Locator: 49774EPD.
Ticker EPD:
Note: OKE is down 40% for the year; down 13% over the last six months.
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The Book Page
The notes for this book at this site.
Book for the weekend. Just arrived. Amazon. Published 2023.
Author's bio. Something tells me this will be a history of Palo Alto of which few are aware. LOL.
The author appears to be a bit farther to the left than Nancy Pelosi, and a bit crazier than Hunter S Thompson. This should be fun!
An old story, S&P Global Platts reported this January 4, 2021. This is now being a "thing" on twitter -- "the Permian Basin has gained an outlet for associated gas."
From Platts: "Permian Highway enters services, brightening gas market outlook for Texas. "
From the linked article, data points:
RBN Energy: Plains All American's Cactus II ramps up Corpus deliveries.
t’s safe to say that Permian producers had a good Christmas. Sure, their stock prices may be off a bit and their rig counts are down. But the absolute prices they are paid for their crude oil are up by almost $20/bbl versus this time in December 2018, and the price spreads between the Permian and neighboring markets have significantly narrowed as a result.
From August 13, 2019:What’s driving this change? There are a variety of factors at play, but chief among them is the new pipeline infrastructure that has helped lift Permian producers’ oil price realizations. Today, we check in on the status of one of the major new pipelines that have contributed to the seismic shift in the Permian oil market this year.
RBN Energy: Plains All American Cactus II oil pipeline nears commercial operation. [We posted a screenshot from twitter regarding this yesterday.) This will be a big story over time. Archived.From August 20, 2019, Platt's:
It’s no secret by now that Permian oil markets have struggled over the last two years as nagging takeaway-pipeline constraints put a damper on production growth and, at times, hammered pricing in the basin. Like the Houston Astros’ opponents in the AL West, though, the days are numbered now for Permian oil market constraints, as two new large-diameter pipelines from West Texas to Corpus Christi will be in-service by the end of the month. One of those pipes, Plains All American’s Cactus II, is set to enter service this week.Cactus II consists of 575 miles of new 26-inch-diameter pipeline and extends from McCamey, TX, in the southern Midland Basin to delivery points near Corpus Christi. Note that Cactus II can also access the oil hub at Wink, TX, in the Delaware Basin via a capacity lease on another Plains-operated pipeline. Also, while Cactus II closely follows the route of Plains’ original Cactus Pipeline , the two pipelines do not share facilities. From the Permian, Cactus II extends southeast toward the Texas Gulf Coast and has been completed to Ingleside, TX, which is just across the bay from Corpus Christi. Plains confirmed last week that Cactus II is in the process of taking linefill in preparation for entering commercial service this week. Plains is also working to complete a final segment of Cactus II that will run from Taft, TX, to delivery points across the water from Ingleside along the Corpus Christi Ship Channel. This segment is expected to be completed by the end of the first quarter of 2020.
From S&P Global:
From September 10, 2019:The first US crude cargo originating from the new Cactus II pipeline loaded onto the Aframax Paramount Hatteras out of the Buckeye Terminal in Corpus Christi, Texas.
The Paramount Hatteras is currently stationary near GOLA after arriving there Monday. It's likely the ship is headed to the terminal to conduct a reverse lightering job for a VLCC set to export.CFlow shows the Paramount Hatteras anchored next to the Irini N Lemos, a currently unladen VLCC. SK Energy booked the Irini N Lemos for a US Gulf Coast-South Korea run at lump sum $4.975 million, loading August 17-21, according to Platts fixture logs.
".... soon be the first in the Port of Corpus Christi to export these barrels transported to South Texas via one of three large Permian long-haul pipeline projects," ...
On August 12, Trafigura announced in a press release that the 670,000 b/d Cactus II pipeline began service to Ingleside, Texas. Cactus II service to Corpus Christi is expected to start in the first quarter of 2020.
Cactus II will be joined by the 400,000 b/d EPIC crude pipeline and the 900,000 b/d Gray Oak pipeline, both expected to start up by year's end.
RBN Energy: Corpus Christi crude oil exports surge to a record.
Despite last month’s much-publicized start-up of two new crude oil pipelines from the Permian Basin to the Gulf Coast — Plains All American’s Cactus II and EPIC Crude Holding’s EPIC Pipeline — tangible evidence of how much crude is actually moving on those pipelines has been hard to come by. That’s because crude oil pipelines don’t post daily flow data, like some natural gas pipelines do, and shipper volumes are a closely held secret that often only becomes available long after the fact.However, Cactus II and EPIC both deliver into the Corpus Christi, TX, market area, where a number of export facilities have been waiting to move Permian barrels out into the global market. We’ve been keeping a close eye on Corpus-area docks and have noticed a significant increase in export volumes over the last few days — a clear indication that Permian crude on Cactus II and EPIC has broken through to the global market. Today, we detail a recent rise in Corpus Christi oil export volumes driven by new supply from the Permian Basin.
| $54.47 | 8/13/2019 | 08/13/2018 | 08/13/2017 | 08/13/2016 | 08/13/2015 |
|---|---|---|---|---|---|
| Active Rigs | 61 | 60 | 57 | 33 | 72 |
It’s no secret by now that Permian oil markets have struggled over the last two years as nagging takeaway-pipeline constraints put a damper on production growth and, at times, hammered pricing in the basin. Like the Houston Astros’ opponents in the AL West, though, the days are numbered now for Permian oil market constraints, as two new large-diameter pipelines from West Texas to Corpus Christi will be in-service by the end of the month. One of those pipes, Plains All American’s Cactus II, is set to enter service this week.
Cactus II consists of 575 miles of new 26-inch-diameter pipeline and extends from McCamey, TX, in the southern Midland Basin to delivery points near Corpus Christi. Note that Cactus II can also access the oil hub at Wink, TX, in the Delaware Basin via a capacity lease on another Plains-operated pipeline. Also, while Cactus II closely follows the route of Plains’ original Cactus Pipeline , the two pipelines do not share facilities. From the Permian, Cactus II extends southeast toward the Texas Gulf Coast and has been completed to Ingleside, TX, which is just across the bay from Corpus Christi. Plains confirmed last week that Cactus II is in the process of taking linefill in preparation for entering commercial service this week. Plains is also working to complete a final segment of Cactus II that will run from Taft, TX, to delivery points across the water from Ingleside along the Corpus Christi Ship Channel. This segment is expected to be completed by the end of the first quarter of 2020.
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?
Oil major Exxon Mobil Corp said on Thursday it would create three new separate exploration and production companies, effective April 1, in an effort to double its profit by 2025.
The three new companies will be called ExxonMobil Upstream Oil & Gas Co, ExxonMobil Upstream Business Development Co and ExxonMobil Upstream Integrated Solutions Co, the company said.
Last year, the world's largest listed oil company devised a plan to boost its operating cash flow and profit as well as deal with sagging output.
Exxon outlined a growth strategy to increase earnings by more than 100 percent to $31 billion by 2025.
ExxonMobil, Plains All American Pipeline, and Lotus Midstream will build a pipeline capable of transporting more than 1 million barrels per day of crude oil and condensate from the Permian in West Texas to the Texas Gulf Coast.
Exxon, Plains All American, and Lotus Midstream decided to proceed with plans to build the Wink to Webster pipeline system, with origin points at Wink and Midland to multiple locations near Houston, including Webster and Baytown, and with connectivity to Texas City and Beaumont.
The companies have formed a joint venture, Wink to Webster Pipeline LLC, and have already ordered 650 miles of domestically sourced 36-inch-diameter line pipe.Lotus? From a press release, August 8, 2018:
The project is the result of a “significant volume of long-term commitments” and is targeted to start operations in the first half of 2021, Plains All American said.
Crude oil logistics provider Lotus Midstream, LLC today announced it has entered into a definitive agreement to acquire the Centurion pipeline system and a Southeast New Mexico crude oil gathering system from Occidental Petroleum Corporation.
The transaction is expected to close later in the third quarter of 2018, subject to customary closing conditions.
Targa Resources in the third quarter of 2014 completed a 3 MMb/month expansion of its LPG export terminal in Galena Park, TX (also on the Houston Ship Channel) that increased the facility’s capacity to 7MMb/month, or about 233 Mb/d. Like Enterprise’s terminal nearby,
Targa’s Galena Park facility has docks big enough for VLGCs; smaller LPG carriers load there too. Targa has previously indicated they expect to export at least 5 MMb/month in 2016 (or 167 Mb/d), on average. So far this year they are ahead of that goal, shipping out 191 Mb/d in the first three months of 2016, 23% of total Gulf Coast exports.RBN Energy has many, many posts on Targa and natural gas pipelines in the Permian.
| 4/4/2017 | 04/04/2016 | 04/04/2015 | 04/04/2014 | 04/04/2013 | |
|---|---|---|---|---|---|
| Active Rigs | 49 | 30 | 94 | 192 | 186 |
The combination of rising production of “associated” natural gas in the Permian Basin and rising exports of pipeline gas to Mexico—and soon, LNG on ships out of planned South Texas export terminals—is driving the need for new gas pipelines from the Permian to the Corpus Christi area, including the all-important Agua Dulce gas hub in Nueces County, TX.
Yesterday (Monday, April 3), NAmerico Partners unveiled plans for Pecos Trail, a proposed 468-mile, 1.85-billion-cubic-feet-a-day pipeline aimed squarely at linking emerging gas supply with emerging gas demand.
Pecos Trail joins two other projects announced within the past few weeks that target the same opportunity.
Today we look at the gas side of the need for new takeaway pipelines out of the U.S.’s hottest shale play, and NAmerico’s newly announced plan to address it.
Two of the hottest energy stories of the past several months (and maybe for the next few years as well!) are 1) the crude oil production boom in the Permian Basin in West Texas and southeastern New Mexico, and 2) the boom in U.S. exports of natural gas—pipeline exports to Mexico and LNG exports by ship.
In fact, there is a real connection between these two headline-grabbers; that is, growing crude production in the Permian will lead to the production of vast quantities of associated gas, and the proximity of the Permian to export markets (Mexico and planned LNG terminals along Texas’s Gulf Coast) make the Permian a logical supplier of a substantial portion of the billions of cubic feet a day of gas that will be needed to keep pace with export demand.
| 10/13/2016 | 10/13/2015 | 10/13/2014 | 10/13/2013 | 10/13/2012 | |
|---|---|---|---|---|---|
| Active Rigs | 33 | 67 | 191 | 184 | 192 |
It will come as no surprise to you that, over time, the high [Texas] intrastate prices encouraged surpluses to develop in that sector while shortages were experienced in the interstate market because the regulated gas prices in that market were kept artificially low.
By the 1970s, natural gas, which traditionally had been in plentiful supply in the U.S., was not available in sufficient volumes to fully satisfy the demands of markets served by interstate natural gas pipelines.
In an effort to fix this mess, Congress and the Carter administration enacted the Natural Gas Policy Act of 1978 (NGPA), a well-meaning but heavy-handed system that established 27 different categories of gas, each with different prices––set by the statute and its regulatory rules––that ranged from about 40 cents/Mcf to about $7.00/Mcf.
The NGPA did its job, and by the 1980s the interstate gas shortages were essentially over. But the complex system of government-set prices made commercial transactions very difficult and prone to errors, and led to market chaos as purchasing pipelines tried to blend 40-cent gas with $7.00 gas to average out to a rational market value.
Eventually this system was dismembered with full price decontrol finally implemented with the Natural Gas Wellhead Decontrol Act of 1989, which was signed into law by the first President Bush.
The Federal Energy Regulatory Commission (FERC) completed the natural gas commodity decontrol process in 1992 with Order 636, which created the market we know today.
“They’ll be selling a lot of equity to finance this acquisition,” Kit Konolige, senior utility analyst at Bloomberg Intelligence, who doesn’t own or rate NextEra or its partnership, said Monday in an e-mail. “Current NextEra partnership shareholders may be concerned about their stake being diluted.”
NextEra Energy Partners fell 10 percent to $31.94 at 10:26 a.m. in New York, the most since June, 2014. NextEra rose 3.2 percent to $108.57.But this is what caught my eye, and I'm sure caught the eye(s) of everyone who read the story:
The purchase marks the first foray into pipelines for NextEra Energy Partners, which was formed in 2014. Before Monday’s transaction, the partnership had focused on buying renewable-energy power assets from its creator.Back to the lede:
NextEra Energy Partners LP, the wind and solar power generator controlled by NextEra Energy Inc., agreed to buy seven natural gas pipelines in Texas for $2.1 billion, adding sales of the power plant fuel to Mexico.So, this company, formed in 2014 -- that was, like, last year? The company lasts one year before it diversifies into fossil fuel. I guess they need natural gas to support their hobby industry if government tax credits don't come through.
By buying closely held NET Midstream, NextEra Energy Partners will gain the ability to ship 3 billion cubic feet of Texas shale gas a day, with the potential to expand that by 1 billion cubic feet. NET’s assets include a pipeline in the Eagle Ford formation, the top U.S. gas field by proved reserves.
Most new Permian production is occurring in the Midland and Delaware basins of the Permian and is centered well to the west of Colorado City. That means crude has to get to Midland, TX, and then to Colorado City before it can be shipped to market on BridgeTex.
As a result, BridgeTex is unable to provide an overnight solution to the Permian crude bottleneck because crude is still stranded west of Midland, waiting for new capacity to Colorado City. That means BridgeTex is unlikely to provide anything more than limited relief until another new pipeline, being built as we write, is completed at the beginning of next year. That is the Plains Sunrise pipeline, Sunrise is expected online on January 1, 2015 and will provide 250 Mb/d of additional capacity between Midland and Mesa – helping to unblock the logjam.The second problem, and this really puts the Bakken into perspective: RBN Energy estimates that crude oil production in the Permian reached 1.75 million bopd (October, 2014), up about one-half million bopd since January, 2013. RBN Energy expects production to increase by another 750,000 bopd to 2.5 million bopd by 2020, and some think it could go as high as 3.0 million bopd. And this is just the Permian. The Eagle Ford is another Texas / Mexico play.
Targa Resources Partners LP and Targa Resources Corp. agreed to buy Atlas Pipeline Partners LP and Atlas Energy LP for a total of about $7.7 billion.
The $5.8 billion transaction, including $1.8 billion in assumed debt, represents a 15 percent premium for Atlas Pipeline holders.
As part of the deal, Atlas Energy will spin off some assets before it’s acquired by Targa Resources for $1.87 billion.
The deal helps Targa expand its market for processing and exporting natural gas liquids.
The transactions are among more than a dozen pipeline deals announced this year amid consolidation of an industry that’s dominated by tax-advantaged master-limited partnerships and often complex corporate structures.
The combined company would have a presence in the Permian Basin, Eagle Ford and Bakken formations, where hydraulic fracturing and horizontal wells have unlocked huge oil and natural gas resources.The companies being bought:
Plains All Amer and Enterprise Products announce agreement to expand Eagle Ford joint venture pipeline: Co and Enterprise Products Partners announced they have agreed to expand their Eagle Ford Joint Venture (JV) crude oil pipeline. The expansion will increase the pipeline's capacity to 470,000 barrels per day of light and medium crude oil grades to accommodate additional volumes expected from PAA's Cactus pipeline that is currently under construction. The Eagle Ford JV pipeline expansion is expected to cost approximately $120 million and is expected to be in service in the second quarter of 2015.