(Oil and Gas) Necessity and the Mother of Invention

(Oil and Gas) Necessity and the Mother of Invention

On the eve of the last day of a decade, it’s worth recognizing two extraordinary outgrowths of America’s energy renaissance that illustrate how our oil and gas industry continues to evolve. Maybe even at a faster pace than we’ve ever realized.

Magnolia LNG

Magnolia LNG LLC, a wholly owned subsidiary of LNGL, is developing an 8 mtpa or greater LNG export terminal in Lake Charles, Louisiana, USA. The project site is on 115 acres adjacent to the Calcasieu Ship Channel, an established shipping channel in the Lake Charles District, State of Louisiana.

Magnolia LNG

Bison

Bison is the largest privately held energy solutions company in Oklahoma. It is the #1 provider of water midstream solutions in the state, and is a market leader in trucking and logistics, environmental services, pipeline construction, midstream manufacturing and fabrication, and a wide range of other energy infrastructure solutions.

www.bisonok.com

 

The rise of LNG as a commodity export ranks as one of those soaring outgrowths with large-, mid- and small-scale liquefaction terminals planned, under construction, or expanding. Spurred by our prodigious volumes of natural gas, this energy subsector is still in its infancy and, incredibly, one in which we will globally dominate in less than four years.

Seems we read news every day of inaugural tanker shipments, more train start-ups to increase capacity, new liquefaction technologies, and dedicated pipelines to transport gas supplies to our export facilities where they’ll be converted to LNG bound for destinations far and wide. For all the criticism levied on the oil and gas industry, American LNG is bringing clean energy to energy-impoverished nations and those looking to transition from coal-powered processes. Among the series of firsts we’ve witnessed this year, Australian and Houston-based Magnolia LNG announced last week a milestone move to supply Vietnam with 2 million MTPA of liquified natural gas from the company’s proposed LNG export terminal in Lake Charles, La. Also of note is that the fuel will be dedicated to generating electricity from a power plant originally planned to fire coal.

The second most impressive outgrowth has rendered itself an absolute must for fracking. Whether fresh from the aquifer or produced from fracking, the business of water storage, hauling, gathering, disposal, recycling and pipeline infrastructure has triggered explosive growth in the nation’s oil and gas basins. This subsector has seen a dizzying number of mergers and acquisitions this year and is quickly becoming a temptress by private equity groups as well. Consider this: Every horizontal well drilled requires between 100,000 to 1 MMBbls of water. And when you’re fracking in the desert environs of the Permian, activity tends to get mighty thirsty. Then, it’s time to do something responsible with all that wastewater and start all over again with fresh.

For Okla. City-based Bison, the need for water management is filling its coffers like never before. The company recently announced yet another acquisition in the Anadarko’s SCOOP, making it the largest provider of water midstream solutions in the state. Water management has now become a $34 billion a year enterprise—and growing. As oil and gas production rises so does the need for more water. For an element once considered an afterthought by drillers, water is now the first consideration to bring oil and gas production online.

What do you think? Oh, and Happy New Year.

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Cresting the Summit

Cresting the Summit

With a new CEO at the driver’s wheel, Summit Midstream in September launched a strategic plan to slash spending with all eyes on further integrating its gas gathering and processing systems in the most productive basins. The Woodlands, Texas-based Summit operates natural gas, crude oil and produced water-gathering systems in its core operating areas of the Appalachian, and in the Williston, DJ, Fort Worth, and Permian basins. The company also holds legacy assets in the Piceance Basin, and the Barnett and Marcellus shale plays. But that’s not where Summit looks to strengthen its balance sheet or secure solid footing.

Summit Midstream

Headquartered in The Woodlands, Texas, Summit Midstream Partners, LP (NYSE: SMLP) is a growth-oriented master limited partnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in the core producing areas of unconventional resource basins, primarily shale formations, in the continental United States.

www.summitmidstream.com

For Summit, augmenting its gathering lines with processing plants—and vice-versa—in the plays offering higher, long-term growth is where this midstream player has been heading for the last two years. Now, that strategy is showing some legs in the climb. The company announced in July the successful commissioning of a 60 MMCFD cryogenic processing plant in the DJ, which delivers residue gas to Colorado Interstate Gas and Trailblazer Pipeline, and processed NGLs to Overland Pass Pipeline.

And with the countdown in full swing to a new year and decade, Summit announced today it has secured $80 million to fund the next phase of its Double E Pipeline. Upon completion in 2021, the Double E will transport 1.3 BCFD of natural gas from points in the Delaware Basin to delivery points in and around the Texas Waha Hub. The company’s Summit Permian processing system, located in the Delaware, and also completed this year, offers 60 MMCFD of capacity with expanded potential to more than 600 MMCFD.

Like they say, every mountain top is in reach if you just keep climbing.

What do you think?

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Company Spotlight: EagleClaw Midstream

Company Spotlight: EagleClaw Midstream

Where the Permian Basin covers more than 75,000 square miles and 25 counties in Texas and New Mexico, EagleClaw Midstream has carved out an impressive niche in the hydrocarbon-rich Delaware shale play. In seven short years, the company has zoomed in size from a small, natural gas-focused midstream start-up to the largest independent player there, operating oil, gas, NGLs and produced water systems.

EagleClaw Midstream

EagleClaw Midstream is strategically located in the heart of the Delaware Basin in one of the fastest growing areas for oil and gas development in the world. They provide the gathering, compression, processing and transportation services required to bring natural gas, natural gas liquids and crude oil to market.

www.eagleclawmidstream.com

Setting anchor in the Delaware has proved a strategic move for EagleClaw. In 2018, the company joined Kinder Morgan to co-develop the 430-mile Permian Highway Pipeline in which EagleClaw has pre-reserved 400 MMCFD of capacity. And earlier this year, EagleClaw announced plans to build the Delaware Link gas pipeline, which will extend from its three processing facilities in Reeves County to the Waha Hub. A fourth cryogenic plant commissioned in May and the 40-mile Delaware Link will expand the company’s total processing capacity to 1.3 BCFD.

On the crude oil front, EagleClaw operates 150 miles of gathering lines with interconnects to the Oryx Trans-Permian and Plains All American’s Pinon Basin, and 90,000 Bbls of crude storage. Its water-gathering and disposal system includes 58 miles of pipelines with injection capacity of 390,000 BPD.

What do you think?

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From the Gulf Coast to the Rockies, Denbury Banks on CO2 EOR

From the Gulf Coast to the Rockies, Denbury Banks on CO2 EOR

Applying carbon dioxide to enhance oil production from conventional wells is nothing new, but it has set Plano, Texas-based Denbury Resources apart from the rest of its ilk. Not that other E&Ps don’t employ this technique in aging or depleted wells (a wink and a nod to Occidental Petroleum—the largest to do so in the Permian). But unlike any of those, Denbury’s core strategy is CO2 EOR. And their E&P strategy just happens to focus on employing this technology on the company’s owned oil and gas operations. As well as putting in place the midstream infrastructure to ensure carbon dioxide gets piped where it’s needed–which is anywhere Denbury is.

Denbury Resources

Denbury Resources is a company engaged in hydrocarbon exploration. It is organized in Delaware and headquartered in Plano, Texas. The company extracts petroleum via enhanced oil recovery, which utilizes carbon dioxide to extract petroleum from fields that have been previously exploited.

www.denbury.com

In the haze and craze of horizontal drilling and hydraulic fracking, Denbury has kept to its guns to focus on what it does best—applying carbon dioxide enhanced oil recovery technology on the oil and gas assets it owns. The company is long recognized as an expert at CO2 EOR, and it’s served them well. Since its birth, Denbury acquired one of the largest CO2 platforms in the country for $4.5 billion, snatched up aging oilfields in hot basins, and extracted an impressive amount of oil using a technology the company continues to evolve. Not exactly the recipe of most of today’s E&P strategies, but one that certainly appears to work for Denbury.

Denbury this week announced it now will build a 105-mile pipeline to flow carbon dioxide to old oilfields along the Montana-North Dakota border. There, CO2 will be injected into the wells to unlock or displace trapped shale rock, offering as much as 10-25% of oil recovery. Denbury’s latest announcement joins several other similar projects, from the likes of Hess Corp. and Exxon’s XTO Energy, which are now in the queue for CO2 EOR in the Bakken and Three Forks. The company’s existing Greencore Pipeline, which sources CO2 from ExxonMobil’s LaBarge Field, flows the gas via interconnects from Wyo., to Mont. In the Gulf Coast region, Denbury also owns the area’s only significant naturally occurring source of CO2 to help recover additional oil from its mature oilfield assets in Texas, La., and Miss., along with at least two other CO2 pipelines. The company’s combined EOR operations during 3Q yielded production of 56,441 BOED.

Question is: Can Denbury’s core strategy or evolving technology apply to fracked wells? Seems the company is working on that, too.

What do you think?

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