If you haven’t heard, America is up to its ears in domestically produced crude oil and natural gas liquids — thanks to the shale boom.This is good news for supporters of American energy independence. Oil imports have fallen 24.6% since 2006, from a high of 10.1 million barrels a day to 7.6 million barrels a day last year, according to the U.S. Energy Information Administration.At that pace, the U.S. could become a net oil exporter by 2020.Unfortunately for upstream oil and gas producers, there aren’t many buyers for all the new crude oil and natural gas liquids NGLs coming out of the ground.The entrenched Gulf of Mexico refineries were engineered decades ago to process heavy, high-sulfur crude oil from Venezuela, Saudi Arabia, Alaska’s North Slope, and the deepwater Gulf of Mexico. These refineries cannot process much of the light, low-sulfur stuff now coming from U.S. shale reservoirs.Today, there is a glut of crude oil and other liquid hydrocarbons at tank farms in Texas, Oklahoma and other major supply hubs.One type of liquid hydrocarbons with which U.S. inventories are particularly oversupplied is gas condensate. Condensate is an oil-like substance that morphs from a gas into a liquid when atmospheric pressure drops, as when gas rushes out of the wellhead — or when it flows through a natural gas processing plant.The basic laws of supply and demand suggest that oil producers would be better off selling lighter crude oils and NGLs to buyers in Europe, Asia and Canada, where refineries are better equipped to handle the light crude blends.
via The Best Way To Profit From Surging U.S. Oil Production – NASDAQ.com.
Acquisition-focused NGL Energy Partners announced Tuesday it has closed on its latest buy — commodities mover and storer TransMontaigne Inc.Tulsa-based NGL is spending $200 million in cash for a controlling stake in the TransMontaigne from Morgan Stanley. Denver-based TransMontaigne owns and operates terminal, storage and transport assets for refined petroleum, crude oil chemicals, fertilizers and other liquid products. NGL also is paying $347 million for inventory in the deal. It gets 17 percent of the outstanding units in the TransMontaigne master limited partnership plus the general-partner management interest.
via NGL Energy closes on latest acquisition, TransMontaigne – Tulsa World: Energy.
The US Environmental Protection Agency EPA has issued a final greenhouse gas GHG prevention of significant deterioration PSD construction permit to Oneok Hydrocarbon, an operating subsidiary for Oneok Partners LP, for expansion of the company’s fractionator at Mont Belvieu, Tex., east of Houston.The permit allows Oneok to build two new units at an estimated cost is $800 million.
via Oneok Mont Belvieu expansion receives GHG permit – Oil & Gas Journal.
There is no denying master limited partnerships have had a good run in recent years. A unique asset class in the investment landscape, MLPs are defined by the legal requirement that they derive most of their cash flows from real estate, natural resources and commodities. One of the key advantages to MLPs is they combine the tax benefits of a limited partnership with the liquidity of a publicly traded company. As measured by the Alerian MLP index, MLPs have provided investors with a compound annual return of 15.8% from the index’s inception in June 2006 through April 2014; the return on the S&P 500 in the same time frame was 7.4%. Over those nearly eight years, the aggregate market cap of MLPs increased to $450 billion from $75 billion and the number of publicly traded MLPs increased to 125 from 55, with a record 21 MLP initial public offerings in 2013. It has been a good run, indeed.ENLARGEAlerian, FactSetWe believe, however, the same factors that drove MLP outperformance in the past eight years could continue to drive outperformance in the next eight years.
via Master limited partnerships positioned to benefit from rising U.S. energy production – Pensions & Investments.
Posted in Bakken, Eagle Ford, Mexico energy, Mexico shale, MLPs, Natural Gas, NGL, Shale Natural Gas
Tagged Bakken, Eagle Ford, Mexico energy reform, MLPs, natural gas, NGL, Shale Natural Gas
Williams Cos. agreed to pay nearly $6 billion to expand its ownership of Access Midstream Partners LP, a move aimed at increasing the natural-gas pipeline company’s presence in areas with growing energy output from shale formations.
via Williams inks $6 billion deal for shale oil expansion – The Wall Street Journal – MarketWatch.
Plains All American Pipeline LP PAA is a master limited partnership that operates in the midstream energy business. PAA provides energy infrastructure and logistics services for crude oil, natural gas liquids or NGLs, natural gas, and refined products. Plains GP Holdings LP PAGP owns PAA’s general partner. PAA is a component of the Alerian MLP ETF AMLP, Global X MLP ETF MLPA, and Global X MLP & Energy Infrastructure ETF MLPX.
via Takeaways from Plains All American Pipeline’s analyst day meeting » Market Realist.
MarkWest Energy Partners and The Energy & Minerals Group EMG plan to add additional capacity at their Hopedale fractionation and marketing complex in Harrison County, Ohio, the companies announced on Thursday.The move comes in order to meet growing natural gas liquids NGLs production in the Utica and Marcellus Shale regions under new contracted commitments from numerous producer customers.The Hopedale complex is jointly owned by a subsidiary of MarkWest and MarkWest Utica EMG, a joint venture between MarkWest and EMG.The expansion will double the propane and heavier fractionation capacity at the Hopedale complex to 120,000 bpd and is expected to be operational in the first quarter of 2015.
via MarkWest Energy to expand fractionation capacity at Ohio NGL complex | Hydrocarbon Processing | June 2014.
Executives who sold Copano Energy to Richard Kinder’s pipeline empire for $3.2 billion last year have lined up $500 million to start a new midstream oil and gas company.Navitas Midstream Partners, based in The Woodlands, is planning to build gathering pipelines, processing and treatment facilities in North America, CEO Bruce Northcutt said in an interview Monday with the Houston Chronicle.It’s among a number of private equity and midstream companies seeking to fill a gap in infrastructure between emerging shale plays and U.S. markets.”You see a lot of players in the midstream place, and part of that is the re-plumbing of America,” said Northcutt, former president and CEO of Copano Energy.
via $500 million in pipeline for newly formed venture – Houston Chronicle.
Posted in Bakken, Eagle Ford, Marcellus, NGL, Pipeline, Shale
Tagged Bakken, Eagle Ford, Marcellus, NGL, Pipeline, shale
After a spate of fiery derailments, the scramble to make North Dakota’s Bakken crude oil safer when it’s being transported on trains has focused on better tracks, slower speeds, and reinforced railcars that bypass urban areas.
But that is starting to change. A potentially more effective approach, which would remove the most volatile elements from the crude before it is being loaded onto rail cars, is now beginning to get attention, both from regulators considering safety enhancements and some lawmakers, industry executives say.
via 'Degassing' North Dakota Crude Oil Before Shipping Among Safety Ideas.
A core Foolish principle is to invest in quality companies with excellent management and a clear growth thesis. This article is designed to point out several energy trends that income investors may not have heard about and two MLPs that can help them profit handsomely, both in terms of income and capital gains.
1. Marcellus shale and ethane exports 2. LNG and gas exports to Mexico
via 2 MLPs Set to Cash in on 4 Important Energy Trends (EPB, MWE).