WTI Trending Toward $60 (Maybe); Only One Well Coming Off Confidential List -- November 26, 2019

First things first: how about them Ravens? And el numero ocho. Lamar Jackson.

WeWork: I never understood this story. Two articles brought me up to date:

• self-identified socialist's take on the company
• Elizabeth Warren's -- but I repeat myself -- take on the company

Cost of renewables: too expensive for emerging markets -- renewable investment falls in emerging markets: mostly due to slowdown in China where recent news suggest China is on a coal-plant binge instead -- solar/wind simply not adequate to meet demand; and too expensive to boot.

Companies moving to Texas: see this post (DFW/Fort Worth/Alliance, TX). Stanley Black & Decker; also, here:

• bought Craftsman from Sears, 2017
• goal: "re-shore" Black and Decker; make about 70% of Craftsman tools in the US
• Fort Worth / AllianceTexas industrial space, new facilities announced:
• Stanley Black & Decker will open a 1-million-square-foot regional distribution center; 300 new job
• just announced: a 425,000-square-foot-Craftsman manufacturing plant, also in AllianceTexas industrial park
• AllianceTexas may have one of the biggest modern distribution centers in the nation:
• strategically located between the airport and the BNSF intermodal facility
• AllianceWestport 11: one million square feet with ability to expand to more than two million square feet
• off the frontage road to State Highway 156

Natural gas emerging as the world's go-to fuel: Rigzone --

Natural gas today provides a rising 30 percent of the energy used in the rich OECD economies. Now, the still developing countries – which constitute 85 percent of the global population – hope to follow the Western model in making a global “dash to gas.” China and India especially have national strategies to lower their overdependence on coal and lift gas’ 8 percent share of energy supply to around 20 percent. 

Since 2000, global gas reserves have expanded over 50 percent to 7,000 Tcf. In turn, total demand since 2010 alone has risen 25 percent to 380 Bcf/d. The rapidly growing LNG trade is encouraging more gas usage, evolving this longtime regional product into a global and fungible commodity like oil. LNG continues to extend its ~15 percent share of the world’s gas consumption by connecting distant suppliers and buyers. LNG investments hit $50 billion in 2019 alone, with hundreds of billions of dollars more on the horizon.

The U.S. shale revolution itself is at the heart of the global “dash to gas.” Over the past decade, U.S. gas production has risen over 60 percent to 93 Bcf/d. Excess supply has helped the U.S. become the third largest LNG supplier in just a few years, now shipping out over 7 Bcf/d. The growth of destination-flexible, hub-priced LNG exports from the U.S. is establishing a more liquid and flexible gas market. Along with advancing systems like FLNG, this is deepening the pool of importing nations, now at 45 versus 25 five years ago.

Seaway crude oil: binding open season

• expansion would add 200,000 bopd, light crude oil, through pump upgrades (very, very ismilar to DAPL proposal)
• 50/50 JV: EPD and ENB   
• 2011 post on the Seaway Crude Pipeline
• initially: 800,000 bopd
• US Midcontinent to Texas Gulf Coast connections
• originally began as a reversal of pipeline flow from oil supply hub of Cushing, OK, to the Gulf of Mexico

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Back to the Bakken

Active rigs:

$58.19	11/26/2019	11/26/2018	11/26/2017	11/26/2016	11/26/2015
Active Rigs	57	62	53	37	65

Only one well coming off the confidential list today -- Tuesday, November 26, 2019: 89 for the month; 190 for the quarter:

• 35640, SI/NC, WPX, St. Anthony 9-16HD, 8-pad well; Mandaree, FracFocus: no data; neighboring wells:
• 17024, petering out, t5/08; cum 207K 9/19;
• 17943, petering out, t11/09; cum 125K 9/19;

RBN Energy: long-term LNG export contracts lift baseload-level demand for US natural gas.

U.S. LNG export capacity has increased 40% in the last seven months, from 4.3 Bcf/d in April to about 6 Bcf/d now, and feedgas demand at the terminals already exceeds that, with more than 7 Bcf/d flowing to the facilities in recent weeks. With each new liquefaction train coming online, feedgas deliveries to export terminals have steadily climbed, and, for the most part, have sustained at rates that suggest consistently high utilization of the facilities’ capacity, particularly once they begin commercial operations and regardless of international market dynamics.

And, that demand is expected to increase further as more liquefaction capacity comes online in 2020 and beyond. The emergence of this seemingly inelastic demand with a baseload-like pull on domestic gas supplies marks an underlying shift in the U.S. gas market that, along with the rising baseload demand from power generation, will make national benchmark Henry Hub prices more prone to spikes. Today, we explain how ever-increasing LNG exports will reshape the U.S. demand profile and, in turn, Henry price trends.