There are a number of reasons why certain U.S. refineries might want to include waxy crude oil from Utah’s Uinta Basin in their crude slates — the highly paraffinic oil has a lot of neat qualities. But waxy crude can be a hard sell, mostly because, like bacon fat, it needs to be kept warm to remain in a liquid, flowable state. As a result, the vast majority of the waxy crude produced is driven in insulated tanker trucks to refineries in nearby Salt Lake City. Uinta producers have been making progress of late, however, in sending regular shipments of waxy crude in coiled and insulated railcars to a couple of Gulf Coast refineries. Existing terminals would support incremental growth, and a proposed new railroad out of the basin would allow far larger volumes to be efficiently railed to market. In today’s RBN blog, we continue our look at the prospects for a most unusual type of crude oil.
By now, many longtime readers of RBN blogs know the basics of Uinta waxy crude as well as they know the Rod Stewart classic behind the title of all our waxy crude blogs. As we said in Part 1 of this series — and in earlier blogs on waxy crude — the heart of Uinta production is Utah’s Duchesne and Uintah counties, which are located more than 100 miles east/southeast of Salt Lake City. The vast majority of the crude produced in the basin is either “black wax” oil with an API gravity of 30 to 34 degrees or “yellow wax” crude with an API gravity of 38 to 44 degrees, making them suitable for blending with a wide range of other crudes to achieve desired feedstock specs. These crudes also have admirably low sulfur content (0.01%), low acid content (TAN, or total acid number, of less than 0.1%), and low metals and nitrogen content, also making them desirable for blending.
We’ve also been driving home the fact that there’s plenty of waxy crude still in the ground, and that Uinta Basin producers have been turning increasingly to horizontal drilling and multi-stage hydraulic fracturing. We’ve heard that since 2016 the use of horizontal laterals of up to two miles and large-scale stimulation in over-pressured areas within the Uinta’s Greater Altamont-Bluebell area (light-green-shaded area in Figure 1) has resulted in favorable initial production (IP) rates and shallow decline curves. Waxy crude is also being produced in the Uinta’s normally pressured Greater Monument Butte and Red Wash areas (tan- and red-shaded areas, respectively). A lot of recent drilling activity and new production has been occurring between the Altamont-Bluebell and Monument Butte areas (dashed red oval).
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