Replies to This Discussion

Permalink Reply by Bobi Carr ("parker") on May 25, 2012 at 9:13

Not liking the sentence.......So ultimately gas faces a few years at least of relatively cheap prices.

......but have been reading it EVERYWHERE I look.   Grrrrrr.

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Permalink Reply by Les Bamburg on May 25, 2012 at 17:55

Bobi, it is unclear what natural gas is required before companies will move drilling rigs back into dry gas plays such as the Haynesville and Fayetteville Shale or the dry areas of the Marcellus, Barnett and Eagle Ford Shale.  This varies by operator as it depends upon each company's list of available development plays that would support their earnings growth objective.   

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Permalink Reply by Krkyoldhag on May 27, 2012 at 5:42

At my age thinking is tricky..takes me awhile to separate out "stuff".

I wonder how much the drop in refinery revenue from dry gas had to do with the drop in NG?  Not sure how that would work..But I do know that NG is "ready to go" doesn't need the refinery to go online.  The refineries were losing money..no business.or big drop in business..The ones that converted to separating liquids got back some share..

So how badly were the refineries hurt with dry gas?  I do know that the one in Waskom is sure happy to be having the liquids coming in and products going out.

Nobody has addressed this so far as I know.

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Permalink Reply by Les Bamburg on May 27, 2012 at 17:10

KOH, I assume you are referring to natural gas processing plants rather than oil refineries.

 

Yes, the transition to rich gas and oil drilling has been a major boost to the natural gas processing and natural gas liquids transportation and fractionation business.  Several new processing plants are currently being constructed in South Texas to handle rich Eagle Ford Shale gas production.  The same is occurring for the Marcellus Shale and Bakken Shale. 

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Permalink Reply by kittycatmama on May 28, 2012 at 5:44

Ok Les, let me show my ignorance. Is there a technology available that can convert dry gas to liquid gas or is that what the new Cheniere plant proposes to do.

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Permalink Reply by Clyde T. Williams on May 28, 2012 at 10:17

I will try to do double duty reply -

"Dry" "natural" field gas will have some wet gases with the CH4 and can be transorted carefully by pipeline to a local separator then wets are trucked out and very drys go to transmission lines... = Unassociated Gas - but $2.50/MMBtu Operators need $3.50 to make any money

 

Associated Gas - Oil production with lots more wets (C2+H+) from oil and some dry gas (CH4) - separation at the pad - so need clusters of pads to do it safely/effecctively - Oil separated for trucking out - if enough wets then a pipeline for transport and in the same trench a dry gas line (OR flare it)

 

Problem - more oil production needs more wets processing and ethylene production for plastics etc or that needs to be sold off to someone elsewise the oil production needs to be throttled back - in order to get the oil out best - needs lots of users/good prices for the dry and wet gases = export the drys, process the wets for plastics feedstock, and sell the oil at a good price = profits on three produced resources and pump the water back in somewhere...

 

Any dry gas liquefier needs a wets processor along side because even at 2-5% wets the 2-5% needs to be sued immediately adjacent to the liquefier eslewise you have to burn it off for power for the liquefier and the LNG system doesn't make the profits...bad economics...so wherever you have a oil fracking ops you need some good oil, condensate, and "dry" gas pipelines, an LNG liqufier, and an ethylene plant.  In Dubai, we were to get 15% wets and couldn't take it without building a plastics industry to use dry gas for 5000MW power plant...

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Permalink Reply by Bobi Carr ("parker") on May 29, 2012 at 2:00

kittycatmama,

  If this works out, they will convert dry gas to gasoline, but since Chesapeake is 50% owner, I have to wonder.

http://www.thetowntalk.com/article/20120523/BUSINESS/205230330/Sund...

  It makes sense that they would invest in this technology.  I remember reading about a plant that converted Natural Gas into diesel in Qatar.

  ........I would believe it more if it were backed by HPB, ECA or some other gas company that BP.

   I'M HOPING IT'S THE REAL DEAL AND NOT JUST ANOTHER MARKETING TOOL TO INCREASE STOCK VALUES.  

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Permalink Reply by Clyde T. Williams on May 29, 2012 at 9:35

The SoAfricans were/have been doing it for decades during the boycott but converting from a rich wet coal gas to gasoline

They tried for almost a decade with the Qataris but dry gas ain't good to start with and since they haven't made it commercial probably I doubt if even with american genius we can make it commerrcially competitive with light crudes even if the feedstock is <$3/mmbtu...easier to ship LNG or run trains and otherr freight on LNG.

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Permalink Reply by El Theo on May 29, 2012 at 16:39

Better yet is this previously reported article about Shell Oil's Qatar plant does and how they plan to migrate this to the southern US. 

 

http://thehayride.com/2012/03/cng-isnt-the-only-way-to-make-natural...

 

They want the Gulf South.  They need infrastructure of a large shale in place.  Shell is EXCO, if I ain't mistaken.  EXCO bought a huge piece of property in DeSoto Parish from Scotty Moran.  I may be dreaming, but I would dig it if a hunch paid off.

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Permalink Reply by Henry on May 29, 2012 at 23:40

What do you mean, "Shell is EXCO?"

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Permalink Reply by Skip Peel - Mineral Consultant on May 30, 2012 at 2:10

EXCO's Haynesville partner is British Gas (BG).  As far as I am aware Mr. Moran sold his mineral rights.  It is possible he sold some of his surface but I don't think it was a huge piece.

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Permalink Reply by Spring Branch,mineral owner on May 30, 2012 at 4:47

It was my understanding that Scotty Moran sold both surface and minerals.

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