Friday, December 20, 2013

More Meandering Musings; CBR, Pipelines, And Fractionation Facilities -- But No Keystone XL

This note may be the most important note I've posted all day, maybe all week. I spoke with a postal carrier yesterday who just happens to be someone I've known for about thirty years. In all those years, he has been a postal carrier for the US Postal Service (aka the US Post Office). I asked him if he was busy, somewhat tongue-in-cheek, knowing this was Christmas. He said -- now remember, he's been doing this same route -- almost the same commercial/retail route -- for over thirty years (he is working beyond his 30-year retirement) -- he said that ... a drum roll  ... this is the busiest year he has ever, ever seen. He says it is due to all the on-line ordering. Amazon.

I see UPS traded at a new high today.

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.

Kinder Morgan Partners and Imperial Oil to build Edmonton crude oil rail terminal :
Kinder Morgan and Imperial Oil today announced a 50-50 joint venture to build a crude oil rail-loading facility in Strathcona County, Alberta, called the Edmonton Rail Terminal. Imperial Oil will be the base load customer and has subscribed for the start-up capacity through a long-term contract. The partners are now actively marketing possible expansion capacity to potential third-party customers. Investment by the joint venture partners for the rail terminal will total approximately $170 million. In addition, Kinder Morgan will invest approximately $100 million in pipeline connections and two new staging tanks to be constructed within the Kinder Morgan Edmonton storage facility. Construction is now underway and completion is scheduled for December 2014. 
Kinder Morgan Partners and Magellan Midstream Partners joint venture enters into a long-term agreement with Anadarko to transport Eagle Ford Shale production:
Kinder Morgan Crude and Condensate LLC and Double Eagle Pipeline LLC, a 50/50 joint venture between Magellan Midstream Partners and Kinder Morgan Energy Partners, announced that they have entered into a long-term agreement with Anadarko Petroleum Corporation to transport Eagle Ford Shale production from Gardendale, Texas, in LaSalle County, to the Houston Ship Channel via the KMCC Pipeline.
Double Eagle will construct 160,000 barrels of storage capacity and a pump station at Gardendale in addition to building an approximately 10-mile pipeline to connect the Double Eagle Pipeline and the KMCC Pipeline in Karnes County, Texas. Double Eagle will transport product from its new Gardendale station to the KMCC Helena station in Karnes County. KMCC will construct 240,000 barrels of storage at its Helena Station to move crude and condensate from the Double Eagle Pipeline to the KMCC delivery points. Double Eagle and KMCC expect to complete construction of these facilities in early 2015 to move production to the Houston Ship Channel. 

Kinder Morgan Partners and Targa Resources Partners (NGLS) sign letter of intent to form joint venture to construct new NGL fractionation facilities: Co and Targa Resources Partners LP (NGLS) announced they have signed a letter of intent to form a joint venture to construct new natural gas liquids (NGL) fractionation facilities at Mont Belvieu, Texas, to provide services for producers in the Utica and Marcellus Shale resource plays in Ohio, West Virginia and Pennsylvania. In order to allow producers and shippers sufficient time to assess their Gulf Coast fractionation and pipeline needs, a binding open season currently under way for the Utica Marcellus Texas Pipeline, a proposed joint venture between MarkWest Utica EMG, L.L.C. and KMP, will be extended until Feb. 28, 2014.

For the archives. It will be interesting to see how this plays out. From SeekingAlpha
It remains to be seen how many of these proposed [LNG export] projects will actually be approved and built, but the projects that were already approved have a capacity of more than 6 Bcf/d. Hopefully, some of the companies involved in these project proposals will realize the potential for loss on these investments and pull out before things get too far and it's too late to minimize losses. If these companies do not sober up before it is too late, we could count them to be among the victims who bought into the shale oil and gas revolution over-hype and got burned as a result.
This article was about natural gas revolution in the US. I can't speak to that; I don't understand natural gas all that well. The Bakken: we might have completed the first 50 miles if this were the Daytona 500 -- Lynn Helms, NDIC. The Bakken operators drill about 2,000 wells/year. It will take a minimum of 60,000 wells to drill out the Bakken. I don't see anything in the tea leaves to suggest the Scandinavians, Slavs, Syrians, and/or Germans will see any reason to increase the pace of drilling over the next five to ten years. 

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