capacity to transport 60,000 bpd of unfractionated NGls from the
Williston Basin to the Overland Pass Pipeline in northern Colorado
first NGL pipeline to transport natural gas from the Williston Basin to facilities in the Mid-Continent and the Texas Gulf Coast
further plans: another $100 million to install additional pump
stations to increase capacity to 135,000 bpd from 60,000 bpd as noted in
today's press release; this expansion will be completed in 3Q14
The other pipeline:
Denbury: from Montana into North Dakota, through Bowman, Slope counties
18-mile pipeline; nine miles inside ND
ND portion: nine miles; $9.2 million (again, rule of thumb -- $1 million / mile)
six months to build; several months of testing; dates unknown
will carry CO2 for EOR
CO2 will originate from XOM's Shute Creek Gas Plant and COP's Lost Cabin Gas Plant in Wyoming; via several pipelines to Fallon County in southeastern MT; from there via this new Denbury pipeline
to boost oil production from depleted wells in the Cedar Creek Anticline Area
second CO2 pipeline in ND; first was the 1998 Basin Electric's Great Plains Synfuels Plant near Beulah to oil fields in Saskatchewan
What’s behind the possible shift at Northern Border? Rising production
of associated gas in the Williston Basin, combined with more gas
processing capacity there, has increased the volumes of basin-sourced
gas flowing into Northern Border, and also squeezed out more gas from
Western Canada, which generally has less rejected ethane in it and
therefore has a lower Btu content. Thus, as the volumes of Williston
Basin gas received by Northern Border have increased, so has the overall
weighted-average Btu content of the gas flowing on the big gas pipe.
Our understanding is that while Northern Border doesn’t necessarily
mandate a maximum Btu content, if the Btu content were to get high
enough to cause problems for the utilities and other end-use customers
it serves, Btu restrictions on the pipeline may need to be put in place.
I'm not going to explain it because I'll probably screw it up again, but when you read the paragraphs from the EIA below, note:
BTU or heat content of methane vs ethane and propane
heat content desired by end user
ethane rejection
From the EIA report linked above:
The primary constituent of natural gas is methane, which has a heat content of 1,010 British thermal units per cubic foot (Btu/cf) at standard temperature and pressure.
In July 2014, the heat content of natural gas in the United States was around 1,030 Btu/cf, or almost 2% more heat content than pure methane, reflecting the composition of the gases in the natural gas stream.
Natural gas requires a certain fuel-to-oxygen mix to burn properly, so stoves and other gas-fueled appliances typically require natural gas to be within a certain range of Btu content.
Pipelines also have a range of acceptable Btu content for natural gas going through their systems, which can vary from one pipeline to another.
High-Btu natural gas contains higher concentrations of natural gas liquids (mostly ethane and some propane) that have higher heat content than methane.
Pure ethane has a heat content of 1,770 Btu/cf and pure propane 2,516 Btu/cf.
Natural gas liquids are often removed during natural gas processing. However, because of the low price of ethane, many natural gas processors are choosing to leave ethane in the natural gas stream, a practice known as ethane rejection, rather than remove it for sale as a distinct product. A relatively high Btu content in a given state may be indicative of ethane rejection.
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.
January 8, 2018: the ONEOK story is also at the Bismarck Tribune. At $1/bbl, 240,000 bbls/day, $1.2 billion, a reader notes that it will take more than 13 years to simply pay off the $1.2 billion. This suggests to me that ONEOK thinks
fossil fuel will be around for a long, long time; and,
the Bakken and DJ will be a huge source for NG for a long, long time.
Long, Long Time, Linda Ronstadt
January 8, 2018: another reader weighs in on this announcement, see comments:
Ethane right now is left with the methane stream except at Tioga Hess
Plant, where the Vantage pipeline to Alberta takes it too a cracker.
That line has a 68,000 barrels per day.
The new lines won't be able to
accommodate ethane, so ethane cracking could be another industry
courtesy of the Bakken.
Ethane doesn't have the value for long distances so it needs to be consumed locally.
January 6, 2018: see comments -
OneOK built a 12" NGL line from MT to SE Wyoming about 5 years ago.
If
you look at a map of the new line it looks like it is parallel with the
original. I wonder if it is in the same right of way?
Pipeline builders would probably like to keep their intentions as quiet
as possible until the line is built. As I recall the original line ran
into some opposition in the area of the Bear Lodge Mountains around
Devils Tower due to the line passing through an area with gyp rock.
With
this much increased capacity to transport NGL out of the WB the future
looks bright for future production growth it appears to me. New or
expanded gas plants in the works also? Or maybe updated Central Tank
Battery production facilities with pad drilling being the new source of
NGL?
I've seen a few CTB sites the last couple times I was in Dunn
County and they contain several what appears to be ASME code vessels
with many pipes connected to each vessel. Do these mini processing
plants strip volatile/liquids from the oil and the gas? Which end up in
NGL pipelines?
(http://www.oneok.com/~/media/ONEOK/Newsroom/ReleaseDocs/ElkCreekPipeline_Map.ashx)
link to the map of the new line. [By the way, to open an "ashx document" use Adobe.]
Later, 1:27 p.m. CT: see first comment --
Sending unfractionated NGLs - aka 'Y grade' out of the Bakken could have a significant positive impact on operators' financials.
Essentially,
removing the methane from the gas stream (possibly 70% +/- of the total
volume) enables the higher value liquids to be transported and
processed via pipeline.
I think liquids are presently transported by rail.
Today's spot pricing at Belvieu, expressed in barrels ...
Ethane ~$11/bbl.
Propane ~ $40/bbl
Butane ~ $42/bbl
Pentanes ~ $58/bbl
Transportation
and processing fees would come out of these figures, but, still, it
adds up in addition to the methane price realized at the Northern Border
transfer point.
Original Post
Every now and then a developer announces a small wind farm and the local media is all over it, talking about the "new" wind farm. At the other end of the continuum the oil and gas sector seems to announce a new billion-dollar project every week. And there's no fanfare. If it weren't for the company's press release, we would probably never hear about it.
If a Martian were to read all the energy stories in the mainstream media, the alien would get the feeling that fossil fuel industry is dead, replaced by wind and solar. Hardly.
Another example, sent by a reader: ONEOK Announces Plans to Increase Natural Gas Liquids Takeaway Capacity out of the Rocky Mountain Region, press release. Details:
the Elk Creek pipeline
from ONEOK's Riverview terminal in eastern Montana to Bushton, KS
900 miles, 20-inch diameter
to be completed by end of next year (2019)
capacity: 240,000 bbls/day of unfractionated NGLs
the pipeline: $1.2 billion
related infrastructure costs: $200 million
with additional pump facilities, capacity will increase to 400,000 bpd
TransCanada pipeline operational. Data points:
Leach XPress
160 mile; 1.5 billion cubic feet/day
will supply gas to Southeast and Gulf Coast markets
had received approval from FERC on January 9, 2017
