"Lower For Longer" -- Maybe Goldman Sachs Was Correct -- June 19, 2018; But For Australia, "Higher For Longer" -- Electricity Surged To $14,000/MWH Late Last Week

ExxonMobil Sees An Opportunity
Coals To Newcastle 

This is pretty coincidental. Three things:

• weather forecasters forecasting one of the colder winters ever for Australia this year; winter has just begun (that was about a week ago; I did not post)
• grid "crisis" in Australia; could not handle heating demand for cold snap; link here;
• today, oilprice.com reports that ExxonMobil plans to build LNG import terminal off Australia's east coast

Other notes:

• Australia sits on some of the world's largest coal reserves
• Australia is saying "no" to coal to save the world from global warming; trying to "make do" with renewable energy; obviously not working

Australia's cold snap yesterday (from the linked article above):

• energy prices surge 160x normal; up to $14,000 / MWH (US average: about $100/MWH)
• several major electricity power stations went down, unprepared for spike in demand caused by cold snap along Australia's east coast
• one of Australia's largest aluminium shelters forced to shut down
• on three separate occasions, Tomago, the state's largest single energy user, was forced to halt production as spot prices soared to a staggering $14,000 per megawatt hour
• Tesla's battery: the largest battery in the world would power the smelter plant for all of eight minutes

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Back to the Bakken

Active rigs:

$64.78↓↓	6/19/2018	06/19/2017	06/19/2016	06/19/2015	06/19/2014
Active Rigs	61	56	28	77	189

RBN Energy: Enterprises fractionators and other NGL-related assets at Mont Belvieu.

The fractionation and NGL storage complex in Mont Belvieu, TX, would surely qualify as one of the Seven Wonders of the Energy World, if there were such a list. With more than 250 million barrels of NGL storage carved — by water! — out of an enormous subterranean salt dome formation, and nearly two dozen fractionation plants with a combined capacity of more than 2 MMb/d, Mont Belvieu not only serves as the largest receipt point for mixed NGL streams on the planet, it is also the key hub of distribution for the ethane, propane, normal butane and other NGL purity products that are either consumed by Gulf Coast steam crackers and refineries or exported to foreign end-users. But unlike wonders of the ancient world like the Great Pyramids at Giza, Mont Belvieu is still very much a work in progress, with new storage caverns and new fractionators now under development to try to keep up with the breakneck pace of U.S. NGL production growth. Today, we begin a company-by-company review of fractionation capacity and other key infrastructure there.

Enterprise owns all or part of nine fractionation plants in Mont Belvieu (see photo below), the newest of which (Frac IX) is an 85-Mb/d facility that has been ramping to full operation this month (June 2018). The nine fractionators’ total capacity is 755 Mb/d, or 36% of the total existing fractionation capacity at the NGL hub. Enterprise — its holdings in Mont Belvieu  — has been a major fractionator there for many years. By 2010, it had 245 Mb/d of capacity up and running in Mont Belvieu, and this decade it’s added six 85-Mb/d plants: one each in 2010, 2011 and 2012; two in 2013 and — as we said above — another this month. The seventh and eighth fractionation units at Enterprise’s Mont Belvieu complex (the ones that came online in 2013) were joint projects with Western Gas Partners (WGP), a master limited partnership formed by Anadarko; Enterprise owns 75% of the two units and WGP owns 25%. Enterprise owns about 130 MMbbl of existing salt dome storage capacity at Mont Belvieu and is in the process of developing 38 MMbbl of additional storage capacity there. The company’s Mont Belvieu assets also including a propane dehydrogenation (PDH) plant, isobutene dehydrogenation (iBDH) capacity, propylene splitters, and an octane-enhancement unit that produces methyl tertiary butyl ether (MTBE) for the export market.