The Long Run - The LNG Canada Project Will Impact Gas Markets, But Not Soon Enough

The final investment decisions by Royal Dutch Shell and its partners in the LNG Canada liquefaction and export project in British Columbia are a long-term boon to Western Canadian natural gas producers and to TransCanada, which now can proceed with its planned Coastal GasLink pipeline across the full breadth of BC. But the LNG Canada facility in Kitimat and the new 420-mile, 2.1-Bcf/d pipe won’t come online until 2023 — an eternity for producers in the region’s Montney and Duvernay shale plays, who through much of 2018 have been enduring profit-crushing price discounts for their gas relative to Henry Hub. Today, we consider the largest North American liquefaction/LNG export project to be sanctioned in several years, and why BC and Alberta producers wish it were coming online much sooner.

Low Budget - Western Canadian Select Crude Topples to 10-Year Low

The price of northeastern Alberta’s key crude oil benchmark, Western Canadian Select (WCS), has been dropping like a rock. Last week, the heavy, sour blend of crude fell to a $45/bbl discount against U.S. benchmark West Texas Intermediate (WTI) — the biggest differential in at least 10 years. With an unplanned summertime outage at a Syncrude upgrader now over, Alberta production rising and pipeline takeaway capacity static — at least for now — the value of Canada’s crude may have even bleaker days ahead, despite a recent global rally in oil prices. Today, we explain why Western Canada’s oil producers are facing the prospect of mile-wide spreads for months to come.

Deep Water, Part 5 - More Plans for Offshore Crude Oil Export Terminals Along The Gulf Coast

Just as midstream companies are in a fierce competition to build new crude oil pipelines from the Permian to the Gulf Coast, there’s a race on to develop what would be the first Gulf Coast terminal in a generation capable of handling fully laden Very Large Crude Carriers. There’s a lot at stake. Currently, 2-MMbbl VLCCs can be filled to the brim without reverse lightering only at the Louisiana Offshore Oil Port (LOOP), and even if U.S. crude production continues to rise at a fast clip, it’s unlikely that more than another one or two high-capacity, VLCC-ready terminals would be needed over the next five years. And, assuming there’s not an overbuild situation, the project or projects that ultimately advance would be expected to be in-demand and highly utilized — VLCCs are the preferred mode of transporting crude to Asia and other far-away markets, and being able to fully load VLCCs saves the considerable cost and time associated with reverse lightering these supertankers in deep water. Today, we conclude our series on the fast-paced efforts to develop export terminals in waters deep enough to float VLCCs chock-full of oil.

Oklahoma Swing, Part 4 - The Pipelines That Flow Out of the Crude Hub at Cushing

The crude oil hub in Cushing, OK, is a big numbers kind of place: 94 million barrels of storage capacity, 3.8 MMb/d of inbound pipelines and 3.1 MMb/d of outbound pipes, not to mention a spaghetti bowl of connections between the many tank farms within greater Cushing. To truly understand the “Pipeline Crossroads of the World” — what it does and how it works — you need to know the hub’s assets and how they fit together. Today, we continue our series with a look at the pipes that transport crude from Cushing to Gulf Coast refineries and export docks, and to inland refineries in the Midcontinent, the Midwest and what you might call the Mid-South — places like Memphis, TN; El Dorado, AR; and Shreveport, LA.

Dog Days Are Over? Part 5 - Unconstrained Northeast Gas Supply Growth Spells Trouble for Henry Hub

With the addition of new large-diameter natural gas pipelines like Energy Transfer Partners’ Rover Pipeline and Enbridge and DTE’s NEXUS Gas Transmission, the dog days of severely depressed gas prices in the U.S. Northeast will be diminishing (though not disappearing entirely), but they are just getting started for its downstream markets. After years of constrained natural gas supply growth, Northeast takeaway capacity appears to be outpacing regional production volumes more and more, and RBN’s analysis of production economics suggests that, left unconstrained, the Marcellus/Utica gas market is set to unleash an incremental 8 Bcf/d into the broader U.S. gas market by 2023, with the bulk of that volume targeting consumption in the Midwest and Gulf Coast regions. In today’s blog, we walk through our outlook for Northeast takeaway capacity and gas production, and by extension, U.S. gas supply.

Coming Up, Part 5 - The Experienced, Deep-Pocketed Team Behind the Golden Pass LNG Project

It’s crunch time in the race to advance the next-round of liquefaction/LNG export projects along the U.S. Gulf Coast to a Final Investment Decision (FID). And if we’re to assume that only a small number of these multibillion-dollar projects will get their financial go-aheads, it would seem eminently reasonable to put a win-place-or-show bet on a joint venture that includes the world’s leading LNG producer (by far) and one of the largest U.S. natural gas producers — oh, and the partners have very fat wallets too. Size and money aren’t everything, of course, but as we discuss in today’s blog, the team behind the Golden Pass LNG project plans to build its liquefaction trains at the site of an existing LNG import terminal with strong interconnections with coastal pipelines already in place.

Shake It Off - U.S. Shale Exports Find New Pathways to China

China exceeded Canada as the largest buyer of U.S. crude exports for the first time in February 2017 and in year-to-date 2018 has averaged 378 Mb/d versus Canada’s 347 Mb/d. Ramping up purchases from virtually nothing in 2015 to more than 500 Mb/d in June 2018 was no small feat — the logistics in getting that much oil across the world include multiple ship-to-ship transfers, several weeks at sea and a whole lot of negotiating between U.S. crude marketers and the major Chinese buyers: Unipec and PetroChina. That already complicated process has recently been made just a little more complicated by the escalating trade war rhetoric between the U.S. and China. In today’s blog, which launches our new Crude Voyager service, we explain how crude flows to China are evolving.

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