Friday, June 21, 2019

Rig Count At 64 -- Same As One Year Ago -- June 21, 2019


June 21, 2019: after posting the note below, I received a note from a reader regarding LNG --
Today, a reader who writes me often about natural gas sent me this note:
Quick background ... 4 years or so ago, I started focusing on the Appalachian Basin region as the production numbers being thrown about seemed outlandishly high.

This interest segued into an exploration first of the gas world in toto and then, more specifically, into the rapidly evolving realm of LNG.

The hardware such as Floating Storage and Regassification Units (FSRUs), small and mid scale LNG plants, containers to both transport and store LNG via truck, rail, barge and ship are ALL prompting the swift transition to natgas as a fuel/energy source.
(Today's HH price of $2.16/mmbtu means the heat energy in natgas is about ONE FIFTH the equivalent energy in oil form).
Data points ...

Pakistan is installing its 3rd FSRU terminal shortly after bringing its first 2 online.

Bangladesh is quickly setting up its 2nd FSRU.

Brazil is soon to bring online the huge (1,500 Mw) Sergipe power plant - biggest gas plant in South America - using fuel from its just- installed FSRU. Two more FSRUs are planned for Belem and Santa Catarina.
Poland setting up an FSRU as is China.

India is planning on possibly an FSRU in all of its ports.

Even Kaliningrad - Kaliningrad!!! - is setting up an FSRU!

Port Kembla, Australia, building $170 million LNG terminal ... expected to take 16 months ... deploying an FSRU ... and - get this - very possible that the LNG could come from USA. Truly a coals to Newcastle situation.

Abundant, economical supply ensures an ongoing transition to natgas for decades to come.
By the way, my hunch is that the reader would suggest that BP's 2019 statistical estimate of US natural gas reserves is again way too low.

By the way -- did you note that comment about transporting LNG by truck. We talked about that earlier this week -- that it might even happen in the Bakken. 

Original Post 

LNG: the boom is back. From Rigzone. The article below piques my interest -- back to Chevron, OXY, and Anadarko. There's a data point in the linked article that I have completely missed -- and it's because I don't understand natural gas, and have not followed it closely. Elsewhere the "$200 billion to be spent on LNG plants and upstream infrastructure between now and 2025" was the headline story elsewhere. The LNG story is absolutely incredible .... huge story. 
Liquefied natural gas (LNG) met almost 11 percent of global energy demand last year and trade in LNG reached a record 316.5 million tonnes, helped by increased supply from Australia, the U.S. and Russia, and growing demand from 37 countries. This picture of buoyant demand and supply is set to continue and even accelerate in coming years.
The latest Wood Mackenzie "Global Gas Markets long-term Outlook 2018: LNG Supply" authored by Giles Farrer, expects that capital spending on LNG plants and upstream infrastructure will total more than $200 billion from 2019 to 2025, to be shared by Canada, Mozambique, Qatar and the U.S., which is scheduled to see a flood of shale gas development. Industry experts maintain that rising world demand for LNG will require the sanctioning of around 60 million tonnes of new gasification facilities by 2020 and a further 100-plus million tonnes between 2020 and 2025 to ensure that markets in such countries as China, India and Pakistan are adequately supplied. Wood Mackenzie global LNG supply research director Giles Farrer said, “The LNG boom is back”.
Plastics: Chevron Phillips Chemical to acquire Canadian Plastics maker; $15 billion deal.

Back to the Bakken

Wells coming off confidential list today -- Friday, June 21, 2019: 70 for the month; 259 for the quarter;
  • 34396, SI/NC, WPX, Lion 18-19HW, Mandaree, no production data,
  • 34091, 924, Oasis, Nelson 5298 13-26 8B, Banks, t1/19; cum 110K 4/19;
Active rigs:

Active Rigs6464592777

RBN Energy: Permian gas takeaway project Whistler Pipeline moves forward, part 2.
Permian gas marketers were likely breathing a sigh of relief earlier this month when news came that the developers behind the Whistler Pipeline had made a final investment decision (FID) to proceed with the new 2.0-Bcf/d link between the Permian and South Texas. The project provides a crucial link in the gas takeaway picture for the Permian and makes it less likely that gas pipeline capacity constraints in the future will result in the negative prices that are plaguing the present-day gas markets in West Texas. Combined with the two other Permian greenfield gas pipelines that have taken FID — Kinder Morgan’s Gulf Coast Express (GCX) and Permian Highway Pipeline (PHP) — there is now ~6 Bcf/d of incremental Permian supply pointed at the Texas Gulf Coast over the next two years. That’s great news for Permian producers, as well as demand centers along the coast, where tremendous growth in LNG exports is under way. Today, we detail the third natural gas pipeline being built from the Permian to the Texas Gulf Coast.

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