Natural Gas Proved Reserves -- Global -- August 22, 2022

Off Cyprus:

• link here.
• this was considered "breaking news" and breathlessly reported -- oh, give me a break.
• but, yes, it's huge -- see Groningen below 
• but so is the Permian 140 trillion cubic feet
  
• TTE, Eni: Cronos-1 well
• preliminary estimates indicate there are about 2.5 trillion cubic feet (TCF) of gas in place, “with significant additional upside”
• that 2.5 trillion: put into perspective by numbers below
• Groningen, which the Dutch closed down? 2.8 trillion cubic feet
  

US proved reserves of natural gas by top eight states, 2016 - 2022:

Staggering global riches of natural gas (the numbers keep increasing). From an earlier post:

Top five countries:

• Russia: 6,000 trillion cubic feet
• Iran: 1,000 trillion cubic feet
• Qatar: 900 trillion cubic feet
• Turkmenistan: 600 trillion cubic feet
• US: 350 trillion cubic feet
• #11: Australia: 152 trillion cubic feet (as of January, 2014). (See this post.)
  

Now, let's go back and re-run the numbers that were posted earlier:

• that recent huge Mediterranean natural gas find: 30 trillion cubic feet; this was said to be biggest natural gas find ever in the Mediterranean
• Barnett, revised USGS figures: 53 trillion cubic feet
• Utica, newly revised figures: 782 trillion cubic feet
• Marcellus, EIA revised estimates: 65 trillion cubic feet, "proved" reserves
• Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
• Qatar: 800 trillion cubic feet, wiki, conversion

Other recent stories on natural gas reserves

• Marcellus: 480 trillion cubic feet of technically recoverable gas, Penn State geoscientist 

Comments regarding natural gas reserves

• for me, it's hard enough getting my hands around billions of bbls of oil; it's almost impossible for me to get a feel for trillions of cubic feet of natural gas
• proved reserves are based on price of recovery, confusing matters from year to year
• estimates are just that, estimates (and often inflated for "certain" reasons)
• watch for this gotcha: sometimes reported in trillion cubic feet; sometimes in trillion cubic meters (35 cubic feet = 1 cubic meter; not trivial)
• for me it comes down to two things:
• any discovery over 30 trillion cubic feet natural gas is staggering, worth reporting
• "we" aren't going to run out of natural gas any time soon

Con Edison Will Roll Back Supply Charges -- New Yorkers Experience Sticker Shock -- March 27, 2022

One of my favorite recurring posts is "ISO NE." New York is not part of "NE" but it's close enough.

Now, today, a reader alerted me to this: mainstream media is finally taking note.

Google: coned February prices electricity, and then click on "NEWS":

August a/c in NYC? 

Reminder: FERC just approved three new natural gas pipelines, one of them for New York state.

ISO NE: By the way, speaking of ISO NE, today, when electricity prices should be approaching zero for New England with all its renewable energy, it's still a fairly pricey $60 / MWH. At 3:00 a.m, electricity in ISO NE was priced at a minus $50.28. Of course, that's when all the wind turbines are actually working, but the three Tesla owners are the only ones using electricity.

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The Energy Transition Is Dead

Tracked here. 

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Sunday Morning Breakfast

From Trader Joe's: Chocolate Brooklyn Babka.

Wiki entry here.

Houston entry here.

Photo and more reviews here. Exactly what I purchased this past week, along with organic naan crackers:

For the record, I won't be buying this babka any time soon. It's just too chocolaty. Is that possible?

On the other hand, the only "white" cracker I will ever buy again is Trader Joe's Organic Naan Crackers. Even better than oyster crackers.

Trenton Lands One Of State's Largest Economic Expansion Projects To Date -- Source -- October 14, 2021

Locator: 10201GTL.

Tag: GTL Trenton 

Updates

November 16, 2021: update here. Williams County loan.

Original Post 

If this doesn't blow you away, nothing will.

Population of Trenton, ND: 372 people. 

Link here. 

Trenton, ND: a few miles southwest of Williston, ND.

Gas-to-liquids plant.

Canada-based Cerilon GTL.

But look at this, for little ol' Trenton: a $2.8 billion plant.

Will start with an initial 24,000 bpd of ultra-low sulfur diesel, and:

• military-grade jet fuel;
• naphtha,
• Group III base oils

Construction to begin in early 2023.

Infrastructure already in place:

• rail
• pipeline
• also has carbon sequestration opportunities

Company anticipates future construction phases and more facilities as part of  its overall vision for the complex.

“The Cerilon GTL complex has the potential to be one of the largest economic expansion projects in the history of North Dakota,” he said. “GTL facilities support the oil industry while reducing environmental impacts. The Williams County facility will be one of many expansions that make North Dakota a leader in carbon neutrality.”

If Governor Burgum had anything to do with getting this project in North Dakota, he needs to be declared governor for life.

Now, if he could only get the NDIC website working.

Natural Gas Production Projection -- August 6, 2021

From Geoff Simon:

The ratio of natural gas to crude oil being produced from Bakken wells will continue to increase, possibly doubling the state's current natural gas output in fewer than 10 years.

That was the message of Justin Kringstad, director of the ND Pipeline Authority, to members of the ND Legislature's interim Energy Development and Transmission Committee this week. Kringstad said the ratio of natural gas to oil typically starts out close to one-to-one, meaning 1,000 cubic feet of natural gas for each barrel of crude oil. But he said the ratio has been steadily climbing as more new Bakken wells are completed.

 

Kringstad said the higher gas-to-oil ratios are not unexpected. He told legislators most new wells today are being drilled in areas where a "parent well" already exists, which means the pressure that holds natural gas in the reservoir has already been reduced.

Click here to listen to Kringstad's comments.

.... the high case of which could have the state's natural gas production approaching seven billion cubic feet per day. The state's output as of the month of May was just under three Bcf per day.

Graphic:

Also from Geoff Simon:

Last year's pandemic-related downturn in oil and natural gas production provided midstream companies some relief in the pace at which new natural gas processing and takeaway capacity was needed. But increasing gas-to-oil ratios mean they will need to return to construction mode quickly.

Helms said the accelerated schedule won't provide midstream companies adequate time to get new processing and takeaway capacity permitted and constructed, but he said tax incentives enacted by the 2021 Legislature will encourage innovative methods of using the additional natural gas. 

SB 2328 established a credit against the oil extraction tax to incentivize use of onsite flare mitigation systems in production operations. The credit is equal to $0.75 per one million BTUs of flare mitigation that results from operating a flare mitigation system on a qualifying well. Credits are capped at a maximum of $6,000 per well per month, for as many as 12 months.

Helms said he's also seeing increased interest in using natural gas and gas liquids to generate electricity.

Notes From All Over -- Saturday Morning Edition, Part 1 -- Juneteenth, 2021

Coal is dead! Long live coal! Wow, how many times have I posted those six words? From social media: US year-to-date coal production totaled 261.5 million shorts tons, 8.7% higher than the comparable year-to-date coal production in 2020. Or go directly to EIA's "weekly coal production" site.

Bakken natural gas -- year-long high: Canadian gas exports on Northern Border reach five-month high despite Bakken growth. Link at S&P Global Platts. Wow, it looks like Platts didn't know which story line to headline. Data points:

• Bakken production reaches year-long high (with 16 active rigs, just saying);
• Bakken gas flaring remains under 7% (how's the Permian doing?)
• Canadian natural gas exports on the North Border Pipeline increased by an average of more than 200 million cfpd over the past seven days (article published June 14, 2021)
• Bakken supply on the pipeline: 1.68 billion cfpd
• lowest amount of Bakken supply on that line since the severe winter storm in mid-February
• freeze-offs dropped it to 1.64 billion cfpd
• okay: 1.68 billion vs 1.64 billion, and that's a headline
• Bakken rigs have climbed nearly 40% since January 1, 2021 (previously posted)

Bloomberg on shale: I had seen this link some time ago, debated whether to post it. Then a reader sent it to me. So it's linked/posted, FWIW. "After blowing $300 billion, US shale finally makes money." Way too many story lines to even begin. All I know is this: a lot of mom-and-pop mineral owners in North Dakota don't mind one bit, smiling all the way to the bank. Which reminds me, the data for the June, 2021, North Dakota Legacy Fund will be posted this next week. Link is here. Currently about $40 million is added each month to the coffers. 

Natural gas reclassification: I understand this not at all but will post the link for the archives. Maybe some day it will make sense.

China: considers lifting all childbirth restrictions by 2025. Link at The WSJ. 

There are so many story lines, I cannot even begin. However, from an energy point of view, and that's all I really care about any more with regard to a blog focused on the Bakken: this tells me all I need to know about China's energy situation. Any decision to drop childbirth restrictions has to be done lock-step with regard to energy requirements. This suggests to me that China feels very comfortable meeting its energy needs going forward. 

That's huge. 

China: I've followed this story for years, mostly from an environmental point of view, but now it's history -- that massive Chinese hydropower plant on the Yaangtze River has begun full operation. Huge. Link here to Charles Kennedy.

• seventh-largest hydropower facility in the world
• 12-generators
• $19 billion
• installed capacity of 10.2 GW
• first started generating electricity one year ago, but now all generators on line
• Wudongde plant aka the "who-done-it" plant
• displaces 12.2 million tons of standard coal and eliminates 30.5 million tons of CO2 annually (FWIF)
• global hydropower capacity:
• China, #1: 1.302 terawatt-hours as of 2019
• Canada, a distant #2: 398 TWh
• China with four of the world's largest hydropower plants, including the massive Three Gorges dam with a capacity of 22.5 GW and Xiluodo aka Xanadu, 13.86 GW

Gasoline demand: the EIA data does not seem to corroborate this story, but Reuters is reporting that US motor vehicle travel jumped by 55% in April, 2021, over 2020 levels. 

Trending on social media: HBO Max releases "Integration test Email #1." 

Exxon feeling pretty good these days? The company rejects union proposal to end Texas refinery lock out. Link here. Seven weeks so far.

And why not? If they were cheap a week ago, they're really cheap now. Three cheap energy stocks to buy right now, from The Motley Fool. By the way, what three things to these three companies have in common?

• Enbridge
• EPD
• OKE

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

Answer to quiz:

• they're all pipeline companies;
• they're all making a gazillion dollars in the Bakken;
• they all pay a great dividend

Just Following Up On An Old IP Question --February 3, 2021

The Hess AN-Bohmbach wells have been discussed often. They are tracked here.

I assume I've talked about this one; can't remember.

35093, 10,626, Hess, AN-Bohmbach-153-94-2734H-8, 35 stages, 9.9 million lbs, Antelope-Sanish, t4/19; cum 316K 12/20;

Does anything catch your eye?

Yeah, that IP of 10,626. 

Here's a pretty good post at the time. In that post, I said I would be waiting for the NDIC report. I don't recall if I ever followed up on that. Maybe I did. I don't recall. Whatever. 

Here's a screenshot of the sundry form from the file report:

It's possible there was a typo on the sundry form. 

But if so, there were two typographical errors. Note the natural gas MCF IP: 27,577 MCF which is about 10x the typical natural gas MCF IP. 

So, it was real. I guess.

Here's a screenshot of the frack/completion:

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The Movie Page

The Draft Page, Kevin Costner, 2014. 

Critics: mixed reviews. 

A bit of irony considering the choice of the Cleveland Browns was made for budgetary reasons only. And then seven years later:

My hunch: the movie played better for true football fans than for movie critics. 

From wiki, look at how "valuable" the screenplay was:

The screenplay was the number one script on the 2012 Black List survey of unproduced screenplays and WhatCulture listed it as the 10th best script of the 2010s. 

It was argued that the script "follows one of the central tenets of screenwriting which is, 'thou shalt make things as hard as possible for your protagonist.'" 

However, it was also stated that "[some] of this high-octane drama was lost in the screen translation, which is a shame, since the script is as good as it gets."

Not A Bit Surprised -- November 16, 2019

From Geoff Simon on Friday, November 15, 2019:

The preliminary oil production numbers for the month of September will not be down as much as earlier predictions. The Director's Cut is scheduled to be released November 19, 2019.

Lynn Helms, director of the Department of Mineral Resources, told a legislative committee this week that the wet weather in September did cause a drop in production, but it will only be about two percent lower than the August numbers.

Helms said production technology continues to improve, especially in the Bakken which he said is the "absolute best place in the country to put a drilling rig."

He said the Bakken continues to out-perform the Permian, the Eagle Ford, the Niobrara and other shale plays around the United States. And he said the improvements are happening quickly.

"A new well coming on in 2019 will produce 50-to-70 percent more in the first 18 months than a well that was completed just a year ago using the new technologies," Helms said.

The downside to the story is that associated natural gas production continues to outpace oil production, and the absence of adequate infrastructure to handle it has constrained industry growth.

"You can see the gas curve is much steeper than the oil curve and that's what really is our struggle as we go forward over the next five to 10 years is, the oil curve is where the money's at, the gas curve has got to be managed."

McKinsey: Natural Gas Update -- Through 2035 -- September 11, 2019

US natural gas: making America great. Link to report on McKinsey Energy Insights. Globally, new natural gas production forecast to be 635 billion cubic meters by 2035; half of that to be produced by US.

Data points:

• among fossil fuels, only natural gas will likely continuously grow in demand through 2035
• 2018: the turning point in terms of gas and LNG market dynamics
• China became the world's biggest LNG importer
• highest volume of liquefaction projects taking final investment decision (FID)
• that set the tone through 2035 -- long term projects
• Asian economies in the ascendancy, led by China; growing energy demand
• US continues to rank highly for both supply and demand
• supply side -- Europe and Asia's second-tier economies falling away
• 2018: China took overtook Japan as the world's biggest importer of gas
• China surpassed South Korea to become the second-biggest LNG importer
• through 2035, Asia (all of Asia) will account for 95% of glboal LNG demand growth until at least 2035
• demand
• global demand: will grow at about 1% annually
• Asian demand: will grow twice as fast, more than 2% annually
• production
• global production: new production to grow by at least 635 billion cubic meters
• US to supply more than half of that; 380 bcm
• Russia: 110 bcm of new production
• Africa: 110 bcm of new production
• Pipeline, note US-Mexico:

... new pipeline construction will add more than 200 bcm of cross-border gas capacity by 2025, with the U.S. and Russia retaining their major piped gas exporter positions. The firm also noted that three U.S.-Mexico projects totaling 60 bcm in capacity – the largest set of pipelines set to be completed anywhere in the world by 2025 – should conclude by the end of this year. Nord Stream 2, which will ship Russian gas to Germany (and the European Union) via the Baltic Sea, represents the second-largest set of pipeline projects and will reach a total of 55 bcm by next year

Finally, LNG and FID:

... “a record volume” of LNG projects – more than 60 million tonnes per annum (mtpa), or 20 percent of today’s market – took FID in the last 12 months and will push the LNG supply-demand balance into the late-2020s.

“Looking ahead, only one in 10 proposed LNG projects will take FID, with over 100 LNG projects totaling 1,100 mtpa of capacity competing to fill the 125 mtpa supply gap by 2023,”

Appalachian Storage Hub Has Been Added As A Link -- June 9, 2019

Appalachian Storage Hub (ASH) has been added as a link to the sidebar at the right.

A google search will reveal that the next ASH conference is scheduled for early June, 2019.

Permian Natural Gas Pipeline Expansion -- What Will The Faux Environmentalists Complain About Next? -- May 26, 2019

Remember this back on May 15, 2019? A Permian pipeline bubble?

Hold that thought.

North Dakota flares about 15% of the natural gas it produces. Bakken flaring was a huge story years ago; that story has pretty much gone away. Environmentalists are now going after the Permian and flaring. Google it.

So, I was curious. How much natural gas is being flared in the Permian? I think we discussed this before. There are two numbers. An "older" number is 4.4%; a newer number is 5.8%. Whatever. I find both numbers incredibly small considering what is going on in the Permian. Remember, unlike the Bakken, the Permian has a lot of natural gas along with its crude oil. From my perspective the operators and the state have done a great job keeping flaring to about 5% of total natural gas production.

But, now look at this. From mrt.com, March 4, 2019:

The proposed pipeline capacity expected to come online in the Permian Basin over the next three years is vastly greater than the estimated volumes of flared gas, according to a Texans for Natural Gas analysis. Recent media reports have called attention to flaring levels in the Permian as production has increased, with one environmental group even suggesting that the market can’t solve the issue. But the new pipeline capacity being added over the next few years appears to contradict that claim.

A TNG review found an estimated 14 billion cubic feet per day (Bcf/d) in additional natural gas pipeline capacity set to come online in the Permian by the end of 2022. This equates to more than five trillion cubic feet of natural gas annually.

I don't know what that means. Is "14 billion cf/d in additional natural gas pipeline capacity" anything to get excited about?

Answer:  That proposed capacity is about 93 times larger than the current flaring levels, according to data from the Texas Railroad Commission.

Comment: private enterprise tends not to like to "over-build." If proposed capacity is 93 times larger than the current flaring levels, that speaks volumes. No pun intended.

If they are over-building, they will cut back.

If they are not over-building, there will be a huge surge in natural gas production over the new few years.

14 billion cubic feet = 2.3 million bbls boe. Per day. That's in addition to whatever is already being produced. 

The Bakken Is An Oil Field, Not A Natural Gas Reservoir -- Or Is It? -- November 27, 2018

From The Williston Herald:

North Dakota’s August gas production alone added 260 million cubic feet per day of gas to daily production totals. By comparison, one world-class gas processing plant would handle 200 million cubic feet per day.

Annualized on a 12-month basis, that kind of growth would require 16 new plants in a year’s time. So far, seven new gas plants have been proposed, adding a little more than one billion cubic feet per day in processing capacity, along with incremental increases of about 40 million cubic feet per day.

The gas production doesn’t come alone, however. There are also NGLs associated with that, which require their own infrastructure. Using a conservative estimate of 6 gallons of NGLs per thousand cubic feet of gas, that would suggest about 40,000 new barrels of NGLs per plant that will also need takeaway and processing infrastructure.

Bakken gas can be as low as 2 NGLs per thousand, but is more often up to 10, making 6 GPM a conservative estimate.

This is absolutely staggering for anyone paying attention. I tend to think I am paying attention but I can hardly keep up. Perhaps I am not keeping up.

But to repeat:

In the Bakken, annualized on a 12-month basis, that kind of growth would require 16 new plants in a year’s time. So far, seven new gas plants have been proposed, adding a little more than one billion cubic feet per day in processing capacity, along with incremental increases of about 40 million cubic feet per day.

By the way, it is very, very likely that the Tribal Council will mandate royalties to be paid on natural gas that is flared. Stay tuned.

By the way, this reminds me. Think about this. Words matter.

The Bakken is considered an oil play, but yet it is producing phenomenal amounts of natural gas, and the production is predicted to increase significantly (exponentially?).  One has to wonder if there really might be something to the "sleeping giant." If natural gas ever got to $8/"unit" we might find out ["unit' = MMBtu, or million British thermal units].

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The Book Page

If anyone is interested in the back story of how Herman Melville came to write Moby-Dick, the best short biography I have ever seen is Chapter VII in Philip Hoare's The Whale, c. 2010.

Meanwhile, I'm continuing to have a blast reading The Bible: A Biography, by Karen Armstrong, c. 2007.

From the book, p. 27:

Unlike the Deuteronomists, P's vision was inclusive. His narrative of alienation and exile constantly stressed the importance of reconciliation with former enemies. Nowhere was this more apparent than in his most famous work, the first chapter of Genesis, in which P describes Elohim creating heaven and earth.

This was not a literal, historically accurate account of creation. When the final editors put the extant biblical text together, they placed P's story next to J's creation narrative, which is quite different.

So, even though P came later, his/her writings were the basis of Genesis. That's why it was confusing for me. I always thought the extant Bible was like a journal, or a diary, chronologically put together as J, E, D, P were writing. I was wrong to think that the beginning of the Bible was J's work and then E added to it, and then D came along with Deuteronomy. Finally P came along and did the chapters after the torah. In fact, the editors or redacters came along (after J, E, D, and P) and re-ordered everything and edited -- probably mostly typographical errors, etc.

So, even thought P came along much later, P's work was placed right alongside that of J and E. It makes sense; I just never gave it enough thought. 

At least that's my world-view. Absolutely fascinating.

Later: shortly after writing the above, I went over to Sophia's house. They had just received the December, 2018, issue of The National Geographic. As usual, every December, these magazines feature a story on Christianity. (More later.)

A Graphic Worth 10,000 Words -- March 30, 2018

It would be interesting to have a similar graph with two natural gas exporters superimposed / compared: the US and Qater. Or the US and Russia. Or the US and anyone else.

US Natural Gas Production, A Random Update -- March 3, 2018

Updates

NOTE: from million tonnes LNG per year (MTPA) to Bcf/d = multiply the former by 0.131584156

March 4, 2018: China became second largest importer of LNG (after Japan) in 2017; Japan 11 Bcf/d; China, 5 Bcf/d; but Japan's and Korean imports have remained steady for years; China's is growing significantly; see EIA data;

March 4, 2018: the world needs a lot more LNG -- Royal Dutch Shell --

• global trade volumes of LNG have doubled since 2005, and will continue to rise
• the US will boast almost 10 billion cfpd of LNG export capacity by the end of 2019
• US will be the third-largest LNG exporter, right behind Australia and Qater
• that alone is amazing, but then consider this: two years ago (2016), the US had less than 1 Bcf/d of export capacity
• Shell says the global supply of LNG won't meet demand
• Shell expects the supply crunch to occur i the early 2020s mostly due to the way buyers/sellers interact
• buyers want smaller, more flexible, shorter (in duration) contracts
• sellers want the opposite to lock in prices / volumes to cover very expensive terminals ($4 billion for Cove Point)
• sellers have responded: smaller trains at Cove Point; floating terminals

March 4, 2018: with regard to the Cove Point comment below, see this Reuters story --

• first vessel carry LNG from newly constructed Cove Point LNG export terminal in Maryland has departed as of Friday (remember all the protesting again Cove Point? with revelations of Russia's meddling in US politics, the dots are starting to connect; I always thought it was Saudi Arabia sponsoring protests against shale, pipelines, natural gas -- nope, it was the Russians; if they dupe people into anti-Hillary demonstrations supporting Bernie Sanders, certainly they could do much more in the energy arena)
• the facility is still undergoing final commissioning
• Cove Point is the second big LNG export terminal in the Lower 48; after Cheniere Energy's Sabine Pass terminal in Louisiana which exported its first cargo in February, 2016
• US became an exporter of LNG in 2017 for the first time in 60 years
• the US will become the third largest LNG exporter this year (2018)

Later, 10:32 p.m. CT: see comments --

Regarding LNG and its export ...

Two developments will greatly assist US companies to bypass existing LNG producers, namely modularization and ship-based LNG plants.

Modularization: Tellurian cost to produce 27 mtpa (almost double Yamal [ Russia, Arctic]) is about $16 billion (about half Yamal) using the modularization approach.

Floating LNG: Delfin plans on using FLNGs -- ships -- to greatly lower the price to liquify gas.

Later, 9:59 p.m. CT: see first comment --

The Cove Point MD LNG just shipped its first test cargo of LNG the other day. [Think of all the jobs this "operation" has produced.]

At 750 MMcfd capacity, it will increase US exports a bit.

One year from now, pipelines will be online carrying 10 Bcfd gas out of the Appalachian Basin. This will increase AB (Appalachian Basin) production from 25 to 35 Bcfd ... simply a staggering amount.  [Again, to put that in perspective -- Bloomberg Gadfly points out that the additional 7 billion cfd growth this year is staggering -- imagine multiplying that 7 billion by four or five times -- and that's just one year from now.]

More increases will continue.

People are gonna be shocked at how much gas the US will be producing 5 years from now.

Original Post 

Natural gas, US production, EIA, the graphic:

Bloomberg, the Gadfly, January, 2018:

Again, to repeat, the US will add the equivalent of the entire output of Turkmenistan -- one of the world's largest gas exporters -- in the space of just one year.

According to a google search:

During 2009, Qatar exported over 2.4 trillion cubic feet of natural gas.

From SeekingAlpha, March 2, 2018:

The big fundamental news this week was that Lower 48 production averaged an all-time high of ~78.4 Bcf/d, and LNG exports reached ~4 Bcf/d.

80 billion x 30 days = 2,400 billion cf/month -- compare to  2,427 billion in the EIA graph at the top.

Disclaimer: I often make simple arithmetic errors, especially dealing with large numbers.

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Just Dropped In ...

... To See What Condition My Condition Was In, Kenny Rodgers and The First Edition

Primer On Natural Gas Liquids -- US Dept Of Energy -- December, 2017

Updates

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.

Clicking on this link will result in a pdf that will load on your desktop, or you can click on this link which will lead you to the pdf link.

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.

But yesterday, from this post:

• 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.

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A Summer Song

A Summer Song, Chad and Jeremy

Making America Great -- A Record Year For Natural Gas -- January 10, 2018

This is for the archives more than anything else. From Bloomberg:

• America's gas production is forecast to set new records this year and next
• huge surge year-over-year
• the "extra" 7 billion cubic feet of gas production expected in 2018 to be produced in the US equals the entire output of Turkmenistan -- one of the world's largest gas exporters

Two reasons for this surge

Two big reasons for this are logistics and oil. Pipelines able to carry roughly 7 billion cubic feet of gas a day away from the prolific Appalachian region are due to start up this year, allowing production that's been bottled up in the East to flood out. Meanwhile, rising oil production in the Permian shale basin and elsewhere will bring increased quantities of associated gas.

Re-Posting: Cheniere, Asia; Qatar Has Sold Its Entire Flexible Winter LNG Supply -- December 6, 2017

Updates

Later, 10:49 p.m. Central Time: see first comment --

The rapid development of improving liquification processes for natural gas has huge implications.

Telurian's $15 billion dollar cost to produce 27 million tons per year of LNG at its proposed Driftwood project is astonishingly low. [Lake Charles, Louisiana.]

For context, the massive LNG Gladstone operations off Queensland [Australia] cost about $60 billion for roughly the same capacity.

In addition, the Norwegian company, Golar, is teaming up with an outfit named Delfin to position 4 FLNG ships off Louisiana which will produce LNG much more cheaply yet.

On the other end, converting older ships into regasification facilities - FSRUs - will economically allow receipt of LNG almost anywhere in the world.

These are the reasons behind tentative plans to import US LNG into a Melbourne-based FSRU in a few years.

Coals to Newcastle.

Original Post

This is just one of the reasons I do not enjoy watching business shows on network television, particularly CNBC. [My latest stretch of not watching CNBC began last Thursday afternoon and continues). The show will spend all day (sometimes multiple days) talking about a single deal (like the Aetna - CVS story), talking about it ad nauseam and completely missing all the other incredible stories out there.

This was posted earlier. It's such an incredible story, on so many levels, I am re-posting it:

Cheniere boosts LNG tanker fleet amid Asian demand boom -- from Reuters via Rigzone, data points:

• expanded its shipping fleet with a flurry of spot vessel charters to keep up with Asian winter demand growth as spot prices hit three-year highs
• Cheniere's Sabine Pass terminal in Louisiana: 22 cargoes last month
• ramping up its fourth train
• more than half its shipments going to China, Japan, or South Korea
• can you say Panama Canal expansion (which the NY Times famously said the expansion was doomed to failure)
• < but get this: Qatar entirely sold out of flexible winter LNG supply following a frenetic period of deal-making with term buyers in China and South Korea
• Cheniere now has 22 ships on the water

It appears the world's largest exporter of LNG is no longer the swing producer; the swing producer/exporter for LNG is the US. 

This has been predicted for quite some time -- that the LNG market would get really, really tight. I did not expect it to happen so soon. Must be a cold, cold winter in Asia,

Making America great again -- with energy. 

BHP Finds 5 Trillion Cubic Feet Of Natural Gas Off Trinidad -- October 25, 2017; Update On ExxonMobil And Vaca Muerta

I cannot keep up with natural gas discoveries. So, I have to cut and copy this from previous posts:

From an earlier post regarding natural gas reserves:

Now, let's go back and re-run the numbers that were posted earlier:

• that recent huge Mediterranean natural gas find: 30 trillion cubic feet
• Barnett, revised USGS figures: 53 trillion cubic feet
• Utica, newly revised figures: 782 trillion cubic feet
• Marcellus, EIA revised estimates: 65 trillion cubic feet, "proved" reserves

• October 18, 2017, Haynesville: USGS survey -- 300 trillion cubic feet of natural gas, up from roughly 70 trillion cubic feet in its last survey in 2010.

• Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
• Qatar: 800 trillion cubic feet, wiki, conversion

I did all that to post this story: BHP finds 5 Tcf of gas off Trinidad. In the area where this was discover the Trinidad energy minister said this: The blocks hold an estimated 10 trillion-40 trillion cf of gas and 2bn-8bn bl of crude. So, better than the Bakken, but then the Bakken is an oily play.

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Vaca Muerta Update

To quote Dorothy Parker, "What fresh hell is this?"

Day in, day out, it's bbls of crude oil. But not for ExxonMobil in South America, apparently. For them, it's "cu m/day: which I assume is cubic meters per day.

So, now the conversion at this site or this site:

11 cu m/day = 69 bbls/day

So 11 million cu m/day is 69 million bbls/day. I guess.

69 million bbls/300 horizontal wells = 230,000 bbls/day/well. Really?

Whatever.

Here's the article from The Oil & Gas Journal:

ExxonMobil Corp. is to launch a Vaca Muerta pilot project that could lead to a staged development of about 300 horizontal wells with an estimated production of 11 million cu m/day once completed.

Argentina’s Neuquen province has approved the company’s 35-year development for Los Toldos I South Block 85 km northwest of Anelo and 175 km northwest of Neuquen City. Initial project investment is $200 million, said ExxonMobil Exploration Argentina SRL (EMEA), which will operate the block with 80% interest. Gas y Petroleo del Neuquen SA and Tecpetrol each hold 10%.

And then this:

The initial investment calls for a pilot project that brings as many as seven wells to production, the construction of production facilities, and development of export infrastructure.

So, $200 million for the initial investment gets one seven wells.

$200 million / 7 wells with infrastructure = $30 million / well.

But 230,000 bbls @ $50/bbls = $12 million / day / well --- in three days the well will be paid for.
  
I can only assume my calculations are off.

It is said that Vaca Muerta has the world’s second-biggest reserves of shale gas and fourth-biggest of shale oil. When I update the Vaca Muerta, I update it here.

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And In Russia, It's Tonnes

From Reuters:

Russia will increase its oil output by 3.5-4.0 million tonnes in 2018 if a global deal between OPEC and non-OPEC producers to reduce production is not extended, Energy Minister Alexander Novak said on Wednesday.

Conversion? Maybe later. But probably not.

Why I Love To Blog -- Reason #12 -- October 18, 2017 -- Natural Gas: Haynesville Has Almost Half What Qatar Has -- HUGE!

This is absolutely why I love to blog. I have just spent a fair amount of time going through the Financial Times article asking whether the US shale revolution has peaked. I check my mail and I find a link to this story in the WSJ: an old fracking hot spot makes a comeback. The Haynesville Shale in Louisiana is being reborn, with the number of active drilling rigs tripling in the past year.

So, to answer the question posed by the Financial Times, no, an emphatic "no," the US shale revolution has not peaked. In fact, with exports of crude oil now increasing, one could argue the US shale revolution is only just beginning.

Now, back to the linked WSJ article. From the article:

A new report by the U.S. Geological Survey estimates the Haynesville and nearby Bossier shales contain more than 300 trillion cubic feet of natural gas, up from roughly 70 trillion cubic feet in its last survey in 2010. [And this is at $3-natural gas.]

The Haynesville Shale, a giant natural-gas field in northwest Louisiana, was one of fracking’s hottest spots a decade ago. But it fizzled out about five years ago as gas prices plunged and drillers focused on finding oil next door in Texas. Now, the Haynesville is being reborn as companies with longstanding positions in the area, such as Chesapeake Energy Corp., and newcomers seeking opportunity rush back in and drill again.

Gas production from the Haynesville has risen more than 20% so far this year, to more than 7 billion cubic feet a day from less than 6 billion in January, according to the U.S. Energy Department. The number of rigs active in northern Louisiana parishes and the Texas portion of the field has more than tripled in the past year to 44, according to oil field services company Baker Hughes Inc.

Chesapeake Energy has been learning how to get more out of the ground by drilling and fracking longer wells, Mr. Patterson told investors earlier this month. Chesapeake, which now produces more than 1.2 billion cubic feet of gas each day in the Haynesville, plans to ramp up efforts to re-frack old wells where production is starting to peter out to squeeze more out of them, using newer technology.

QEP Resources Inc. is also re-fracking 30 Haynesville wells this year.

Most WSJ articles have 0 - 5 comments or so. This article currently has 56 comments which suggests a considerable amount of interest in this subject. Some comments on the comments:

• Yiquan Hu is an idiot. At least his / her comment suggests an idiot wrote it.
• Jim Decker is right on target: drilling does not cause earthquakes. Earthquakes associated with fracking have to do with waste water (produced water) being injected back into another deep well. This is almost totally an Oklahoma/crude oil issue and has nothing do to with the Haynesville. With regard to water table contamination: this is "total leftist propaganda."
• David Cates: a nominee for the Geico Rock Award.

By the way, from an earlier post:

• May 16, 2017: Haynesville experiencing a resurgence as takeaway is bottled up in the northeast.

The Haynesville is tracked here. Occasionally.

From an earlier post regarding natural gas reserves:

Now, let's go back and re-run the numbers that were posted earlier:

• that recent huge Mediterranean natural gas find: 30 trillion cubic feet
• Barnett, revised USGS figures: 53 trillion cubic feet
• Utica, newly revised figures: 782 trillion cubic feet
• Marcellus, EIA revised estimates: 65 trillion cubic feet, "proved" reserves

• October 18, 2017, Haynesville: USGS survey -- 300 trillion cubic feet of natural gas, up from roughly 70 trillion cubic feet in its last survey in 2010.

• Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
• Qatar: 800 trillion cubic feet, wiki, conversion

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.

FERC Approves Third Major LNG Export Project for Lower 48 -- September 18, 2017; US Close To Surpassing Qatar In LNG Export

Before reading this post, you might want to re-read the post about a looming global LNG deficit which we might see in as little as five years from now.

For investors, this almost seems like an open-book test. Nuclear energy is dead -- just saying.


FERC okays Elba Island LNG liquefaction trains. From Argus Media, data points:

• off Savannah, Georgia, which houses an existing LNG import terminal
• Kinder Morgan owns 51 percent of Elba Island LNG export terminal
• 10 liquefaction trains
• third major LNG export project to come on line in the Lower 48
• to start operating in mid-2018, less than a year from now
• the other two previously approved:
  Louisiana, Sabine Pass, started operating February, 2016
• Maryland, Cove Point, on track to start operating later this year
• Elba Island: the only major LNG export terminal in the Lower 48 that will use small movable modular liquefaction trains: lower cost; faster construction schedule
• estimated cost (with associated pipeline): $2.2 billion
• capacity: 2.5 million tons/year, equivalent to 350 million cf/day (9.9 million cubic metric tons/day) of gas; peak capacity of 4 million tons/year
• in comparison:
  Sabine Pass, 25 million tons/year; $20 billion

Final line from the article:

The six facilities being built would have combined baseload capacity of about 64mn t/yr and peak capacity of about 75mn t/yr, almost equaling Qatar capacity of 77mn t/yr.

For previous posts on this story, see these links:

• Update on US LNG liquefaction capacity, staggering -- March 3, 2017
• List of potential US LNG export facilities, October 12, 2016
• Kinder Morgan update, June 3, 2016
• Kinder Morgan update, July 15, 2015
• LNG xxport -- main page, August 10, 2012

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Meanwhile, In Canada: 

British Columbia-Based Aurora LNG Export Terminal Project Canceled

From The Oil & Gas Journal, data points:

• Aurora LNG and its partners: Nexen Energy and INPEX Gas British Columbia
• had studied the project for four (4) years
• reason cited: "an adverse macroeconomic environment" -- whatever that means

Until told otherwise, I will assume the "macroeconomic environment" is code for the cost of fighting faux environmentalists for the next three decades.

The folks did say that upstream operations in the Horn River region of northeast BC would continue.. who they will sell all that NG to is anyone's guess.

And that's the difference between Trudeau's anti-growth policies and Trump's make America great policies.