per day starting this summer (2014). 
A phase two facility is scheduled to be operational in the fourth quarter of 2014 and capable of producing 66,000 GPD.
NDLNG targets the drilling, fracking and transportation sectors of the unconventional oil and gas industry and will help meet the need for a cost-effective power source by converting natural gas feedstock into value-added liquid fuels.
Also:
Currently, operators producing oil and gas from unconventional reservoirs in the Bakken face high fuel costs and environmental scrutiny from their use of diesel-powered equipment and flaring of natural gas generated by their drilling activities.
Therefore, significant demand exists for locally produced LNG derived from North Dakota’s abundant natural gas reserves that will help operators not only reduce energy costs but also lower carbon emissions.
NDLNG will also offer North Dakota’s agricultural industry an alternative fuel choice to propane. Leveraging LNG will garner farmers and ranchers lower operating costs, reduced emissions, and the ability to use a 100 percent locally produced fuel.
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In a sense, this is a wash for those following the Eagle Ford, one company simply selling assets in the Eagle Ford to another company, but it's important for the archives. Reuters is reporting:
Canada's largest natural gas company Encana Corp said on Wednesday it is buying producing assets in the Eagle Ford shale field in Texas from Freeport-McMoRan Copper & Gold for $3.1 billion, nearly doubling its oil output.
Encana has been concentrating on five shale fields that are rich in oil and natural-gas liquids to lessen its dependence on lower-value gas. This transaction will add a sixth focus area and is aligned with Encana's growth strategy, the company said.
Calgary-based Encana has been focusing on five shale fields - Montney in British Columbia, Duvernay in Alberta, the DJ Basin in Colorado, the San Juan Basin in the U.S. Southwest and the Tuscaloosa Marine Shale in the U.S. South. It has sold natural gas properties in Wyoming's Jonah field and other acreage in East Texas to reduce its dependence on pure gas assets.
The deal will give Encana 45,500 net acres in Karnes, Wilson and Atascosa counties in south Texas. The properties produced the equivalent of about 53,000 barrels of oil per day in the first quarter.
I did a lot of back-of-the-envelope calculations on this one; the numbers were such that I felt uncomfortable posting them here. But every way I did the calculations suggest that the Bakken is really, really undervalued.

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It looks like the war on coal won't be enough if we're gonna beat global warming. President Obama also needs to declare a war on God, or Allah, or at least on nature, or more specifically, El Niño. Yahoo!News is reporting:
About half of the surface warming that's helping shrink Greenland's glaciers is due to temperatures in the tropical Pacific Ocean, not greenhouse gases, a new study reports.
Sea-surface temperatures in the Pacific are already known to influence global weather patterns at lower latitudes. For example, the El Niño cycle shifts rainfall around the world, delivering precipitation to western North America and causing drought in Australia and Central America.
The new findings could explain why Greenland and the Canadian Arctic are getting hotter more quickly than other regions of the planet. The feverish temperature rise has puzzled scientists: The most up-to-date climate models, such as those in the fifth assessment report of the Intergovernmental Panel on Climate Change, fail to reproduce the rapid warming seen in the Arctic.
"We know that global warming due to human impacts can't explain why it got warm so fast," said lead study author Qinghua Ding, a climate scientist at the University of Washington.
 As noted, the next community organizer that runs for President needs to call for a war on Allah.

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