Four Wells Coming Off Confidential List Today -- Januaty 17, 2019

A little hyperbole. Offshore service spending will outpace onshore shale. Interesting, Very interesting. This story is one side of the coin, as they say; the other side of the coin is not quite as intuitive. I read that to mean that with regard to onshore shale production: operators are getting more despite spending less. Could be wrong. But the headline was certainly click bait. How much more will be spent offshore compared to onshore ... drum roll ... four percent. Must have been a very, very slow news day.

12: US oil output to average 12 million bopd in 2019.

U.S. crude oil production will average 12.1 million barrels per day (MMbpd) in 2019 and 12.9 MMbpd in 2020, with most of the growth coming from the Permian region of Texas and New Mexico.

That’s according to the U.S. Energy Information Administration’s (EIA) latest short-term energy outlook, which estimates that U.S. crude oil production averaged 10.9 MMbpd in 2018.

The EIA’s latest outlook forecasts that U.S. dry natural gas production will average 90.2 billion cubic feet per day (Bcf/d) this year and 92.2 Bcf/d in 2020, with increases in the Appalachia and Permian regions “driv[ing] the forecast growth”. U.S. dry natural gas production averaged 83.3 Bcf/d in 2018, the EIA highlighted.

U.S. crude oil and petroleum product net imports are estimated to have fallen from an average of 3.8 MMbpd in 2017 to an average of 2.4 MMbpd in 2018, according to the EIA’s January outlook. The organization forecasts that net imports will continue to fall to an average of 1.1 MMbpd in 2019 and to less than 0.1 MMbpd in 2020. In the fourth quarter of 2020, the EIA forecasts the United States will be a net exporter of crude oil and petroleum products, by about 0.9 MMbpd.

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Back to the Bakken

Wells coming off the confidential list today -- Thursday, January 17, 2019

• 34958, SI/NC, Slawson, Submariner Federal 4-23-20H, Big Bend, no production data,
• 33781, 743, Oasis, Crane Federal 5300 14-27 5B, 50 stages; 19 million lbs,Willow Creek, t7/18; cum 79K 11/18;
• 33728, 2,127, CLR, Norway 2-5H2, Fancy Butte, t11/18; cum 18K 11/18;
• 33727, 2,232, CLR, Norway 3-5H, Fancy Buttes, t11/18; cum 18K 11/18;

Active rigs:

$51.69	1/17/2019	01/17/2018	01/17/2017	01/17/2016	01/17/2015
Active Rigs	68	58	38	49	157

RBN Energy: part 4, boom ahead for Pacific Northwest LPG exports?

LPG export terminals along the Gulf Coast account for more than nine of every 10 barrels of propane and normal butane that are shipped from the U.S. to foreign buyers. That makes perfect sense, given the terminals’ proximity to major NGL production areas like the Permian, the Eagle Ford and SCOOP/STACK, and to the world-class fractionation hub in Mont Belvieu, TX. But, increasingly, LPG terminals on the East and West coasts, are growing in significance. On the Atlantic side, Marcus Hook, near Philadelphia, is enabling more and more volumes of Marcellus/Utica-sourced propane and butane to reach overseas markets. And, as we discuss in today’s blog, West Coast exports are on the rise as well, with Petrogas’s Ferndale terminal in Washington state providing a straight shot across the Pacific to Asia for propane and butane fractionated in Western Canada, plus a good bit more LPG export capacity under development in British Columbia.

This is the fourth and final episode in this series on rising LPG export volumes and the race to develop new export terminal capacity to handle still-higher volumes of propane and normal butane — two NGL purity products generally referred to as LPG — into the early 2020s. 

Earlier we noted that the U.S. flipped from being a net importer to a net exporter of LPG in 2012, and that waterborne LPG exports subsequently soared to more than 1.1 MMb/d (in 2018). The vast majority of those volumes — about 92% of last year’s total — are being sent out of the half-dozen LPG terminals in coastal Texas and Louisiana. The rest of the exports-by-ship are flowing through a total of three smaller terminals in the Mid-Atlantic region and Pacific Northwest. We concluded Part 1 with a review of the Gulf Coast’s — and the U.S.’s — largest LPG export facility: the Enterprise Hydrocarbon Terminal (EHT), which is located on the Houston Ship Channel and whose capacity is in the midst of being expanded to 720 Mb/d from the current 545 Mb/d. 

Then, we looked at the three other large Gulf Coast LPG export terminals: Targa Resources’ Galena Park Marine Terminal, also along the Houston Ship Channel, Phillips 66’s Freeport LPG Export Terminal down the coast in Freeport, TX, and Energy Transfer’s export facility in Nederland, TX. These facilities sent out a total of 578 Mb/d on average in 2018, including 233 Mb/d from Galena Park, 173 Mb/d from Freeport and 172 Mb/d from Nederland.

Finally we discussed four smaller LPG export terminals: two along the Gulf Coast and two in the Mid-Atlantic region. The busiest of these, with 2018 export volumes averaging about 60 Mb/d, is Energy Transfer’s Marcus Hook Industrial Complex near Philadelphia, which is located at the terminus of the company’s newly expanded Mariner East NGL pipeline system.

Today, we turn our attention to the Pacific Northwest, where there is a lone LPG export terminal in Washington state — Petrogas’s Ferndale facility — and where two new export terminals are under construction up the coast in British Columbia. Taken together, the 30-Mb/d Ferndale terminal and the planned AltaGas/Royal Vopak and Pembina terminals will provide the greater Pacific Northwest with a total of about 100 Mb/d of LPG export capacity by mid-2020. Additionally, two other BC projects now in earlier stages of development would provide Western Canadian propane and butane producers with even greater access to Asian and Latin American LPG markets as soon as 2022.