Friday, January 26, 2018

LNG From Russia Set To Arrive In Boston Any Day Now -- Just In Time For The Next Polar Vortex -- January 26, 2018


January 29, 2018: update here
Original Post 

See this post -- Massachusetts importing natural gas from Russia. Tanker to arrive this weekend; a second one is scheduled to arrive February 15, 2018. This gives me a chance to re-post my favorite map:

The story is here.
The tanker carrying Russian natural gas that’s been sitting outside of Boston Harbor for days will probably land over the weekend, according to the U.S. Coast Guard.
The Gaselys carries liquefied natural gas originally produced in Siberia, according to vessel tracking data. The ship, poised to dock at Engie SA’s Everett import terminal, would be the first LNG shipment from anywhere other than Trinidad and Tobago in about three years.
“It is expected to be in the port over the weekend,” Luke Pinneo, chief petty officer at the U.S. Coast Guard in Boston, said in a telephone interview.
The delay in bringing the ship into the harbor “is not unusual,’’ according to Pinneo. Inspections can take as long as three days, depending on the time line for getting a Coast Guard boat with a boarding team to it and the specific safety concerns being addressed.
What's unusual is importing natural gas from Siberia when there is ample supply just a few miles to the west.

Sort of reminds me of a Geico commercial.

Reader Has A Question Over At The "Discussion Group" -- January 26, 2018

A huge "thanks" to a reader for using the "discussion group" forum. I haven't seen anyone use that forum in a long, long time. The reader was curious about why a well was put on confidential status after it was fracked, instead of earlier when it was being drilled. For those interested, I posted my thoughts.

EOG Has Permits For Another 6-Well Austin Pad; Twenty Permits Renewed; And That Was All -- January 26, 2018

Active rigs:

Active Rigs573848156187

Six new permits:
  • Operator: EOG
  • Field: Parshall (Mountrail)
  • Comments: EOG has permits for a 6-well Austin pad in NWNW 17-154-90
Twenty permits renewed:
  • EOG (12: six Sidonia permits; three Liberty LR permits, all in Mountrail County; three Hawkeye permits in McKenzie County
  • QEP (4): four Tipi V permits in McKenzie County
  • Resource Energy Can-Am (2): two Marauder permits in Divide County 
  • Sinclair (2) two Ersa Federal permits in McKenzie County
No DUCs reported as completed.

No permits canceled.

2018 Geico Rock Award Nominee -- Robert Rapier Over At Forbes -- January 26, 2018

How many years has Venezuela been going down its road of self-destruction? Wasn't Hugo Chavez first elected president in 1998? If so, I guess that would be coming up on 20 years.

Apparently Robert Rapier, contributor to Forbes has just come out from under the Geico rock and noticed that: "barring major reforms, Venezuela's oil industry is finished."

Keystone XL Is Still Doable -- TransCanada CEO

From Bloomberg.

Doable, even with new route. 

Hope springs eternal.

If This Is True, This Is Brutal

It is being reported that Maxine Waters will be giving the Democratic response to the 2018 State of the Union Address.  Most likely Maxine will become the face of the state of the Democratic Party.

This Natural Gas Graphic Should Get Your Attention -- January 26, 2018

I thought the graphs at this link were striking:

But then I saw this one, the one on the right below, today, via Twitter:

Asleep At The Wheel -- Guilty As Charged -- January 26, 2018

I completely missed this. At least as far as I can tell. If I posted this, I have forgotten all about it.

For the archives.

From a press release:
  • date: September 1, 2017
  • RimRock, a start-up oil and gas exploration and production cmpany
  • on this date, completed the acquisition of upstream assets located in the Williston Basin
  • seller: Whiting
  • location: on the Fort Berthold Indian Reservation, Dunn and McLean counties
  • 30,000 net acres
  • $500 million
  • 8,000 bbls of oil/day
  • back-of-the-proverbial envelope: about $17,000 / net acre
  • average well in North Dakota, 100 bopd = at most 80 wells; probably much less (except this is the prolific Fort Berthold area; I might be surprised)
  • to the best of my knowledge the wells have not been transferred yet (I could be wrong)

Another Natural Gas Gathering System On The Drawing Boards -- $400 Million RimRock Project -- Fort Berthold/Dunn County -- January 26, 2018

From The Williston Herald:
The other project, a little further out on the horizon, is a $400 million gas gathering system, also in the Fort Berthold area, that would be constructed by RimRock.
The North Dakota Industrial Commission granted the company permission to temporarily exceed flaring limits for gas at RimRock’s new, Charging Eagle well for a year, so that the company can estimate maximum production, and thus determine the overall size of infrastructure needed in that area.
The company would flare an estimated .1 billion cubic feet of gas during its temporary exemption, but it's project would ultimately capture an estimated 47 billion cubic feet.
  • 26430, RimRock Oil & Gas, Heart Butte-Bakken, 2 wells on two existing overlapping 2560-acre units; Dunn County

Reader Has Question About Shut-In Well Near Location Of New Williston Airport -- Janaury 26, 2018

A reader asked if I or readers might have any insight as to why this well is shut in:
  • 19617, IA/230, Nine Point Energy/QEP, Trinity 1-14-23H-155-102, Squires, t10/11; cum 168K 11/17;
Recent production profile:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

I referred the reader to this post.

There is nothing on the NDIC map to suggest any other drilling activity that might affect this well.

There are no forms in the NDIC file report to suggest why this well is shut in.

This was my reply to the reader:
This well has never been a particularly great well. 

Through 2016 and 2017, mostly around 1,200 bbls/month.

Then it was taken off-line as of 9/17 and has been off-line since then and is now listed as "INACTIVE" (IA).

There is an interesting letter in the file dated June 12, 2017, from the NDIC that relates to the new airport northwest of Williston and new/existing wells.

An e-mail from the operator says this well is outside the airport restrictions -- greater than 10,000 feet from the end of the airport runway.

It's possible there is still ongoing discussion between NDIC / airport location / and this well but I have nothing on which to base that opinion.

Looking at the NDIC map I see no other activity in the area that might impact this well, nor are there any sundry forms suggesting why this well is shut in.
Maybe readers might have some insight.

If all else fails, the NDIC is usually pretty good about answering inquiries, based on what I have heard from readers.

Bummer -- 2.6% -- The Market And Energy Page, T+5 -- January 26, 2018

Bummer: 4Q17 GDP at 2.6%. If GDP had been 3% or greater, it would have made it the first time since 2005 that growth had been reported at 3% or better for three quarters in a row (or in other words, the first year of Trump's presidency). But it didn't happen. GDPNow forecast wrong (again -- and by a large margin).
Latest forecast: 3.4 percent — January 25, 2018.
The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 3.4 percent on January 25, unchanged from January 18. The forecast of fourth-quarter real residential investment growth decreased from 10.2 percent to 9.5 percent after yesterday's existing-home sales release from the National Association of Realtors and this morning's housing market releases from the U.S. Census Bureau. This morning's Advance Economic Indicators release from the Census Bureau has been rescheduled for Friday morning due to the federal government shutdown.
Futures unchanged: perhaps slightly up following GDP numbers.

Bakken economy: 1,900 jobs available in Williston.
“Think of 1,900 jobs in a city this size; that’s pretty incredible. That’s more than what Watford City’s population used to be when I was mayor. It’s an incredible, incredible amount of people needed to bring in there — 1,900 jobs. That means families, that means spouses and everything,” 
XTO: adds 20 employees to Williston field office.

Walmart: to re-model their stores in Williston, ND, and Wahpeton, ND -- only two Walmart stores in ND to announce facelifts.

Amazon HQ2: a few days ago I ranked Amazon's HQ2 list. Now, The WSJ provides their ranking. Apparently, for some reason, The WSJ only ranked US cities, did not include the one non-US city in its ranking.
  • First tier: Dallas; DC proper; Montgomery County, MD; northern Virginia
  • Second tier: Atlanta; Miami; Boston; Seattle
  • Third tier: Raleigh, NC; LA; Indianapolis; Denver
  • Fourth tier: Chicago, Austin, TX; Columbus, OH; NYC
  • Fifth tier: Philadelphia; Pittsburgh; Nashville, TN; Newark, NJ
Based on this list, and thinking about this again, my final three, based on this single question, of the cities listed, where would Jeff Bezos most like to spend six months of every year?
  • Washington, DC
  • Raleigh, NC
  • northern Virginia
Soros: the one name that no mentions at Davos.

Phoenix rising: Saudi Aramco refining.
Over the past five years, Saudi Arabian Oil Co., known as Aramco, has boosted its global refining capacity by more than a third to 5.4 million barrels a day, helped by new facilities along the kingdom’s Red Sea and Persian Gulf coasts. The kingdom also has commissioned an additional refinery in the southwest of the country, set to come online in 2019.

These moves and others including taking full control of the biggest U.S. refinery, in Port Arthur, Texas, have vaulted Aramco’s global refining capacity beyond Western rivals such as Exxon Mobil Corp. , Royal Dutch Shell RDS.B, and BP BP. But unlike Aramco, the international oil majors already had strong downstream businesses to bolster their earnings when crude prices plummeted just over three years ago.

Saudi Arabia is now one of the top three exporters of diesel to Europe—the world’s largest diesel market for passenger vehicles—grabbing market share from the continent’s two longtime suppliers, Russia and the U.S. Saudi diesel sales to Europe in October rose more than 50% year-over-year, while European imports of American diesel fell by 34% during the same period, according to the International Energy Agency.

Russia has passed Saudi Arabia as the world’s biggest producer, and the U.S. is set to overtake Saudi crude output for the first time in a generation. At the same time, the kingdom is fighting off threats to its market share in China from Russia, the U.S. and fellow OPEC members like Iraq.
Near-Arctic: China declares itself a "near-Arctic state."  Ironically, Obama had planned to pull out of the Arctic. From the linked article:
In its first policy paper on the Arctic, Beijing acknowledges Chinese territory doesn’t touch the Arctic Circle. Still, the paper declares China a “Near-Arctic State” with an interest in developing shipping, carrying out scientific research and exploiting the region’s oil, gas, minerals, fisheries and other natural resources.
The report puts a policy gloss on China’s increasing activities in the polar region, from sailing cargo vessels through its seas in the warmer months to a multibillion-dollar investment in a liquefied natural gas project on Russia’s Yamal peninsula. The strategy also fits with China’s efforts to invest in new frontiers, such as space and deep-sea research, in a bid to surpass the U.S. and other powers.
“China is really good at long-term planning,” said Malte Humpert, founder of Washington, D.C.-based think tank The Arctic Institute. He said China’s plans amount to a low-risk bet with a payoff that may not come for decades. “They are ahead of the curve.”

Global Warming? What Global Warming? Denmark Joins Germany, Walks Away From Paris Accord -- January 26, 2018

Active rigs:

Active Rigs563848156187

RBN Energy: E&P profitability deteriorates despite higher oil prices, but what about 2018?

Denmark Sees The Light

Graphic link:

One year ago this was the "big news" for Denmark's energy sector:
Over at "the big stories," under US Energy Revolution, I update US LNG export stories.
Add another customer to the list: Denmark.

This is really quite a story. Denmark already has an incredibly bad energy story going forward (highest utility rates in Europe due to all their wind energy) and now add one more problem: Denmark's largest gas field will close by the end of ... next year. Not 20 years from now. Not 10 years from now. Not even five years from now. Less than two years from now Denmark's largest gas field to close.  

UPI is reporting that the operator, Maersk Oil says it has not found an economic solution to continue production from the Tyra field. Wow.

This is not simply the largest gas field supplying Denmark, it's about the only gas field supplying Denmark (it supplies 90% of the nation's gas production).
Maersk Oil operates the Tyra natural gas field on behalf of a broader consortium that includes partnerships with energy majors like Royal Dutch Shell. Maersk said that, even after spending more than $140 million on reinforcing structures associated with production over the past 15 years, safety is becoming a clear factor.
The company said in a statement decommissioning of Tyra will proceed with the aim of ending production by October 2018. Starting next month, any resources now targeting reconstruction will go toward shutting the field down.
Today, GlobalData is reporting that Denmark had second thoughts. Denmark will not close Tyra field:
The $3.3bn Tyra Future redevelopment project is critical in enabling Denmark to achieve its gas supply requirements, while supporting future regional investments and protecting industry jobs.

An agreement with the Danish government was approved by parliament and the final investment decision on the project was made by the Danish Underground Consortium (DUC) operated by Maersk Oil in December.

The project’s go ahead decision was influenced by the importance of Tyra as a hub in the Danish North Sea area, where the interruption of the production would have a significant negative impact in the country’s oil and gas production.

Faced with either redevelopment or early decommissioning, the Tyra fields present a level of expenditure not seen before in the Danish sector but the DUC and the Danish government are eager to execute the project.

The estimated remaining recoverable reserves of the fields under the 1/62 License contiguous area is nearly 900 million barrels of oil equivalent or 78 percent of total remaining reserves of Denmark.
If you need a link, here's one: