Updates
June 24, 2012: Here's
another story about the importance of natural gas liquids (note particularly the price being paid for NGLs -- up to 80 to 90 percent what oil is getting).
June 24, 2012: I don't do this often, but this is a huge story or at least a great update. Normally I just update the story at the original post; if folks are interested they will find it. However, this is another huge story about the Bakken in general and Tioga Hess specifically, I brought it all forward.
As reported earlier, Tioga Hess is expanding. The
data points from the Minot Daily News:
- current capacity: 115 million cubic feet daily (115 mmcfd); or 260,000 gallons daily ( I believe a bbl is 42 gallons; thus equates to about 6,190 bbls which jibes with the "6001" I generally use)
- product mix: propane (50%); butane (25%); natural gasoline (25%)
- expands to: 250 mmcfd
- expansion of "liquids processed" will increase from 260,000 gallons daily to 2.5 million gallons per day (no typos, at least from the article; I've checked it several times)
- product mix: ethane (50%), propane (30%), butane (15%), natural gasoline (5%)
- to be completed in 2013
Regular readers know that "wet gas" products provide a much higher return that "dry" natural gas; this mix is notable.
In addition to this expansion, reported earlier this week, North Dakota approved a new pipeline that will take ethane from this processing plant to a production plant in Calgary. The pipeline is 430 miles long; the portion in North Dakota is 80 miles (about the same length as the Keystone XL gap in Nebraska); and, requires US State Dept approval (don't hold your breath). That pipeline will carry 40,000 to 60,000 bbls of ethane daily.
The TiogaHess story is so big, I've added a new tag.
Other data points from earlier posts, regarding Hess in North Dakota, follow.
From March 18, 2011:
- Bakken -- "single biggest investment for Hess in their portfolio."
- Hess North American budget: $3 billion; Bakken to get 25 percent of that
- Main focus in 2010: acquire acreage
- Total Hess Bakken acreage: 647,000 core acres
- 18 rigs: enough work for next five years
- Hess spokesman: "This is the most amazing oil I have seen in my 30-year career."
- Hess concentrating on export infrastructure to minimize trucking and flaring
From February 27, 2011:
- One-third of Hess' entire corporate budget will be spent in the state of North Dakota
- Hess Corp CAPEX for North Dakota for 2011 is $1.8 billion
- Tioga Gas Plant will be expanded; will be doubled in size and completed in 2012
- A new large rail terminal at Tioga will be completed by the end of the year
- An oil stabilization facility, now being built, will allow oil to be conditioned before going on the rail
- Hess will drill 180 wells this year; half targeting the Bakken, half the Three Forks formation
- Hess currently controls 730,000 net acres, second to Continental Resources (in North Dakota)
- Hess currently operates 248 Bakken wells and participates in 226 non-operated wells
- Hess' Minot's regional headquarters will soon move into the IRET Corporate Plaza
- The company currently has 90 employees in Minot; the new headquarters has room for 200 - speaks volumes
One other little data point that might be of interest: The Bakken is an oil field, not a "gas" field. When I first started this blog, the 30-second sound bite was that natural gas accounted for only 3 percent of the economic activity in the Bakken. I do not know if that figure has changed. But the fact remains: the Bakken is an oil field, not a gas field. This is why I've tagged this post "staggering." If there is this much activity surrounded a product that accounts for only 3 percent of the economic activity in the Bakken, can you imagine how much the activity in oil will continue to grow. Companies like BNSF aren't adding $200 million in maintenance and upgrades if they didn't see the need (earlier story). Likewise, this Hess story is incredible. At least to me.
Original Post
The
Minot Daily News provided an update of Hess Corp plans for 2011 and impact on North Dakota, and Minot. I don't think there is anything new here for those following Hess closely but for others, it's nice to see it in one spot.
The
data points come from the finance manager for Hess Corp in North Dakota:
- One-third of Hess' entire corporate budget will be spent in the state of North Dakota
- Hess Corp CAPEX for North Dakota for 2011 is $1.8 billion
- Tioga Gas Plant will be expanded; will be doubled in size and completed in 2012
- A new large rail terminal at Tioga will be completed by the end of the year
- An oil stabilization facility, now being built, will allow oil to be conditioned before going on the rail
- Hess will drill 180 wells this year; half targeting the Bakken, half the Three Forks formation
- Hess currently controls 730,000 net acres, second to Continental Resources (in North Dakota)
- Hess currently operates 248 Bakken wells and participates in 226 non-operated wells
- Hess' Minot's regional headquarters will soon move into the IRET Corporate Plaza
- The company currently has 90 employees in Minot; the new headquarters has room for 200 -- you do the math
And that's just one of many oil companies in North Dakota, albeit one of the bigger ones.
The most incredible data point for me:
- One-third of Hess' entire corporate budget will be spent in the state of North Dakota. That's pretty incredible.
The most important data point for the state:
- The continued emphasis on expanding natural gas gathering and processing in North Dakota; this may be the most important thing Hess could do for the state.
The most important data point for investors (comes from other sources):
- Among natural gas focused companies, Hess is moving faster than any other oil and gas E&P company to convert from natural gas focused to oil focused.
***********************
Because the numbers are so huge, I've provided
a "cut and paste" from the Minot Daily News, June 23, 2012, regarding the expansion:
According to Emma Meade, Hess Corporation Communications in Houston,
Texas, the current capacity of the Tioga plant is 115 million standard
cubic feet per day. That equates to 260,000 gallons daily. Of that
amount, 50 percent is propane, 25 percent butane and 25 percent natural
gasoline. When the expansion goes on-line the processing capacity will
increase to 250 million standard cubic feet per day.
The
expansion is not scheduled for completion until sometime in 2013. When
finished, the amount of liquids processed will increase from 260,000
gallons daily to 2.5 million gallons per day. Meade said the breakdown
will be 50 percent ethane, 30 percent propane, 15 percent butane and
five percent natural gasoline.