Shale Oil Fiasco

[D Coyne + 305]

7 minutes ago, Boat said:

I think the large producers are doing exactly what you said except apparently your so called parent/sibling wells are a plus and not a minus. They are just getting more oil out of a smaller area. 
Adding more stages and explosions closer together increased production. Maybe an old tier 1 well didn’t produce as much as a tier 2 well does now because of these newer techniques. 
Even after today’s fracking most of the oil is still in the ground awaiting the engineering technology of tomorrow. Your betting on the rock and I would bet on the brains behind tech.

Boat,

There is this thing called the law of diminishing returns.  Not a whole lot of new technology has really been applied, in the past few years, just tweaking of existing technology to optimize the well to get the most oil at a minimized cost,  once these minimizations have been accomplished, the only way to get more oil is at higher cost, when you increase frack stages or increase lateral length beyond some optimum, the extra money spent does not yield enough extra oil to make it a profitable expenditure.

In addition the best rock gets drilled first so with the optimum well design, EUR goes down as you move to a less prospective area.  This is how it has gone in every oil field, it is not going to change, physical laws cannot be bent, they are hard and fast.

[D Coyne + 305]

10 hours ago, PE Scott said:

As a side note, I think maybe you guys misinterpret "sweet spots" in tight shale. What you have to remember, from a physical standpoint, is that oil and gas are mostly immobile in tight shale. So, the lithology doesn't support the same kinds of traps and such that you see in conventional reservoirs. Granted, there are thicker parts of formations and many many sandstone lenses etc. 

Again, narrow perspective, but a sweet spot in shale for me is more likely to reflect on operation and development cost based on its physical proximity to critical infrastructure. In that sense, the low hanging fruit is being picked quickly.

PE Scott,

I think of the sweet spots as the areas where the drilling is most intense, generally there are areas that are known to be the areas where the most prolific wells have been drilled.  I think when a company finds such an area they drill as many wells as they can in a way that optimizes output.  If a well gets drilled in an area and the well is in the bottom 10% of the productivity distribution, a smart oil company looks for a better lease to drill their next well.  Infrastructure might also be a factor, but generally if there is a very productive area, the infrastructure will be built to service it.

[Boat + 1,324]

2 minutes ago, D Coyne said:

Boat,

There is this thing called the law of diminishing returns.  Not a whole lot of new technology has really been applied, in the past few years, just tweaking of existing technology to optimize the well to get the most oil at a minimized cost,  once these minimizations have been accomplished, the only way to get more oil is at higher cost, when you increase frack stages or increase lateral length beyond some optimum, the extra money spent does not yield enough extra oil to make it a profitable expenditure.

In addition the best rock gets drilled first so with the optimum well design, EUR goes down as you move to a less prospective area.  This is how it has gone in every oil field, it is not going to change, physical laws cannot be bent, they are hard and fast.

Over the last decade fracking took the o’l wore out Permian that had been drilled for almost a century and has saved the US hundreds of billions of dollars. As of yet there hasn’t been a surge in completions and a drop in production. If tech was around decades ago, where was this production then. Seems to me every year over the last 7 production exploded compared to its 100 year history. That’s what the charts say. Right now in Texas I can get a gallon of gas for $2.08. Without fracking it would be closer to $4. That’s a lot of potatoes.

The future? I will watch completions and production. That’s the bottom line.

[Guest]

@Old-Ruffneck .... 43.

Just sayin'   

la la la 

[Douglas Buckland + 6,308]

Are you saying that there is no issue with the sibling wells robbing production from the parent wells?

I am not ‘betting’ on the rock. I am simply saying that tight rock ‘is what it is’ and the present methods of producing from that rock are limited to increasing the effective surface area of the wellbore. The law of diminishing returns comes into play, especially when money becomes tight as well (pun intended).

Waiting on the ‘technology of tomorrow’ assumes that you can remain financially afloat until if/when that technology is available.

I am not anti-shale. If it is good for the States and is pursued in a manner that does not destroy the industry internationally, I am all for it.

What annoys me is the ‘shale cheerleaders’ who spout the wonders of shale oil while dismissing the fluid and rock properties associated with it, the flaring of a natural resource associated with the production of shale oil instead of addressing the issue as a ‘cost of doing business’ and the business model where US shale oil is produced  in such a way that is detrimental to the industry as a whole. Keep in mind, when this source slows down, we will need good relations with the other oil producing regions. Burning those bridges now will bite us in the butt later.

[D Coyne + 305]

4 minutes ago, Boat said:

Over the last decade fracking took the o’l wore out Permian that had been drilled for almost a century and has saved the US hundreds of billions of dollars. As of yet there hasn’t been a surge in completions and a drop in production. If tech was around decades ago, where was this production then. Seems to me every year over the last 7 production exploded compared to its 100 year history. That’s what the charts say. Right now in Texas I can get a gallon of gas for $2.08. Without fracking it would be closer to $4. That’s a lot of potatoes.

The future? I will watch completions and production. That’s the bottom line.

Boat,

Yes it has been amazing.  The main reason it occurred was high oil prices in 2008 and then 2011-2014, it kept going because there was a lot of debt racked up, and they figured out how to bring costs down.  At $50/bo not a lot of money is made on the average well (in the Permian basin breakeven is around 55  per barrel at the wellhead.

The resource is limited and US tight oil will peak by 2026, enjoy the cheap gas prices while they last, it won't be long until oil prices rise to $80/bo, probably by June 2022.

[James Regan + 1,776]

Question- How much of the US Shale Plays do the Saudis own?

[James Regan + 1,776]

6 hours ago, D Coyne said:

The main reason it occurred was high oil prices in 2008 and then 2011-2014, it kept going because there was a lot of debt racked up, and they figured out how to bring costs down.

You are correct but there were some very smart people who took advantage of the collapse of the oil sector by renting dirt cheap land rigs and worked the system to prepare the DUCs , these were the guys who made the big money, cheap rigs and using cheap labour, great business model but not sustainable, shale will just be a blip on the graph once it’s all said and done. The USA will suffer long term this is well documented, we have never seen a sector of the oil industry so badly scrutinized. Some of these plays look like Baku 50 years ago.

But for now it’s a good thing, IMO you should have left it in the ground for world domination at a later date.

Yes im a shale hater as it wrecked the conventional market and cost a lot of people and companies (US) their existence.

The oil industry in general has no moral compass but shale surpasses anything that conventional has done. I would easily be able to take a tree hugging position on LTO but it would be hipochracy. 👌🏻 Respect to the men who made fortunes over a bad situation. Most of these players had a lot of insider assistance.

just to add using Chinese made land rigs....

Edited January 9, 2020 by James Regan
Stamping my feet like Greta😂

[D Coyne + 305]

3 hours ago, James Regan said:

You are correct but there were some very smart people who took advantage of the collapse of the oil sector by renting dirt cheap land rigs and worked the system to prepare the DUCs , these were the guys who made the big money, cheap rigs and using cheap labour, great business model but not sustainable, shale will just be a blip on the graph once it’s all said and done. The USA will suffer long term this is well documented, we have never seen a sector of the oil industry so badly scrutinized. Some of these plays look like Baku 50 years ago.

But for now it’s a good thing, IMO you should have left it in the ground for world domination at a later date.

Yes im a shale hater as it wrecked the conventional market and cost a lot of people and companies (US) their existence.

The oil industry in general has no moral compass but shale surpasses anything that conventional has done. I would easily be able to take a tree hugging position on LTO but it would be hipochracy. 👌🏻 Respect to the men who made fortunes over a bad situation. Most of these players had a lot of insider assistance.

just to add using Chinese made land rigs....

James, 

I agree tight oil will only be a blip and it may have been better if the resource had been developed slowly. In a scenario where WTI rises gradually to $83/bo in constant 2018$ by 2025 and then remains at that level until 2035 then gradually decreases to $35/bo (in 2018$) by 2055 and then remains at that level out to 2080 (obviously we do not know future prices, this is a WAG so some number can be plugged into a model), we get a US tight oil URR of about 96 Gb, lower oil prices (say a maximum for WTI of $63/bo in 2018$) would lead to a much lower URR, about 60 Gb.  This scenario is my best guess (50/50 chance it will be too high or too low).

[ceo_energemsier + 1,818]

6 hours ago, James Regan said:

You are correct but there were some very smart people who took advantage of the collapse of the oil sector by renting dirt cheap land rigs and worked the system to prepare the DUCs , these were the guys who made the big money, cheap rigs and using cheap labour, great business model but not sustainable, shale will just be a blip on the graph once it’s all said and done. The USA will suffer long term this is well documented, we have never seen a sector of the oil industry so badly scrutinized. Some of these plays look like Baku 50 years ago.

But for now it’s a good thing, IMO you should have left it in the ground for world domination at a later date.

Yes im a shale hater as it wrecked the conventional market and cost a lot of people and companies (US) their existence.

The oil industry in general has no moral compass but shale surpasses anything that conventional has done. I would easily be able to take a tree hugging position on LTO but it would be hipochracy. 👌🏻 Respect to the men who made fortunes over a bad situation. Most of these players had a lot of insider assistance.

just to add using Chinese made land rigs....

And you are the sole owner of the superior and higher morality in the oil world. You are right you should be stomping your feet like Greta Stunkburg!!!!LOL

[James Regan + 1,776]

36 minutes ago, ceo_energemsier said:

And you are the sole owner of the superior and higher morality in the oil world. You are right you should be stomping your feet like Greta Stunkburg!!!!LOL

Yes I’m that full of myself and you maybe need to learn how to read a post. I’m actually trying to be honest and with a bit of humility, words your not accustomed to use in the USA . But your obviously another shitkicker which don’t have a passport.

Edited January 9, 2020 by James Regan

[ceo_energemsier + 1,818]

2 minutes ago, James Regan said:

Yes I’m that full of myself and you maybe need to learn how to read a post. I’m actually trying to be honest and with a bit of humility, words your not accustomed to use in the USA . But your obviously another shitkicker which don’t have a passport.

You cant take a joke with a pinch of sarcasm? Very funny about not have a passport. I take my American SCHITTKICKING humility wherever I go in the world 🤣

[James Regan + 1,776]

3 hours ago, D Coyne said:

James, 

I agree tight oil will only be a blip and it may have been better if the resource had been developed slowly. In a scenario where WTI rises gradually to $83/bo in constant 2018$ by 2025 and then remains at that level until 2035 then gradually decreases to $35/bo (in 2018$) by 2055 and then remains at that level out to 2080 (obviously we do not know future prices, this is a WAG so some number can be plugged into a model), we get a US tight oil URR of about 96 Gb, lower oil prices (say a maximum for WTI of $63/bo in 2018$) would lead to a much lower URR, about 60 Gb.  This scenario is my best guess (50/50 chance it will be too high or too low).

Answered like a gentleman and a scholar, thankyou sir. I appreciate you taking the time to put an informative post to a person you don’t know and was clearly anti shale, respect.

[James Regan + 1,776]

5 minutes ago, ceo_energemsier said:

You cant take a joke with a pinch of sarcasm? Very funny about not have a passport. I take my American SCHITTKICKING humility wherever I go in the world 🤣

I can take and love jokes when there obvious pie in face style, I just woke up. Apologies if I jumped to quick, my family are all shitkickers so it’s endearing really. 😊

Edited January 9, 2020 by James Regan
To quick to draw 💥 🤠 💥

[ceo_energemsier + 1,818]

1 minute ago, James Regan said:

I can take and love jokes when there obvious pie in face style, I just woke up. Apologies if I jumped to quick, my family are all shitkickers so it’s endearing really. 😊

Cheers!!!!

[ronwagn + 6,290]

On 12/12/2019 at 6:37 PM, markslawson said:

Douglas - again you have completely missed the point. These cycles have happened several times. You need to sit down and think what happened at each cycle? How did the industry bounce back. There is nothing to suggest this cycle is in any way different, or at least you have to show that it is in some way different. Of course its dreadful that these people lose their jobs but its all happened before and you will find that the companies involved have some way of recruiting the skill. I would urge you to adopt a balanced view of these matters, and take on board what I said. That's the end of comments on this issue for me.  

I would guess that it all has to do with the oil and natgas plus associated liquids prices. I project that when oil becomes too expensive natural gas will take over. The entire fleet of ICE vehicles can be converted gradually as our oil runs out. 

[0R0 + 6,251]

2 hours ago, D Coyne said:

Thanks.

Keep in mind the recovery factors will vary from place to place.  It may be possible that in the sweet spots the recovery factor has increased, but it is unlikely that this has occurred everywhere.  My guess is that higher recovery factors in some areas will not be matched everywhere, that it is a sweet spot phenomenon that will be very limited in area.  Difficult to say, but the Delaware and Midland basin USGS studies are fairly recent, my guess is the geophysicists mean estimate may be about right with perhaps an error of +/-10%.  PEScott would know better.

The refracs might work on 10% of older wells at high prices, but recent child wells will likely drain the area making the refrack a bust.  So I am far less confident of various investor presentation hype.  This stuff is to get people to buy the stock and drive up the stock price in my opinion.  So far only the Eagle Ford and Niobrara are seeing new well EUR falling when output is normalized by lateral length.  Much of the increased output in the Permian, Eagle Ford, and Niobrara has been a function of increased average lateral length.  That will not help overall basin URR as a longer lateral well uses more area, I am fairly sure nobody is making the basins any bigger.    The result of longer laterals is fewer potential wells overall.  For example if there are 200,000 potential well locations at 5000 feet laterals per well, a doubling of lateral length to 10,000 feet reduces the total wells to 100,000.  Not everyone gets this.  Probably a good metric would be EUR per acre, that number may not have changed much, though perhaps a bit due to heavier proppant use.

Agree more natural gas pipeline capacity will help, though in my models I assume they get $1.87/MCF at the well head (including NGL sales) so I am already assuming most producers are selling their gas rather than flaring it, in other words my model is optimistic in this regard.

Also mote the 90 Gb tight oil estimate is a resource estimate, it is not a 2P reserve number, tight oil reserves are only about 24 Gb, The USGS estimates are for undiscovered technically recoverable resources (UTRR), I add reserves and cumulative production at the time of the studies to the UTRR estimates to get a TRR than apply economic analysis to get the economically recoverable resources (ERR), that is where the 90 Gb estimate comes from.

The Eagle Ford and Niobrara info is very useful. Do you recall whether it was a substantial rate of decline or minor? I am still wondering about the statistical finding that recoveries from Tier 2 and 3 wells has not been that much less than from Tier 1. Assuming that what is being drilled at these 2 fields is now lower tier, it would be useful to see how much EUR/length has declined. 

IEA puts the total US peak oil at just under 15 MMBbl/d at 2027 and staying at about that level through the 2030s.

I expect that oil will be displaced by NG and NGLs as a petrochemical feedstock over the next decade (what hasn't been swapped yet) so would be about 10% lower in consumption, assuming 4% is Naphtha for nylons etc.which is not that easily replaced by NG, though it is possible. China does it with its chemical production from coal. The current share of NG in petrochemical feed is 37% or so, and industry expectation is that it will hit 43-44% by 2040. I don't believe it will be that slow. The cost advantage is just too great for NG. So in 20 years expect it to displace all of the existing production out of oil. 

Marine transport, will take longer to be displaced but its' 12% share will be mostly gone by 2040, So that is another 10% drop - which is not considered by industry nor EIA yet. 

OECD X US population aging and drop will reduce passenger car consumption by 4 MMBbl/d and another 1 or 2 MmBbl/d may come from the US aging vs. the transition to larger SUVs and trucks. 

China's active population is already shrinking. But rising wages may continue till their credit crisis manifests. So while their population shrinks, their oil intensity in passenger car use will rise to compensate in part. But the first car buying demographic has shrunk by 43% so the rate of addition of drivers has fallen by that much. Furthermore, starting last year, more people retired than joined the workforce. Meaning that those of retirement age that owned cars will be using them for 1/4 or less of the driving they did while working. By 2030 demographics' contribution to oil consumption will fall by 6.5%, and will continue falling at an accelerating rate. Presuming China oil consumption is peaking this year along with its active driving age population, at say 15 MMBbl/d  then they will consume 1 MMBbl less by 2030 and 2.5MMBbl less by 2040. Presumably, their plastics industry will continue being base on coal as primary input. 

All of emerging S. America and SE Asia but for India Indonesia and the Philippines have aging demographics. Their younger generations may become better off, but there are fewer of them. While the more youthful countries are growing more slowly than historically and may not be able to compensate for much of the drop of consumption from OECD and China. India is still not constructing roads that would take additional car density. Their main passenger transportation modes are scooters, public transport and trains. And unless the government changes its direction it will stay that way. IEA expects a 2 MMBbl/d rise in consumption. So I will leave it at that. 

India has increased oil imports significantly over the decade, but not that much of it goes for passenger transport and industrial demand will likely be displaced by LNG. Car sales have grown very slowly this decade at 5-6 mil/yr as legendary metropolitan congestion makes car ownership less useful. Scooters and buses just won't get them to be a huge oil market, so even if they double consumption as their forecasts say, that will be an additional 6 MMBbl/d.

Considering that Africa is the main source of population expansion and is young, there may be a future oil consumption giant there. But the cultural hurdles to development and the deep and broad corruption will limit investment. So its development.is still in question despite much effort by Western charitable organizations to kick up microlending. So I will leave that with 1 MMBbl/d

.  

The EIA case for petrochemical oil consumption growing 80% is unlikely, as the bulk of the increase in petrochemical consumption will come from NG and NGLs rather than oil till their pricing comes to balance in energy and carbon content. So I believe the oil prices will never reach as high as they expect, and NG prices will ultimately be somewhat higher than EIA estimates.

The core problem with the energy estimates outside of too little consideration of displacement by NG is that the standard demographic forecast from the UN is simply no longer current. The world has already had its first year of fewer births than the year before, and all but a handful of countries and Africa at large are shrinking their active populations into the 2030s. And they are also shrinking in the developing world. The global population will grow to only 9 billion vs. the UN forecast of 11 B. Most significant though, is that the fraction of it that is retired or semiretired will be much greater than expected, and they consume so much less.. . . 

So looking ahead to the 2030-2040 period I am guesstimating a 14 MMBbl/d decline from current levels. Of course, some Gas to liquids plant might be necessary for dry gas regions where NGLs are insufficient, and that might not be competitive with oil sourced feeds even at current ratios of NG below $20 Boe vs. $60 Bbl. .. 

 

 

 1 quad = 180 MMboe

EIA U.S. Natural Gas Exports by Country.html

 

[0R0 + 6,251]

Chart that didn't load correctly.

[Coffeeguyzz + 454]

Oro

You, or anyone actually, may find the rbn energy post today (1/8 dated) on the specifics of US LNG costs highly informative.

The included Figure #1 charts future curve pricing (Asia and Europe) against both cash (spot) and full cycle costs.

One of the unmentioned aspects in this outstanding article is how the 'fixed' (full cycle) costs are apt to significantly fall as the second wave of US LNG plants start to come online in 2022.

Yamal and the Curtis Island projects cost ~$28 billion and ~$50 billion respectively for ~17 mtpa and ~27 mtpa respectively. (Prelude cost ~$14 billion for 3 1/2 mtpa).

In contrast, Driftwood, Calcasieu Pass, Rio Grande LNG are all pegged at the 1/2 billion dollar per mtpa range ... almost 4 times cheaper.

This - along with rock bottom pricing of US natgas - ensures a strong competitive position in global markets.

FSRUs - seemingly going in everywhere - will greatly accelerate this buildout.

[Coffeeguyzz + 454]

Oro

As dramatic an appearance as your second chart is showing US LNG exports at 1.8 Bcfd, the September 2019  number is way higher at 5.4 Bcfd ... 5.8 in October ... 6.3 in November.

This is entirely new territory, here.

Edited January 9, 2020 by Coffeeguyzz

[0R0 + 6,251]

Thanks, I had the impression of the EIA numbers being behind the curve since not all the operators are in their circle of reporting entities. 

Considering that Brent to gas is even higher, ~33-34 and Brent to LNG is about 12, or about half of Brent Boe, then the pressure to swap inputs to NG and NGLs will continue. Surely the refiner's crackers are not going to be as busy as they used to be, at least not for producing C2 C3 and C4 feedstocks.   

35 minutes ago, Coffeeguyzz said:

Oro

As dramatic an appearance as your second chart is showing US LNG exports at 1.8 Bcfd, the September 2019  number is way higher at 5.4 Bcfd ... 5.8 in October ... 6.3 in November.

This is entirely new territory, here.

Do you have a chart reference? This is a bit above EIA numbers. BTW they are monthly totals, not daily values. Last is 180 Bcf/month, or about 6 Bcf/d 

54 minutes ago, Coffeeguyzz said:

Oro

You, or anyone actually, may find the rbn energy post today (1/8 dated) on the specifics of US LNG costs highly informative.

The included Figure #1 charts future curve pricing (Asia and Europe) against both cash (spot) and full cycle costs.

One of the unmentioned aspects in this outstanding article is how the 'fixed' (full cycle) costs are apt to significantly fall as the second wave of US LNG plants start to come online in 2022.

Yamal and the Curtis Island projects cost ~$28 billion and ~$50 billion respectively for ~17 mtpa and ~27 mtpa respectively. (Prelude cost ~$14 billion for 3 1/2 mtpa).

In contrast, Driftwood, Calcasieu Pass, Rio Grande LNG are all pegged at the 1/2 billion dollar per mtpa range ... almost 4 times cheaper.

This - along with rock bottom pricing of US natgas - ensures a strong competitive position in global markets.

FSRUs - seemingly going in everywhere - will greatly accelerate this buildout.

I assume you are referring to this

https://rbnenergy.com/ratio-ga-ga-crude-to-gas-ratio-hits-six-year-high-of-30x-ramifications-for-oil-gas-and-ngls

So the capital cost per unit throughput is about 1/4 of what existing LNG facilities had cost? Well, yippee for that.

Do you have a current figure for cash cost and capitalized cost of LNG liquefaction? 

[ceo_energemsier + 1,818]

Oh shale deniers will deny these job exists !!!!

Shale haters will say its all  made up by royalty owners and non producers and so on

_________________________

 

Permian Oil and Gas Employs 87,000 People in 2019

 

 

Direct oil and natural gas employment in the Permian basin totaled 87,603 people in 2019, according to a new report from the Texas Independent Producers and Royalty Owners Association (TIPRO).

The report, which outlined that this figure represented an increase of nearly 43,000 jobs since 2009, highlighted that the largest Permian basin counties by oil and natural gas employment in 2019 included Midland (33,328), Ector (14,791), Lea (8,356), Eddy (7,766) and Hockley (2,765).

The largest increase in oil and gas employment between 2009-2019 occurred in Midland County (20,802), followed by Ector (7,693), Eddy (4,985), Lea (2,407) and Hockley (1,513), according to the report.

TIPRO’s report said the upstream sector remained the top employer for oil and gas in the Permian basin last year. Support activities for oil and gas operations supported 54,507 positions, crude petroleum and natural gas extraction supported another 16,572 jobs and drilling oil and gas wells supported 6,554 jobs, according to the report.

Fifty-four percent of Permian basin oil and gas workers in 2019 were between the ages of 25 and 44 and approximately 37 percent were 45 years or older, the report showed. In 2019, Permian companies employed more than 12,560 women and 48 percent of all oil and gas jobs were held by Hispanic or Latino workers, according to the report.

In September last year, TIPRO forecasted that the Permian basin oil and gas industry will support 93,201 jobs in 2020.

The total number of oil and natural gas businesses in the Permian basin exceeded 3,350 in 2019, with the highest number of oil and gas businesses located in Midland County (1,012), TIPRO’s latest report outlined.

Total oil production in the Permian basin exceeded 1.5 billion barrels of oil in 2019 and oil production increased by 1.2 billion barrels in the region between 2009-2019, the report noted.

[ceo_energemsier + 1,818]

The first cargo of ethylene from Enterprise Products Partners L.P. and Navigator Holdings Ltd.’s new marine terminal near Houston has set sail.

Enterprise and Navigator reported Wednesday that the Navigator Europa – carrying 25 million pounds of ethylene for the Japanese trading company Marubeni Corp. – has departed their new export terminal at Morgan’s Point, Texas, along the Houston Ship Channel.

“The opening of the jointly owned ethylene export terminal represents the beginning of an expansion of the export of valuable intermediate petrochemical gas products including ethylene and propylene,” David Butters, executive chairman of Navigator Gas, said in a written statement issued by 50/50 joint venture partner Enterprise.

A.J. “Jim” Teague, CEO of Enterprise’s general partner, commented that abundant U.S. natural gas liquids (NGL) production has made the U.S. a leading global source of ethylene and has spurred an “unprecedented buildout of mostly ethane crackers” on the Texas and Louisiana Gulf Coast.

“Including a second wave of new petrochemical plants now being developed, production of ethylene is poised to continue growth and is expected to exceed 100 billion pounds per year by 2025,” noted Teague. “We are very pleased to join forces with Navigator to bring this new terminal to fruition, which complements Enterprise’s integrated pipeline and storage network, including the development of open market hubs for ethylene and polymer grade propylene that help ensure price transparency, reliability and flexibility for petrochemical producers and consumers.”

Enterprise stated the new terminal includes two docks and can load 2.2 billion pounds per year of ethylene. The firm added that a refrigerated storage tank for 66 million pounds of ethylene is under construction at the site and will enable the facility to load ethylene at a rate up to 2.2 million pounds per hour. It projects tank construction to conclude in the fourth quarter of this year.

In addition, Enterprise noted the terminal is linked via pipeline to the company’s NGL storage complex in nearby Mont Belvieu. The company noted that it is commissioning a high-capacity ethylene salt dome storage well at the Southeast Texas hub that will be able to store 600 million pounds of the petrochemicals feedstock. It contends the system will serve as an open market storage and trading hub for the ethylene industry.

“By domestically manufacturing these products, highly skilled American jobs are created while at the same time the sale of the petrochemical gases to international customers generates favorable balance of trade and payments,” Butters said, referring to intermediate petrochemical gas products such as ethylene and propylene. “We expect this trend of exporting intermediate petrochemical gases to accelerate, benefiting our specialized tankers. Furthermore, we are working in the development of domestic and international infrastructure projects that will facilitate this important trend.”

Enterprise also stated that it will further extend its ethylene pipeline and logistics system into South Texas via two projects:

• A 24-mile pipeline linking Mont Belvieu and Bayport, Texas, via Morgan’s Point that should begin service in the fourth quarter of this year
• The 90-mile Baymark Pipeline that it is building from Bayport to Markham, Texas, and should be completed during the fourth quarter of this year.

According to Enterprise, the new pipelines – supported by long-term customer commitments – will provide access to the Enterprise open market ethylene storage and trading hub for producers and consumers throughout Texas.

[Coffeeguyzz + 454]

Oro

Regarding LNG export data, article from Natural Gas Intelligence, Dec. 18, Jamison Cocklin author.

Rbn Energy article is 1/8/20, "Steady as she goes" ... #5 in their running series.

 

Regarding cash/capital cost of LNG ... too much variability, but very strong trend towards mid scale size module assembly using various liquefaction processes.

Excellent intro can be had with video on Magnolia site showing 2.4 mtpa trains composed of 5 sub modular pieces manufactured offsite, shipped to location for onsite assembly. These sub components are manufactured in dedicated plants in China, Thailand, Italy, et al and are extremely cost competitive.

The Calcasieu Pass website (Venture Global) has similar, educational video with their .6mtpa trains manufactured in Avenza, Italy by BHGE and paired into blocks.

The Magnolia project has a mirror image plant ready to go in Nova Scotia if the supply pipes get built.

Calcasieu Pass  also has a mirror-image plant - Plaquemines Parish - ready to go ... only twice the size at 20 mtpa.

 

For folks interested in energy matters, particularly hydrocarbon related, gaining more familiarity with this topic (especially the numbers involved) might be a good idea.

[Old-Ruffneck + 1,246]

6 hours ago, ronwagn said:

I would guess that it all has to do with the oil and natgas plus associated liquids prices. I project that when oil becomes too expensive natural gas will take over. The entire fleet of ICE vehicles can be converted gradually as our oil runs out. 

Makes more sense than EV cars, just in miles of maximum range. But until we see more service stations carrying LnG, electric seems to be the next phase of cars etc. The powers that be invested and by God that's is the choice. So a handful of upper 1% dictate the lower 99%.