Last Wednesday (October 9, 2013) Buckeye Partners announced an agreement to purchase Hess Oil’s East Coast terminal assets – including a crude and fuel oil terminal on the Island of St Lucia in the Caribbean. Buckeye already own a large oil storage terminal in the Bahamas, known as BORCO so with the new acquisition they will become the largest storage and terminal player in the Caribbean market. The fuel oil trade in the region is a combination of local bunkers supply, fuel oil for power plants and larger scale transshipments of fuel oil for international markets. Today we look at fuel oil terminal facilities in the Caribbean.
Daily Energy Blog
Tuesday, 10/08/2013
The BOSTCO Terminal started operations this week on the Houston Ship Channel. By early next year (2014) the terminal will have 6 MMBbl of storage capacity. This $500 Million investment by two midstream companies is designed to meet the expanding needs of fuel oil blenders at the Gulf Coast. Before the first phase could be completed, 900 MBbl of additional refined product storage planned for phase two, was snapped up by Morgan Stanley for distillate fuels. Today we describe the terminal facilities and ownership structure.
Thursday, 10/03/2013
The pig, or “Pipeline Integrity Gauge,” is a sophisticated device that is critical to the safety and integrity of pipelines. The oil and gas pipeline transportation industry can’t live without them. They help ensure the safe and efficient passage of crude oil, NGLs, petroleum products and natural gas through more than 2.3 million miles of pipeline in the U.S, according to PHMSA (Pipeline and Hazardous Materials Safety Administration). Over 3,000 pipeline operators in the U.S. manage this transport system. Their success is due in large part to pigs. Today we investigate the role of pigs in oil and gas pipeline transportation infrastructure.
Wednesday, 9/18/2013
The market for residual fuel oil is traditionally not attractive for refiners because prices are lower than for crude feedstocks. However, some of the world’s biggest oil traders profit from arbitrage between different fuel oil grades and locations. The Gulf Coast market is expected to expand as refiners add imported fuel oil to their feedstocks to balance lighter crudes coming their way from shale production. In October a brand new fuel oil terminal will open on the Houston Ship Channel to help serve the growing needs of fuel oil traders. Today, appropriately “International Talk-Like-a-Pirate-Day” we begin a new series covering the Gulf Coast fuel oil market.
Thursday, 8/08/2013
Three North Dakota electric utility companies are adding close to 800 MW of new generating capacity in the next five years. Unlike 68 percent of the State’s current generating capacity that uses coal fuel, the new plants will be powered by locally produced natural gas. The plants are needed in part to meet growing demand for power from Williston Basin oil and gas field services and infrastructure. A 2012 study sponsored by the North Dakota Transmission Authority estimates that demand in 45 Williston Basin counties will increase by 90 percent or 1000 MW between 2012 and 2017. Today we review regional power demand from the oil and gas industry.
Monday, 6/24/2013
A couple of months back in March 2013, the US Environmental Protection Agency (EPA) released proposed Tier 3 gasoline regulations that, if approved, will go into effect on January 1, 2017. The new rules include lower sulfur specifications for gasoline and tighter emissions controls for motor vehicles. Tier 3 also encourages acceptance of higher percentages of ethanol in gasoline. These regulations come at a time when US refinery gasoline blenders are jumping through hoops to handle a flood of new light shale crudes and increased demand for natural gasoline exports to Canada. Today we examines the proposals and their impact on gasoline and natural gas liquids markets.
Wednesday, 6/19/2013
Emission regulations require that companies planning new olefin crackers in EPA designated nonattainment areas like Houston must buy emission credits prior to construction. The market for credits in Houston for one criteria pollutant – volatile organic compounds (VOCs) skyrocketed from $4.5K/ton in 2011 to $300K/ton this month. The scarcity of emission credits and their rising price threaten to constrain or delay new petrochemical plant builds and will continue to hamper plant development and expansions in the Gulf Coast region. Today we describe the challenge new projects face.
Tuesday, 6/18/2013
Cheap feedstocks resulting from dramatic increases in US shale production of natural gas and natural gas liquids (NGLs) have led petrochemical companies to plan at least 7 new processing plants - known as olefin crackers - all but one on the Gulf Coast. These plants are expensive (think $billions) and take years to permit and build. They also produce significant quantities of emissions that are restricted by the Clean Air Act (CAA) – some of which trade in a market that has been skyrocketing for the past few months – threatening to delay or constrain the Gulf Coast cracker building spree before it gets started. Today we describe the regulations.
Thursday, 5/09/2013
Last week (May 3 2013) a very late winter snowstorm crossed the Rocky Mountains into the upper Midwest, dropping over a foot of spring snow from Colorado to Wisconsin. So-called winter Storm Achilles smashed snowfall records across the Upper Midwest. The storm was only the second May snowstorm on record for Kansas City and Des Moines. Today we look at the impact of this year’s late winter weather on energy markets.
Wednesday, 4/24/2013
There is plenty of crude oil in North Dakota but the State does not refine enough of it to meet rising demand for diesel caused by booming energy industry activity. The latest North Dakota Pipeline Authority data shows oil production in February 2013 up 40 percent since February 2012 to 778 Mb/d. Demand for diesel increased 35 percent between February 2010 and February 2013. North Dakota’s only refinery produces less than half the diesel the State consumes. To help remedy that disparity the first new refinery to be built in the Lower 48 since 1977 is under construction today and two more new refineries are planned. Today we look at the refinery economics.
Wednesday, 4/17/2013
It’s time! Registration for RBN’s *Summer* School of Energy is open. Once again RBN Energy is offering an intense curriculum of energy market fundamentals analysis covering the whys and hows of the most important developments in the crude oil, natural gas and NGL markets. This time the course is hot. Really hot. Because we are holding the conference in the middle of July in Houston. And we’ve expanded the content to include an optional Preschool that consists of a half-day deep dive into the (hot) condensate markets, and another half day for a tour of (very hot) Mont Belvieu. There is more - much more that we’ll review below. And BTW, if this sounds like an unabashed commercial for our conference, that’s because it is. You have been warned!
Tuesday, 4/09/2013
Last week our attention was drawn to the “State of Energy” report published by the Texas Independent Producers and Royalty Owners (TIPRO). Using Bureau of Labor quarterly census data the report provides a summary of state and national benefits attributed to growing US oil and gas production during 2012. For example, TIPRO reports that oil and gas industry employment increased by 65,000 to 971,000 in 2012. But the benefits of increased production are not just confined to the oil and gas industry. According to a presentation by the Chamber of Commerce Institute for 21st Century Energy (ITCE) the shale revolution provided $237B of growth to the US economy in 2012. Today we look at how huge changes taking place in US energy supplies impact the wider economy.
Sunday, 3/31/2013
The start of April marks the traditional summer driving season. Domestic demand for gasoline is waning due to renewable fuels and higher fuel economy standards. At the same time the tight oil shale revolution is delivering greater volumes of lighter sweeter crudes to US refineries – including condensates. Those light crudes produce more gasoline when refined but can cause problems for refineries not configured to handle them. Today we describe a revolutionary process that could potentially bypass refinery distillation.
Thursday, 3/07/2013
Does lightning strike twice? How about three times? Sure seems like the coal industry has been hit by three lightning bolts in the past several years: a recession that reduced demand for electrical power, low prices for competing fuels (i.e., natural gas), and new federal regulations on smokestack emissions. Today we review regulations that have left coal power generators singing the smokestack blues.
Sunday, 2/24/2013
Last week (Feb 19, 2013) we explored California’s cap-and-trade program for Greenhouse Gas emissions (GHG) and saw that it has already increased electricity prices by 20% and pushed up the cost of refining a barrel of oil by $0.78/bbl. These developments are just the tip of the iceberg. California’s program will impact regional natural gas demand and basis. Companies will shift the locations where crude oil is processed. Power imports into the California market from the Pacific Northwest will soar. Today we’ll dive even deeper into the emissions market to better understand the outlook for GHG pricing and how the cap-and-trade rules are likely to influence all sorts of energy and fuel markets.
