It's possible this has been posted earlier but do not remember. Regardless, I would rather report a second time than miss something.
From a reader, who alerted me to this story: ONEOK seeks to expand a NGL pipeline that connects to its Bear Creek gas processing plant near Halliday in Dunn County.
Data points:
wants to add two pump stations
currently carries up to 15, 000 bpd
expansion would permit up to 80,000 bpd
one pump: on a 5-acre parcel of land eight miles southeast of Watford City
second pump: on a 7-acre parcel of land 18 miles northwest of Killdeer
pipeline: 38 miles long; built in 2016;
no change in maximum operating pressure;
NGLs ultimately be shipped via ONEOK's Bakken and Elk Creek pipelines, from eastern MT to Kansas
this expansion is separate from a planned expansion of the Bear Creek processing plant
Maine: for what it's worth. The state is looking at nationalizing its power grid. Op-ed here.
Bakken census: from a reader, thank you. At this rate, North Dakota will surpass the population of California in 2325. Link here.
Minot’s population dipped somewhat in the latest estimates released by the U.S. Census Bureau today.
The estimate of 47,370 as of July 2018 is down 1% from 47,885 in 2017 and down nearly 4.4% from the peak estimate of 49,531 in 2015. The official 2010 census was 40,888.
Although communities such as Minot and Stanley have seen declines from their oil boom highs, significant growth still is occurring in northwest North Dakota’s oil patch. That growth is concentrated around Williston, which saw an estimate increase of 5.7%, and Watford City, up 8% in 2018.
Watford City’s new estimate of 7,080 is lower than the community believes is its true population. Vawnita Best, community development director, said the community estimates its population around 8,500. Working with the Census Bureau, the city learned its error rate on the 2010 count could have been off as much as 25 percent, which if carried over in the estimates would put the 2018 population at 8,750, she said. That compares with 1,744 residents counted in 2010.
Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.
From The Williston Herald. A long, long article with ND officials suggesting "second attempt" will have much greater chance of succeeding, suggesting first attempt was "too fast too soon."
CEO William Gilliam, Badlands NGLS, filing for Chapter 7 bankruptcy in a Colorado court.
Natural gas plant liquids (NGPL): Those hydrocarbons in natural gas that are separated as liquids at natural gas processing, fractionating, and cycling plants. Products obtained include ethane, liquefied petroleum gases (propane, normal butane, and isobutane), and natural gasoline. Component products may be fractionated or mixed. Lease condensate and plant condensate are excluded.
Note: Some EIA publications categorize NGPL production as field production, in accordance with definitions used prior to January 2014.
Natural gas plant liquids (NGPL) production: The extraction of gas plant liquids constituents such as ethane, propane, normal butane, isobutane, and natural gasoline, sometimes referred to as extraction loss. Usually reported in barrels or gallons, but may be reported in cubic feet for purposes of comparison with dry natural gas volumes.
I do not know if there is a difference between NGL and NGPL (natural gas liquids and natural gas plant liquids). For purposes of this discussion, probably not.
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).
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.
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.
the conversion of natural gas gathering lines into a natural gas liquids transmission pipeline
about 45 miles of pipeline conversion
only $1.8 million; will involve very little construction
capacity: 50,000 bbls of natural gas liquids (NGLs) from the Lonesome Creek gas processing plant in McKenzie County to the Stateline gas processing plant in Williams County
will deliver NGLs into the Bakken Pipeline
ND NGLs:
currently, more than 400,000 bpd
of that, 40,000 to 60,000 bpd transported by rail due to pipeline shortage
by 2035: North Dakota NGL production is expected to come close to one million bpd
since it runs under the Missouri River, it will require a US Army Corps of Engineers permit revision
Also:
Oneok is developing the Elk Creek Pipeline
a 900-mile pipeline for NGLs
will transport NGLs from Sidney, MT, to Bushton, KS
the pipeline begins in Sidney, MT, but transports Bakken NGLs
There’s one more aspect of NGL markets that must have been designed to
confuse outsiders, because it certainly does. NGL quantities are quoted
in barrels. NGL prices are quoted in gallons. Really. So I’ll sell
you 10,000 barrels of non-TET normal butane for $1.36 per gallon. It
never occurs to NGL people to convert either the quantity to gallons or
the price to a per barrel number. They think of everything multiplied
by or divided by 42. Go figure. And BTW, propane retail people do
think in gallons - but that’s another story.
NGLs are sometimes referred to by the number of carbon atoms in their
molecules. Yes, even traders with no engineering background do this.
It makes you part of the secret NGL society. Ethane’s chemical formula
is C2H6, meaning that it has two carbon atoms and 6 hydrogen atoms, and
in the market it is called C2. Propane’s formula is C3H8, and it is
called C3. Butanes are a little more complicated and it is best that we
not get into the molecular chemistry here to explain it (for me and for
you). Suffice to say that normal butane is called NC4 and isobutane
IC4. Finally natural gasoline is called C5 (even though natural
gasoline contains C5 plus a lot of C6 and greater). The more carbon
atoms in a hydrocarbon molecule, the heavier it is. So in the market,
butanes and natural gasoline are called ‘heavies’ or ‘heavy ends’.
Ethane and propane are ‘lights’ or ‘light ends’. Using these
semi-technical terms keep others from understanding what NGL people are
talking about, which of course is the objective.
59a. Butane, one of the
two natural gas liquids that is also known as LPG (liquefied petroleum
gas; the other being propane). In the U.S. context, we are generally
referring to normal butane, that
product used in U.S. markets primarily as a motor gasoline blending
component, and to a much lesser extent as a petrochemical feedstock.
59b. How much NGL is North Dakota producing? A lot. 400,000 bpd in 2018; expected to increase to about 1 million bpd by 2035. See this post.
Reading the business news and all the new oil and gas projects and all the infrastructure going in, I was absolutely certain "we" were at risk of "over-building." Apparently not. This from a reader who knows the subject very, very well; it came in as a comment at another post:
To put some context to supply/shortage/US NGL potential ... feedstock supply is dwindling on the global stage.
Right now, in the US, oversupply of ethane is resulting in about 600,000 barrels a day rejected back into the pipelines.
That
is, due to the current infrastructure shortage, ethane that could
supply 6 large crackers is simply being burned along with methane.
The
US has a HUGE advantage on the world stage with rock bottom, ample
supply of feedstocks along with cheap electricity to run the operations.
February 22, 2018: be sure to watch comments. I can't bring them all to the main post (it would get too cluttered) but this one is too important to lose. From a reader:
The line to Alberta might well ship both ethane and propane either in batches or separated by pigs.
The
huge cracker in India built by Reliance Industries is being fed by a
virtual pipeline of brand new, built -for-purpose ethane carrying ships
out of Morgan's Point.
Reliance said that even with transportation
costs (halfway around the world), they are still profiting $300
million/year more rather than using naptha.
This shipping or liquefied ethane is a new industry entirely with Marcus Hook and Morgan's Point being the ports of origin.
Original Post
For an understanding of natural gas liquids, a reader recommends this monograph: "Natural Gas Liquids Primer: With a Focus on the Appalachian Region" produced by the US Department of Energy, December, 2017.
This link will also be found at the "Data Links" page tabbed at the top of the blog.
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And this blows me away.
The first thing I wanted to check: the volume of natural gas liquids produced in the Appalachian region, now that we know that number of North Dakota (posted earlier today or yesterday -- see below).
Hold your breath.
From the monograph linked above:
If I'm reading the graph correctly, and it's not a particularly difficult graph to read:
in 2013, the Appalachian region was producing less than 250,000 bbls of NGL daily
in 2016, production had jumped to 1.2 million bbls / day
through 2049, production tends to level off at 1.2 million bbls daily
So? So what? What's the point?
The Appalachia (Marcellus/Utica) is a natural gas play. It's producing about 1 million bbls NGLs on a daily basis and is projected to level out at that level.
North Dakota produces more than 400,000 bbls of NGLs daily
this NGL production will more than double by the 2030s -- ranging from from 800,000 to 1 million bbls daily
Okay, you can breathe now. I may be missing something or misreading something, but it seems fairly straightforward.
But there's more.
This is not as interesting, perhaps, but it certainly helps put things into perspective. This graph is from the same monograph:
This is annual production of natural gas in the Appalachian region, measured in trillions of cubic feet. Currently it looks like the region is producing around 8 trillion cubic feet annually but just a few years ago, half that much, about 4 trillion cubic feet. But just for the fun of it, let's call it 3.65 trillion cubic feet, divide by 365 and come up with 10 billion cubic feet / day.
North Dakota is producing 2 billion cubic feet / day. Yes, ten billion is 5x two billion -- a huge difference but it's not exponentially different.
I am simply blown away. The natural gas comparison might not be that remarkable, but the natural gas liquid comparison certainly caught my attention. It certainly helps explain why the NDIC and industry leaders in North Dakota have a sense of urgency about this issue. Even if there were no caps on flaring, what will the industry do with all this "by-product."
Disclaimer: especially for newcomers -- I often make simple arithmetic errors. I am inappropriately exuberant about the Bakken. I see things that may not exist. On many of the things I post I feel I am in a distinct minority. C'est la vie.
Because of the holiday on Monday, the API data will be released today, instead of Tuesday. That data will come out later this afternoon. API forecasts a 1.300-million-bbl build. Later: here is the actual number: interesting -- not a build at all, but a decrease - API has the weekly crude oil inventory number dropping 0.907 million; in other words, down about a million bbls.
Later: WTI: $61.10 just as the API number hit the internet, 4:30 ET. Five minutes later, $61.12 -- in other words, no impact.
Likewise, the EIA weekly petroleum report that usually comes out Wednesday will be delayed a day, to be released Thursday.
I use the EIA data for calculating "re-balancing" time frame.
****************************** Update On Andeavor's Belfield Logistics Hub
I'm not sure if this has been previously reported or if this is new but related to the previously reported story regarding the proposed Andeavor natural gas logistics hub near Belfield, North Dakota. I guess parts of this have been previously reported, but this fills in a lot of the details.
44 miles long -- McKenzie, Billings, and Stark counties (the original article regarding the Belfield hub did say the company would connect its new Belfield hub with a location in McKenzie County
at Belfield, the mixed natural gas liquids would be separated into products such as ethane, propane, butane, and natural gasoline
from Belfield, the products would be transported by pipeline to the Andeavor Fryburg Rail Terminal and loaded unto rail cars
North Dakota produces more than 400,000 bbls of NGLs daily
this NGL production will more than double by the 2030s -- ranging from from 800,000 to 1 million bbls daily
memo to self: memo to Art Berman
the entire project:
three pipeline segments that total 44 miles
conversion of 42 miles of Andeavor BakkenLink crude oil pipeline into NGL service
would carry NGLs from the Oasis Wild Basin natural gas processing plant that's being expanded near Watford City (I believe when the Oasis Wild Basin NG processing plant comes on line it will be the biggest such plant in North Dakota -- although it may not hold that title for long)
pipeline would initially carry 15,000 bbls/day; could be expanded to 34,000 bbls/day
total project cost estimate: $150 million
The second story: ONEOK (previously posted on the blog) --
has proposed to have the 900-mile Elk Creek Pipeline transport NGLs from Bakken to Kansas
that project originates in Sidney, MT, but will connect to existing pipelines in northwest North Dakota
ONEOK would convert an existing 45-mile NG gathering pipeline into a NGL pipeline in McKenzie and Williams counties
Meanwhile, the status of the Keystone XL remains muddled.
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Tulips
Because of the wind, rain, and winter advisory here in north Texas, I had to move the tulips indoors.
