More On That Report Of That Ethane Shipment -- Staggering -- January 20, 2021

See this recent post re: ethane exports. That post begins:

Ethane: largest single shipment of ethane heads to China after loading at US export facility. S&P Global Platts.Data points:

• 911,000 bbls of ethane
  
• VLEC Seri Everest on maiden voyage
• Panama Canal
• loaded at Energy Transfer's terminal in Nederland, TX
• VLEC: very large ethane carrier
• will reach destination by mid-February
• ET's Marcus Hook facility in Pennsylvania is also capable of handling VLECs

Now, this from a reader providing the significance of this article. I knew none of this and reinforces the importance of readers. Thank you very, very much.

From the reader who knows this industry very, very well:

I did a double take when you posted that story about the inaugural shipment from the Orbit Terminal on the maiden voyage of the Seri Everest. 

That ~900 thousand barrels capacity is almost four times larger than the initial 'Dragon Ships'  ethane carriers that were launched just five years ago.  

Prior to that 2016 lifting of ethane from Marcus Hook, there was virtually NO 'industry' of seaborne transport of ethane except for small, infrequent barge transfers in the Baltic region.

The explosive growth of both ethane and propane production from US shales has prompted ...

1. Big build out of new steam crackers and Propane Dehydrogenation  Units (PDHs) in India, Europe, and China to process ethane/propane as making products from these raw materials is MUCH cheaper than using naptha, the historical supply which is generally obtained from oil. 

2. An entirely new 'industry'  has emerged in the building and launching of ships designed for the express purpose of transporting liquified ethane and propane, something never before even contemplated.

There are now 'virtual pipelines'  ferrying these products to Indian, Chinese, and European plants. A huge  Propane Dehydrogenation Plant is opening next year in Belgium and a massive cracker/PDH complex  in Antwerp is set to come online in 2024.

US shale is expected to provide virtually all the raw products.

Amongst other ripple effects, the value of ethane and propane should continue to increase.

More on "Dragon Ships" here.  

This was from 2016: 

A new fleet of so-called dragon-class ships are creating a virtual pipeline across the Atlantic, carrying ethane, a derivative of natural gas and the basic building block of common plastics, from Houston to European petrochemical companies. The shipments, which began Sept. ... They also are shipping to Asia.

More at this post, and this was from June 15, 2015, suggesting just how old this story is and how I completely missed it. Link here.  

A major European petrochemical manufacturer is taking steps to begin importing ethane from the United States this year. Over the past several years, ethane production in the United States has been increasing, from 869,000 barrels per day (b/d) 2010, to 1,081,000 b/d in March 2015. In addition, U.S. ethane prices have declined compared with other fuels. In recent years, the growth in production has spurred ethane pipeline exports to Canada and investment in the domestic petrochemical industry. And now, one of Europe’s largest petrochemical companies, Ineos Olefins & Polymers, headquartered in Switzerland, is close to completing the first transoceanic ethane shipment from the United States.

On May 28, Ineos Olefins & Polymers Europe, with ethylene cracker operations in Scotland and Norway, and its partner Evergas, a company specializing in seaborne petrochemical and liquid gas transportation, took delivery of the first ship in a planned eight-vessel fleet of Large Gas Carriers (LGC). These vessels will primarily transport ethane produced in the Marcellus and Utica shale plays to Europe from the Mariner East project/Marcus Hook Industrial Center in Pennsylvania, under a 15-year contract between Ineos-Europe and Evergas. Though designed and constructed for transoceanic shipment of ethane, the ships will be capable of transporting other hydrocarbon gas liquids (HGL), as well as liquefied natural gas (LNG).

These ships measure 591 feet (ft) long, 87 ft wide, and have a draft of 30 ft. They are the largest ethane carriers in production to date and have a rated capacity of 971,162 cubic feet, or 175,000 barrels. These ships are designated as the Dragon class, and are identified by Evergas as among the most technologically advanced liquid gas carriers on the seas today. Manufactured by Sinopacific Offshore & Engineering, a shipyard in China, these LGCs use LNG for propulsion and cargo handling, systems supplied by Wärtsilä Marine, a Finnish manufacturer, to optimize performance for ship’s systems and cargo management.

Ineos Europe was the first European company to contract for ethane feedstock from the United States. In 2012, Ineos contracted with a Marcellus-based supplier, Range Resources, for ethane, and with Sunoco Logistics for the associated transportation capacity on the Mariner East project that would move the ethane east from the Appalachian Basin for transatlantic shipment. As an anchor shipper, Range Resources has firm transportation of 40,000 b/d (20,000 b/d ethane, 20,000 b/d propane), and will have storage capability for both ethane and propane at Marcus Hook.

When I see those numbers I wonder if the writer of the original got "cubic feet" mixed up with bbls.  

More from hydrocarbonprocessing:

More than 911,000 barrels of ethane bound for Lianyungang, China on world’s largest VLEC 1/20/2021 Dallas-based Energy Transfer LP announced the first Very Large Ethane Carrier (VLEC) has been loaded under its previously announced joint venture with Satellite Petrochemical USA Corp., Orbit Gulf Coast NGL Exports, LLC (Orbit).

The Seri Everest, the world’s largest VLEC, departed from Orbit’s newly constructed export facilities at Energy Transfer’s Nederland Terminal in Nederland, Texas, on Jan. 17, 2021, to complete its maiden voyage. The vessel was loaded with more than 911,000 barrels of ethane destined for Satellite’s Lianyungang ethane cracker in northeastern Jiangsu Province, China, the largest single shipment of ethane to date. Its anticipated arrival at Lianyungang Port is mid-February 2021.

Orbit’s export terminal at Nederland, one of only three U.S. ethane export terminals, includes a 1.2 million barrel ethane storage tank and an estimated 180,000 barrel per day ethane refrigeration facility. Energy Transfer’s Marcus Hook facility in Pennsylvania is also capable of handling VLECs. The combination of the two terminals represent over 50 percent of the U.S. waterborne export capacity. Under the joint venture with Satellite, Energy Transfer is the operator of Orbit’s assets, which also include a newly constructed 20-inch pipeline originating at Energy Transfer’s fractionation and storage facilities in Mont Belvieu, Texas, for ethane deliveries to the Nederland export terminal as well as domestic markets in the region. In association with Orbit, Energy Transfer also completed its build-out of wholly owned infrastructure at Mont Belvieu to supply ethane to Orbit’s pipeline, and at Nederland to load the ethane onto VLECs. Under separate agreements, Energy Transfer will provide Satellite with approximately 150,000 barrels per day of ethane under a long-term, demand-based agreement, along with storage and marketing services.

Energy Transfer (via Sunoco Logistics) was the first company to export ethane out of the U.S. by pipeline. Its Mariner West pipeline first transported ethane to Canada in January of 2013. Energy Transfer was also the first to export ethane out of the U.S. via ship in March of 2016 from its Marcus Hook Terminal in Pennsylvania.

Re-Posting: Ethane Power Plant West Of Williston -- January 15, 2021

Updates
January 15, 2021: press release, dated January 12, 2021, from Bismarck, ND, and Westlake Village, CA, data points:

• Bakken Midstream Natural Gas, LLC
• has signed its first ethane supply term sheet to support the power plant previously announced
• will be the largest power plant to utilize advances in combustion turbine technology that enables ethane as its primary fuel source;
• The Energy Center: to be located in the Mountrail-Williams Electric Cooperative near Williston, ND
• October, 2020: announced it had secured nearly $25 million from two separate capital raises
• funding rounds led by the Family Office of Founder and executive chairman, Steven E Lebow
• Lebo was joined by ND business leaders including Gene Nicholas, Ron D. Offutt, and Stephen L. Stenehjem
• Lebow, previously: 
• founded and co-led Donaldson, Lufkin & Jenrette's (DLJ) Los Angeles office and created and led GRP Partners, a US and European venture capital firm;
• from day one, he was the primary fanancier for companies including Costco Wholesale, PetSmart, Dick's Sporting Goods, Envestnet, Bill Me Later (sold to PayPal) and ULTA Beauty;
• three years of preparation and work to get to this point
• Bakken Midstream: 
• CEO Mike Hopkins
• Lebow, and co-founders Curt Launer and Shane Goettle
• Hopkins:
• has successfully developed 54 power projects around the world, totaling over twelve gigawatts
• was extensively involved in the build out of the value-added industry in Alberta, Canada
• Launer:
• number-one ranked natural gas industry analyst on Wall Street for twelve years
• in the Institutional Investor Magazine Hall of Fame
• Goettle:
• life-long North Dakota businessman and attorney with more than 25 years of state and federal level experience;
• former head of the North Dakota Department of Commerce
• former chair of EmPower North Dakota

Original Post

Link here. 

Bismarck Tribune link here. 

Williston Herald link here.

From The Bismarck Tribune, data points:

• west of Williston
• Bakken Midstream Natural Gas
• $400-million facility
• construction: to begin in 2022
• to take two years
• CEO: Mike Hopkins
• Bakken Midsream
• formed in 2018
• mission: to develop "such" projects
• received a $200,000 investment from ND Department of Commerce
• confidentiality precludes more specific information
  

Are there any other such plants in the US that might provide readers some comparison?

• Pennsylvania Power Plant said to be the first to tap ethane for electricity -- March 27, 2020 -- NGI, link here; proposed as long ago as 2015 by GE, link here;

EIA: costs for new energy plants, 2018, link here. 

• average construction costs, combined cycle: $900 / kW = $900,000 / mW or about a million dollars for a new combined cycle plant;
• average new capacity for a new natural gas plant: 500 MW
• so, 500 megawatts x one million dollars = $500 million 

Hess natural gas processing plant: $150 million, link here. 

Hess Vantage pipeline: link here. 

RBN Energy: Shell's new ethane-consuming steam cracker in the home stretch. See this post also. Archived.

After several years of development, Shell’s $6 billion Pennsylvania Petrochemicals Complex — the first of its kind in the Marcellus/Utica shale play — is really taking shape about 30 miles northwest of Pittsburgh. The facility, which will consist of a 3.3-billion-lb/year ethylene plant and three polyethylene units, is in its final stages of construction, as is a pipeline that will supply regionally sourced ethane to the steam cracker. When the Falcon Pipeline and the PPC comes online, possibly as soon as 2022, they will provide a new and important outlet for the vast amounts of ethane that is now either “rejected” into natural gas for its Btu value or piped to Canada, the Gulf Coast, or the Marcus Hook export terminal near Philadelphia. Today, we discuss progress on the Marcellus/Utica’s first world-class petrochemical complex and what it will mean for the play’s NGL market.

Follow-Up On ND "Hot Gas" And The Northern Border Pipeline -- September 5, 2020

This is in response to the story posted earlier today regarding "hot gas" and the Northern Border Pipeline.

A reader wrote that he/she had a I have a very dear friend from college. He managed gas plants throughout the OK/TX panhandle. His dad did the same in TX, NM and AZ. I've been lucky enough to have them each walk me through a plant, drive me through the country they were gathering, etc. I asked him for Cliff Notes on our "too hot" gas. This is the reply from that individual with extensive experience with this issue:

It is not uncommon to have some 1200 BTU gas in a field, depends on zone, depth, area, etc. 

It sounds like they need more gas processing in North Dakota. 

The regulation is dumb to me because the gas can be processed downstream.

Normally pipelines are NOT the end user, they are only the transporter and someone else can pull the BTU out of the gas.

Also it is important to gas processing plants to be able to leave the ethane in the gas if the market is paying more for the ethane in the gas rather than in the liquids stripped out of the gas.

All gas processing plants are designed to run in ethane rejection (leave the ethane in the gas rather than remove it with the propane, butane, pentane, etc. ) if the markets pays better for ethane in the gas rather than in the liquids removed. 

Every plant I ever worked in or managed was capable of ethane rejection even if not originally designed for it. Just warm up the tower temps and the ethane goes out the top with the methane rather than out the bottom with butane, propane, pentane, etc. 

If designed for it then they can do it more efficiently. 

It does sound like the ND gas is pretty hot overall. I saw / toured one plant in the Denver area years ago that BP ran and they sold to the pipeline that provided Denver. In order to cut the btu they actually injected air into the pipeline. It sounded insane to me because we spent a lot of time making sure we did not get air into our pipelines, we operated some lines at below atmospheric pressure so any leak pulled air into the system, and air can cause explosions, but at the Denver site they actually injected air into the system. Probably was no added compression on the system after the air injection. Air and compression don't mix well.

This was my reply, noting that is way above my pay grade, and far ahead of my headlights, to mix metaphors:

Two immediate thoughts come to mind: 

Political: someone is trying to keep ND gas out of the Northern Border Pipeline so the Canadians can ship more of their own gas; or, more likely, it's a matter of who pays: 

Financial: either the operators in ND pay to "dilute" their "hot gas" before it goes into the pipeline, or the end user (in Illinois, or wherever) pays for the process of doing that (sounds minimal). 

Regardless: it sounds like a manageable problem, and maybe this will spur ND to put in more natural gas processing plants.

Wow, this takes me to the early days of the Bakken: ethane rejection. I had forgotten all about it. I have a lot of problems with tags (bottom of page) but in this case, I'm glad I had an "ethane rejection" tag. 

******************************************
The Original Post

This was the original post:

From Geoff Simon's top stories of the week:

A tariff pending before the Federal Energy Regulatory Commission may place limits on the heat content of natural gas in the Northern Border Pipeline.

Justin Kringstad, director of the ND Pipeline Authority, told members of the ND Industrial Commission this week that the tariff would allow Northern Border to reject any gas that exceeds 1,100 BTU per cubic foot.

That could be a problem for North Dakota producers because natural gas produced in North Dakota is rich in ethane and other natural gas liquids.

Kringstad said the gas must be processed to remove those NGLs to reduce its heat content to the 1,100 BTU level.

North Dakota gas now makes up about 80 percent of the total moving through the Northern Border Pipeline, and "signs are pointing toward North Dakota being almost the exclusive shipper in the next three to six years," Kringstad said. He said achieving the 1,100 BTU threshold would require the removal of additional 80,000 bbl/day of ethane by the year 2027.

Industry sources say the ideal heat content for natural gas is between 950 and 1,100 BTU/cubic foot. Gas that burns hotter can damage appliances and other equipment that burn it. Kringstad said Northern Border interconnects with several downstream pipelines that limit heat content to 1,100 BTU or less.

"The downstream folks are concerned that North Dakota's gas is getting too hot," Kringstad said. "The marketability and safety issues downstream are what's driving pressure on Northern Border to implement the tariff change."

North Dakota may have a little time to adapt if FERC approves the new tariff. Kringstad said the change would not be immediate because the tariff would be phased in, starting at 1,155, stepping down to 1,140 and eventually down to 1,100. He said the near-term solution is balancing the hotter gas going into the pipeline with dryer gas that has had most of its liquids removed. Kringstad said one other possibility he's exploring that could provide opportunity to electric generators is injecting hydrogen gas in the pipeline.

Fascinating story on so many levels. 

 

Northern Border Pipeline Could Reject US Natural Gas If ND Producers Don't React -- September 5, 2020

 From Geoff Simon's top stories of the week:

A tariff pending before the Federal Energy Regulatory Commission may place limits on the heat content of natural gas in the Northern Border Pipeline.

Justin Kringstad, director of the ND Pipeline Authority, told members of the ND Industrial Commission this week that the tariff would allow Northern Border to reject any gas that exceeds 1,100 BTU per cubic foot.

That could be a problem for North Dakota producers because natural gas produced in North Dakota is rich in ethane and other natural gas liquids.

Kringstad said the gas must be processed to remove those NGLs to reduce its heat content to the 1,100 BTU level.

North Dakota gas now makes up about 80 percent of the total moving through the Northern Border Pipeline, and "signs are pointing toward North Dakota being almost the exclusive shipper in the next three to six years," Kringstad said. He said achieving the 1,100 BTU threshold would require the removal of additional 80,000 bbl/day of ethane by the year 2027.

Industry sources say the ideal heat content for natural gas is between 950 and 1,100 BTU/cubic foot. Gas that burns hotter can damage appliances and other equipment that burn it. Kringstad said Northern Border interconnects with several downstream pipelines that limit heat content to 1,100 BTU or less.

"The downstream folks are concerned that North Dakota's gas is getting too hot," Kringstad said. "The marketability and safety issues downstream are what's driving pressure on Northern Border to implement the tariff change."

North Dakota may have a little time to adapt if FERC approves the new tariff. Kringstad said the change would not be immediate because the tariff would be phased in, starting at 1,155, stepping down to 1,140 and eventually down to 1,100. He said the near-term solution is balancing the hotter gas going into the pipeline with dryer gas that has had most of its liquids removed. Kringstad said one other possibility he's exploring that could provide opportunity to electric generators is injecting hydrogen gas in the pipeline.

Fascinating story on so many levels. 

 

US Ethane Production Hits Record -- ArgusMedia -- August 31, 2020

We used to talk about ethane a lot. We even had a tag for ethane. Then, all of a sudden, crickets.

Until today. From ArgusMedia: US ethane production hits new record -- EIA.

US ethane field production rose to a record high in June as producers moved to recover more product late in the second quarter.

Ethane output rose to 2.1mn b/d, a 14 percent increase from the prior record 1.8mn b/d produced in May and a 16pc increase from the previous June, the Energy Information Administration reported today in its monthly data.

Production fell sharply in March and April as shut-in natural gas wells reduced output of associated gas. By late May, rising prices supported recovery of more ethane from the gas stream. Mont Belvieu, Texas, EPC ethane averaged 12.97¢/USG in April, before rising to 22.36¢/USG in May and 21.88¢/USG in June.

Ethane inventories also rose, climbing to 52mn bl in June, up 9 percent from the previous month, but a 14 percent drop from the 60mn bl reported in June 2019. June ethane exports of 308,000 b/d were up by 3 percent from May and up by 12 percent from June last year.

More at the link.

Most Interesting Development -- March 6, 2020

Updates

April 14, 2020: as scheduled, the PSC was scheduled to consider this pipeline request today, The Bismarck Tribune link here.


Later, 2:39 p.m. Central Time: an eagle-eyed reader caught this one. Look at the story below.

• Time line:
• story published today by The Williston Herald 
• pipeline to be operational by April 1, 2020
• PSC hearing two weeks later: April 14, 2020
• time to construct: 6 - 8 weeks
• Comments:
• either a typographical error, and more likely to be operational by July 1, 2020; or, 
• "they" have the ditch dug, pipe in place; just waiting for the go-ahead?  

Or someone's watching too many re-runs of "Back To The Future."
 

 ************************************

Original Post

Link here.

As the amount of Bakken gas production has increased, future BTU limits on the Northern Border pipeline have become more and more likely. That’s prompting a unique proposal for an alternative, high-BTU gas market in the Williams-Mountrail County region.

Liberty Midstream Solutions is proposing a 4.7 mile, 8-inch residue pipeline on privately owned lands in the area to take high-BTU residuals to an existing third-party line, from where it could be sent to markets in Chicago.

The Alliance Sales Line would carry up to 80 million cubic feet per day for an estimated construction cost of $4.6 million.

The Public Service Commission has set a public hearing for the pipeline at 9 a.m. April 14 at Neset Consulting Service in Tioga. The company has asked for waivers of some procedures and timelines to expedite construction.

Liberty hopes to have the line operational by April 1, 2020. It would take six to eight weeks to construct.

Much, much more at the link. Archived.

Maps:

Two Incredible Statistics -- February 22, 2020

Updates

Later, 11:16 p.m. Central Time: had this been a close race this would have been the story -- what's going on with the Nevada-tabulating app? The caucuses have now been closed for several hours, and only 27 percent of precincts has reported. What's taking so long? Only because Sanders won by such a lopsided margin no one is asking this question. But again, this is extraordinary, how long it's taking for the votes to come in.


Later, 10:33 p.m. Central Time: coming out of Nevada, this is what happens next:

• South Carolina shootout: Biden, Sanders, Steyer -- in that order
• Latino voters will be the surprise voting bloc: Sanders takes Texas and California
• African-American vote incredibly important in South Carolina, but everywhere else, it's all about the Latino/Latina vote -- and Bernie has that vote locked up

Later, 9:00 p.m. Central Time: I'm a political junkie. I can't stand MSNBC. Tonight I find myself defaulting to MSNBC. This is absolutely fascinating. Remember: these MSNBC talking heads were 1000% behind Hillary. They were supremely surprised / shocked that she lost, and subsequently severely depressed, some (most) suffering from Trump Derangement Syndrome. It appears it is happening again. These MSNBC talking heads are shocked at how well Bernie has done. This was never, never expected. It is a hoot to watch MSNBC talking heads trying to sort this out. And that's why I keep turning back to MSNBC tonight. It will be interesting to see how Rachel Maddow handles this shock Monday.

Later, 8:40 p.m. Central Time: wow, wow, wow -- will anyone hit the 15% threshold except Bernie and Biden?

• Bernie: 46%
• Biden: 24%
• Buttigieg: 14%
• Pocahontas: 9%
• but, think about this: Bloomberg was not on the ballot. Bloomberg would have taken a few votes from Bernie and Buttigieg, but he would have likely knocked out Biden and Pocahontas. 

Original Post

First incredible statistic: Nevada caucuses -- early results show Bernie Sanders taking upwards of 55% of the vote. That is incredible, on so many levels. Bloomberg is so lucky he did not enter this race.

By the way, speaking of Bloomberg, is it just me or do those Bloomberg ads look really, really pathetic now? Before the debate, the Bloomberg ads were "believable." The ads didn't say anything except "Mike can do it," but after the debate one really wonders if the only thing Mike can do is make slick ads. We'll see.

Bernie won (or came very, very close to winning) in Iowa and New Hampshire. Then he delivered a knockout blow in Nevada and will clearly win in South Carolina. He will win California on Super Tuesday, and unlike the other candidates won't even have to campaign in California. While his opponents will have to spend a huge amount of time and a huge amount of financial resources in California, he can spend his time in other states. 

Back on January 31 2020, I wrote:

The California poll, KQED/NPR, 1/25 - 1/27: if by Super Tuesday, we still have seven viable Democrat candidates, it's very, very possible Sanders takes all delegates.

The Super Tuesday states:

Alabama, Arkansas, California, Colorado, Democrats Abroad, Maine, Massachusetts, Minnesota, North Carolina, Oklahoma, Tennessee, Texas, Utah, Vermont, and Virginia.

Finally:

The excitement in the Bernie camp is palpable. Everyone's eyes are on California. But when you look at the entire list of states voting on March 3, it's hard to believe he will do as well as the Bernie folks think he will. But by Super Tuesday, will Biden, Klobuchar, Pocahontas, Buttigieg, even have the resources to keep going? I'm not sure.

Anyway, that's longer than I had planned.

**********************************

Back to the Bakken

The second incredible statistic, which comes from the Bakken, and from a reader in response to this post. This is the comment from that reader regarding all the ethane coming out of the Bakken (a reminder for those who are receiving royalties: natural gas is primarily methane, a one-carbon gas; ethane, propane, and butane are the C2 - C4 gases).

An eerie point in this story that the EXTRA Bakken ethane that needs to be pulled out of the gas (not all of it, just the extra) would be enough to fill a cracker.

https://btuanalytics.com/bakken-gas-quality/. This is an incredibly good article, dated February 11, 2020. I will come back to this one. It's so important that I have archived it.

Later: I have spent the last hour or so trying to sort out this "BTU Analytics" story, and still haven't found what I wanted. A reader that really, really understands this, and really provides me helpful information, put this article into perspective:

Theoretically, a $6 billion cracker could be built in North Dakota and have an almost indefinite amount of 'free' ethane feedstock for decades. 

The qoutation marks surrounding 'free' are only due to the needed processing (fractionation) and piping to this theoretical cracker.

That 90,000 bbld rejected ethane is less than a single Appalachian Basin operator - Antero - rejects every single day.

Meanwhile, India (Gail and Reliance) has started a brand new industry - along with European Ineos - in constructing fleets of massive ships to transport American ethane/ethylene to their new crackers.

Huge new plants going up in Antwerp and in at least two cities in China.

The amount of gaseous hydrocarbons brought to market via this Shale Revolution is simply unfathomable.

I will post this article as a stand-alone post.

 

Richness, GPM, from a "white paper:

Associated gas is produced as a by-product of oil production and the oil recovery process. After the production fluids are brought to the surface, they are separated at a tank battery at or near the production lease into a hydrocarbon liquid stream (Crude Oil or Condensate), a produced water stream (brine or salty water) and a gaseous stream.

The gaseous stream is traditionally very rich (Rich Gas) in natural gas liquids (NGLs).

NGLs are defined as Ethane, Propane, Butanes, and Pentanes and “Heaviers” (higher molecular weight hydrocarbons) (C5+). The C5+ product is commonly referred to as Natural Gasoline.

Rich gas will have a high heating value and a high HDP. When referring to NGLs in the gas stream, the term GPM (gallons per thousand cubic feet) is used as a measure of hydrocarbon richness. The terms “rich gas” and “lean gas” are commonly used in the gas processing industry. They are not precise indicators but only indicate the relative NGL content.

HDP: hydrocarbon dew point --

the water dew point is the temperature at which water vapor will condense to liquid water. The water content in a pipeline is already covered by tariff provisions and is mentioned here for illustrative purposes. Similarly, the hydrocarbon dew point (HDP) is the temperature at which hydrocarbons will begin to condense; hence the expression "hydrocarbon liquid drop out."

Bakken Ethane And An Ethane Cracker, BTU Analytics, Readers' Comments -- February 22, 2020

See this news story also, link here. 

Hess Midstream Partners LP is expanding natural gas processing capacity at its 250-MMcfd Tioga gas plant in North Dakota, north of the Missouri River.

The planned 150-MMcfd expansion will add residue and y-grade liquids processing capacity to the existing full-fractionation and ethane-extraction capability of the current plant, Hess Midstream said.

The expansion—for which product takeaway has been secured and which will raise total gas processing capacity at Tioga to 400 MMcfd—is scheduled to enter service in mid-2021 at a total cost of about $150 million.

Following completion of its 100-MMcfd Little Missouri 4 gas processing plant in McKenzie County, ND—a joint venture with Targa Resources Corp.—scheduled for some time in third-quarter 2019 and the Tioga expansion, Hess Midstream said it will have 500 MMcfd of net gas processing capacity in the Bakken region.

The Tioga expansion comes amid continued Bakken growth from Hess and third parties that has created additional demand for processing capacity north of the Missouri River, said John Gatling, Hess Midstream’s chief operating officer.

Re-posting:

[An] incredible statistic, which comes from the Bakken, and from a reader in response to this post. This is the comment from that reader regarding all the ethane coming out of the Bakken (a reminder for those who are receiving royalties: natural gas is primarily methane, a one-carbon gas; ethane, propane, and butane are the C2 - C4 gases).

An eerie point in this story that the EXTRA Bakken ethane that needs to be pulled out of the gas (not all of it, just the extra) would be enough to fill a cracker.

https://btuanalytics.com/bakken-gas-quality/. This is an incredibly good article, dated February 11, 2020. I will come back to this one. It's so important that I have archived it.

Later: I have spent the last hour or so trying to sort out this "BTU Analytics" story, and still haven't found what I wanted. A reader that really, really understands this, and really provides me helpful information, put this article into perspective:

Theoretically, a $6 billion cracker could be built in North Dakota and have an almost indefinite amount of 'free' ethane feedstock for decades. 

The qoutation marks surrounding 'free' are only due to the needed processing (fractionation) and piping to this theoretical cracker.

That 90,000 bbld rejected ethane is less than a single Appalachian Basin operator - Antero - rejects every single day.

Meanwhile, India (Gail and Reliance) has started a brand new industry - along with European Ineos - in constructing fleets of massive ships to transport American ethane/ethylene to their new crackers.

Huge new plants going up in Antwerp and in at least two cities in China.

The amount of gaseous hydrocarbons brought to market via this Shale Revolution is simply unfathomable.

This was posted earlier but deserved a stand-alone post. 

Richness, GPM, from a "white paper:

Associated gas is produced as a by-product of oil production and the oil recovery process. After the production fluids are brought to the surface, they are separated at a tank battery at or near the production lease into a hydrocarbon liquid stream (Crude Oil or Condensate), a produced water stream (brine or salty water) and a gaseous stream. 

The gaseous stream is traditionally very rich (Rich Gas) in natural gas liquids (NGLs). NGLs are defined as Ethane, Propane, Butanes, and Pentanes and “Heaviers” (higher molecular weight hydrocarbons) (C5+). The C5+ product is commonly referred to as Natural Gasoline. 

Rich gas will have a high heating value and a high HDP. When referring to NGLs in the gas stream, the term GPM (gallons per thousand cubic feet) is used as a measure of hydrocarbon richness. The terms “rich gas” and “lean gas” are commonly used in the gas processing industry. They are not precise indicators but only indicate the relative NGL content.

Disclaimer: I absolutely don't understand so much of this. What little I understand: this is a huge, huge story for the Bakken. Yeah, I get the "chemistry," but what I don't understand is the economics of this. The BTU Analytics article and the input from readers is a great help. Thank you.

Making America Great -- Exxon-Sabic Texas Project -- June 13, 2019

From Rigzone:

• a 1.8 million-metric-ton ethane steam cracker complex
• near Corpus Christi, TX
• will create nearly 7,000 jobs during construction
• 600 permanent jobs; average pay: $90,000
• joint venture
• Exxon Mobil
• Saudi Basic Industries (SABIC)
• will be the world's largest steam cracker
• just one of several key projects currently adding to Exxon Mobil's bottom line
• the ethylene produced will be delivered to three "derivate" units:
• a monoethylene glycol (MEG) unit
• two polyethylene (PE) units
• startup projected for 2022
• this is the first SABIC project outside of Saudi Arabia
• lead project contractors:
• The Wood Group
• McDermott & Turner Industries Group
• Chiyoda and Kiewit
• Mitsubishi Heavy Industries & Zachry Group

Broader context: this project is part of Exxon Mobil's "Growing the Gulf" series of investments in Texas and Louisiana.

Background, Update, And Comments From A Reader On The Hess Ethane Pipeline -- The Vantage Pipeline -- To Alberta -- April 27, 2019

A reader was nice enough to remind me of some data points regarding the Hess Vantage pipeline.

I replied that I was lazy this week/this weekend -- just too much to blog and I did not take the time for a proper update. Sorry. This all started with updates on Hess yesterday, these two links:

• Hess, 1Q19 earnings;
• Hess reclaims bragging rights to largest NG processing plant in North Dakota

and then readers' comments regarding the "Hess pipeline to Alberta."

The "Hess pipeline to Alberta" is the Vantage Pipeline.

So, let's do a blog search and provide some background:

• the Vantage Pipeline, from an October 13, 2014, posting:

With regard to ethane and ethane pipelines, a reader recently commented:

The Vantage pipeline to Alberta from the Hess plant is probably the longest ethane pipeline in North America. OneOK y-grade pipe line takes Bakken NGLs to Conway, Kansas, where the propane is fractionated and sent to north to Iowa and points north. The rest of the NGLs are sent to Mt Belvieu, TX, where the rest of the fractionations occur. 

The Vantage pipeline:

The Vantage Pipeline is a high vapour pressure (HVP) pipeline carrying ethane from a source near Tioga, North Dakota, extending northwest, through Saskatchewan, Canada, and terminating near Empress, Alberta, Canada. The pipeline links a growing supply of ethane from North Dakota to markets in Alberta. 

The Vantage Pipeline is 445 miles steel pipeline, with an outside diameter of 10 inches.

• the Vantage Pipeline, from a September 2, 2014, posting:

The Wall Street Journal is reporting:

Pembina Pipeline Corporation is pleased to announce that it has entered into agreements to acquire the Vantage pipeline system and Mistral Midstream Inc.'s interest in the Saskatchewan Ethane Extraction Plant for total consideration of US$650 million.
 
Vantage is a recently constructed, approximately 700 kilometre ("km"), 40,000 barrel per day ("bpd"), high vapour pressure pipeline that originates in Tioga, North Dakota and terminates near Empress, Alberta. Vantage provides long-term, fee-for-service cash flow and strategic access to the prolific and growing North Dakota Bakken play for future natural gas liquids (NGL) opportunities. 

The Vantage pipeline can be increased to 60,000 bpd with minimum costs. 

• From July 16, 2013: Canada's biggest plastic producer will purchase all the ethane that Hess produces at its Tioga plant; US State Department approved the international pipeline to complete the deal. 

Now, new today: to say the least, the Vantage Pipeline really excited me when it was announced and then completed. But I was remiss re-posting all that for newbies. Again, a big apology. The notes above might be a bit disjointed, but one can probably sort it out.

Now, putting all that together from the reader today:

Hess moves ethane on this pipeline from Tioga to Empress, Alberta, where the Alberta Ethane Gathering System takes it to Nova Chemical's petrochemical complex at Joffre, Alberta. 

Hess is just completing the fifth year, I believe it is, of a ten-year deal supplying ethane to Nova. 

So I doubt they want to move ethane off this pipeline in the immediate future. 

And then this, which I had completely forgotten:

You may recall you previously mentioned one Bakken "tidbit", that Nova Chemicals is a subsidiary of IPIC (International Petroleum investment Company) which is wholly owned by the government of Abu Dhabi, United Arab Emirates. Another Bakken amazement - supplying the UAE ethane! 

And for the post on that, see this September 19, 2018, entry. 

Progress At Williston's New Airport, XWA, Continues Despite Polar Vortex -- February 10, 2019; Answers To That "Pop" Quiz On Ethane

Link here at The Williston Herald.

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Answers To That Ethane "Pop" Quiz

I find this fascinating. Posting the answers to the quiz posted yesterday. 

Link here for answers.

Ethane is a "feedstock" for just about "everything."

1. How many countries export ethane internationally? [That's redundant, obviously, but that's how the EIA phrased it.]  Two.

2. Name the top five countries that export ethane internationally. [Ditto,] Trick question. There are only two: the US and Norway.

3. Name the country that is #1 in ethane exports. The US.

4. Name the country that is #2 in ethane exports. Norway.

5. The US exports how much ethane?

a. 50,000 bpd
b. 250,000 bpd
c. 500,000 bpd
d. 1 million bopd

6. The country that exports the most ethane, exports how much ethane?

a. 50,000 bpd
b. 250,000 bpd
c. 500,000 bpd
d. 1 million bopd

7. The #2 country in ethane exports, exports how much ethane?

a. 50,000 bpd
b. 250,000 bpd
c. 500,000 bpd
d. 1 million bopd

8. The #3 country in ethane exports, exports how much ethane? Trick question. Only two countries export ethane.

a. 50,000 bpd
b. 250,000 bpd
c. 500,000 bpd
d. 1 million bopd

9. In what year did the #1 country overtake the #2 country (questions 3 and 4 above). 2015.

10. The United States exports ethane to how many countries? Ten.

11. In 2014, the US exported ethane to only one country. Name that country that was the only country to import ethane from the US. Canada.

12. Extra credit: American Ethane, when given federal approval, will supply ethane to a number of petrochemical crackers in China, from a new terminal on the Neches River in Beaumont, TX. "Who" funds American Ethane? Russia. Don't you just love all that talk about sanctions on Russia!

See also this post.

It Never Quits -- An Ethane Update -- February 9, 2019

Sometime in the past week or so, I think it was a result of the president's state of the union address, folks got carried away with fact checking the president on whether the US really was a net exporter of energy. Wow, what an incredibly shallow argument. While pundits are arguing over how many angels can dance on the head of a pin (we've had this discussion before -- the answer depends on whether their arms are outstretched or held close to their wings) so much more important stuff is going on.

Until I saw the recent EIA tweet on ethane, I had completely forgotten all about it. During the Bakken boom, "ethane rejection" was a big topic (something I knew nothing about; a reader gently informed me what "ethane rejection" meant).

Since then, it hasn't been something I've thought about much.

I do have a tag, "North Dakota ethane plant."

Since the boom, the US has begun exporting ethane to some extent, and there are now folks worried that the US exporters will deplete our own ethane that is needed for our own feedstock.

This is why they are worried: the Middle East doubled its petrochemical output in the 2000s and now doesn’t have enough ethane for many future projects.

Wow.

It turns out that the US has plenty of ethane and won't run out anytime soon.

It is all because of hydraulic, horizontal fracking, thank you very much. The chemical industry wasn’t prepared for all the ethane that ultimately came from the shale boom. The US is #1 in crude oil production from HHF, and Argentina is #2. Most other western countries, it seems, bans fracking. In fact, some US states ban fracking. Folks sort of forget that more comes out of fracking than just oil. But I digress.

Back to US ethane.

Data points from a 2018 article that updates US ethane data from 2017:

• the petrochemical industry’s initial reaction to this bounty was to convert plants from naphtha to ethane feedstock and launch quick, incremental expansions
• the response ramped up last year (2017) when new crackers from Dow Chemical and Mexichem added a combined 2.0 million metric tons of annual ethylene capacity
• two monster crackers from ExxonMobil and Chevron Phillips Chemical, which combine for 3 million metric tons, are starting up right now
• five more projects will add more than 5.0 million metric tons by 2020
• the new chemical plants will mean an enormous leap in ethane consumption by 2020, going from a market that was consuming 1 million barrels to one that will use 1.8 million bbls
• Now, on to exports:
• almost three crackers' worth of ethane is currently being exported from the US
• because of low prices, producers are rejecting more than 600,000 bpd -- enough to support 10 million metric tons of annual ethylene capacity
• prices are starting to support new fractionation capacity
• Nova Chemicals
• a Canadian company
• recently bought Williams Cos.' ethylene cracker in Geismar, LA
• Nova / Borealis and Total have just okayed an ethylene cracker in Texas
• also using US ethane in Canada
• since 2014, Nova has been piping ethane from North Dakota to Nova's operations in Joffre, Alberta; the company received enough ethane from North Dakota to build a new polyethylene plant
• Nova: North Dakota has a big surplus of ethane and not enough outlets to market
• Nova now wishes they had put in a bigger pipeline from North Dakota to Joffre
• Appalachia
• currently at 800,000 bpd
• should grow to 1.3 million bpd by 2022
• new pipelines to the east coast for ethane export; new ethylene complexes in Pennsylvnai, and a cracker funded by two Asian firms are planned for Belmont, OH, should help soak up that excess
• an Appalachian hub could catalyze $36 billion in investment and 100,000 jobs in the region
• some think the region could support as many as four or five crackers

Much more at the link.

See also this post.

See this superb series on ethane in the Houston Chronicle. I believe I have linked this article before; it was sent to me by a reader some time ago. The Chronicle allows a few free articles each month.

• Part 1. 
• Part 2.
• Part 3. 

More:

• ethane infrastructure squeeze should loosen in 2019, ExxonMobil, November 2, 2018;

Ethane -- Pop Quiz -- February 9, 2019

Ethane is a "feedstock" for just about "everything."

1. How many countries export ethane internationally? [That's redundant, obviously, but that's how the EIA phrased it.]

2. Name the top five countries that export ethane internationally. [Ditto,]

3. Name the country that is #1 in ethane exports.

4. Name the country that is #2 in ethane exports.

5. The US exports how much ethane?

a. 50,000 bpd
b. 250,000 bpd
c. 500,000 bpd
d. 1 million bopd

6. The country that exports the most ethane, exports how much ethane?

a. 50,000 bpd
b. 250,000 bpd
c. 500,000 bpd
d. 1 million bopd

7. The #2 country in ethane exports, exports how much ethane?

a. 50,000 bpd
b. 250,000 bpd
c. 500,000 bpd
d. 1 million bopd

8. The #3 country in ethane exports, exports how much ethane?

a. 50,000 bpd
b. 250,000 bpd
c. 500,000 bpd
d. 1 million bopd

9. In what year did the #1 country overtake the #2 country (questions 3 and 4 above).

10. The United States exports ethane to how many countries?

11. In 2014, the US exported ethane to only one country. Name that country that was the only country to import ethane from the US.

12. Extra credit: American Ethane, when given federal approval, will supply ethane to a number of petrochemical crackers in China, from a new terminal on the Neches River in Beaumont, TX. "Who" funds American Ethane?

Link here for answers.

See also this post.

Now, Another Bottleneck In The US Ethane Story -- October 27, 2018

I assume the four major processes involving ethane:

• production at the well-head
• fractionation
• transportation
• end user (petrochemical plant)

I believe back in the early days of the Bakken boom, the ethane was not wanted because there was inadequate demand by the end user (not enough petrochemical plants).

See ethane rejection.

Now it appears there is not enough ethane available to meet end user demand: not enough capacity to separate ethane from the other natural gas liquids (NGLs).

If I that correct, imagine all the petrochemical plants that have sprung up over the past few years, or expansion of existing plants.

See this article in the Houston Chronicle.

By the way, I haven't heard a thing about NGLs Badlands in a long, long time. It seems I was sent a note on it recently but if so I lost it. I did ask for an update on April 16, 2018, but no response (at least nothing that I posted). See this post, from June 21, 2016:

North Dakota’s top oil producer—Continental Resources Inc.—has signed a long-term agreement to supply ethane to a proposed $6.5 billion polyethylene plant that Badlands NGL plans to build in the state.

“The interesting thing is that the Continental announcement is leading to very serious dialogues with other producers in North Dakota,” William Gilliam, Badlands CEO, told The Bakken magazine. “We are also pursuing very serious discussions in Canada.”

He cited a recent report by the Canadian Energy Research Institute (CERI) which said Canada could produce 350,000 barrels of ethane per day. Gilliam noted that he will be in Alberta this week for meetings with potential ethane suppliers.

“We’re actually looking at building a bigger ethane cracker in North Dakota because of the fact that we think we can be successful in gaining an important amount of ethane from Canada,” Gilliam said.

My thoughts: nice problem to have. "They" will solve it. Lots of jobs. If Proposition 112 in Colorado passes, there will be a lot of experienced workers ready to help out in Texas. 

Mineral Owners, Rejoice! But North Dakota Flaring Is Getting Worse -- September 17, 2018

From RBN Energy today:

There is more evidence that mayhem is afoot when we look at NGL price relationships. In fact, ethane tells a big part of the story.

Since mid-May 2018, the price of Mont Belvieu ethane has more than doubled, from 25 c/gal to 55 c/gal on Friday (September 14).  All measures of ethane value that we monitor here at RBN are back to levels not seen since 2012.

Ethane is now three times the price of natural gas on a per-Btu basis. The last time we saw that was May 2, 2012. The ethane price is up to 34% of West Texas Intermediate (WTI) crude oil. Last year at this time, it was 20%. The frac spread, where ethane is a big component, is up to $8/MMBtu, the highest level since crude prices crashed in 2014.

Two things are driving this dizzying ascent of ethane prices.

First is increasing ethane demand from all the new U.S. ethane-only crackers coming online plus growing ethane exports. The second factor is the focus of this blog: the fractionation capacity constraint. Maxed-out fractionation capacity caps ethane production.

Ethane can’t be delivered to petchem plants or export docks until it has been fractionated. But not only does fractionation capacity cap ethane production, there is a more nefarious process at work. Even though ethane prices are now three times natural gas prices, ethane rejection (the sale of ethane as natural gas) is on the rise.

That is because processors are rejecting ethane to make room for the fractionation of propane and the heavier NGLs.

There are all sorts of quirks that happen when rejection is driven by fractionation capacity constraints instead of natural gas-versus-ethane value economics, not the least of which is that lowering the ethane content of incoming y-grade actually reduces the effective capacity of the fractionator (more on that math in an upcoming blog). But regardless of the math, the net result is lower ethane supply just when ethane demand is cranking up. No surprise that ethane prices are skyrocketing.

Talk about a conundrum. The price of ethane is going up. But North Dakota doesn't have the infrastructure to process all of the ethane it is producing. And even if North Dakota had the necessary infrastructure it sounds like the US doesn't have the necessary capacity to handle all of it.

On top of all this, look at the NG fill rate.

If you are having trouble following the pricing / measuring of LNG, you are not the only one. See this post.

Last week, it's all about LNG.

More from the RBN Energy link:

So what happens if production continues to outpace fractionation capacity? Presumably, at some point, there is no more storage capacity for y-grade. How about exporting the surplus? That’s what happens with purity products like ethane and propane. While theoretically possible, exports of y-grade are extremely problematic — there are no appropriately configured docks or ships. Consequently, if storage is full, production must be curtailed. But here’s the catch: Y-grade gets produced as a byproduct along with associated and “wet” gas production. The only way to dial down y-grade production is to dial down the production of associated gas (which means pulling back on crude oil production), or to reduce wet gas production — or both. That would be an unprecedented market development.

****************************************

Treasure Every Moment

Fractionation: Keeping America Great -- September 17, 2018

Must read: today's RBN Energy post on NGL fractionation. See below. It starts with ethane. Over the weekend a reader sent me the link to a 3-part series in the Houston Chronicle on fractionation. One is allowed three free articles/month over at the Chronicle. Hopefully, you still have three free articles. The link to part 3 will get you to all three parts in the series. If you get to the articles, don't close the window; if you open it again, it will count against your free articles. I've archived all three.

RBN Energy: far-reaching impact of the unprecedented shortfallin NGL fractionation capacity.

Y-grade, welcome to the Hotel Fractionation. You can check in any time you like, but you can never leave!  OK, so that’s a bit of an overstatement. But there is no doubt that the U.S. NGL market has entered a period of disruption unlike anything seen in recent memory. Mont Belvieu fractionation capacity is, for all intents and purposes, maxed out. Production of purity NGL products is constrained to what can be fractionated, and with ethane demand ramping up alongside new petchem plants coming online, ethane prices are soaring. But that’s only a symptom of the problem. Production of y-grade — that mix of NGLs produced from gas processing plants — continues to increase in the Permian and around the country. Sooo … If you can’t fractionate any more y-grade, what happens to those incremental y-grade barrels being produced?  How much can the industry sock away in underground storage caverns?  Does it make economic sense to put large volumes of y-grade into storage if it will be years before it can be withdrawn? — i.e., “you can never leave.” And what happens if y-grade storage capacity fills up? Today, we begin a blog series to consider these issues and how they might impact not only NGL markets, but the markets for natural gas and crude oil as well. 

Fractionation, the process of splitting natural gas liquids (NGLs) into purity products — ethane, propane, butanes and natural gasoline — is as important to the NGL market as refining is to the crude and products markets. In fact, the functions are quite similar — take a raw material with no direct use and transform it into usable products. 

In the past, we considered the implications of a tight fractionation market, but did not get the NGL heebie-jeebies. So what has changed? The answer is mostly one of magnitude. The situation is quickly becoming more dire. Fractionation capacity in Mont Belvieu, the rest of Texas and Louisiana is running at or near full capacity. Railcars of “x-grade” NGLs (mixed NGLs with less ethane than y-grade that can be transported by rail) are fanning out across the country looking for open fractionator space.  Marcellus/Utica fractionators are being inundated with barrels from as far away as the Permian. Some midstream companies that move y-grade from the Permian through Mont Belvieu fractionation are said to be charging between 70 and 80 c/gal for spot transportation and fractionation fees (T&F), up from 15 c/gal before all this started. 

Wow, It Never Quits -- Making America Great Again -- First Of Its Kind Outside The Gulf Coast -- November 8, 2017

Wow, it never quits.

Back on January 19, 2017, it was reported that Potter, PA, has unanimously approved a conditional use permit for Royal Dutch Shell to move forward with construction of a multibillion-dollar petrochemical complex near Pittsburgh. Data points:

• $6 billion project
• will use low-cost ethane from shale gas producers in the Marcellus and Utica basins in PA, OH, and WV
• to produce 1.6 million tonnes of polethylene per yer
• company hopes to start construction sometime near the end of 2017
• target in-service date early in the next decade
• 6,000 construction workers; 600 permanent employees when project completed
• this is "Shell's pioneering project" -- the first of its kind outside the Gulf Coast -- "could be the cornerstone for regional economic growth for decades to come

Today, the Oil & Gas Journal reports that the main construction phase has begun on this project. Data points:

• Shell's Chemical Appalachia LLC's petrochemical complex in Potter Township, PA
• early works program included
• building bridges;
• relocating a state highway;
• improving existing interchanges;
• repositioning a rail line (wow); and, 
• preparing foundations for the complex
• complex to include four processing units 
• an ethane cracker; and,
• three polyethylene units
• the ethane cracker will be the largest part of the facility with more than 200 major components and 95 miles of pipe
• the site will include a 250-Mw natural gas-fired power plant
• much more at the link

Making America Great -- It Never Quits -- The Second Wave Of Ethane Crackers Begins -- October 3, 2017

Wow, it never quits! Making America great. The positive ramifications from the shale revolution continue to reverberate through the economy.

A reader sent me this story from the Pittsburgh Business Times about the new ethane cracker being built in Pennsylvania. From the article:

Shell Chemicals' $6 billion ethane cracker being built in Beaver County [Pennsylvania] isn't just important to the tri-state region, it's also playing a big role in the U.S .petrochemical industry.

"That essentially is the beginning of the second wave" of ethane crackers, ...

The Potter Township plant made the list of 13 ethane crackers being built from 2017 until 2021 ...

"You'll see the biggest buildup in the U.S. petrochemical industry we have ever seen," [a spokesman] said. It's part of the estimated $85 billion a year in investment in the domestic petrochemical industry since 2010, a big change since the industry's downturn a decade ago.

What revived the petrochemical industry from stiff foreign competition? The shale boom that has lifted many parts of the country, including southwestern Pennsylvania.

The Shell cracker in Beaver County is scheduled to go online in the second half of 2021. That will come at a good time for the petrochemical industry, which is growing at a rate of about four world-class steam ethane crackers like the Shell plant a year.

Additional data points:

• ethane production has doubled since 2005 and is likely to grow another third by 2020
• already, 318 petrochemical projects worth a total of $185 billion since 2010
• the shale boom is likely to supply enough ethane for a second wave of crackers; will be lead by the Potter Township plant

Comment: it should go without saying that Hillary Clinton promised to do what she could to stop fracking in the US had she been elected president. I am absolutely convinced that she may not have been able to stop the US shale revolution and fracking but she certainly could have slowed it down with executive orders, additional EPA regulations, and the use of the bully pulpit. 

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And In Minnesota, This Beats Solar Panels

Meanwhile in Minnesota, being reported in Minneapolis/St Paul Business Journal:

Emerson Automation Solutions is growing again in Minnesota, investing in plants in Chanhassen and Shakopee as it enjoys renewed strength from oil-industry customers.

The Star Tribune reports that the company will soon embark on a $14 million project in Chanhassen that will add another 80 workers to that location and convert 30,000 square feet of offices into more factory space. That follows a $10 million renovation project in Shakopee, where Emerson has hired 100 new workers.

The company, a division of St. Louis-based Emerson Electric Co., makes pressure, temperature, flow, level and wireless measurement instrumentation. It employs more than 2,400 people in Minnesota.

The company expanded into Shakopee in 2013 with a $70 million, 500-job facility, but work slowed shortly afterward as oil prices tumbled. (Emerson has a big chunk of the market for oil and gas monitoring equipment.) Prices since stabilized again at about $50 a barrel — not boom-era prices but enough to get customers spending on equipment again.

Largest Petrochemical Plant Of Its Kind To Be Built Near Houston; LyondellBasell; $2.4 Billion -- Making America Great Again -- 2,500 Construction Jobs -- July 21, 2017

Updates

July 22, 2017: after posting the LyondellBasell article below, I thought back to this article just a couple of days earlier:

RBN Energy: Really? New US cracker demand, exports will strain ethane supply. Really? Remarkable. Absolutely remarkable.

The last couple of years have been a wild ride for the U.S. ethane market, but look out ahead.  It’s going to get crazy. 

The onslaught of new, ethane-only crackers is upon us at the same time overseas exports are expected to ramp up. 

At first glance, it might appear there is enough ethane to meet all that demand, coming from molecules that today are being rejected — that is, sold as natural gas rather than liquid ethane. But the big question — will it be enough? Because not all that rejected ethane has access to pipeline capacity needed to get it to market, at least not right now. In today's blog, we begin a new series on rising ethane demand, how the new demand will be met, and what it all means for ethane prices.

Ethane is a unique market — it’s the only energy commodity that can morph from being sold as natural gas to being sold to petrochemical plants as a liquid feedstock.

Original Post

 

A huge "thank you" to the reader who sent me this. From Chron.com, the data points:

• Houston petrochemical company, LyondellBasell ("Pat, I would like to buy an 'L'.")
• to build a $2.4 billion plant near Houston Ship Channel
• would be the largest factory of its kind in the world
• 2,500 construction jobs; 160 permanent positions
• represents a continuation of the petrochemical boom along the Gulf Coast
• of the $185 billion in petrochemical plants completed since 2010 or planned through 2023, $70 billion of those along the Texas Gulf Coast
• direct result of the shale-drilling boom which produced large amounts of ethane

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US Will Dominate Energy -- Rick Perry

For various reasons I did not want to post this story but on second thought there were some important points to bring out. The reader who sent me this article mentioned this about the journalist who interviewed Rick Perry for the article below: Ms Zito was one of the few reporters that covered the election correctly; she was on the ground in western Pennsylvania and got a great feel for Trump's support.

From The Washington Examiner, meeting with SecDOE Rick Perry outside Pittsburgh earlier this week:

BRUCETON, Pa. — The National Energy Technology Laboratory in suburban Pittsburgh is one of 17 government-funded national labs within the Department of Energy and is also part of a fascinating chapter in American history, not just in the development of energy, but also of science.

The complex, atop a rolling Appalachian ridge, once housed the head of the Ordnance Engineering Group for the Manhattan Project and the researchers and scientists who helped design the trigger for the first atomic bomb. SecDOE Rick Perry visited for a tour of the lab that is working to expand the possibilities for horizontal drilling and hydraulic fracturing for natural gas in shale. He praised work the lab is also doing to identify and extract rare-earth elements from coal and coal byproducts.

Two things come to mind immediately:

• the new attitude in Washington: America's exceptionalism
• fracking: for the US, no looking back

Automobile Association And The Open -- What They Both Lack In Common -- July 19, 2017

British.

This is pretty funny. When we were stationed in England, one of the first things I noticed is that for the British, the rest of the really doesn't count. Or at least the institutions outside of Great Britain did not mind. When we went to buy automobile road insurance, I noted it was not the "British Automobile Association" like the "American Automobile Association" but rather the "Automobile Association."

As in THE Automobile Association. The only automobile association.

LOL.

It was only a matter of time before someone else noted that. In The Wall Street Journal today,  this headline: "Dear American twits: this golf event's proper name is "The Open." THE Open. As in the only golf open. LOL. I will read the article later. It should be a hoot.

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The Bakken

Active rigs:

$46.48	7/19/2017	07/19/2016	07/19/2015	07/19/2014	07/19/2012
Active Rigs	59	30	73	195	207

RBN Energy: Really? New US cracker demand, exports will strain ethane supply. Really? Remarkable. Absolutely remarkable.

The last couple of years have been a wild ride for the U.S. ethane market, but look out ahead.  It’s going to get crazy. The onslaught of new, ethane-only crackers is upon us at the same time overseas exports are expected to ramp up. At first glance, it might appear there is enough ethane to meet all that demand, coming from molecules that today are being rejected — that is, sold as natural gas rather than liquid ethane. But the big question — will it be enough? Because not all that rejected ethane has access to pipeline capacity needed to get it to market, at least not right now. In today's blog, we begin a new series on rising ethane demand, how the new demand will be met, and what it all means for ethane prices.

Ethane is a unique market — it’s the only energy commodity that can morph from being sold as natural gas to being sold to petrochemical plants as a liquid feedstock.

It is this chameleon-like attribute that contributes to ethane’s volatility, both in terms of production volume and pricing. Because of ethane’s unique niche (and our fondness for the product here in the RBN blogosphere), we’ve been posting lots of blogs on the topic for years, going back to the original Ethane Asylum that heralded the ramp-up in ethane rejection in the Shale Era. Then in Ethane: Boat on the Water!, we discussed the growing supply of ethane, falling prices and the challenges that had to be overcome for the first ship of U.S. ethane exports to set sail. That finally happened on March 9, 2016, when the first ethane cargo departed the Marcus Hook, PA terminal near Philadelphia.

We examined ethane’s relationship to the price of natural gas, ethane rejection economics, and ethane’s competitiveness as a petrochemical feedstock in It’s Complicated. More recently, in Ain't Wastin' Time No More, we detailed Shell’s plans for a Beaver County, PA steam cracker and the regional supply and infrastructure necessary to support the cracker’s supply chain. 

Last night I read an article that discussed this very issue -- natural gas as a fuel vs a manufacturing feedtstack. I posted the link to that article but did not highlight this issue because I thought it a bit nerdy. Now, I see it's mainstream with RBN Energy. Cool. From this linked article:

As the US increases its shale gas production in the next 5 years, there should be enough to supply US manufacturers and to export the rest to foreign customers, [the IEA] said. “Manufacturing is taking over from power generation as the main gas demand driver."