Comparing The New EPD Cryogenic Processing Plant In East Texas With That Proposed For Williams County -- January 23, 2020

We talked about this yesterday: infrastructure build-out starting to show dividends. Now this, from Rigzone: Enterprise starts gas processing at its new Bulldog cryogenic natural gas processing plant in Panola County, Texas. Data points:

• 200 million cubic feet per day of natural gas
• can extract up to 12,0000 bbls/day of natural gas liquids
• combined with its existing Panola cryogenic facility:
• 320 MMcf/d and 18,000 bpd of NGLs within the region

So, let's compare this with the Outrigger-XOM facility proposed for Williams County:

Outrigger Energy II LLC announced today that it has entered into a long-term definitive gas gathering and processing agreement with XTO Energy, Inc. to service XTO’s production in Williams County, ND.

The gathering system will comprise a 70-mile, 20- and 24-inch diameter, rich gas pipeline originating in eastern Williams County and terminating at a new 250 MMcfd cryogenic gas processing plant located west of Williston, ND. 

Plans are also underway for a plant expansion of up to an additional 200 MMcfd, for total gas processing capacity of 450 MMcfd.

Another CRYO Natural Gas Processing Plant -- Follows On The Heels of The ONEOK Plants -- Plains All American Ross Gas Plant -- The Williston Basin, North Dakota, USA

Ross Gas Plant to be built by Plains All American Pipeline data points

• a cryogenic gas processing plant
• "deep cut ethane plus recoveries and specification product fractionation"
• purity ethane, specification propane, butane plus raw-make NGL stream
• 50 - 75 million cfd (compare to 100 million cfd at each of three ONEOK plants)
• to be on-line by 2Q13
• will deliver pipeline quality residue gas into Williston Basin Interstate Pipeline Company's transmission system
• the facility will include rail-loaindg and storage facilities
• first phase: capacity to trans-load 8,500 bbls/day of NGLs and 20,000 bbls/day crude oil
• second phase: 4Q12; unit train loading of up to 65,000 bbls/day, to be served by a new 16-mile, 10" crude oil pipeline from PAA's Robinson Lake pipeline near Stanley, ND

The press release did not state a dollar amount for the project.

A big thank you to MD for sending me this link.

Update on ONEOK's Garden Creek, Stateline I and II Natural Gas Processing Plants -- The Bakken, North Dakota, USA

First, this link, the record well in northeastern McKenzie County, just across the river from Williston:

The Tarpon Federal 21-4H is a Whiting Petroleum operated well and had a 24-hour initial production (IP) rate of 7,009 barrels of oil equivalent (BOE), setting a new Williston Basin record for a Bakken well.  The Tarpon Federal produced 4,815 barrels of oil and 13,163 Mcf of natural gas on October 17, 2011 after being fracture stimulated with 30 stages.

13,163,000 cubit feet of natural gas translates roughly into  2,000 barrels of oil equivalent.

Elsewhere, a writer updates the progress of ONEOK's Garden Creek natural gas gathering and processing plant.

The location of the ONEOK's three new processing plants can be found at this map. It appears that the processing plant that I am taking photos of west of Williston is most likely Stateline #1. With one red triangle designating "Stateline I and II Plants," perhaps the two "Stateline" plants will be collocated.

According to the link above:

• the new well is being referred to as a "real torch"
• Garden Creek is about to go on-line
• Garden Creek is located about 12 miles directly south of the Tarpon well
• a new Bear Paw compressor station is just a couple of miles away from Garden Creek
• several other strong wells in this general area are producing significant amounts of wet gas after longer term production

One word: exciting.

Expansion of the Hess Tioga Plant; Compare to the New ONEOK Plants -- The Bakken, North Dakota, USA

Update

Because the Bakken is considered an oil field and not a gas field, I concentrated on the oil aspect of the Bakken when I began this web-log. In addition, I was more comfortable with oil, and had a more difficult time understanding natural gas and the other by-products of oil production in the Bakken. Because of that blind spot, I failed to pay much attention to the natural gas projects -- gathering and processing facilities, and pipelines -- that were generating a lot of jobs, and pouring a lot of cash into the economy.

The link below to an article in PennEnergy is a good example. I do not recall if I saw it when it was first published in September, 2010, but even if I had, I may not have paid any attention to it. Now I understand why a reader wondered if the new ONEOK processing plants were half the size of the Tioga plant. The Hess expansion project at Tioga is huge; some datapoints:

• a $500 million expansion project; I believe the three new ONEOK projects total about $500 altogether (I vaguely remember posting that; I'm sure I could be mistaken)
• the project will employ 300 to 500 personnel, and that fits with the large number of workers I saw at the ONEOK plant west of Williston

A reader provided a lot more background to this project; see "original post" below.

Original Post

This all started with my original post on the new ONEOK natural gas gathering and processing plants west of Williston. If this is new to you, you may want to return to one of the earlier posts. These related posts are now tagged/labeled with CRYO, ONEOK, or Pipeline; tags/labels are found at the very bottom of the blog.

Again, more information regarding the natural gas picture in the Bakken. This comes to me in the way of a comment.

Knowing that some folks won't see the comments, the information is printed here as a stand-alone post.

The Hess Tioga plant expansion will include the ability to fractionate (separate) ethane from the methane and from the natural gas liquids (NGL). That plant had previously had left the ethane with the methane - leaving both as a gas. The removal of ethane is much more difficult technically and requires much higher capital than removal of propane/butane/nat gas. An ethane pipeline into Canada is also being constructed. In Alberta, the chemical industry there has the capability to convert ethane.

So in effect the Hess Tioga plant is not only expanding, but moving from two products (a methane/ethane gas mixture plus a NGL mixture without ethane) to three products: methane gas, ethane liquid, and a NGL mixture without ethane. By contrast, the ONEOK plants will have two product streams (methane and NGL with ethane).

"The expansion will be located about a mile from the current Tioga plant in Williams County. For an investment of $500 million, the expansion will allow the plant to process ethane from natural gas, which is used as a refrigerant and in chemical manufacturing."

http://www.pennenergy.com/index/articles/display.articles.pennenergy.petroleum.refining.2010.09.north-dakota_approves.QP129867.dcmp=rss.page=1.html

Nat gas and oil pipelines in ND:
https://www.dmr.nd.gov/pipeline/assets/07292011/NDPA%20Webinar%207-29-2011.pdf

ND nat gas plant infrastructure:
https://www.dmr.nd.gov/pipeline/assets/pdf/05202010/2010%20ND%20Natural%20Gas%20Report.pdf

All of these projects require a lot of new workers, and helps explain the huge man-camps in the Tioga area.

Pipeline Issues in the Bakken -- North Dakota, USA

It's incredible how much great information is sent to me. I really appreciate it. Often I post the information as soon as I get it without reading it first to get it out to readers as quickly as possible. Then I go back and read it myself.

An excellent example is the natural gas gathering and processing story that was sent to me overnight. The commentary was excellent, and the supporting documentation/links were outstanding. I post a lot every day and for newbies, it's important to scroll down to see the several articles that have been posted (of course, I also update links to previously posted items, the more important ones linked on the sidebar at the right).

One of the links in that post include one from "My West Texas." Two things jump out.

• I am a big fan of pipeline companies and this article validated my hunch that pipelines will be one of the big winners in the Bakken going forward; and, 
• all the references to natural gas liquids and crude-by-rail oil loading facilities.

At the link:

Producers can no longer, as Lippe said, simply punch holes in the ground and assume product will get to market. Strictures in transportation and processing may even affect drilling projects at some point if capacity cannot grow fast enough.

I thought the takeaway issue had been resolved in the Bakken based on corporate presentations. There may be more going on at all the CBR facilities being built in western North Dakota than just oil. Every time I think the Bakken has no more surprises, something new pops up.

If you are interested in Bakken natural gas and/or pipelines, you need to check out the links above.

Update on LNG Acivity in Western North Dakota -- The Bakken, North Dakota, USA

Updates

May 8, 2012: There are three huge stories coming out of the unconventional oil/shale/fracking story: a) oil; b) natural gas; and, c) ethylene.

Two of the three stories are well known:

• The Bakken is an oil field, and this blog is mostly about oil, the first story.
• The second story is how the massive amount of natural gas in North America will have a disruptive effect on the US energy policy going forward. Essentially, it's this: natural gas will pretty much eliminate alternate non-transportation energy sources (nuclear, coal, wind, solar). 

The third story is not as well known: ethylene. I don't think much about that story. It takes a lot of articles to remind me how big a story this really is. Read the original post for background regarding the ethylene story.

Over at Carpe Diem, there is another reminder regarding ethylene:

"The [shale] discoveries have prompted several firms — including Dow Chemical Co. and Shell Oil — to announce plans to build new North American ethylene crackers, with Shell making the almost-unheard-of decision to place its new cracker in western Pennsylvania, near the gas-rich Marcellus Shale. Other companies, including Chevron Phillips Chemical and Formosa Plastics, have announced plans to increase their North American polyethylene output as a result of the shale gas wave.

These three stories are huge.  I have to keep posting these stories to remind me how big these stories are, particularly the ethane/ethylene story.

Original Post

For folks who are new to the site or who have not read the earlier posts on the ONEOK cryo natural gas processing plants going up west of Williston, you should read an earlier post first, which will also link you to the post that started this discussion.

This post will also answer the question that is frequently asked, what does "O," "G," and "P,' or "PPROD," stand for on your royalty statement.

The individual who has really helped me understand what these plants are all about has provided a wonderful overview; it was posted as a comment but is reprinted here for those who may not read comments:

What should be noted is the natural gas liquids (NGL) that are a high fraction of the raw natural gas stream are higher value than the natural gas itself - about twice the value of methane for the Bakken.

ONEOK estimated the NGLs to be 6% of Bakken value, with 3% as NG. Untreated NG consists of methane, natural gas liquids (ethane, propane, butane, and nat gasoline), carbon dioxide, H2S, SO2, some nitrogen, and water vapor. The nat gas plants in ND separate out the CO2 and water, remove the sulfur, and separate the NGLs from the methane, and then liquefying the NGLs.

Almost as important as the four plants ONEOK that will operate is the $500 million NGL pipeline that ONEOK is constructing from near the MT/ND line to the Overland NGL pipeline in Colorado, which in turn feeds into Bushton, Kansas. At Bushton, ONEOK owns a fractionator complex that separates the NGLs into their own components. Each of these components have their own markets, which in most cases are compared to WTI prices.

See pp 71-90 on presentation
http://media.corporate-ir.net/media_files/IROL/12/120070/OKE-OKSAnnualInvestorDay-Sept2011%20FINAL1.pdf

Ethane is the key building block for the plastics industry - but first the ethane must be processed through a cracker that produces ethlyene. Much of the cracker capacity in North America had been shut down when NG and NGL prices were high, as foreign ethane had to be imported to stay operating (Dow Chemical, Ethyl and others nearly gave up on North America, leaving the chemical and plastic industry to Europe and the Middle East just three years ago). Now, older ethylene plants have been restarted in Texas and there is talk of building new NGL to plastic plants in the Utica/Marcellus region - which would take billions in capital.

Because of the NGL pipeline that ONEOK is building, the NGL side of the Bakken should be much more profitable. Most of the regional companies will contract with ONEOK, as the capital demands to reproduce what ONEOK is doing is huge ($1.7 billion or more) although larger companies (obviously Hess) as well as EOG, XTO, and others, may build additional plants / capacity, but choose to tie into ONEOK's pipeline.

An article on the massive changes ongoing in the NGL business: http://www.mywesttexas.com/business/oil/article_61c788ee-cabe-5f2c-bd39-55167a83e85f.html

A huge "thank you" for this information. Maybe the local newspapers will pick up this story and do a feature article on it. The Williston Herald has become too small a newspaper for some reason to carry this story, but this would be a great story for a paper like the Bismarck Tribune.  

Random Note About Cheniere Energy -- LNG -- Implications for the Bakken, North Dakota, USA

Back on August 24, 2011, I posted Jim Cramer's top oil and gas picks.

On that date, Cheniere Energy (LNG) was selling for $7.12. From there Cheniere took a rather sudden fall to a low of $4.00 on October 3. Yes, one could have bought LNG at $4.00 earlier this month.

Following landmark news earlier this week that the US will be exporting liquid natural gas through the terminal owned by Cheniere, Cheniere's stock has turned around. Today, I see Cheniere selling for almost $11, up about 3.5 percent, on an otherwise flat day for the market.If you bought at $4 and it gets to $12, you've tripled your money in a month. (Disclaimer: this is not an investment site; it is for information, education, and entertainment. I hold no shares of LNG or ONEOK. Nor do any of my relatives as far as I know.)

ONEOK Partnerships is building three new cryo liquid natural gas processing facilities west of Williston.

By the way, when you go back to that link you will see a nice comment regarding these plants. This comment was particularly interesting: ".... while significant to the local economy, [the new ONEOK natural gas processing plants] have relatively small capacity."

The link to the US Energy Information Administration on natural gas processing plants in the US: 2010 update --

Some data points from that update:

• There are 493 operational natural gas processing plants in the US
• Plants are getting bigger: operating capacity nationwide increased 12 percent; the number of processing plants in the lower 48 decreased by 8 percent
• Between 2004 and 2009, the average plant capacity increased from 114 million cubic feet to 139 million cubic feet (each ONEOK plant west of Williston will be rated 100 million cubic feet)

Two comments: "relatively small" might be a bit misleading. Based on the data points and the map at the link, one could argue that each plant is about average, and taken as a group, they would be well above average. Whatever.

More important is the comment that "while significant to the local economy..." -- wow, that is so true. I think one of the things that folks forget when talking about the Bakken, the vast amount of production is coming from six or seven counties in western North Dakota. The population of the entire state is not much more than 600,00 about half the population of my current home, San Antonio. And in these few counties, there are only two towns of any real size, Dickinson and Williston (Minot is just east of the activity for the moment), and they only have about 40,000 residents together.

[One of the nice things about the Bakken is that like Linde, who is building these plants, for the most part, the operators are second or third tier. It was the likes of Continental Resources, Whiting, Brigham, Northern Oil and Gas,  Kodiak Oil and Gas, and others that promoted the Bakken from the beginning, not XOM or CVX. The Bakken  has allowed some small players in oil and gas to move to a new level. Of course, the big oil service companies have always been here: SLB, HAL, BHI, Weatherford, etc.]

But, again, I digress.

I believe the construction costs of these three natural gas plants is about $150 million apiece. In 2010, Williston set a record with $100 million in building permits; in 2011, Williston will triple that record with $300 million in building permits.

Each of these three plants will have about the same capacity of the Hess facility at Tioga (110 million cubic feet) which is a fairly significant operation for this area. 

So, yes, these facilities during the construction phase, and then during operations, will have a huge impact on the local economy.

Oh, by the way, the natural gas you see flaring: the value of the natural gas compared to the total value of the Bakken production is four (4) percent.

Perhaps the Definitive Post on The CRYO Plants West of Williston -- The Bakken, North Dakota, USA

"Anonymous" sent an incredibly informative comment to my posting regarding the natural gas processing plants going up west of Williston. It was too important to be left as a comment only, so here is the entire comment. I will add my thoughts at the bottom, later.

Linde will not be the owner of these plants: ONEOK Partnerships will be the owner and operator.

http://www.prnewswire.com/news-releases/oneok-partners-to-invest-up-to-305-million-for-additional-growth-projects-in-the-bakken-shale-114304929.html

Linde does operate its own cryogenic plants for oxygen / nitrogen / argon etc, but, as a side business, also has a chemical engineering design/project group that provides chemical process design/construction business to the natural gas business. Pipeline companies like ONEOK rely on Linde and other E&C companies for those services.

Here's a list of nat gas plants Linde has designed, which are generally smaller type plants, not the huge scale plants seen mostly in Texas and Louisiana: 

http://www.lppusa.com/international/web/le/us/likeleuslbpp30.nsf/repositorybyalias/lpp_naturalgas/$file/Natural%20Gas%20Experience%20List%20Yr-Loc-Des%20Only%2006-2011.pdf

Larger NG plants are not Linde's expertise (more appropriate for Fluor Daniel or some other large-scale chemical process design and construction firm).

Here's a synopsis of U.S. natural gas plants, which show that the new ND plants, while significant to the local economy, have relatively small capacity.

http://205.254.135.24/pub/oil_gas/natural_gas/feature_articles/2010/ngpps2009/

My comments to be added later.

Photos: Update of the ONEOK Processing Plant Northwest of Williston -- The Bakken, North Dakota, USA

Remember the original posting regarding the ONEOK CRYO processing plant northwest of Williston (about 8 miles west and five miles north on the Grenora Road, County Road 5)? This is Stateline 1 which should be operational sometime in 2012. Then Stateline II will be built, coming on line in 2013. These are ONEOK natural gas processing plants; they are being built by Linde

This is huge: it looked like about a 100 vehicles inside the compound of those working on the complex; at shift change there was a steady stream of vehicles leaving -- I didn't count, but easily 30 - 40 vehicles were leaving; and four large cranes on site.

For the company's explanation of what is going on at this site, go to this link, a PDF file, and check out slides 79 - 91. 

How Big Is The Bakken? Compare These Three Cryo Plants With Others Around the World -- Bakken, North Dakota, USA

Update

This is ONEOK's Stateline 1 natural gas processing plant northwest of Williston. It is being built by Linde and should be on-line sometime in 2012. ONEOK's Garden Creek cryo-natural gas processing plant northwest of Watford City came on-line in 2011.

Original Post

Tonight, while checking out some wells northwest of Williston, we ran into a industrial park under construction. The location is about 14 miles west of Williston on US 2, and then four miles north on the Grenora Road. It looks like it's about 80-160 acres in size, and it could be as much as 320 acres (one-half mile by one mile). The fences are up, top soil moved, stadium lights in place, and some initial pipeline in place, and that's about it. For an explanation from the company on what is going on, go to this link (a PDF file, and look at slides 79 - 91).


Linde Processing Plant Site Northwest of Williston: One of Three Such Sites in the Williston Area. Bakken, North Dakota, USA

There is no sign saying what is going up there, but there is this sign on one of the on-site modular buildings:

Linde Processing manufactures cryogenic gas processing plants. I don't follow that technology, so I don't know whether the sites in the Williston area are noteworthy or not. But, below is the list of the cryogenic processing plants Linde has completed since 1997. Note that in all locations there has only been on plant; in the Williston area there will be three. Note the size of the Williston plants: 100 MMscfd compared to 16 MMscfd in Texas; 6 MMscfd in Israel; and, 60 MMscfd in Los Angeles. Even where there are 100MMscfd plants, there is only one plant, but in the Williston area there will be three. In addition, the Bakken is known as a "oil" field, not a "natural gas" field. So here's the list:

2012 Stateline II, ND
100 MMscfd cryogenic
gas processing plant, incorporating LPP's
CRYO-PLUS™ technology.

2012 Stateline I, ND
100 MMscfd cryogenic
gas processing plant, incorporating LPP's
CRYO-PLUS™ technology.


2011 Williston, North Dakota
100 MMscfd cryogenic
gas processing plant, incorporating LPP's
CRYO-PLUS™ technology.


2010 Port Arthur, TX
16 MMscfd
Liquid Recovery Unit, incorporating LPP's
CRYO-PLUS™ technology.


2005 Haifa, Israel
6.2 MMscfd FCC Off-gas
Liquids Recovery Unit.

2001 Fort McMurray, Alberta
107 MMscfd ethylene recovery

2001 Bayway Refinery
Refining facility in Port of New York and New Jersey
Where the process was invented
48 MMscfd design for
ethylene recovery with full product
fractionation.

1997 Los Angeles, CA
63 MMscfd refinery off-gas
unit utilizing LPP's Cryo-Plus™ technology.