Locator: 52077B.
Oil demand to peak 2035 - 2040, link here.
And yet Valero is likely to spend upwards of $500 million to re-start production from a mothballed refinery along the coast. It's hard to believe Valero would spend that kind of money if the "end is near." Link here.
Valero Energy is paying $320.5 million to purchase LyondellBasell’s mothballed refinery on the Houston Ship Channel, with plans to restart 165 Mb/d of light, sweet crude processing at the site by the end of 2027.
The deal, announced on October 30, 2026, comes after years of U.S. refinery closures and highlights the Gulf Coast’s advantages as a refining hub. Restarting an idled plant takes money, time and a clear operating plan, and Valero’s approach figures to be one of the fastest ways to add a substantial block of refining capacity at an economically justifiable cost.
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Back to the Bakken
WTI: $96.65.
New wells reporting:
- Wednesday, November 4, 2026: 4 for the month, 70 for the quarter, 569 for the year,
- 41909, conf, Devon Energy, Owan Trust North 29-28-27F 2H,
- Tuesday, November 3, 2026: 3 for the month, 69 for the quarter, 568 for the year,
- 42702, conf, WGO Resources, Moe 1-34,
RNB Energy: Kinder Morgan’s Southeast Connector charts a new path to the heart of the south. Link here. Archived.
Efforts by midstream companies to add natural gas pipeline capacity into and through the U.S. Southeast took a big leap forward recently when Kinder Morgan sanctioned plans for the Southeast Connector, a greenfield, 48-inch-diameter pipeline that will serve customers across Middle Tennessee, northeastern Alabama and northwestern Georgia.
And don’t forget, Kinder is also expanding part of its Tennessee Gas Pipeline (TGP), which will be a primary supplier to the Southeast Connector near Nashville; building the Mississippi Crossing project; and expanding the Southern Natural Gas (SNG) pipeline system it co-owns with utility giant Southern Company.
In today’s RBN blog, we’ll discuss the Southeast Connector project and why it’s not hyperbole to call it a game-changer.
As we said earlier this year in The Big Picture, the southeasternmost states in the South — from west to east, Mississippi, Alabama, Florida, Georgia and South Carolina — account for only 0.4% (~ 400 MMcf/d) of total U.S. natural gas production but a full 12% (~11 Bcf/d) of U.S. gas demand, mostly due to their heavy (and growing) reliance on gas-fired power generation and (especially in Alabama, Georgia and Mississippi) a lot of industrial demand too.
Gas-demand growth in the region has been coming on fast and furious over the past few years, stressing the legacy gas pipeline networks there and resulting in the SNG/SONAT, Florida Zone 3 and Transco Zone 4 price trading points — primary indicators of gas prices in our five-state focus area — being among the very few points where gas is priced at a premium to Henry Hub.
Put simply, pipeline capacity into and through the Southeast has barely kept up with gas demand growth. The key pipeline systems that deliver gas to the region from:
- the Gulf Coast (onshore and offshore):
- the Midcontinent and, increasingly,
- the Marcellus/Utica.
These pipelines include:
- Transco,
- Texas Eastern Transmission,
- Tennessee Gas Pipeline,
- Texas Gas Transmission,
- Columbia Gulf,
- Southeast Supply Header,
- Gulf South,
- Midwestern Gas Transmission,
- SNG,
- Gulfstream, and
- Florida Gas Transmission.
