Found this interesting yesterday:
January 29, 2015 [Reuters] - Storage companies in China are set to boost commercial oil tank capacity by more than a tenth this year, just in time to cash in on speculative demand to stock up on cheap crude, a survey of storage and trading executives shows.
The volume of at least 42 million barrels of crude represents about one week of China's net crude oil imports, and purchases to fill the tanks could offer support global oil prices that have more than halved since last summer to drop below $50 a barrel as Saudi-led OPEC faces off with U.S. shale producers.
Traders and producers are seeking to stash crude to sell months down the line on expectations that prices will possibly recover towards late 2015. Up to 30 tankers have been booked for such a purpose, Reuters has reported.
Storage operators looking to meet this demand include Dutch tank and terminal specialist Vopak, Hong Kong-listed Brightoil Petroleum and little-known private companies CEFC China Energy and Zhejiang Tianlu Energy Group.
Vopak, building an 8.8-million-barrel base in Yangpu on the southern island province of Hainan, is already getting enquiries for the lease of storage space due to be ready around April, said sources with direct knowledge of the discussions.
"In this market, all those with tanks are smiling," said Cui Zhenchu, Shanghai-based head of oil trading at CEFC China Energy, which is building an 18-million-barrel tank farm, also at Yangpu on Hainan island.
Most of the storage space is being added by independent companies that have only recently been allowed to operate crude oil storage facilities in China. The sector has long been controlled by state giants Sinopec Corp and PetroChina Corp, but Beijing now intends to draw more investors to boost the supply cushion as its import dependence surges.
During EPD conf. call today management noted about 2 weeks to get the line repaired
Accidents after the fact typically expose gaps in defenses, if we cannot move ethane to Cadiz from PA Marcellus, I say we have a hole in our defenses that needs to be addressed.
Anyway, from local news paper today, appears those effected are rejecting ethane into the gas stream.
"Rainey said the ATEX normally collects ethane from four natural gas processing plants in the area: the MarkWest Energy facilities in Houston, Pa. and in Cadiz; the Blue Racer Natrium facility in Marshall County; and the M3 Midstream Utica East Ohio facility in Scio. He said the Blue Racer and MarkWest Houston, Pa. facilities are now unable to ship ethane on the line because of the damage.
"MarkWest's processing and fractionation complexes have not been impacted by the ATEX pipeline incident. MarkWest has other alternatives to ship purity ethane or can choose to leave the ethane in the gas stream," MarkWest spokesman Josh Hallenbeck said Tuesday."
Well you keep checking in so sounds like your still interested. One look at the guy running the FB and I just had to pass. By the way, what's the dividend yield?
MV goes to Hopedale, but not sure if any ethane exits Hopedale to Cadiz. So I think were'r screwed, including RRC and others on the eastern shore of the Ohio. Only hope is DOT govt. workers won't like standing out in the cold and mud, and once everyone agrees on how to pour coffee, the line will be repaired quickly and back up and running.
I knew the Mobley-Majorsville was operational, wasn't sure about the Sherwood line.
Anyway, appears we may be able to reverse Liberty flow to Majorsville to Cadiz as an option for ATEX down. I would suspect Williams is down also. Not sure if they have a reroute beyond the break.
From Marcellus Drilling News:
Monday Jan 26 - Brooke County WVa.
The MarkWest processing plant in Cadiz (Harrison County), OH and the M3 processing plant in Scio (Columbiana County), OH are still online and connected to ATEX.
The MarkWest plant in Chartiers (Washington County), PA and the Blue Racer plant in Natrium (Marshall County), WV are both not pumping ethane via ATEX until the rupture is repaired.
Brooke County Sheriff Chuck Jackson said the blast caused no injuries or property damage for local landowners, but said two families along Archer Hill Road evacuated as a precautionary measure. Because of the snow covered roads, a Follansbee Fire Department truck became stuck while the driver tried to respond to the fire. Officials with the West Virginia Division of Highways, Brooke County Sheriff’s Department and local fire departments blocked the roadways leading to the fire.
“They turned the gas off, but it’s my understanding that it takes a while to burn out,” Jackson said late Monday as the flames continued flaring. “We really would just like to know what caused it so something like this doesn’t happen again.”
Rick Rainey is a spokesman for Houston, Texas-based Enterprise Products Partners, which operates the 1,260-mile long ATEX pipeline, said company officials noticed a pressure drop at the Follansbee pump station.
“We detected a pressure drop at our Follansbee pump station. We then alerted the proper parties,” Rainey said. “The local responders all did a great job.”
Rainey said his firm will work with the Pipeline and Hazardous Materials Safety Administration, a division of the U.S. Department of Transportation, to determine the cause of the blast. He said the line will not operate again until PHMSA officials approve.
“We just really don’t know at this point,” Rainey added regarding the potential reason for the line failure.
Thinking possibly could our redundant system flow ethane out of Majorsville to Cadiz since they are connected??
Not sure if you had the chance, but AR announced 2014 data. Looks impressive and according to WVa. DEP data, AR is tops in recent permitting. Pretty much analogous to RRC performance and recent permitting.
Going to double check but recall MWE running an NGL line from Sherwood to Majorsville. Haven't heard if that project is up and running.
Give it up dude. Few in E&P today had a good day. I would suggest that the double cut in Capex for 2015 could in fact mean more dry powder for a strategic acquisition. I haven't seen management make a bad one yet. An RRC-AR merger would be another great alternative.
Last Friday Chevron laid of 162 Marcellus ops workers. That was the first announcement I heard of so far.
Today, it's been flat to down for some time now. Couple of things working against us now. Strong dollar is hurting overseas operations, Europe is weak without much signs of getting better any time soon. The other is the US economy is anemic, yesterdays economic data showed an unexpected downturn was a reality check.
You should listen to and get a copy of the recent earnings conf. call. Management pretty much states the headwinds. So be careful, it is a great company, but I am anticipating a flat year for performance.
I would agree, in fact news of production and reserve increases is perceived by the short-term minded market as a negative. Most are focused on a $600 phone today, mine cost me about $30 and serves me just fine.
Drilling in the super-rich areas appears to be the most economical for E&P now, AR and RRC appear to be doing this as well as others. The longer NGL trains in addition to new pipeline takeaway suggests this is the case.
Would also suggest that part of the glut is the continuing dismal economic growth, noted by the surprise in GDP numbers yesterday. One noted yesterday the 2015 GDP may be as low as .2%, a big drop from 3-4% which IMO is still anemic. Tax increases will definitely keep a lid on growth. But like you have always noted, DCF is of most importance.
Colder weather predicted for end of this week going into Feb. Keeping an eye on the weatherbell report every Saturday, with heavy snow in place, that will help keep temps down.
In the area past week. Very large NGL unit train into Liberty. With SXL ME-1 full, appears greater market for NGLs.
See YouTube Vidoes at CHRXIND1
W&LE Liberty Inbound 25 Jan 2015
Compilation of Shale Related Businesses
May lessen the headache for today's market action.
If ya get time, take a look at REXX 20 Jan 8-K report. Note the use of sand in relation to well performance. Selectivity is going to be the rule for at least this year focused on be best rate of return plays, and be sure that will includes the use of more sand. But we are going to have to be tied to the right customers with the best plays. For rates of return, the Marcellus and Utica are very important.
Expecting Capex cuts in coming earning conf. not sure how that impacts future ATM, likely less, which IMO would be good. I do expect a go with Fox though assuming ROVER goes on as schedule.
Also see REXX Jan 20 8-K. Some data on production and pricing, also relationship between the use of sand and well performance. At my end, added to SXL and EPD this week, along with a common stk.
Be interesting to see this year if Shell gives a go-ahead on the Monaca cracker. I suspect it will happen. Keeping an eye on CNX/NBL ACAA wells for wet production. They should be fracing some of these by now. Assuming CNX has commitments to the Shell plant, and Fox nearby, you talking close 10 mile feed stock.
You better hope they get bought now, as it will be a distressed sale. You never see 100 regardless of the acreage quality because the product market is flooded with supply, NG and NGLs. Top management selling on the 20th tells me we are in a year flat trend, and hopes of a buyout are out. We have no winter this year. So we cut back, and draw down the inventory. Hope for better price environment in 2016-2018 time frame. Assuming SXL and EQM, and D/DM, ETP, get the takeaway built and up and running.
Having that said, I would not be surprised to see a merger in time. AR could be a possibility, or perhaps a small to mid size acquisition. REXX, RICE, Stone, MHR, and on the big side, NBL, APA among others are all possibilities.
It is already helping in a couple of ways. Recently as of December 2014, EEP Flanagan South and via EPD's Seaway twin is already bringing some amount of Canadian crude to PADD-3. This in turn helps refiners process the heavier crude, which they are more equipped to process. In addition, refiners may blend US light with heavy Canadian and other medium crude. So this in turn creates a market over the Saudis for both the US and Canada.
Canada is the top exporter already to the US, and the US is becoming a major nat gas export to Canada. Should mention that Canada is a primary ally to the US. It's really a good idea to work with your allies Vs. ignoring them. Especially since Canadian pipeline outfits have been in the US for many years keeping product flowing thus keeping America strong.
I believe we will be exporting crude in the near future. A positive to PADD-2 and PADD-1 refineries in time as they tool up. Overall it's good for market competition on a world-wide basis.
Some argue whether Keystone is really needed now. A portion already in place to Cushing, and beyond, really just building the leg that crosses international boundaries and ties into the existing Keystone system. Flanagan already makes this route accomplished though it is a longer route.
Looked at CNNX prior to offering, and like most from what I researched, and like most midstream MLP, a few months ago, priced too high IMHO. I held CNX for many years, but sold out last year. I hold larger pipeline/midstream MLP's though. We are in a tough environment now. That in turn impacts or put into question DCF going forward. CNX will be creating a thermal coal MLP and spin-off in part it's met coal later this year. It will then terminate it's dividend, and be essentially a gas E&P, but receiving IDR from CNNX and the thermal side, as well still controlling most of the met side. CNNX does have two good outfits behind it, that is NBL and CNX. I am not sure what the distribution will be for CNNX. There are a lot of other big names out there that are getting the attention simply because of their size, scope and history. I am watching about 6 MLP's now, outside of everything else, but have noted CNNX decline. RMP (dry gas) down also.
I'll keep watching, good luck.