Gross production of natural gas in the Niobrara region topped 5 Bcf/d for the fourth consecutive month in November 2018, according to the Energy Information Administration, and it's estimated that regional output this month will hit another record: nearly 5.2 Bcf/d. These production gains, and the concentration of new wells in or near Weld County, CO — the epicenter of the Niobrara’s Denver-Julesburg Basin — are straining the ability of existing gas processing plants to keep up, and spurring the rapid development of new processing capacity. The scale of the build-out in the D-J is impressive: some 2.7 Bcf/d in new cryogenic plants are either under construction or in various stages of pre-construction planning in northeastern Colorado. Today, we continue our review of Rockies crude oil, gas and NGL production and infrastructure, this time focusing on gas-processing needs in the sky-high D-J.
This is the fourth blog in this series. In Part 1, we discussed the Niobrara’s geography and hydrocarbon production history. By our assessment, the play includes the D-J Basin and the Powder River Basin (PRB), with the heart of PRB in northeastern Wyoming and the D-J taking up much of northeastern Colorado and part of southeastern Wyoming. The Niobrara has been producing oil and gas for more than a century. Total production of natural gas took off there in the late 1990s and early 2000s, and production held relatively steady through most of the 2010s at between 4.3 Bcf/d and 4.9 Bcf/d, breaching the 5-Bcf/d mark only once (in January 2012) until this past August; since then, production has ratcheted up month by month, hitting a record 5.15 Bcf/d in November.
As for crude oil, production in the D-J Basin and PRB took off during the Shale Era, soaring from less than 140 Mb/d in January 2010 to a peak of nearly 500 Mb/d in April 2015. Drilling activity and production sagged with crude prices in 2014-16, and by January 2017, the play’s oil output was down to just a hair above 400 Mb/d. Since then, though, it’s been on a tear — up to 664 Mb/d as of November, again according to EIA. The agency doesn’t specifically track NGL production in the Niobrara, but its data show NGL output rising generally in the Rockies — Petroleum Administration for Defense District (PADD) 4 — by one-third since 2013, with a substantial portion of those gains likely occurring within the Niobrara.