Crude oil production growth in Oklahoma over the past two years has been so rapid that apparently the State of Oklahoma “misplaced” (under-reported?) as much as 100 Mb/d of output according to a recent Energy Information Administration (EIA) report. Whatever the true production numbers a couple of central Oklahoma plays continue to attract new drilling and infrastructure investment in the face of the oil price meltdown. Today we describe new infrastructure in the region.
Plains All American
Sunday, 2/21/2016
According to the latest Energy Information Administration (EIA) monthly Drilling Productivity Report, crude production from the Niobrara shale in Colorado and Wyoming peaked at 491 Mb/d in April 2015 and is forecast to decline by ~100 Mb/d to 388 Mb/d through March 2016 – in response to falling crude prices and lower drilling activity. Meantime midstream companies are still building new pipeline capacity out of the region with the Saddlehorn and Grand Mesa projects set to add 350 Mb/d of takeaway capacity this year (2016). The pipeline build out has already caused a shift of crude shipments away from crude-by-rail (CBR) that peaked in December 2014. Yet as we describe today - rail terminals and infrastructure are still under construction in the region.
Monday, 12/07/2015
Over the past few years, midstream companies have responded to the boom in crude oil and lease condensate production in the Eagle Ford and the Permian by developing significant new pipeline capacity to, as well as storage and dock facilities in, both Houston and Corpus Christi. Now, with production in the Eagle Ford off its high and growth in the Permian slowing, these same midstreamers (and producers, marketers, refiners, and exporters of condensate and other refined products) are taking stock, and assessing not only what new infrastructure might still be needed in this period of lowered expectation, but whether shifting more of their attention (and liquids) towards Corpus instead of Houston might be warranted. Today, we continue our look at Corpus Christi’s increasing role as a crude/condensate powerhouse.
Monday, 4/20/2015
The flood of domestic light shale crude showing up at the Texas Gulf Coast by pipeline in the past two years is not best matched to most refineries in the region that are configured to run heavier crude. But flows across the Gulf Coast to refineries in the Mississippi Delta more suited to process light crude are constrained by a lack of pipeline capacity between Texas and Louisiana. New domestic shale crude has been delivered to eastern Gulf Coast terminals such as St. James by rail but narrowing coastal differentials to inland prices have reduced the CBR advantage. Today we detail how new pipeline projects promise to increase the flow of crude from Texas to the Eastern Gulf.
Thursday, 4/16/2015
The Plains All American (PAA) Cactus Pipeline comes online in the West Texas Permian this month (April 2015). Cactus will bring up to 250 Mb/d of crude and condensate from Midland and McCamey in the Permian to Gardendale, TX - the heart of the Eagle Ford shale – linking the two basins for the first time by pipeline. It also forms a major component of an expanded pipeline and dock infrastructure owned by a combination of PAA and Enterprise Product Partners (EPD) set to deliver as much as 600 Mb/d of crude and condensate to Corpus Christi and 470 Mb/d to Houston by the end of 2015. Today we describe how a good deal of those deliveries will be processed condensate eligible for export.
Wednesday, 1/21/2015
The prolific, liquids-rich Permian Basin and Eagle Ford plays have attracted more than a dozen midstream companies interested in meeting the growing need for natural gas processing plants, fractionators and natural gas liquids pipelines. Some of the larger players have assembled broad-based portfolios of assets, while others have focused on more stand-alone NGL pipeline or gas processing investments. Today we begin wrapping up our series on NGL-related assets in two of the nation’s most important shale plays.
Sunday, 12/07/2014
Although as everyone ought to know by now, overall crude prices have dropped more than 35% in the past six months, prospects for the prolific Permian Basin continue to look rosy. Wide price discounts experienced by Permian producers at Midland, TX versus West Texas Intermediate (WTI) crude delivered to Cushing, OK over the past 13 months have narrowed recently in anticipation of the Plains All American Sunrise pipeline coming online. Permian production has been surging all year and midstream companies continue to invest in and expand takeaway capacity. Today we review ongoing infrastructure plans to handle growing output.
Monday, 11/17/2014
With Western Canadian oil sands bitumen output increasing rapidly, producers need more diluent to blend with their production so that it can flow to market in pipelines. That means delivering diluent to remote locations as far as 250 miles northwest of Edmonton. Smaller oil sands projects typically get their diluent delivered by rail or truck but pipeline infrastructure is being built out for larger projects as their production comes online. Inter Pipeline (IPL) diluent delivery volumes on their Polaris pipeline at the end of 2013 were just 20 Mb/d. By 2017 that volume could be to 1.2 MMb/d. Today we detail IPL and Plains build out plans.
Sunday, 11/09/2014
Last week Eagle Ford producer BHP Billiton – apparently tired of waiting for a ruling from the Department of Commerce Bureau of Industry and Security (BIS) – decided to export a cargo of processed condensate that they have “self-classified” as refined product – meaning it is not subject to U.S. export restrictions on lease condensate and crude oil. That move followed BIS approval for Enterprise and Pioneer to make similar exports in July 2014 and could set off a posse of similar condensate exports by Eagle Ford producers. Today we review new market options for condensate producers.
Sunday, 9/28/2014
By Q2 of 2015, the Plains and Enterprise joint venture pipeline in the Eagle Ford will carry up to 470 Mb/d of crude and condensate to market in Houston and Corpus Christi including barrels shipped from the Permian Basin on the Cactus pipeline. This pipeline expansion will easily make the two-midstream operators the largest players in the Eagle Ford market. On top of that, Enterprise already has a leg up in the race to crank up condensate exports – having recently won one of the coveted BIS letters. Today we describe recent expansions in these two company’s Eagle Ford networks.
Wednesday, 5/14/2014
New crude pipeline capacity being added in the Rockies to ease congestion will compete directly with rail terminals built or planned in the region. Some of these rail terminals are purpose built to take barrels off the pipelines for delivery to West Coast refiners or perhaps to facilitate blending of heavier Canadian grades with lighter shale crudes. The competition between pipelines and rail in the region underlines a key accomplishment of the post-shale crude distribution system - the advent of greater choice for producers. Today we describe growing rail alternatives in the Rockies.
Thursday, 5/08/2014
Permian Basin crude production is expanding rapidly. At over 1.5 MMb/d it already represents nearly 19 percent of total US crude output. Midstream companies are busy developing more than a dozen gathering system extensions and additions to deliver Permian production to about 1 MMBbl of mainline pipeline capacity coming online between the start of 2013 and 2015. In today’s blog we detail planned improvements to the Basin and Cactus pipelines.
Thursday, 5/23/2013
Recently there has been a spate of pipeline tariff filings to the Federal Energy Regulatory Commission concerning crude oil quality specifications for Bakken crude in North Dakota. While the immediate disagreement between pipeline company Enbridge and shipper Plains Marketing appears to have been resolved, it has highlighted an issue which has not received much attention until now. Today we detail the concerns.
Tuesday, 2/26/2013
North Dakota Bakken crude production continues to grow at record rates with nearly 770 Mb/d produced in December 2012 up 40 percent since January 2012. The North Dakota Pipeline Authority estimates that 64 percent of that crude was transported to market by rail in December. After local refinery consumption (80 Mb/d) that means 440 Mb/d moving by rail. Today we continue our survey of North Dakota crude rail loading terminals with an in-depth look at three midstream companies that between them can potentialy load 280 Mb/d of crude in North Dakota.
Wednesday, 2/13/2013
Total crude oil shipped out from the South Texas Port of Corpus Christi increased 19 fold between November 2011 and November 2012 from 2.1 MMBbl to 36 MMBbl. All of that crude is coming from the Eagle Ford shale oil basin 70 miles north of Corpus in the form of light crude or condensate via pipeline. Six marine terminals have been built or expanded at Corpus but can they handle the traffic jam? Today we review how the Port is coping.