Monday, July 14, 2014 -- More On Whiting-KOG Deal; ONEOK To Build Seventh NG Plant In North Dakota

North Dakota approves another ONEOK natural gas gathering and processing plant. The Bismarck Tribune is reporting:

The North Dakota Public Service Commission unanimously approved the proposed 200 million cubic-feet-per-day Lonesome Creek natural gas processing plant.

Some data points:

• $280 million
• the company's sixth such plant since 2010
• the company's seventh plant in the state
• 300 - 400 construction jobs
• permanent jobs: 250
• will require 50 megawatts to operate

Commissioners worried about electricity base in North Dakota:

Commissioner Randy Christmann expressed concern over the spiking demand for additional electrical power capacity in the state — especially in the oil patch.

“It just frustrates me that no base load power generation applications are coming in,” Christmann said.

He said he’s concerned about a growing reliance on wind power until more capacity is created through traditional energy sources. He has said on numerous occasions that he believes over-reliance on wind energy could create issues with reliability on the grid and increased costs to consumers. [The "road to Germany."]

Fedorchak noted that the grid does currently have capacity for the Lonesome Creek plant and will be serviced by a new substation to be built nearby.

***********************************

Active rigs:

	7/14/2014	07/14/2013	07/14/2012	07/14/2011	07/14/2010
Active Rigs	191	186	215	178	133

RBN Energy: stabilizers in Eagle Ford and condensate export rules. 

Just over a week ago (July 3) Reuters reported that Enterprise Product Partners sold their first 400 MBbl export cargo of condensate to Japanese trader Mitsui. That export follows private letters from the Bureau of Industry and Security (BIS) to Enterprise and Pioneer that represent a change in the government’s interpretation of 40-year-old legislation banning the export of unprocessed crude and condensate from the US. The apparent relaxation of the rules could open up export opportunities for shale producers – especially in the wet gas / condensate window of the Eagle Ford in South Texas. Today in the first of a two part series we describe existing stabilizer capacity and export routes to market in the Eagle Ford.

Three weeks ago we posted a blog the day after news broke that the US Department of Commerce BIS issued private letters to Enterprise and Pioneer granting them permission to export lease condensate from their Eagle Ford production.

Since the private letters were revealed, few other details have emerged, except for confirmation from the two companies concerned that the BIS has accepted their assertion that passing condensate through their wellhead stabilization units represents sufficient processing for the export restrictions to no longer apply.

This determination that stabilization is “processing-enough” to allow for exports represents a change to the previously accepted market assumption that condensate needed to be processed into component fractions such as naphtha and NGLs – for example in a condensate splitter – in order to get past the export regulations. 

The Wall Street Journal

Whiting to buy KOG.

Whiting Petroleum Corp. said it would buy Kodiak Oil & Gas Corp. for $3.8 billion in stock plus the assumption of $2.2 billion in debt, creating a new top producer in the Bakken Shale and Three Forks formations.

The two companies together produced 107,000 barrels a day of oil equivalent in North Dakota and Montana in the first quarter. That compares with Continental Resources Inc. CLR -2.18% 's output of around 97,500 barrels of oil equivalent a day in the region.  

Global turmoil.

Sen. John McCain in a CNN interview Sunday, said the world is "in greater turmoil than at any time in my lifetime." Many of the seeds of instability in the Middle East have taken root since the upheaval that followed the Sept. 11 terror attacks. At the same time, post-Cold War shifts are continuing as superpower influence has receded.

The breadth of global instability now unfolding hasn't been seen since the late 1970s, U.S. security strategists say, when the Soviet Union invaded Afghanistan, revolutionary Islamists took power in Iran, and Southeast Asia was reeling in the wake of the U.S. exit from Vietnam.

In the past month alone, the U.S. has faced twin civil wars in Iraq and Syria, renewed fighting between Israel and the Palestinians, an electoral crisis in Afghanistan and ethnic strife on the edge of Russia, in Ukraine.

The article did not mention the president's OPEN BORDERS policy which could create significant turmoil in Mexico before this is all over.

Flood of child migrants spurs local backlash. The federal government is scrambling to find temporary housing for thousands of children streaming across the Mexican border, asking states for help as an increasing number of governors and local officials protest efforts to send the migrants to their communities. 60,000 children, some as young as 4 and 5 years of age, arrive almost "simultaneously" during the first week of July, crossing the entire country of Mexico. Well-staged.

Thousands fleeing Gaza strip.

The Los Angeles Times

Jay Leno and his cars.