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Smells Like Rotten Eggs – The Bakken Crude Hydrogen Sulfide Challenge

published by Sandy Fielden on Thu, 05/23/2013 - 16:37

Recently there has been a spate of pipeline tariff filings to the Federal Energy Regulatory Commission concerning crude oil quality specifications for Bakken crude in North Dakota.  While the immediate disagreement between pipeline company Enbridge and shipper Plains Marketing appears to have been resolved, it has highlighted an issue which has not received much attention until now. Today we detail the concerns.

I Can See (Them) for Miles and Miles and Miles – The Tank Cars are Coming

published by Callie Mitchell on Wed, 05/22/2013 - 20:00

Crude-by-rail has had a huge impact on the market for tank cars.  Currently there are 53,000 tank cars on back order and more orders are coming in. That’s up from a backlog of 48,000 just a couple of months ago. The tank car manufactures are enjoying every bit of it but for the first time since the ethanol boom, they can’t keep up. In the old days it took 9 months to deliver a new car. Now, there is such a backlog that manufacturers can’t deliver a new car for 24 - 30 months.  Today we will review the rapidly evolving tank car situation based on a recent presentation made by Travis Brock from Strobel Starostka, a construction and rail services firm deeply involved in in the crude-by-rail markets.

Too Wrong for Too Long? How Marcellus Forecasts Changed The World Sooner Than We Thought

published by Sandy Fielden on Tue, 05/21/2013 - 19:06

Production forecasts for natural gas in the Appalachian Marcellus shale have doubled from 7 bcf/d to 14 bcf/d in less than two years. As a result northeast demand for natural gas will be almost entirely met from local production in coming years. Significant re-plumbing of the US natural gas pipeline distribution system will be needed and in many cases has already commenced. Today we review accelerating changes to US gas flows.

Utica Oil or Bust? A Wet Gas Play With Plenty of Condensate

published by Sandy Fielden on Mon, 05/20/2013 - 20:00

Last Thursday (May 16, 2013) the Ohio Department of Natural Resources offered a rare glimpse into 2012 production in the Utica shale. In a long awaited report, the State said that 87 wells drilled by 11 companies produced about 1750 b/d of oil and 35 MMcf/d of gas. Those numbers disappointed investors hoping for evidence of another Bakken or Eagle Ford. But the State data does not tell the whole story. There should be a surge in production now that infrastructure is coming online. And significant condensate production will present new challenges for midstreamers. Today we take a closer look at Utica production.

Crude Loves Rock’n’Rail – Bright Future in Shales (Season Finale)

published by Sandy Fielden on Sun, 05/19/2013 - 20:00

There is a bright future for crude by rail in the oil shale plays regardless of what happens to crude price differentials. That is because the flexibility of rail transport meshes well with the rhythm of shale oil development. Meantime Canadian heavy crude will be the focus for rail terminal development in the near term as continued pipeline delays force producers to look seriously at rail options. And the economics of raw bitumen by rail may end up undercutting pipelines. Today we look ahead to these trends.

Too Wrong for Too Long? How 2011 Bakken Crude Forecasts Compare to Today

published by Sandy Fielden on Thu, 05/16/2013 - 20:00

Two years ago in June 2011 Bentek forecast that crude production in the Williston Basin would grow to 900 Mb/d by 2016. Today’s production in North Dakota and Montana is already at that level. What we are learning about US shale production is that it has been growing at twice the rate of every forecast out there.   Today we begin a new series looking at what we are learning about the accelerating pace of North American shale production.

Through the Looking Glass: NGLs, Condensates and Pentanes Part 1 – U.S. versus the World

published by Al Troner on Wed, 05/15/2013 - 20:00

By Al Troner, President Asia Pacific Energy Consulting (APEC)

U.S. production of field (lease) condensates is growing like crazy, especially in the Eagle Ford.  There is way too much of this material for it to be absorbed into traditional crude blending markets.  At the same time the production of plant condensate, a.k.a. natural gasoline, is also increasing along with the yield of all other products from natural gas processing plants.  A glut of condensates has developed and is getting worse. Clearly this is an opportunity for new market development, and the bizdev community is hard at work coming up with concepts, projects and proposals to use all of this material in the U.S. and in export markets.  But there is a problem. Condensate markets in different geographies seem to have little in common with each other.  It’s like walking through the looking glass.  One term can have several meanings.  One meaning can be ascribed to several terms. Today we launch a RBN blog series to make sense of it all.

ECHO and the Blending Men – Texas Terminal Wars

published by Sandy Fielden on Tue, 05/14/2013 - 20:00

Houston is getting swamped with crude that isn’t being consumed by area refineries. Light sweet crude prices are being discounted by up to $6/Bbl versus St James, LA. There is no pipeline capacity to move crude from Houston to Louisiana so it can only go by barge. The reconfiguration of terminalling and storage capacity on the Texas Gulf Coast to handle rising volumes of incoming crude more smoothly is underway but far from finished. Enterprise Product Partners (EPP) announced their latest expansion plans for their ECHO terminal earlier this month. Today we review progress on the Enterprise Texas crude network.

Big Surge Comes to Whoville – Northeast NGLs to Increase Six Fold

published by Kelly Van Hull on Mon, 05/13/2013 - 21:00

A few months back we introduced Whoville, the emerging NGL hub in a small corner of Pennsylvania and West Virginia.  Now that hub is coming on like gangbusters.  Between now and 2015 nearly 4.7 Bcf/d of additional cryogenic natural gas processing capacity is due to come online along with 500 Mb/d of fractionation capacity and 500 Mb/d of NGL pipeline takeaway capacity to support growing Utica and wet Marcellus production.  As a result, NGL production from the Northeast is due to exceed 400 Mb/d by 2015, a six fold surge from EIA’s 63 Mb/d February production number.  In today’s blog, we examine growing Northeast NGLs production.

Crude Loves Rock’n’Rail – 154 Terminals Operating – BNSF the Dominant Oil Transport Railroad

published by Sandy Fielden on Sun, 05/12/2013 - 20:00

During the past two years the US domestic crude transportation business has been revitalized by a huge increase in shipments of crude oil by rail. In the Bakken region alone over 600 Mb/d of crude is shipped to market by rail. The number of rail terminals in producing regions loading crude oil onto rail tank cars has increased from a handful at the end of 2011 to 88 and growing today. A further 66 crude oil unloading terminals have been built or are under construction. Today we summarize the crude oil terminal build out by region and by railroad.

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