Daily Energy Posts

Looking out over the next year and a half to 2016, Houston crude storage capacity looks to be lower than necessary to meet operational needs.

Last week RBN co-hosted the “Surviving the Flood” conference with Turner, Mason & Company in Houston.

Vacuum gas oil or VGO is one of those mystery products talked about by refiners but barely understood by those of us that are not engineers. However it is an important intermediate feedstock that can increase the output of valuable diesel and gasoline from refineries.

The Enbridge crude oil network is North America’s largest. Its original objective was to deliver western Canadian crude to refineries in the US Midwest. Many of those refineries like the 413 Mb/d BP Whiting complex south of Chicago have spent billions upgrading to process heavy Canadian crude.

Canada’s National Energy Board (NEB) already has approved export licenses for nine LNG export projects in British Columbia that, if all built, would demand a total of up to 16 Bcf/d of Western Canada natural gas. Several other LNG export projects also are under development in BC.

The condensate potential of the Utica shale play in northeast Ohio continues to be talked up by producers drilling for oil there. Natural gas output in the Utica is doing pretty well on its own of course – part of the Appalachian Tsunami of production that includes the Marcellus play.

Changes, expansions and reversals of the existing logistics system that supplies crude to 2.5 MMb/d plus of refining capacity in Houston have allowed refiners to expand output and process more crude than ever before.

A quarter million dollars for mud?  Mud for a single horizontal well can cost that much and more.  As horizontal well laterals keep getting longer, they need that much more mud.   So the $10 billion drilling mud fluids business is growing fast.  The industry has a unique

Exporting large volumes of Western Canadian gas as liquefied natural gas (LNG) would help resolve the region’s growing gas glut.

Enbridge own and operate the longest liquids pipeline system in North America extending from Fort McMurray in Alberta to Montreal in Eastern Canada and south through the US Midwest to Freeport on the Texas Gulf Coast.