Two Must-Read RBN Energy Blogs Before They Disappear Behind A Paywall -- January 21, 2024

Locator: 46595B.

RBN Energy: two recent RBN Energy blogs are still available but will soon disappear behind a paywall. [Update: the second of the two articles is now behind a paywall.]

One is about takeaway capacity in the Bakken -- a must-read -- and the other is relevant to the Bakken for the same reason.

RBN Energy: Bakken production growth will soon test infrastructure limitations. Archived.

In North Dakota’s Bakken production region, crude oil is king. The light, sweet crude produced there is attractive to buyers in the Midwest and Gulf Coast and is the primary driver of producer economics in the basin. And when the crude is produced, it comes along with a healthy dose of NGL-rich associated natural gas. But while those are valuable products in their own right, providing economic uplift when sold, it’s a double-edged sword. Natural gas and NGL volumes are increasing rapidly and will soon test the limits of takeaway capacity, with the potential to disrupt not only those commodities but also the crude production with which they’re associated. In today’s RBN blog, we discuss three potential limitations faced by Bakken producers: natural gas pipeline capacity, NGL pipeline capacity and, at the fulcrum of those two, the Btu heat content of the gas being piped out of the basin.

RBN Energy: Alberta's ethane demand to soar with approval of new Dow ethane cracker. Archived.

The demand for ethane by Alberta’s petrochemical industry has experienced a slow expansion in the past 20 or so years. However, that demand is likely to increase sharply by the end of the decade now that Dow Chemical has sanctioned a major expansion at its operations in Fort Saskatchewan, AB, that will more than double the site’s ethane requirements. As we discuss in today’s RBN blog, this will call for an “all-hands-on-deck” approach to increasing Alberta’s access to ethane supplies from numerous sources.

 Fort Saskatchewan The Record: look at the size of this project. Amazing. For updates, google Dow Fort Saskatchewan Path2Zero Expansion.

From the second blog:

Most RBN readers know about fractionation facilities: They separate a mixed NGL stream (aka Y-grade) into purity products like ethane, propane, butane, etc. As shown in the left chart in Figure 5 below, fractionation plants at the Dow site in Fort Saskatchewan (purple bar segments) and elsewhere in Alberta (brown bar segments) have been producing steady — and, often, increasing — amounts of ethane over the past several years. (The Dow volume for 2023 is an estimate.)

A straddle plant is a different animal that has traditionally played a major role in Alberta. In essence, a straddle plant is a gas processing plant that sits astride (or straddles) a main gas trunkline that already contains pipeline-specification gas — in other words, gas that has already been processed to the point where it can be piped for use by end-use customers. Pipeline-spec gas typically includes at least some ethane (and, to a much lesser degree, other NGLs) that could be extracted with further processing. Straddle plants (aka “deep-cut plants”) take that “deeper cut” by extracting most of the remaining ethane for use in the petchem industry. 

And then this:

With fractionation plants likely to lead the increase in ethane supplies, followed by straddle plants, that leaves one avenue of future supplies in the form of ethane imports. We mentioned earlier that there is still spare capacity on the Vantage Pipeline to the tune of about 36 Mb/d based on actual import volume of 32 Mb/d through the first 10 months of 2023. With Bakken gas producers looking for every possible way to move more NGLs out of the region to meet their own pipeline specifications for produced gas, we think it very likely that ethane imports to Alberta from the Bakken will also see an increase closer to the time that the first phase of the Dow expansion comes into service (2027).