Tesoro Corp To Acquire Williston Crude Oil Transportation / Storage Asset -- Great Northern Midstream -- December 8, 2015

Updates

December 30, 2015: see Google satellite image of the Fryburg CBR terminal that Tesoro will be acquiring.

December 17, 2015: the story on Tesoro's pending acquisition of Great North Midstream (see below) in The Bismarck Tribune in which Tesoro will add capacity to pump 65,000 bopd of out of the Bakken:

Awaiting regulatory approval, Tesoro agreed last week to acquire Great Northern Midstream LLC and its crude oil pipeline, gathering system, storage and rail loading facilities in the state.

Assets include:

• the 97-mile BakkenLink crude oil pipeline (connects to several 3rd-party gathering systems;
• a 28-mile gathering system in the core of the Bakken where most of the drilling in today's low-price environment is being done;
• a 154,000 bopd rail loading terming (Fryburg); and, 
• a 657,000 barrel storage facility in Fryburg 

More:

Tesoro already has the Tesoro High Plains Pipeline, which pumps crude oil directly into the company’s 68,000 barrel-per-day refinery in Mandan.

“This acquisition would not substantially change the way we move product to our Mandan Refinery. We expect our enhanced system to provide Tesoro’s West Coast facilities with cost-effective access to advantaged crude oil and provide producers additional market access. Customers gain additional flexibility from the rail loading and storage facility, which can provide outbound deliveries to the West, East and Gulf coasts,” Tesoro spokesperson Brendan Smith said.

Original Post

Tweeting now:

Tesoro Corp to acquire Great Northern Midstream, which has Williston crude oil transportation and storage assets.

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EAI Longer-Term Energy Outlook

December 8, 2015: from the EIA, today:

While U.S. onshore oil production is expected to continue declining through most of next year, offshore oil output in the Gulf of Mexico is on track to steadily rise.

In its new monthly forecast, the U.S. Energy Information Administration said offshore Gulf oil production is expected to increase to 1.7 million barrels per day during the fourth quarter of 2016 up about 250,000 barrels per day from the fourth quarter of last year.

See my commentary posted over the weekend in which I suggest it is unlikely that I will see $60 - $65 oil again in my investing lifetime.

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EAI Short-Term Energy Outlook

Winter Fuels:

• The effect of lower crude oil prices, along with the potential for above-normal temperatures, is spilling over to lower residential heating oil expenditures, as the average household using heating oil should save almost $600 this winter.

Crude Oil:

• While U.S. monthly onshore oil production is expected to continue declining through most of next year, oil output in the Gulf of Mexico is on track to steadily rise.
• Energy companies have cut back on their onshore oil exploration and drilling activities in response to low crude prices, but oil production in the Gulf of Mexico is less sensitive to short-term movements in crude prices as companies are committed to completing more complex and costly offshore oil projects once they begin.

Gasoline/Refined Products:

• After paying the lowest Thanksgiving gasoline prices in seven years, U.S. drivers will continue to save money at the pump through December as low crude oil prices keep downward pressure on motor fuel costs.
• Local fueling stations in some areas of the country are already selling gasoline for less than $2 a gallon and those prices are expected to drop further in December.

Natural Gas:

• U.S. natural gas inventories posted their first decline of the winter heating season in late November, but natural gas inventories at the end of December are expected to be the third highest ever for the month.

Electricity:

• For the first time, more electricity is expected to be generated from natural gas than coal for five months in a row from July through November, as sustained low prices for natural gas make it more cost-competitive as a generating fuel.

Renewables:

• Both U.S production and net imports of biodiesel are expected to increase in 2016 in response to new federal renewable fuel standard targets.