Bakken Natural Gas Flaring Reaches Historical Low As Production Climbs -- Platts -- November 18, 2021

I mentioned this in passing when the North Dakota September, 2021, data, was released with the Director's Cut earlier in the week, but I did not headline it:

Comments:

• an incredibly good report;
• natural gas capture rate up from 92% to 94%
• look at that crude oil price appreciation from August, 2021
• two consecutive months with increased production m/m
• rig count pretty much steady but up slightly
• DUC count down slightly, but not worth a headline
  

But Platts did headline it: Bakken Shale natural gas flaring reaches historical low as production climbs --

• North Dakota gross gas volumes surpassed 3 billion cubic feet / day
• new midstream infrastructure promises upside

So many stories:

• The impending completion of WBI Energy Transmission's North Bakken Expansion natural gas pipeline project is likely to increase the Bakken's ability push more gas to Northern Border Pipeline for ultimate delivery downstream in the Midwest.
• ONEOK recently announced that it will build Demicks Lake III, announced sometime ago, before the project was "suspended."

Lots of information regarding MDU's subsidiary WBI at the linked Platts article. 

ONEOK To Complete Previously Announced Natural Gas Processing Facilities -- November 15, 2021

Natural gas processing plants in North Dakota are tracked here.

A reader, thank you, alerted me to this ONEOK story. 

The company's press release via Yahoo!Finance:

ONEOK, Inc. today announced plans to complete previously announced natural gas and natural gas liquids (NGL) infrastructure projects, including:

• Demicks Lake III, a 200 million cubic feet per day (MMcf/d) natural gas processing facility in the Williston Basin.

• MB-5, a 125,000-barrel per day (bpd) NGL fractionator in Mont Belvieu, Texas.

The Demicks Lake III plant:

• the 200-MMcf/d Demicks Lake III natural gas processing plant in McKenzie County, North Dakota, is expected to cost approximately $140 million to complete.
• the facility, which is supported by acreage dedications with primarily fee-based contracts, is expected to be completed in the first quarter of 2023. 
• the new plant will increase ONEOK's Williston Basin natural gas processing capacity to approximately 1.9 billion cubic feet per day.

"People" keep telling me the end is near for the Bakken, and then we get another one of these stories. 

See also this post, as well as many others if one searches "Demicks Lake."

ONEOK Seeks To Expand Pipeline Capacity Near Halliday, Dunn County -- December 3, 2020

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
  

Natural gas processing plants in North Dakota are tracked here.

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Elf On A Shelf

With Sophia's favorite salty snack. 

ONEOK Announces Additional Infrastructure -- July 25, 2019

If I can find the post from sometime earlier this week suggesting that we were about to see some announcements along this line, I will post the link.

Until then, a huge "thank you" to a reader for sending me this article. I had not seen it.

From a press release, ONEOK announces plans to expand natural gas and NGL infrastructure. Data points:

• North Dakota / Bakken / Bear Creek:
• a 200 million cfpd expansion of the Bear Creek natural gas processing facility
• Dunn County, ND
• $405 million project
• to be completed in 1Q21
• Mid-Continent NGL fractionation expansions totaling approx 65,000 bpd and additional NGL infrastructure capacity between the Elk Creek and Arbuckle II
• $150 million project
• 15,000 bpd expansion to be completed in 3Q20
• 50,000 bpd expansion to be completed 1Q21
• why? In expectation of accelerating volume growth from the Williston and Powder River basins, additional infrastructure will be constructed to increase connectivity between the Elk Creek and Arbuckle II pipelines.

More on the Bear Creek expansion:

ONEOK's Williston Basin natural gas processing capacity will increase to more than 1.6 billion cubic feet per day following the completion of the Bear Creek expansion. The expansion is expected to produce approximately 25,000 bpd of NGLs in ethane rejection, resulting in 225,000 bpd of raw feed contracted since the announcement of the Elk Creek Pipeline.

More at the link including expansion plans for the Permian.

Natural gas processing plants in North Dakota are tracked here.

At that link, there is a "Bear Creek II," 200 million cfpd, 2021 -- that may, in fact, represent this newest announcement. ONEOK calls is an expansion; ND regulators list it as a new project, co-located at existing Bear Creek I, it appears.

Call me naive, but this would suggest to me that ONEOK does not agree that the North Dakota Bakken is reaching peak production. 

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Natural Gas Records

The Bakken -- It Simply Never Quits -- September 27, 2018

This was recently posted, but I missed a small but interesting point. When ONEOK announced it was going to build yet another natural gas processing plant, I was unaware that they had not yet completed the one they are currently building, Demicks Lake 1. From The Bismarck Tribune:

A company that’s constructing a new natural gas processing plant in the core of the Bakken announced plans this week for a second plant, doubling the size of the project.

Oneok plans to construct Demicks Lake II in McKenzie County, adding 200 million cubic feet per day of processing capacity.

Demicks Lake I, which also will have a capacity of 200 million cubic feet per day, is under construction but expected to reach capacity soon after it’s complete, Terry Spencer, Oneok president and CEO, said in a news release.

That increased the need for the Demicks Lake II plant, a $410 million project.

I think this simply incredible. It's a big story that yet another natural gas plant is being built, but to learn that it would be oversubscribed as soon as it was completed, and would necessitate expansion or another processing plant altogether.

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Manic Monday

Yeah, I know it's Thursday, but "manic Thursday" doesn't work. LOL.

Wow, I'm in a great mood.

I try to ride my bike every day, even during the winter. I remember riding during snow days in Boston. Slipping and sliding.

Every day I ride, I grade the riding conditions on a scale of 0 - 10, in half point increments, based on: wind; precipitation/humidity; and, temperature (seasonally adjusted).

Temperature is seasonally adjusted because one can "dress" for the weather. The other two are not seasonally adjusted --

Best riding weather is 8.0 - 10.0, obviously. I generally won't ride if the number is below 6.0. Vertical snow might drop a half point, but horizontal snow easily knocks off four or five points. Rain? Depends. But a light drizzle, only a half point or so. A sudden downpour, four or five points. I won't start out in a downpour, but I occasionally get caught in one (poor planning on my part and I deserve no sympathy).

I do not allow any day to get a grade greater than 10.0 but if I could, today's grade would have been 12 to 14. They used to call this weather "Indian summer" but to be politically correct, I guess we either call it "Native American summer" or ... whatever.

Wow, it was gorgeous today.

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What A Great Country

I biked to Starbucks this morning, about 6:00 a.m. Sunrise at 7:14 a.m. I had been there about 90 minutes. At 8:00 a.m. my wife telephoned to tell me the "GasCap" light lit up on the dashboard of our very old Chrysler minivan, closely followed by the "EngineLight."

I left my back pack; my computer; my cellphone -- everything -- on "my" chair at Starbucks, and promptly got up and walked up to the Firestone Service Center about a block away. I told my wife I would meet her there. She arrived shortly thereafter. Chris, at Firestone, said he would take care of it, but he said the $100 diagnostic test that was mandated by the company would not be worth it. He said to go down the street to Chrysler and buy a new gas cap ("do not buy an after-market gas cap") -- if that doesn't solve the problem, he would gladly see me and take care of the problem.

My wife arrived, we drove down to Chrysler, and got the gas cap. The problem was solved.

My wife brought me back to Starbucks -- my stuff was still there -- someone saw me leave earlier and wondered -- but with my bike still there, they knew I would be coming back ...

Later, my wife called to confirm that the"EngineLight" also disappeared. I bought a $20 Jimmy John's gift card and gave it to Chris at Firestone on my bike ride home.

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The Bakken

I'm not going to post any new data here, but suffice to say, the Bakken is staggering. Absolutely staggering. I hope folks reading the blog are getting that same feeling. If not, I'm obviously not doing my job.

Elenore, The Turtles

ONEOK North Dakota Update -- September 8, 2018 -- Might ONEOK Have The Largest Natural Gas Processing Plant In North Dakota?

See this ONEOK post for background, back in February, 2018.

I can't recall if I posted this story, but it's starting to get some national attention. From The Williston Herald, March 2, 2018: suspended plant out of mothboalls -- ONEOK's Demicks Lake "large" gas processing plant is back on the table. Data points:

• project suspended when oil prices collapsed -- that was back in 2015
• since then, huge flaring problem in the Bakken
• the "new" plant will be located in McKenzie County near Fort Berthold
• this area has the highest amount of flaring in the state
• as much as 30% of gas produced in Fort Berthold was flared in 2017; back to 20% now
• statewide: 13 percent of production flared; 284 million cubic feet (50K boe) flared in December, 2017
• the new plant raises total gas processing in the state to exceed that produced but due to regional differences, flaring won't end statewide
• footprint: 160 acres; 13 miles northeast of Watford City
• 400 million cubic feet/day; two separate cryogenic turboexpanders units ("trains")
• original (2015) cost estimate: $321 million; now $400 million
• in service by 4Q19

North Dakota natural gas processing plants are tracked here.

But note this: the link above still shows the Demicks Lake plant with a capacity of 200 mcfpd, whereas the linked story above says the plant is likely to go to 400 mcfpd.

Oasis has bragging rights with the largest natural gas processing plant (Wild Basin) at 345 mcfpd, but ONEOK could claim the title if it goes to 400 mcfpd.

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Meanwhile, Kinder Morgan ...

This story was posted earlier, but for those who missed it the first time, from August 8, 2018, The Bismarck Tribune:

• to expand the Roosevelt Gas Plant in McKenzie County by 150 million cubic feet per day
• increasing the capacity to process up to 200 million cubic feet per day

Besides the obvious -- more natural gas processing capacity -- but more importantly, it needs drillers can increased oil production.

For newbies, crude oil production in North Dakota is constrained by:

• the price of oil; demand for light oil
• takeaway capacity (not much of an issue now that the DAPL is flowing)
• flaring (a big issue)
• workforce: competition with the Permian

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Highway Change

When biking along a busy highway, I generally won't stop to pick up a single penny, but occasionally I hit the "mother lode."

The other day, on the frontage road along the highway this treasure trove.

The ratio was very unusual. Generally I don't find nickels. The ratio is usually about 25 pennies to every two dimes and to every one quarter. But seldom any nickels. But look at all those nickels on the left. No quarters.

Down the road a bit further, same day, same ride:

The mix was a bit more typical, although the two nickels were still surprising. Four quarters (on the right), two dimes, only five pennies; an unusual mix.

Unless Something Bigger Happens In The Next 48 Hours, This Is The Biggest Bakken Story Of The Week -- January 25, 2018

Link here to Rigzone.

Hess Midstream Partners LP and Targa Resources Corp. have formed a 50/50 joint venture to build a new 200 million standard cubic feet per day dry gas processing plant near Targa’s existing Little Missouri facility in McKenzie County, North Dakota, Hess Midstream announced Thursday.

“The Little Missouri Four Gas Processing Plant demonstrates our commitment to executing our strategy by providing additional Bakken basin processing capacity, which provides another layer of organic growth to meet our long-term targeted annual distribution per unit growth,” John Gatling, Hess Midstream’s chief operating officer, said in a company statement. “By executing infrastructure projects that provide more optionality to producers, Hess Midstream expects to continue to capture additional Hess and third-party volumes, reinforcing the competitive advantage we enjoy from our strategically located infrastructure in the core of the Bakken.”

According to Hess Midstream, Targa will manage construction of the approximately $150 million Little Missouri Four (LM4) plant and operate the facility. Hess TGP Operations L.P. – owned on a 20/80 basis by Hess Midstream and Hess Infrastructure Partners LP (HIP), respectively – will hold Hess Midstream’s 50-percent stake in the gas plant, the company added. In addition to contributing a total of $75 million to the plant’s construction, Hess Midstream said the two Hess units will invest approximately $100 million toward new pipeline infrastructure to gather volumes to LM4.

Earlier this was posted:

Link here at The Bismarck Tribune. Data points:

• Hess Midstream Partners
• $150 million natural gas processing plant
• partner: Targa Resources Corp
• name: Little Missouri Four plan
• capacity: 200 million cf/d
• location: near Targa's existing facility south of the Missouri River near Watford City
• completion date: by the end of this year
• natural gas production in ND set a record in November, 2017: 2.1 billion cubic feet/day
• flaring: still at 14%
• one of four natural gas processing plants in the planning or construction stages in North Dakota
• the four projects would add an additional 615 million cubic feet per day of additional processing capacity
• ONEOK: to expand it Bear Creek natural gas processing plant north of Killdeer; will expand from a capacity of 80 million to 175 million cubic feet per day
• Crestwood Equity Partners: expand the Arrow Bear Den gas processing plant near Watford City, adding another 120 million cfpd
• Oasis Wild Basin processing plant it expanding to process 345 million cfpd in McKenzie CountyN

Note: if that is not an error in reporting, it seems that the Oasis expansion to 345 million cfpd is a huge addition; prior it was 80 at Plant 1; and 150 at Plant 2.
Note: it looks like a race among Hess, ONEOK and, Oasis to see who will have bragging rights to most natural gas processing capacity in the state.
Note: for newbies, this is a huge, huge story. The Bakken is an "oily" story, an "oily" play; no one expected this much natural gas activity back in 2007.

Update On ONEOK's Plan To Boost Bakken Takeaway Capacity -- RBN Energy -- January 24, 2017

Measles outbreak in Texas. Shocking. Surprising? Not.

ObamaCare: healthcare premiums rise well ahead of healthcare costs for employer-provided health insurance. Huge story over at WSJ. How often do folks buy $500 washing machines? How often are folks paying premiums for ObamaCare?

Report finds boost in spending as use of most health-care services declined.Spending on health care accelerated in 2016 for Americans who get insurance through work, even as use of most health-care services declined or remained flat. The reason, according to a new report: price increases.

Rising prices for prescription drugs, surgery, emergency-room visits and other services drove a 4.6% increase in total spending per person, versus 4.1% in 2015 and less than 3% in the two previous years, according to the research nonprofit Health Care Cost Institute, which analyzed data for nearly 40 million people up to age 65 with employer-sponsored insurance.

The institute found the same trend when it analyzed spending over the five years from 2012 to 2016. Prices and spending rose, while use of health care largely declined.

Canadian CBR: we just talked about this the other day. Now Reuters is reporting that Canadian National Rail cannot meet demand for Canadian CBR.

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, job, or relationship-related decisions based on anything you read here or think you ma have read here.

At least this part of GE is working: BHGE adjusted earnings beat forecasts on strong North American demand.

KMI: Motley Fool has thoughts. Very, very positive.

Closing: Toys "R" US closing 180 stores in the US.

They must be reading the blog: we wrote about this the other day, "more reasons why the stock market is surging." This will only add to "synchronized global growth." From The WSJ:
foreign firms brace for potential cost increases after U.S. tax overhaul finance. Executives worry certain provisions of the new tax law could offset some of the gains from the lower U.S. tax rate.

Foreign companies are calculating whether the cost increases they will bear under the new U.S. tax law will outweigh the benefits of a lower corporate rate.

New measures, such as taxing large companies on payments made to international affiliates under the Base Erosion and Anti-Abuse Tax—or BEAT—are raising alarm among international companies operating in the U.S. Meanwhile, tighter rules on the deductibility of interest and one-time charges linked to a reduction in the value of deferred tax assets are also sparking concern.

Foreign companies worry these moves will put them at a competitive disadvantage.
Still, a centerpiece provision of the new tax law ushers in a steep reduction in the U.S. corporate tax rate to 21% from 35%, which makes doing business in the U.S. more attractive.

GS/CEO: incredibly bullish on the market. But worries that once interest rates "normalize," things will change (get worse). "Easy money" driving the market. Haven't we had easy money for sixteen years? Certainly we've had easy money for nine years. The "easy money" story didn't change. What changed? Trump. GS/CEO says he likes Trump's policies. On CNBC this morning.

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Back to the Bakken

Active rigs:

$64.72↑↑	1/24/2018	01/24/2017	01/24/2016	01/24/2015	01/24/2014
Active Rigs	57	38	47	157	186

RBN Energy: ONEOK's plan to boost Bakken and Niobara/DJ Basin NGL takeaway capacity.

There has been growing concern regarding NGL pipeline takeaway capacity out of the Williston Basin and the Niobrara — particularly the DJ Basin — over the past year, with one of the major pipes through those regions now running full. Finally, ONEOK has announced plans for the Elk Creek Pipeline, which will have an initial capacity of 240 Mb/d and be expandable to 400 Mb/d. The new pipe will transport mixed, unfractionated NGLs from eastern Montana to the Conway/Bushton fractionation hub in central Kansas, and provide long-term relief for a lot of Bakken, Powder River and Denver-Julesburg (DJ) Basin producers. But with an end-of-2019 in-service date, will the new capacity come soon enough to avert NGL takeaway constraints? Today, we discuss the Elk Creek project, the flows on existing NGL pipes to Conway/Bushton, and the growing significance of ethane as pipelines fill.

Whiting's Flatland Wells In Twin Valley Have Been Hooked Up To ONEOK's Pipeline -- September 5, 2015

Regular readers will remember that ONEOK announced a few weeks ago that it had upwards of 700 wells in the Bakken to connect, IIRC. [700 wells this year, 2015; and 600 wells next year, 2016. It should be noted that the Bakken is an oil play, not a natural gas play.]

This morning while updating Whiting's Flatland wells, I noted that the Flatland wells have been connected to the ONEOK pipeline.

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CBR

What happens to excess CBR tank cars? They get parked. For example:

Gennessee and Wyoming, the nation’s largest short line rail road, is collecting as much as $5 a day on each of about 2,000 idle crude rail cars in Utah, the Midwest and Canada.

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Mideast VLCC Tracking: Sailings At Multi-Month Lows

This was reported some time ago, but I'm only now getting to it. For the archives. 

Platts is reporting:

* Middle East's weekly outflow drops to pre-summer lows
* Saudi August departures at four-month low
* China takes 11 VLCCs from Angola in August

The fall in demand to move crude has caused Middle East outflows to tumble to their lowest since before the summer, Platts ship-tracking tool cFlow showed Wednesday, resulting in numerous VLCCs being idled for longer while ample supply and low bunker fuel prices have continued to push down freight rates.

Over the week to Wednesday, sailings from Saudi Arabia, Iraq's Basrah, Iran and the wider Middle East hit their lowest since before the start of June as refinery run cuts across parts of Asia have weakened demand.

So, just when Saudi announces it will not cut production (last October, 2014), causing the price of oil to plummet; Asia sees huge decrease in need for oil. Oh, well.

But look how many ships sail from Saudi Arabia every month; this is really quite amazing -- remember, these are VLCC, the largest tankers:

Departures from Saudi Arabia fell to 24 from 30 last week, while total sailings for August slipped to a four-month low of 125 VLCCs, down from 137 in July.

Iraq:

From Iraq's southern terminals, five tankers left over the week, while in August, a total of 36 departed, up from 34. Despite the slight uptick in VLCC sailings, crude oil exports from Basrah on all ship-types fell in August, to 3.021 million b/d, a drop of 43,000 b/d from July. Oil ministry spokesman Asim Jihad, however, said the fall was due to a technical fault in the export system.
Inshallah.

More:

Total outflow from the Middle East -- or the count of ships that left the region -- sank to 19 from 24 last week, also the least since before June. ("Sank" is probably not the best word to use when talking about ships in the Mideast.)

From Africa:

Within West Africa, Angolan departures fell to a three-week low of two, down from three the previous week. In August, a total of 15 ships left, with 11 going to China, which typically takes around two thirds of VLCC sailings from Angola -- currently its second largest supplier of crude after Saudi Arabia.

Also this regarding Angola to US crude oil:

The US also takes crude oil from Angola -- its 10th-largest supplier -- at 100,000 b/d in June, however, the boom in US tight oil production has caused this flow to drop by three quarters from around an average 400,000 b/d in 2010. However, the bulk of the cargoes are hauled on Suezmaxes, with no VLCCs making the voyage this year, while only one went in 2014.

So, not only are we learning about the Bakken, but we are learning about VLCCs and Suezmaxes.

Seeking Alpha Article On ONEOK's Recent Announcement To Hook Up 700 Wells In The Bakken -- August 14, 2015

On August 5, 2015, there was a story that ONEOK was going to hook up 700 wells in the Bakken. Today, there is an article in Seeking Alpha that provides some more background to this story:

The company plans to spend from $1.0B to $1.5B this year in growth projects, with much of that spending already done in the first half, but paid via short-term debt. These projects are largely to connect flare gas volumes in the Williston Basin and the Mid-Continent.

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What Happens To Excess CBR Tank Cars?

They get parked and smaller railroads are getting paid to store them. For example:

Gennessee and Wyoming, the nation’s largest short line rail road, is collecting as much as $5 a day on each of about 2,000 idle crude rail cars in Utah, the Midwest and Canada.