Wednesday, June 27, 2012

Kinder Morgan Reverses Another Pipeline -- From Northeastern US Back to Alberta, Canada

I wish I had the link to the Kinder Morgan presentation summarized below. I don't have it yet. The presentation explains why North Dakota's ethane production and export to Canada has been in the news lately; and it demonstrates how huge the natural gas liquid story is in the Bakken.


A reader sent me a great Kinder Morgan presentation for the Minnesota Propane Association Meeting. The presentation is dated June 25, 2012; it was prepared by Karen S. Kabin, but it is not yet at the Kinder Morgan website, unless I missed it.

The Kinder Morgan Cochin Pipeline datapoints
  • put into service in 1978
  • runs from Alberta, Canada, southeast to Windsor, Ontario
  • the pipeline runs diagonally across North Dakota, from northwest corner to southeast corner, right through the heart of the Bakken
  • peak capacity was 124,000 bbls per day of light hydrocarbon liquids
  • supported by a long-term (20-year) ethylene shipping agreement
  • it also provided US market outlets for Alberta's excess ethane and propane
  • interestingly enough, Canada's recent propane net export volume has declined significantly
  • US deliveries of propane from Cochin's throughput: 28K bbls (2008) --> 16K bbls (2011)
  • Alberta is also ethane short due to the ethylene plant expansions in 2000
  • US NGL production is increasing due to unconventional shale
  • Bakken and Marcellus already impacting the Cochin terminal markets on the east coast
  • North Dakota propane production: 2010 avg - 12 mbpd; 1Q12 - 28 mbpd
  • Tioga Hess in process of expansion; right on the pipeline
By the end of 2014, Canadian import demand for light condensate will exceed available pipeline capacity
  • Kinder Morgan will reverse the Cochin Pipeline
  • light condensate from eastern end of the pipeline; transported to Alberta (Fort Saskatchewan)
  • eastbound propane service will continue through March 2014, during the changeover
  • by 2Q14, reversal -- light condensate only -- will begin at Fort Saskatchewan, Alberta
Hopefully this makes sense; hopefully I caught the main points correctly. Hopefully, the presentation will be posted on-line soon

Kinder Morgan noted this in the summary slide: US propane production growth will replace historical Canadian imports

North Dakota's propane production increase of 15 mbpd between 2010 and 1Q12 is more than the Cochin Pipeline delivered to the entire US in 2010.


The presentation also has a great graphic of ONEOK's new Bakken NGL pipeline.

The ONEOK Bakken NGL pipeline runs directly south from its Stateline I and II facilities (west Williams County, North Dakota) to the Overland Pass Pipeline which runs west of the Niobrara  (Wyoming/Colorado) southeast to Bushton, Kansas.

The new Bakken NGL pipeline: initial capacity, 60 mbpd; expandable to 110 mbpd.

The Overland Pass pipeline is also being expanded to 255 mbpd to handle the additional 60 mbpd from the Bakken


Note: KM used "bbls" in this presentation regarding propane (see earlier post/comment re: bbls and gallons when referring to NGLs; some vindication).

XOM/CEO -- We're Losing Our Shirts on Natural Gas

Link here to

Tectonic shifts.

From CarpeDiem: North Dakota Leads Nation in 1Q12 Personal Growth Income

Link here to CarpeDiem. com.
No. 1 North Dakota's income growth in Q1 was a full one-half percent above second place Nebraska, which had 1.8% income growth.    
Can't wait to read the comments. 

I was impressed to see Nebraska in the #2 spot.

Progressive Railroading On the Bakken

Link here to Progressive

I will add this website to my external links at the sidebar at the right. External links are at the bottom of that long, long sidebar.

Back to 217 Active Rigs --

Just before signing off, I see OAS is offering $300 million is senior notes.

And first thing I see when signing back on is that the active rig count is back to 217 today, just one shy of the record, 218. That sorta snuck up on me. 

WSJ Wrap-Up -- Wednesday, June 27, 2012

Fourth section: Home libraries, book reviews, and Olympic swimming qualifications.

Third section: Nothing that catches my eye.

Second section:
  • U.S. judge blocks sale of Samsung tablet
  • Wal-Mart lags in clinic race
  • Facebook raises hackles on email
  • For energy producers, natural gas may not be the only source of a glut
First section:
  • Court backs EPA on warming: decison on greenhouse-gas rules is victory fo Obama, blow to coal industry
  • Expanded oil drilling helps U.S. wean itself from Mideast
  • Portland puts new twist on trash pickup: every two weeks; stresses composting
  • Vote ensures Japan will double sales tax to 10%
  • France to lift minimum wage in bid to rev up economy
  • Huge photo of laying 10-inch gas pipeline near Watford City, North Dakota, p A14
  • Op-ed: the iPhone turns five

RBN Energy Discusses Natural Gas Company Rankings

Link here to RBN Energy. Even if you don't think much about natural gas, some of the names on the attached list are oil and gas companies, with a significant presence in the Bakken.

Talk about putting me in a great mood. RBN's story today is a nice data point to archive, and the ISA link in the previous post is absolutely outstanding for folks interested in oil and the Bakken. A great way to start the morning.

Energy Links at Independent Stock Analysis; Great Data Points Re: NOG

Two things.

First, the link to ISA for today's energy stories.

Second, ISA provides three or four or five superb data points for NOG. I don't know if the above link will get you to those data points, but I am sure you will find them if you search ISA. They are very, very interesting. Just to whet your appetite: a) NOG participates in a higher percentage of Bakken wells than CLR; and, b) NOG drilled more net wells than KOG or OAS 1Q12.

Eight (8) New Permits -- The Williston Basin, North Dakota, USA

Daily activity report, June 27, 2012 --
  • Operators: ERF (2), KOG (2), CLR, Murex, Fidelity, and Petro-Hunt
  • Fields: Zenith (Stark), McGregory Buttes (Dunn), Moccasin Creek (Dunn), Mandaree (Dunn), Lonesome (McKenzie), Ranch Creek (McKenzieI
Wells coming off confidential list today:
  • 21104, 228, WPX Energy, Delores Sand 29-32H, Sanish, t4/12; cum 18K 4/12;
  • 21729, WI, Ward-Williston, LDCMU 4-33, Little Deep Creek, a vertical Madison well; water injected
  • 22064, 110, Corinthian Exp, Corinthian N Skarphol 8-33 1H, North Souris, Spearfish well; formation depth, 3,500 feet; 15 stages; 150,000 lbs proppant;
Producing wells completed: none.

Recent permits/wells plugged"
  • 21818, Dry, Hess, BL-A Iverson-155-96-1213H-2N, Beaver Lodge, Williams County; the company cut its losses; never got past the Lodgepole, so just abandoned the well; 
Regarding the Corinthian well above:
In the North Souris Field well #22064 has come off confidential with a production of 3038 bbls in 16 days in April and 6360 bbls in May.  This is what the average Bakken well produces.  It looks like Corinthian has gotten off to a good start.  They have more in the works.