May 4, 2016

Updates

Later, 12:27 p.m. Central Time: yes, it will be GOP presidential nominee-in-waiting, Donald Trump speaking at the oil conference in Bismarck. No links; story everywhere. [Okay, by popular demand, here's the link.] Meanwhile, Hillary Clinton will be telling West Virginia miners her comment that she will put coal miners out of work and coal companies out of business was "lost in translation." And I bet she still wins West Virginia in the general election.

Original Post 

I'm being told the groundbreaking for a new bank in Watford City was on television last night. This is the website of the new bank: Cornerstone Bank.

Cornerstone Bank will break ground on a new location in Watford City on Tuesday, May 3 at 11:00 a.m. at the building site located on Highway 85, just east of Heggen Equipment. The bank is scheduled to open to customers in the summer of 2017 and will offer conveniences like a drive up ATM and better parking in addition to the same great services offered at the current location. Cornerstone is working on this project with the Architecture Firm Wild CRG.

Heartbreakers in Williston to become first (and only) LGBT bar in the Bakken. No link; story everywhere. Name of new bar not announced. The other bar on the south end of Main Street has converted to a sports bar. And we move on.

Lynn Helms teases that an "amazing speaker" will attend the Bismarck oil conference. Rumors are it will be Trump.

Active rigs:

	5/4/2016	05/04/2015	05/04/2014	05/04/2013	05/04/2012
Active Rigs	26	84	185	192	211

RBN Energy: Is Shell Chemical finally ready to act on Ohio River cracker?

Shell Chemicals is taking steps that suggest it finally may be ready to pull the trigger on a long-debated petrochemical complex which would include an ethylene plant (steam cracker) and three polyethylene units in the heart of the “wet” Marcellus/Utica natural gas liquids production region. If the $3+ billion project advances to construction soon, it would significantly impact ethane market dynamics, not just in Ohio/Pennsylvania/West Virginia but along the Gulf Coast too. And if it turns out we’re in for extended stagnation in drilling and production, the Shell cracker also may undermine plans to build additional NGL pipeline capacity out of the Marcellus/Utica—or any other cracker there.  Today we discuss the likelihood of Shell proceeding with its Beaver County, PA, cracker and the effects the project’s development might have.

The production of NGLs in the Utica/Marcellus really started taking off in 2011-12, when shale drillers, responding to declining prices for natural gas, began to focus on “wet” gas liquids plays to take advantage of higher prices – thus higher returns.

That required the build-out of gas processing and fractionation capacity. As we noted in [an earlier report], in 2009, there was only 600 MMcf/d of gas processing capacity in the entire Northeast region, most of it legacy infrastructure dating back decades, and now there is some 7,600 MMcf/d of gas processing capacity—more than 40 new plants built in the past six years, most of them built by MPLX (MarkWest) at eight major processing centers across the region. 

There are still more gas processing plants on the drawing boards. Similarly, there’s now some 500 Mb/d of fractionation (C3+ or full range) and another 240 Mb/d of de-ethanization capacity.

All that production—natural gas, mixed NGLs and “purity” products like ethane, propane, butanes and natural gasoline—has also resulted in the build-out of extensive take-away capacity (pipelines for gas, NGLs and purity products; rail- and barge-loading terminals for NGLs and purity products) as well as the development of local gas-fired power plants to consume Marcellus/Utica gas and—the subject of our blog today—proposals to construct in-region steam crackers to consume locally sourced ethane.

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Despite oil glut, US imports more foreign oil. Market disruptions and overseas storage that is at or near capacity have pushed crude imports form 20% from a year year. The Wall Street Journal is reporting. This has been on the blog for quite some time, first noted by John Kemp. 

Oil price upheaval finally hits refiners. The Wall Street Journal is reporting. Earnings are down sharply from year earlier.

Google will partner with Fiat Chrysler minivans for self-driving tests. Good choice. The New York Times is reporting.

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Active rigs:

	5/4/2016	05/04/2015	05/04/2014	05/04/2013	05/04/2012
Active Rigs	27	84	185	192	211