Reports related to this article:
Project(s): View 15 related projects in PECWeb
Plant(s): View 14 related plants in PECWeb
Released March 13, 2014 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--High prices for crude oil, and relatively high prices for natural gas liquids (NGLs), have triggered a rise in oil & gas project activity in Wyoming. It may not be a Texas-sized boom, at least not yet, but the Cowboy State welcomes it all the same.
Crude oil production from Wyoming's Powder River Basin (PRB) is projected to grow about 75%, from current levels of about 200,000 barrels per day (BBL/d) to about 350,000 BBL/d by 2019, BENTEK Energy analyst Erika Coombs told about 100 attendees at the 4th Annual Niobrara Infrastructure Development Summit, held last week in Denver. And more than half of that crude will be light and sweet, with API gravity between 30 and 40, she added. By contrast, as recently as 2010, roughly 75% of all crude oil produced in that basin had much heavier API gravity, which made it less attractive for refiners, Coombs told the conference, which was sponsored by Information Forecast Incorporated (Infocast), (Woodland Hills, California).
Meanwhile, PRB gas production is shifting: "associated gas," which is found with oil, is rising, while coal bed methane production is falling. The associated gas contains valuable natural gas liquids (NGLs), which coal bed methane lacks. Production of more associated gas has triggered a surge in investment in gas-processing facilities and NGL pipelines in Wyoming.
"Historically, the coal bed methane produced in PRB was so dry you could put it into a pipeline with little or no processing," Kenneth Kemp, a vice president of business development at Tallgrass Energy Partners LP (NYSE:TEP) (Overland Park, Kansas), told the conference. "But the gas being produced today is richer--it has more NGLs, which is driving the need for NGL processing capacity and NGL takeaway capacity."
Today, about 760 million cubic feet of gas per day (MMcf/d) is being produced in the PRB, BENTEK's Coombs said in a post-conference interview. That's down from 2010, when production was nearly 1.6 billion cubic feet per day. Coal bed methane accounted for nearly all PRB gas production in 2010, but its share of overall production is declining significantly at a time when production of associated gas is rising sharply.
Click on the image at right to see historical and predicted production of coal-bed methane and associated gas in the Powder River Basin.
Going forward, production of associated gas, with its NGLs, is expected to continue growing, while production of coal bed methane is expected to continue dropping, Coombs said. Total gas production from PRB is expected to decline to a little under 800 million cubic feet of gas per day by 2016, but the presence of NGLs in associated gas makes it more valuable than coal bed methane, particularly if gas prices stay soft.
"Associated gas production has made significant gains in 2012 and 2013," a recent BENTEK report said. In 2012, associated gas grew by 27% and averaged slightly more than 103 million cubic feet of gas per day during the year. Similarly, associated gas production grew 23% in 2013, to an average of 128 million cubic feet of gas per day. Production gains have continued in 2014, with associated gas production averaging 157 million cubic feet of gas per day.
"Given the increased interest and favorable economics toward the production of liquids-rich plays," the analysis continued, "BENTEK expects associated gas production in the Powder River (Basin) to grow by an average of 29% per year to an average of 271 million cubic feet of gas per day by 2016."
In an interview at the conference, Darrell Bull, vice president of business development for Crestwood Midstream Partners (NYSE:CMLP) (Houston, Texas), said: "In the PRB, things are growing. It's not like the Bakken, where people are announcing a lot of big new gas-processing facilities, but we are seeing growth in the PRB."
There are 44 active oil & gas projects worth about $1.7 billion that are being developed in Wyoming, according to Industrial Info Resources' North American Project Database. By value, Pipeline projects account for the bulk of scheduled project spending, but companies also are developing more than $550 million of Production and Terminals projects as well.
Click on the image at right for a chart showing scheduled project spending for oil & gas projects in Wyoming.
Crestwood and Access Midstream Partners LP (NYSE:ACMP) (Oklahoma City, Oklahoma) are building a cryogenic gas processing facility in Douglas, Wyoming. It will be able to process up to 120 million cubic feet of gas per day when it is completed later this year. The total investment value (TIV) of that project is about $100 million. In the coming weeks, Crestwood and Access will decide on whether to build a second cryogenic processing facility in the PRB.
Tallgrass is expanding two gas processing plants in the PRB to add about 50 million cubic feet per day of processing capacity. Those expansions are under construction now.
Meritage Midstream LLC (Denver, Colorado) is particularly active in the PRB, with NGL pipeline and gas-processing projects under development. Anadarko Petroleum Corporation (NYSE:APC) (Houston, Texas) is also expanding a PRB gas-processing plant.
Oil-related project spending in Wyoming and Colorado also is surging, as production continues to grow in the PRB, Denver-Julesburg (D-J) Basin and Niobrara Shale. The largest oil project under construction is the Pony Express project, which will convert an existing natural gas pipeline into a crude-oil pipeline. It stretches about 430 miles from Guernsey, Wyoming, to Cushing, Oklahoma. The $662 million project is scheduled to be brought online in the fourth quarter of 2014. It will be able to transport about 230,000 BBL/d. A second phase could add another 90,000 BBL/d.
The White Cliffs Crude Oil Pipeline Loop will add about 90,000 BBL/d in outbound transportation capacity from Colorado to Cushing, Oklahoma. That $170 million project is scheduled to be completed in the next few weeks.
View Plant Profile - 1027985 1058521 1072506 3084939 3085036 1063496 3112694 3100117 3100118 3112856 3109170 3083686 3008735 3098725
View Project Report - 300047135 300047153 300110456 300110466 300110558 300110562 300136419 300149464 300133328 300133351 300149680 300144365 300108612 300140890 300131350
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Crude oil production from Wyoming's Powder River Basin (PRB) is projected to grow about 75%, from current levels of about 200,000 barrels per day (BBL/d) to about 350,000 BBL/d by 2019, BENTEK Energy analyst Erika Coombs told about 100 attendees at the 4th Annual Niobrara Infrastructure Development Summit, held last week in Denver. And more than half of that crude will be light and sweet, with API gravity between 30 and 40, she added. By contrast, as recently as 2010, roughly 75% of all crude oil produced in that basin had much heavier API gravity, which made it less attractive for refiners, Coombs told the conference, which was sponsored by Information Forecast Incorporated (Infocast), (Woodland Hills, California).
Meanwhile, PRB gas production is shifting: "associated gas," which is found with oil, is rising, while coal bed methane production is falling. The associated gas contains valuable natural gas liquids (NGLs), which coal bed methane lacks. Production of more associated gas has triggered a surge in investment in gas-processing facilities and NGL pipelines in Wyoming.
"Historically, the coal bed methane produced in PRB was so dry you could put it into a pipeline with little or no processing," Kenneth Kemp, a vice president of business development at Tallgrass Energy Partners LP (NYSE:TEP) (Overland Park, Kansas), told the conference. "But the gas being produced today is richer--it has more NGLs, which is driving the need for NGL processing capacity and NGL takeaway capacity."
Today, about 760 million cubic feet of gas per day (MMcf/d) is being produced in the PRB, BENTEK's Coombs said in a post-conference interview. That's down from 2010, when production was nearly 1.6 billion cubic feet per day. Coal bed methane accounted for nearly all PRB gas production in 2010, but its share of overall production is declining significantly at a time when production of associated gas is rising sharply.
Click on the image at right to see historical and predicted production of coal-bed methane and associated gas in the Powder River Basin.Going forward, production of associated gas, with its NGLs, is expected to continue growing, while production of coal bed methane is expected to continue dropping, Coombs said. Total gas production from PRB is expected to decline to a little under 800 million cubic feet of gas per day by 2016, but the presence of NGLs in associated gas makes it more valuable than coal bed methane, particularly if gas prices stay soft.
"Associated gas production has made significant gains in 2012 and 2013," a recent BENTEK report said. In 2012, associated gas grew by 27% and averaged slightly more than 103 million cubic feet of gas per day during the year. Similarly, associated gas production grew 23% in 2013, to an average of 128 million cubic feet of gas per day. Production gains have continued in 2014, with associated gas production averaging 157 million cubic feet of gas per day.
"Given the increased interest and favorable economics toward the production of liquids-rich plays," the analysis continued, "BENTEK expects associated gas production in the Powder River (Basin) to grow by an average of 29% per year to an average of 271 million cubic feet of gas per day by 2016."
In an interview at the conference, Darrell Bull, vice president of business development for Crestwood Midstream Partners (NYSE:CMLP) (Houston, Texas), said: "In the PRB, things are growing. It's not like the Bakken, where people are announcing a lot of big new gas-processing facilities, but we are seeing growth in the PRB."
There are 44 active oil & gas projects worth about $1.7 billion that are being developed in Wyoming, according to Industrial Info Resources' North American Project Database. By value, Pipeline projects account for the bulk of scheduled project spending, but companies also are developing more than $550 million of Production and Terminals projects as well.
Click on the image at right for a chart showing scheduled project spending for oil & gas projects in Wyoming.Crestwood and Access Midstream Partners LP (NYSE:ACMP) (Oklahoma City, Oklahoma) are building a cryogenic gas processing facility in Douglas, Wyoming. It will be able to process up to 120 million cubic feet of gas per day when it is completed later this year. The total investment value (TIV) of that project is about $100 million. In the coming weeks, Crestwood and Access will decide on whether to build a second cryogenic processing facility in the PRB.
Tallgrass is expanding two gas processing plants in the PRB to add about 50 million cubic feet per day of processing capacity. Those expansions are under construction now.
Meritage Midstream LLC (Denver, Colorado) is particularly active in the PRB, with NGL pipeline and gas-processing projects under development. Anadarko Petroleum Corporation (NYSE:APC) (Houston, Texas) is also expanding a PRB gas-processing plant.
Oil-related project spending in Wyoming and Colorado also is surging, as production continues to grow in the PRB, Denver-Julesburg (D-J) Basin and Niobrara Shale. The largest oil project under construction is the Pony Express project, which will convert an existing natural gas pipeline into a crude-oil pipeline. It stretches about 430 miles from Guernsey, Wyoming, to Cushing, Oklahoma. The $662 million project is scheduled to be brought online in the fourth quarter of 2014. It will be able to transport about 230,000 BBL/d. A second phase could add another 90,000 BBL/d.
The White Cliffs Crude Oil Pipeline Loop will add about 90,000 BBL/d in outbound transportation capacity from Colorado to Cushing, Oklahoma. That $170 million project is scheduled to be completed in the next few weeks.
View Plant Profile - 1027985 1058521 1072506 3084939 3085036 1063496 3112694 3100117 3100118 3112856 3109170 3083686 3008735 3098725
View Project Report - 300047135 300047153 300110456 300110466 300110558 300110562 300136419 300149464 300133328 300133351 300149680 300144365 300108612 300140890 300131350
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
