Wednesday, August 29, 2012

That Fertilizer Plant Talked About Earlier? Jamestown, North Dakota

A big "thank you" to a reader or readers for sending me several links regarding this story.

I posted this back in early July:
New billion-dollar fertilizer plant being proposed, from the Grand Forks Herald: 
The North Dakota Corn Growers Association announced Monday that a feasibility study has been completed for the plant, with the steering committee of corn growers and fertilizer industry consultants looking at building the facility in North Dakota, South Dakota or Minnesota. 
The North Dakota Corn Growers Association announced Monday that a feasibility study has been completed for the plant, with the steering committee of corn growers and fertilizer industry consultants looking at building the facility in North Dakota, South Dakota or Minnesota.
Plans are moving along for a $1 billion nitrogen fertilizer plant that could make use of the natural gas now being flared off in western North Dakota’s Oil Patch.
It looks like they might have chosen a site, data points:
  • Jamestown, North Dakota; $1.3 billion fertilizer plant; using natural gas from the Bakken
  • a capacity of 750,000 tons of anhydrous ammonia/year
  • North Dakota Corn Growers Association spearheading the effort
  • need to raise $300 million in equity from the farmers; minimum investment: $35 - $50,000/individual
  • construction could begin in April, 2015; production a year later
  • plant could be paid off in five years
For another interesting story about this site, read the comments below, and go to this link:

Twelve (12) New Permits; XTO Has a Nice Well

Active rigs: 190

Twelve (12) new permits:
  • Operators: BR (6), Hess (3), Whiting (2), and Liberty Resources
  • Fields: Truax (Williams), Johnson Corner (McKenzie), Blue Buttes (McKenzie), Dutch Henry Butte (Stark)
Liberty Resources has a permit for a wildcat in McKenzie County. Folks might recognize Blue Buttes: it's just north of the Helis Grail.

Meanwhile, the following wells were released from the confidential list:
  • 21567, 471, Hunt, Quill 2-10-3H, Bailey, t5/12; cum 25K 6/12;
  • 22205, DRY, Ballard, Haskins 11-27, a Madison well, wildcat, completed 3/12;
And two producing wells were completed:
  • 22263, 28, Crescent Point, CPEUSC McQuarters 14-23-158N-101W, Little Muddy, t4/12; 
  • 20417, 1,730, XTO, FBIR Goeseverywhere 31X-11, Heart Butte, t5/12; cum 27K 6/12;

ONEOK Will Build a Fifth Natural Gas Processing Plant

Link here. Same size as others, it appears.
The ONEOK says the plant will cost $160 million and be able to process 100 million cubic feet of natural gas each day. Oneok is based in Tulsa, Okla. It already operates two natural gas processing factories in western North Dakota and is building two others.
The article does not say where, but on a ND PSC agenda Don sent me ONEOK has an application for "Garden Creek #2. If this is related, then maybe this fifth natural gas processing plant will be northeast of Watford City. 

For those keeping track:
  • the first ONEOK natural gas processing plant: Grasslands
    the second: Garden Creek (#1) -- northeast of Watford City
  • the third: Stateline #1 -- northwest of Williston
  • the fourth: Stateline #2 -- northwest of Williston
  • the fifth: Garden Creek #2 -- northeast of Watford City, most likely

Dickinson's New Fracking Water Plant ..

...or better known as a waste water plant.

Link here to The Bismarck Tribune.

Data points:
  • $30 million project
  • south of the Heart River
  • water to be sold for industrial uses, including fracking and farming
  • capacity to support a population of 35,000; Dickinson's current population estimated at 23,000
  • two years to complete

Oasis Moving To Pad Drilling -- SeekingAlpha; In Support of Less Ceramics

Link here.
In particular, the company has sought to decrease the company's use of ceramic proppant, which tends to cost more than sand and doesn't necessarily produce superior results. Management estimates that a well with a 36-stage lateral that uses sand as a proppant costs about $0.8 million less to complete than a development than one that relies on a mix of sand and ceramic material. That being said, the firm continues to use a full load of proppant when targeting thicker formations that exhibit relatively low levels of water saturation.
The article is about "all" of Oasis, but I just wanted to pick out one point that I will be discussing later.

Some Random Statistics From The Williston Basin, August, 2012; Natural Gas Infrastructure Estimate at $8 Billion

There are over 7,300 active wells in North Dakota. As of June, 2012, the state was producing about 660,000 bopd.

There are 190 active rigs in North Dakota (down from a record of 218; up from recent low of 189)

The state has issued 1,464 oil, gas, and salt water disposal permits so far this year. That puts "us" on track for 2,236 new permits for calendar year 2012, a record for the current Bakken boom.

There are 1,872 wells on the confidential list today; that does not include those which came off the list today. The list includes about 35 salt water disposal wells.

In 2011, the natural gas infrastructure necessary to support the Bakken was estimated to be about $4 billion (10 natural gas processing plants, infrastructure to support those plants); in 2012, the estimate had risen to $8 billion (about 20 natural gas processing plants); the Bakken is an oil field, not a natural gas field.

On the confidential list, by selected operator:
  • BEXP: 158
  • Burlington Resources: 82
  • CLR: 243
  • Denbury: 45
  • Enerplus: 72
  • EOG: 35
  • Fidelity: 16
  • G3: 20
  • Helis: 12
  • Hess: 186
  • Hunt Oil: 23
  • KOG: 77
  • Marathon: 75
  • Newfield: 32
  • Oasis: 38
  • OXY: 34
  • Petro--Hunt, LLC: 126
  • QEP: 32
  • Samson Resources: 53
  • Slawson: 50
  • SM Energy: 30
  • Triangle: 15
  • Whiting: 79
  • WPX: 71
  • XTO: 56
  • Zavanna: 20
  • Zenergy: 33

Looking at the list may provide some clue why KOG seems to command a better share price than Oasis.

With 243/1,872, CLR has about 13% of the wells on the confidential list.

Petro-Hunt, LLC, is very, very active.

EOG has certainly dropped down the list in terms of active program in the Williston Basin.

Why WAWS Is Needed

Link here.
R&T Water Supply, which serves Ray, Tioga, Stanley, and Wildrose is coming off a long hot summer of water restrictions and earlier this month concluded it will wait as long as a year before allowing any new rural developers to hook up. 
Business manager Liz Suhr said three developers who want to build rural subdivisions outside Ray for up to a 1,600 population in each development will have to put their plans on hold unless they can come up with another source of water. 
The three proposed developments are the Southern Cactus Star, Dix Development, and Iron Horse-West Bank, she said. 
R& T water was so tight this summer that two large man camp developments near Tioga were shut off for a period and one of them -- a Target Logistics facility -- was just put back on the system on Friday, she said.

RBN Energy: Another Nice Analysis of Record Dry Natural Gas

Link here.
Natural gas power will continue to be a growing source of new gas demand. New demand will come at the expense of coal plant retirements over the next four years. Plant owners and operators ... plan to retire almost 27gigawatts of coal fired generation capacity between 2012 and 2016. That amounts to 8.5 percent of total 2011 coal-fired capacity..... 
US production will also continue to push out Canadian imports ... Another event for new demand is pipeline gas exports to Mexico already at 1.8 bcf/d and growing fast. An increase in industrial demand for natural gas is also expected to result from new reefing, petrochemical and processing infrastructure being built to handle increased natural gas, natural gas liquids and crude oil production in the US.
I have often said that much of the increased natural gas production (wet and dry) is the result of all the gas that accompanies the shale oil. RBN Energy says that is only partly the answer. In fact, operators are bringing back natural gas rigs which is absolutely counterintuitive.

The two data points about Canada and Mexico were very interesting.

Another great article by RBN Energy; go to the link to read the full story.

Savage Announces Completion of Its Trenton CBR Facility


September 3, 2012: a reader supplied another link to this story; trade journal.

Original Post
Link here.
Savage announces the completion of its terminal located near Trenton, ND, with direct connection to BNSF Railway’s main line track. The terminal is strategically located to gather crude oil from the Williston Basin and Bakken Shale and facilitate the transport of crude to key refinery markets. The terminal provides the oil industry with inbound gathering access through truck receiving stations, pipeline connections and crude oil tankage. Outbound delivery of crude oil is served by a double loop track capable of holding two 118 car unit trains.
Data points:
  • in operation on a manifest basis since December, 2011
  • inbound: truck
  • outbound: double loop; two 118-car unit trains
  • operate 24/7
  • capable of expansion
A big "thank you" to a reader for alerting me to the announcement.