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Oil and Gas Roundup — Oct. 16

October 16, 2013
TOPICS: In the news
A roundup of oil and natural gas news from around the state, nation and world:

TransCanada to build Cushing storage by year-end

TransCanada Corp will complete construction of tank and storage facilities at the key Cushing, Oklahoma, oil storage hub late this year as part of its project for the southern leg of the Keystone XL pipeline, the company said on Tuesday.

In a press release highlighting job opportunities created by the project, the Canadian company reiterated its plan to bring the Keystone southern pipeline to commercial service at the end of 2013.

TransCanada plans to build 7 crude oil storage tanks with a total capacity of 2.25 million barrels at Cushing, according to permit applications filed with the Oklahoma Department of Environmental Quality.

The pipeline will ship 700,000 barrels per day of U.S. and Canadian oil from Cushing to Nederland, Texas, when it starts operating. Its capacity can expand to 830,000 bpd.

— Reuters

Noble says gas could meet Cyprus needs by 2016

A senior Noble Energy official says the U.S. firm is looking at the possibility of piping offshore gas to Cyprus to meet the bailed-out country's domestic energy needs by mid-2016.

J. Keith Elliot told reporters Tuesday that this could happen if the Cyprus government commits to the project by the end of this year.

Elliot said a modified rig would be brought over from the Gulf of Mexico to extract gas from the field off Cyprus' south coast which would then be piped to an onshore power plant.

Noble and its Israeli partners Delek and Avner are now developing the field estimated to hold 3.6 to 6 trillion cubic feet of gas.

Elliot said Noble backs Cyprus' plan to build an onshore gas processing plant to export excess supply.

— Associated Press

So far this year: 3,266 new wells in the Eagle Ford

Eagle Ford Shale drillers have started 3,266 new wells so far this year, according to the latest Baker Hughes Well Count.

The numbers show the shale field continuing to pick up steam. Operators have drilled 15.3 percent more wells this year than in the same time period last year.

Last year, there were 3,806 wells started in the Eagle Ford (2,832 in the first three quarters of the year), according to Baker Hughes.

Baker Hughes said that compared to the second quarter, Eagle Ford well count was up by 44 wells, or 4 percent.

In the Permian Basin in West Texas the well count increased 66 wells, or 3 percent, in the Permian Basin. The Williston Basin in North Dakota was up 54 wells, or 8 percent.

The quarter-to-quarter well count dropped in the Fayetteville Shale in Arkansas, which was down 35 wells, or 18 percent. The Barnett Shale in North Texas was down 23 wells, or 6 percent.

In the Eagle Ford, there were an average of 233 drilling rigs in the field during the third quarter, and they drilled 4.86 wells per rig. That’s a bit faster than the 4.22 wells per rig during the same months in 2012.

The Baker Hughes Well Count is a quarterly census of new onshore oil and gas wells. The count doesn’t include workover, completed or plugged and abandoned wells – just wells that have spudded, or started drilling.


Mexico's Pemex voids $1.8B tender to import U.S. shale gas

Mexican state oil and natural gas monopoly Pemex Tuesday voided what was to have been a $1.8 billion tender for a huge pipeline to bring US shale gas south of the border.

Pemex said no attempt will be made to invite a new round of bids for Los Ramones II. Instead, an offshore Pemex subsidiary, TAG Pipelines, will take on the job.

Only one bid was registered for the project. It came from Spain's Enagas and Belgium-based GDF Suez.

Analysts had warned that the terms of the tender would mean that at least two competitive bids would have to be lodged. Pemex said TransCanada and IEnova, a Sempra Energy unit, were reported to be preparing bids, but canceled their plans.

The Los Ramones pipeline was devised in 2011 under the Mexican presidency of Felipe Calderon as Mexican industry faced natural gas shortages caused by sharply increased prices of shale gas in the US.

The project was divided into two phases. Los Ramones I was assigned by Pemex to its own gas subsidiary and Gasoductos de Chihuahua, a Sempra-Pemex joint venture.

— Platts

Supreme Court to hear greenhouse gas case

The Supreme Court on Tuesday agreed to review whether the Environmental Protection Agency has the power to require greenhouse gas permits for big, stationary pollution sources such as power plants, factories and refineries.

The justices said in an order that they would review “whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”

Oral arguments in the case are expected to take place in early 2014.
An array of industry and conservative groups and states had urged the high court to conduct a much more sweeping review. They had asked the court to review every piece of a sweeping appeals court decision in 2012 that upheld the EPA’s first wave of climate change regulations and the agency's power to impose future rules.

But industry groups nonetheless cheered the Supreme Court’s announcement.

“The EPA is seeking to regulate U.S. manufacturing in a way that Congress never planned and never intended,” said Harry Ng, the American Petroleum Institute’s vice president and general counsel. “The Clean Air Act clearly only requires pre-construction permits for six specific emissions that impact national air quality — not greenhouse gases.”

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Column: Why oil & gas should be regulated by the states

At the time of this writing, it appears that congress and the White House are nearing an agreement that would raise the nation’s debt ceiling and end the 17% shutdown of the federal government.  In the hope that does come to fruition, it’s instructive now to have another look at the ways in which the event did — and did not —impact the oil and gas industry.

Perhaps you’re sitting there thinking “Impacts?  What impacts?” and if so, no one could blame you, given that the impacts that have taken place have hardly been visible to the general public.  The average guy driving his car to and from work every day has had no problem stopping in at the local gasoline station to fill his tank, has had uninterrupted natural gas flow to heat his water and cook his food, and has seen no upward or downward impact to his monthly electricity bill as a result of the shutdown.

However, there have been impacts, mostly on permitting processes that are already glacially slow to begin with. Given that only 7% of EPA’s employees are considered by their own government to be “essential” (if you find irony in that reality, please take a number and move to the back of the line), that agency obviously hasn’t been issuing any air permits over the last couple of weeks.

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