WTI Trending Toward $39; No Wells Coming Off Confidential List; Time For Tea -- October 1, 2020

OPEC basket, link here: huge drop; OSP drops to $40.65. Saudi Arabia can't make it on $40-oil.

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Back to the Bakken

Active rigs:

$39.06	10/1/2020	10/01/2019	10/01/2018	10/01/2017	10/01/2016
Active Rigs	11	60	63	58	33

No wells coming off confidential list today.

RBN Energy: an update on Alberta's two PDH-PP plants and their appetite for propane.

In the past three years, two major commitments were made to construct propane dehydrogenation and polypropylene plants in Alberta to take advantage of the rising bounty and generally low cost of propane supplies in Western Canada. Two Calgary-based midstream companies, Inter Pipeline Ltd. and Pembina Pipeline, each started developing PDH-PP plants in Alberta’s Industrial Heartland area northeast of Edmonton. But then came COVID-19, which set back the timeline for one of the projects and put the other on ice. All this comes as Western Canada’s propane market is in greater flux than usual, and facing a tightening supply/demand balance as exports to Asia ramp up. Today, we provide a status check on the development of these two plants, and what the increase in demand might portend for propane balances in the next few years.

The increased role of unconventional oil and gas plays in Western Canada in the past decade has resulted in substantial growth of NGL supplies, including propane — too much propane, it often seemed. To make fuller use of burgeoning propane supply, Alberta’s provincial government in December 2016 initiated a royalty incentive program to promote investment in projects that would upgrade propane into value-added products. Taking advantage of abundant low-cost propane supplies and the government’s royalty incentives, two projects eventually came forward: one by Inter Pipeline Ltd.’s (IPL) Heartland Petrochemical Complex (HPC) and the other by a joint venture of Pembina Pipeline and Kuwait Petroleum Corp. (KPC). Both plants rely on the process of propane de-hydrogenation (PDH) to create polypropylene (PP), a primary chemical building block for everyday products such as automotive parts, plastic containers, and reusable shopping bags.

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Time For A Tea Party