Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints

new pipeline projects in the permian

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Wink to Webster Texas Pipeline

  • Companies: Plains All American Pipeline L.P. and Exxon Mobil, Lotus Midstream LLC

  • Capacity: 1 million b/d capacity

  • Projected In-Service: In-Service: Q1 – Q2 2021

  • More Info:https://winktowebsterpipeline.com/

 

Gray Oak

 

Cactus ii

 

Jupiter Crude Pipeline

 

Epic Crude Pipeline

 

 

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Permian Global Access Pipeline

  • Companies: Tellurian

  • Capacity: 2.0 bcf/d

  • Projected In-Service: 2023

  • More Info: http://www.pgap.com/

 

Gulf Coast Express

 

Permian Highway Pipeline 

 

Pecos Trail

 

Permian-Katy Pipeline 

  • Companies: Sempra LNG & Midstream, Loews/Boardwalk Pipeline Partners

  • Capacity: 2.0 bcf/d

  • Projected In-Service: Q3 2020

  • More Info: http://www.p2kpipeline.com

 

Whistler Pipeline

 

 

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Grand Prix Pipeline

 

Epic ngl Pipeline

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Total SA has agreed to take over Toshiba’s portfolio of LNG, including a 20-year tolling agreement for 2.2 million tonnes/year of LNG from Freeport LNG Train 3 in Texas and the corresponding gas transportation agreements on the pipelines feeding the terminal. Train 3 is expected to start commercial operations by second-quarter 2020.

Under the transaction, Total will acquire all shares of Toshiba America LNG for $15 million to be paid by Total to Toshiba and will be assigned all contracts related to the LNG business by Toshiba Energy Systems and Solutions Corp. for a consideration of $815 million to be paid by Toshiba to Total.

Total will therefore receive from Toshiba a net cash consideration of $800 million.

The takeover is in line with Total’s strategy to become a major LNG portfolio player, said Philippe Sauquet, president gas, renewables, and power at Total. “Already an integrated player in the US gas market, Total is set to become one of the leading US LNG exporters by 2020 with a 7 million-tpy portfolio,” he said.

The transaction is expected to close by yearend.

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Rystad Energy: US oil output poised to set yet another record in 2019

US oil production keeps accelerating towards new highs. New records are expected both when the final numbers for May emerge and at the end of the year.

Rystad Energy: US oil output poised to set yet another record in 2019

Rystad Energy is raising its forecast for US crude output to 13.4 million bpd by December 2019. For May 2019, research and calculations point to crude oil production averaging 12.5 million bpd. Both are new all-time highs.

“Our US supply projections have been revised up yet again. US oil production is already higher than many in the market believe,” says Bjørnar Tonhaugen, Head of Oil Market Research at Rystad Energy.

Preliminary US well production data shows that tight oil production alone reached pre-winter levels of around 8.5 million bpd in May. This prompted an upward revision of the 2019 US total production exit rate by approximately 200 000 bpd, to 13.4 million bpd. The 2020 exit rate was also revised up to 14.3 million bpd, up by approximately 75 000 bpd.

“Strong growth persists in the Permian Basin on both the New Mexico and the Texas sides. Updated production estimates suggest that the Permian Basin surpassed 4.5 million bpd in May. Considering the ongoing recovery in fracking activity, Rystad Energy maintains its previous expectation that Texas production will exceed 5 million bpd at some point during the second quarter of 2019,” Tonhaugen added.

The energy consultancy sees production in the Gulf of Mexico reaching 1.95 million bpd by the end of 2019, up by 135 000 bpd since its last update, partly thanks to the early start-up of Shell’s Appomattox field.

Oil prices

Rystad Energy expects crude oil prices to stay flat in the near term.

“The oil market is again in a tug-of-war situation with downwards pressure currently dominating. Downside pressures exist from weak demand and fear of economic growth degradation, partially induced from protectionist policies in the US and partially from structural forces, as exemplified by Chinese PMIs showing a dip again in May,” Tonhaugen remarked.

OPEC production

Rystad Energy estimates OPEC crude oil production of 29.9 million bpd for May, the lowest monthly output level in more than five years and an astonishing 2.6 million bpd below October 2018 reference levels. For 2019 as a whole, Rystad forecasts OPEC crude production of 30.3 million bpd, down 1.6 million bpd year-on-year. It also lowers its projections for Saudi Arabia to around 10.3 million bpd, from 10.6 previously.

“We continue to expect OPEC production to increase through the remainder of 2019, but risks to short-term supply are undoubtedly still plentiful, with a total of 1.3 million bpd at risk from Iran, Venezuela, Libya and Nigeria,” Tonhaugen said.

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The U.S. currently holds the title of global leader in recoverable oil resources, according to the latest annual report of world recoverable oil resources by energy research firm Rystad Energy.

With 293 billion barrels of recoverable oil resources, the U.S. beats out both Saudi Arabia and Russia by 20 billion barrels and 100 billion barrels, respectively.

Rystad’s estimates of U.S. recoverable oil is also five times more than reported proven reserves published in the BP Statistical Review of World Energy 2019.

According to Rystad analysis, the Permian’s tight oil plays hold 100 billion barrels of recoverable oil resources and the resources there remain largely flat from the previous year. Improvements in well configuration plays a part in this.

“We also note that production has not been fully replaced by increased reserves in some U.S. shale plays, including Eagle Ford in Texas and Utica in Ohio,” Rystad Energy CEO Jarand Rystad said in a release “Oil companies have been focusing on core development and cash flows rather than exploration and de-risking non-core assets.”

Using the standard of the Society of Petroleum Engineers (SPE) when estimating reserves and resources in fields in order to consistently compare OPEC and non-OPEC countries as well as conventional and unconventional fields, Rystad estimates the world’s proven oil reserves to total 386 billion barrels.

“Official reserves reporting from Saudi Arabia indicates an upwards revision of 10 percent, but we don’t see increases in activity that would justify such a large upgrade, so this revision could be due to changes in reporting methodology,” said Per Magnus Nysveen, Rystad’s head of analysis. “The 20 percent revision to official U.S. reserves, on the other hand, is due to higher reserves reported by the operators and is based on more stringent rules from the U.S. Security Exchange Commission.”

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US to become net oil exporter in November: EIA

Imports projected to meet 8% of US demand this year

US net oil exports to average 550,000 b/d in 2020

The US will become a net oil exporter for the first time on a monthly basis in November, with crude and refined product exports exceeding imports by 220,000 b/d, the Energy Information Administration said Tuesday.

 

EIA sees the US continuing to be a net oil importer on an annual basis in 2019, with imports exceeding exports by an average of 620,000 b/d. Then the US will flip to annual net exporter in 2020, with exports exceeding imports by 550,000 b/d.

The US snagged the net oil exporter title for all of one week last November, driven by a surge of 3.2 million b/d in crude exports that pushed crude and product exports above 9 million b/d, according to S&P Global Platts Analytics.

The growth of the Gulf Coast refining sector made the US a net exporter of refined products in 2011. Rising crude exports since 2015 have made the overall net oil exporter status possible.

Still, US crude imports will continue to exceed crude exports by 4.43 million b/d in 2019 and 4.4 million b/d in 2020, EIA said.

IMPORT RELIANCE PLUMMETS

EIA's Annual Energy Outlook 2019 predicted in January that foreign oil would meet just 7.5% of US demand this year.

A decade ago, EIA forecast in its 2009 AEO that foreign crude would meet 44% of US demand in 2020. Imports met 60% of US consumption in 2006 and were projected to fall to 50% by 2010, according to the 2009 report. That was before the US tight oil revolution got underway in earnest.

EIA's projections have accelerated as US oil production growth keeps beating expectations.

Even just two years ago, EIA's 2017 AEO forecast the US remaining a net importer through 2050, with foreign oil meeting 17.7% of national consumption that year. Last year's AEO predicted the US would gain net exporter status in 2029 - nine years later than the current forecast.

President Donald Trump praised the net oil exporter milestone in his State of the Union speech to Congress in February, albeit before it actually happens.

"The United States is now the number one producer of oil and natural gas anywhere in the world. And now, for the first time in 65 years, we are a net exporter of energy," Trump said at the time.

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The US will maintain oil production despite falling prices, says deputy energy secretary

  • Despite low oil prices, shale producers in the U.S. will continue to produce 12 million barrels a day — which are all-time highs — throughout next year, and perhaps going up to as high as 13 million barrels, U.S. Deputy Energy Secretary Dan Brouillette told CNBC on Wednesday.
  • While shale drillers in the U.S. have been said to face obstacles on growing output, and the number of operating oil rigs have declined this year, Brouillette said that production is not actually the biggest problem.
  • Meanwhile, Chinese tariffs on U.S. natural gas will not put a dent in the country’s ambitions to be a top energy exporter, he indicated, citing high demand from the rest of Asia.
  • The U.S. will maintain its oil production — or even ramp it up higher — despite low energy prices and slowing economic growth, Deputy Energy Secretary Dan Brouillette said Wednesday.

    Shale producers in the U.S. will continue to produce a record 12 million barrels a day throughout next year, he said, citing projections from the Energy Information Administration. They may even go up to as high as 13 million barrels, he added.

     

    “U.S. production numbers are going to continue for quite some time,” Brouillette told CNBC.

    U.S. West Texas Intermediate (WTI) crude futures have fallen almost 20% since reaching their 2019 peaks in late April, as oil prices were dragged down by intensifying fears of an economic downturn that’s started to impact oil consumption.

    But Brouillette rejected fears that oil demand would be hit amid slowing growth.

    “Growth is slowing down slightly ... over the course of early 2019. But I suspect that as the economy begins to rev up, we’ll start to see that demand pick up as well. And it’s going to be good news for oil producers,” he said.

    On Wednesday, Brent crude futures were at $61.34 per barrel, and U.S. crude futures were at $52.40 per barrel — off this year’s highs of around $74 and $66 per barrel in April.

    Even though shale drillers in the U.S. have been said to face obstacles on growing output amid a wave of belt-tightening that’s cutting billions of dollars from budgets, and the number of operating oil rigs have declined this year, Brouillette said that production is not actually the biggest problem.

    “Our biggest challenge in the United States is not maintaining production, it’s actually getting the product to market. We are developing infrastructure ... at a rapid pace, but we need to do more. We need more pipeline capacity in order to have the oil and the gas reach these export markets,” he said.

    In fact, Brouillette said, there will be increased production, not falling output, in the U.S.

    Last year, the global appetite for natural gas grew at the fastest pace since 2010. Most of that supply is expected to come from the U.S., amid its ambitions to be a top liquefied natural gas (LNG) exporter.

    American gas output surged by 11.5% in 2018 — marking the fastest growth since 1951, according to the International Energy Agency. Currently, Australia and Qatar are the top two exporters of LNG, which is a form of the fuel chilled to liquid for transport by sea.

    But amid the trade war, Chinese tariffs on U.S. natural gas could put Washington’s ambitions on hold, with the Asian giant accounting for a large share of global demand and taking the spot as the world’s number 2 importer for LNG.

    Brouillette dismissed that notion, however, pointing to high demand from the rest of Asia.

    He said that sales to South Korea and Japan look “very, very large” relative to China. With Mexico numbers added to that tally, “the future looks pretty bright,” he added.

    “We still see continued LNG export growth all throughout the world,” Brouillette added.

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Shale deposits drawing plastics attention to Ohio Valley

Houston — The shale-rich Ohio Valley region continues to draw interest from materials firms because of its abundant supplies of natural gas.

The region now produces 50 percent more oil and gas than it did during its previous peak in the 1970s, Greg Kozera said June 5 at Global Plastics Summit 2019 in Houston. Kozera is marketing director for Shale Crescent USA, a trade group that promotes the Ohio Valley region of Ohio, Pennsylvania and West Virginia to potential investors.

Shell Chemical is making the region's potential a reality with a massive petrochemicals project near Pittsburgh that's set to open in the early 2020s. That project will include around 3.5 billion pounds of annual production capacity for polyethylene resin.

Shell, which is based in Houston and London, chose the western Pennsylvania site because of the availability of natural gas via hydraulic fracturing (fracking) from the Marcellus and Utica shale deposits. Shell officials also have touted the proximity of the region to a large number of American consumers and end markets.

 

A similar resin and feedstocks joint venture in Dilles Bottom, Ohio, is being analyzed by PTT Global Chemical of Thailand and Daelim Industrial Co. of South Korea.

At GPS 2019, Shale Crescent USA business manager Nathan Lord said that 85 percent of U.S. natural gas production growth from 2008-18 took place in the Ohio Valley. The region "produces more natural gas than Texas with half of the land mass," he added.

The area "is based on top of feedstock and in the center of customers," he added. "And a large amount of the U.S. population is within a one-day drive."

Lord also cited a 2018 study from IHS Markit, which co-hosted GPS 2019, that showed the Ohio Valley has a 23 percent cost advantage on PE and a 10-11 percent advantage on polypropylene vs, the U.S. Gulf Coast for material made and shipped in the same region.

"It comes down to a shipping advantage," he said. "Shell will be able to deliver material in 25-45 hours instead of in 25-45 days from the Gulf Coast."

"The challenge is to see the opportunity and go for it," Kozera added.

 

 

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Big Oil’s growing shale footprint may stabilize US oil outlook: BP’s Dale

US tight oil production could become less sensitive to price volatility in the coming years as more cash-rich oil majors pile into the sector and commit to new development spending, BP’s chief economist Spencer Dale said.

Over the last two years, the concentration of investment spending by the top 10 US tight oil producers has started to rise, edging up to 50% from 45%, according to BP’s latest Statistical Review of World Energy, indicating that recent shale acquisitions by oil majors is feeding through to spending plans.

Uncertainty over longer-term global oil demand, the falling costs of drilling and fast development times for US shale have underpinned a strategic shift by many oil majors to prioritize shorter cycle returns from shale developments.

Major acreage holders in the key Permian US shale Basin include the supermajors Chevron and ExxonMobil with the scale of Occidental’s shale stake set to grow sharply following its recent $33-billion deal for Anadarko. Both BP and Shell have said they are looking to grow their production and footprint in US shale and unconventional oil projects.

“Big Oil has increased its footprint and the incentives for consolidation to exploit the benefits of scale and contiguous acreage have increased,” Dale said, presenting the Statistical Review.

“The intuition here is large oil companies have bigger balance sheets and so are able to smooth through variations in oil prices and capital and may make production less sensitive [to prices],” he said.

US production of tight oil and natural gas liquids from shale plays has bounced back from the 2014 oil prices slump, jumping by a record 2.2 million b/d last year, according to BP.

Continued IOC expansion into shale plays means the majors now make up some 18% of shale drilling activity in the US, Citi Group’s head of commodities research Ed Morse said last month.

With the role of oil majors in the US shale sector growing, Morse said some industry watchers are underestimating the growth potential of shale developments. The US could be producing more than 29 million b/d of oil and other liquids within just six years, over 50% more than current levels, Morse told an S&P Global Platts event.

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Low natural gas prices drive up generation share in US Midwest

Gas-fired power 25% less expensive than coal

Switching may boost July, August power burn

Low natural gas prices in the Midwest have helped boost gas-fired generation in the region this year and could lead to even greater coal-to-gas switching during the peak summer months of July and August.

 

 

Total electricity loads across the Midcontinent Independent System Operator shows coal has dropped by 9 average GW year on year while gas-fired generation has increased by 0.6 average GW year on year, according to MISO data.

In fact, gas as a percentage of thermal loads is averaging 45% month to date in June, or nearly 10% higher year on year. For the summer in general, gas as a percentage of thermal loads are averaging 46%, or roughly 6%, higher year on year.

Looking ahead, seasonally expanding loads should help drive gas burns higher. Notably, relative to June's month-to-date average, S&P Global Platts Analytics forecasts total loads within MISO will average about 90 average GW and total gas generation will be 25.7 average GW, up 18% and 14%, respectively.

Based on Platts Analytics reference prices, gas as a percentage of thermal loads is forecast to average 42% for the peak summer months of July and August, 3% higher than last year. But the recent selloff in both Henry Hub and regional gas hub prices will likely stimulate higher than expected levels of coal-to-gas switching. This would allow gas to take more incremental market share than previously expected.

COAL-TO-GAS SWITCHING

Regarding switching, with Chicago city-gates pricing below $2.15/MMBtu over the next few months, gas is much more economical relative to coal across MISO's North and Central regions. Looking at delivered coal costs to the region, and adjusting for a gas-fired combined-cycle power plant heat rate advantage, gas is trading at more than a 25% discount to the price level over a coal-fired power plant.

Because of this pricing advantage, Platts Analytics sees MISO adding anywhere from 300 MMcf/d to 400 MMcf/d of more-than-expected gas-fired generation over the peak months of July and August.

Part of the higher gas-fired generation stems from a wave of coal plant closures. Nearly 10 GW of coal generation has retired since 2015 while more than 2 GW of gas generation has come online in the Midwest over the same period. Platts Analytics' expects another 2 GW of coal retirements by the end of 2019 combined with 2 GW of new gas-fired generation online by year's end.

The coal retirements played a significant role in the Midwest reaching record-high levels of gas-fired generation last winter. In January, Midwest power burn averaged 3.2 Bcf/d, reaching a single-day, all-time high of 3.9 Bcf/d, according to Platts Analytics. This record occurred despite the Chicago city-gates averaging more than $3/MMBtu for the month.

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Citing a “growing mismatch” between hope and action, BP executives released the company’s annual Statistical Review of World Energy featuring slow progress on climate change and rapid growth in energy demand and emissions of carbon dioxide.

The report also noted that the US recorded the largest-ever annual production increases by any country for oil and natural gas, “the vast majority” coming from onshore shale plays.

Global energy demand grew by 2.9%, and carbon emissions grew by 2% in 2018, “faster than at any time since 2010-11,” BP said in a press release.

“There is a growing mismatch between societal demands for action on climate change and the actual pace of progress,” said Chief Economist Spencer Dale, citing the increases in energy demand and carbon emissions. “The world is on an unsustainable path.”

Natural gas consumption and production increased 5% last year and accounted for 40% of global energy demand growth.

Consumption of renewable energy grew by 14.5%, near the record increase of 2017, but still accounted for only one third of the increase in total power generation.

Global oil consumption grew by 1.5%.

The record production increments in the US were 2.2 million b/d for oil and 86 billion cu m for the year for natural gas.

 

https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html

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US oil supply keeping lid on prices despite global risks: IEA chief

Growth in US oil production has kept prices at "reasonable levels" despite the recent oil tanker attacks near the Strait of Hormuz and other supply risks around the world, International Energy Agency chief Fatih Birol said.

"There is substantial amount of oil coming from the United States, which puts a strong ceiling on oil prices," Birol said in an interview Friday on the sidelines of the G20 energy ministerial meetings in Karuizawa, Japan.

"Growth from the United States is a welcome addition to oil markets, especially looking at from an oil security point of view and looking at affordability for oil importers, including Japan, Korea and other Asian importers."

The IEA's June Oil Market Report forecast non-OPEC supply growth will rise to 2.3 million b/d in 2020, from 1.9 million b/d this year amid a surge in US shale and strong output from Brazil and Norway as new fields start up.

"According to our numbers, in five years' time, the United States will be the largest exporter in the world," Birol said.

"This is great news for consumers. Think about the fact we are seeing so many developments in the world: Venezuela, Iran, Libya, Nigeria and many [others]. Still, oil prices are staying at reasonable levels."

TANKER ATTACKS A WAKE-UP CALL

The alleged attack on two oil tankers near the Strait of Hormuz Thursday was a wake-up call to stakeholders in oil markets, Birol said.

"We are seriously concerned about the recent attacks, and we are monitoring the situation very closely in consultation with our member governments. We are ready to act if and when it is necessary."

The Front Altair and the Kokuka Courageous were carrying cargoes including naphtha. The incidents followed attacks on May 12 on four tankers near the bunkering port of Fujairah.

"Having lots of supply does not mean that oil security is not important, and this very important incident reminds all of us, all actors in the markets once again, how important an issue oil security is," Birol said.

The Strait of Hormuz was the most important oil choke point, especially for Asian energy importers, he said.

"Today about 18 million barrels of oil on a daily basis flows through this choke point coming from Saudi Arabia, emirates and other countries to China, Japan, India and other Asian customers."

"But at the same time it is a major route for LNG, liquefied natural gas. About 30% of LNG goes through this strait, coming again to Japan, South Korea, and other Asian countries."

Asked whether oil importers will need to seek alternative supplies away from regions so as not to have to transit the Strait of Hormuz, Birol said: "I think this will be a situation observed by oil importers, especially in this part of the world."

Birol said he did not expect a major shift in oil flows any time soon.

The tanker attacks and heightened supply risks came at a time of concerns about lower global oil demand growth.

Asked which was the biggest risk to the oil market, Birol said the IEA cut its oil demand growth forecast in its June report mainly because of a slowing in the global economy -- "not only the advanced economy, but [also] the emerging countries. Chinese economic growth prospects are much lower than previously thought".

The IEA cut its 2019 oil growth again to 1.2 million b/d, but it sees 2020 growth of 1.4 million b/d on petrochemical demand.

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Port Arthur Terminal Expansion Wraps Up
Howard Energy Partners (HEP) reported Thursday that it has largely completed expansion projects at its bulk liquid terminals in Port Arthur and Corpus Christi, Texas.

“The substantial expansions at our Port Arthur and Corpus Christi facilities signify HEP’s commitment to designing and constructing fully engineered facilities that are tailored to meet the exact needs of our customers,” Brad Bynum, HEP co-founder and president, said in a written statement.

According to HEP, the projects raise the company’s Gulf Coast terminal storage capacity to 2.6 million barrels. Moreover, the firm noted that it now boasts three ship docks, three barge docks, unit train loading capacity for up to two trains per day and direct pipeline connectivity through wholly owned pipelines to seven refineries.

The expansion at Port Arthur added 12 tanks, four butane bullets, two barge docks, one ship dock and a 6.5-mile bidirectional pipeline, HEP stated. The company added that the facility – equipped to handle bulk liquids including refined motor fuels, crude oil and condensate – can now blend gasoline with up to six separate components at delivery rates of up to 40,000 barrels per hour to comply with regional and international quality specifications. With the expansion, HEP pointed out the Port Arthur facility now comprises:

    16 tanks with 1.35 million barrels of total storage
    Four butane bullets (360,000 gallons total capacity)
    8.8 miles of rail track capable of loading one 94-car unit train per day and track capacity to handle up to five unit trains simultaneously
    Three barge docks with vapor control capability
    One ship dock with a loading rate up to 40,000 barrels per hour that can load one 500,000- to 750,000-barrel ship every other day
    A bidirectional pipeline
    Permitting and engineering for a second ship dock that is nearing completion.

HEP also reported that it has added rail capacity at its terminal within the Port of Corpus Christi. The company stated that it has contracted with an existing customer to load additional unit trains at Corpus Christi bound for new destinations in Mexico. In conjunction with that contract, HEP is acting as an agent to assist with engineering, procurement and construction oversight of a new receiving terminal in northern Mexico. The firm stated that the new receiving terminal will increase utilization of its 65,000-barrel-per-day rail loading facility in Corpus Christi.

According to HEP, the Corpus Christi terminal facility includes six tanks with 480,000 barrels of storage capacity, an MR class ship dock, a 12-inch pipeline linked to six local refineries and unit train facilities capable of loading one unit train per day. The company added that the terminal is permitted for immediate expansion up to 1.2 million barrels, also pointing out the facility is expandable up to 2.5 million barrels of total storage capacity.

HEP reported that it, along with the port authority, also jointly funded the engineering and permitting of a new Suezmax class dock. The company stated the dock will facilitate the movement of refined products, crude oil, condensates, natural gas liquids and liquefied petroleum gas.

“We currently have more than 470 acres for additional Gulf Coast expansion projects, including significant water frontage,” noted Bynum. “We will continue to work closely with our customers to understand their needs and evaluate growth projects that create beneficial results for all participants within the supply chain.”

 

 

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(edited)


Permian NGL Access a Plus for Exxon-Sabic Project

The Gulf Coast Growth Ventures (GCGV) ethane steam cracker complex that Exxon Mobil Corp. and Saudi Basic Industries Corp. (SABIC) have decided to build near Corpus Christi, Texas, will enjoy closer proximity to a major source of natural gas liquids (NGL) feedstocks than other Texas Gulf Coast sites.

That’s an important advantage, according to Larry Schwartz, principal with Houston-based LS Consulting and former NGL Fundamentals Advisor with BP-IST.

The San Patricio County site – located near the town of Gregory – is “closer to the Permian Basin production of NGL than either Houston or Mont Belvieu,”  Moreover, he cited lower-cost ethane supplies and plentiful natural gas and acreage for building as other selling points for the GCGV project, which secured permits Wednesday from the Texas Commission on Environmental Quality (TCEQ).

To be sure, Schwartz observed that the project faces a significant challenge regarding where to put the facility’s feedstocks and products.

“There is no available storage for ethane/ethylene within the area surrounding this proposed plant,” he said. “The closest storage is further up the coast at Stratton Ridge and Markham, which implies that pipelines will be needed to utilize storage there for both ethane feed and ethylene production.”

Could the storage issue, coupled with significant local opposition to the project, derail GCGV?

“Well, it has been proposed by others to add additional NGL fractionation in Corpus Christi and thus they will also be required to add storage to manage this situation,” said Schwartz. “These new NGL fractionators would be required to supply the nearly 115,000 barrels per day of ethane feed. Lastly, Enterprise Products has announced an extension of their ethylene pipeline system to the Corpus Christi area so that may be an adjunct to any new requirements this new complex would have.”

An attempt to obtain details from GCGV about the project's storage component was unsuccessful as of Friday morning.

The experiences with other Gulf Coast ethane crackers also leads Schwartz to view the announced GCGV project timelines with a skeptical eye. The Exxon-SABIC joint venture has reported that it expects to begin construction during the third quarter of this year and start-up the facility in 2022.

“I must take issue with this for the reason that this is much faster than the norms for expansions at already existing facilities,” said Schwartz. “Please note that ExxonMobil and its Baytown project was much longer than two years, closer to four years, and Chevron Phillips Chemical – which also built a new cracker on an existing site – was also in the three-plus-year range. Lastly, please note that the head of the TCEQ is quoted as saying, ‘If they begin construction, they would be doing so at their own peril.’ This suggests that the permit may yet be overturned due to court actions by the local and environmental communities.”

he believes the GCGV project will get built – but not by 2022. His view is that by late 2023 or even early 2024 is a more likely time frame.

“Will the timing for the EPIC NGL system and fractionation in Corpus Christi support this project?” Schwartz concluded. “Likely. Watch out for the vagueness of the permit that was issued for this project.”

Edited by ceo_energemsier

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U.S., Canada, Brazil oil output nearly doubles in last decade -BP SRWE 2019

Global oil production shows the U.S. leading with 16.2% share
- Canada moved to 4th in the world last year from 7th in 2008 h

From 2008 to 2018 the amount of oil produced by the U.S, Canada and Brazil almost doubled. These three countries now produce roughly one quarter of the world's oil, according to BP's annual Statistical Review of World Energy 2019 .

The U.S. alone in this time has more than doubled its oil output and effectively grabbed an additional 8 percentage point slice of the world's oil production. Annual oil production data by country shows the U.S. with a world leading 16.2% share of global production last year. In 2008, the U.S. ranked third in the world with an 8.2% share. The top two a decade ago, Saudi Arabia and Russia, now trail at 13% and 12.1% of total 2018 production, respectively.

oil_world_production.jpg

Other countries with the largest gains in production over the last decade, following the U.S., are Iraq, Canada, Brazil, and the United Arab Emirates. Canada ranked seventh in the world in 2008 with a 3.9% world share but it rose to fourth globally with a 5.5% share last year. Iraq moved up six spots to sixth in the world. Kazakhstan and Qatar also each moved up six spots to 13th and 14th among the world producers. The Republic of Congo moved up seven spots, but accounts for a relatively small 0.35% share of global oil output.

oil_world_percentange.jpg

Countries in turmoil were the largest decliners over the past decade, namely Syria, Venezuela, Sudan and Yemen. Syria fell 16 spots, Venezuela 11 and Sudan and Yemen each dropped 10 spots in the global ranking of output. Venezuela, the largest producer among the four, is now ranked 17th in the world with a 1.6% share.

Oil production from countries in the Persian Gulf and Arabian Sea regions rose from a 31.2% global share in 2008 to 33.3% by 2018.

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