Replies to This Discussion

Permalink Reply by dbob on December 7, 2013 at 14:53

FT under ideal conditions is going to use 30-60% of the input gas as fuel.

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Permalink Reply by Two Dogs, Pirate on December 7, 2013 at 17:01

I would think that 12.5 billion would be small change on a big return on a unicorn ranch.

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Permalink Reply by Krkyoldhag on December 8, 2013 at 6:28

In a world where Obama gives the operators a "pass" on the danger of the windmills to endangered bald Eagles while shutting down construction sites to save a frog anything is possible.  Even Unicorn power.

A question:  did you all know that the refinery in Waskom ships by rail gas to Canada?  I just learned the destination of the stuff loaded behind the fish place there.

Isnt' there a closer source for Canada?

Permalink Reply by jim weyland on December 8, 2013 at 8:42

two dogs, pirate,

remember they could slap the branding irons to them. of course, the brand could take the shape of the shell "pectin"

that way the stock wouldn't be generic, they'd be shell branded product, always worth a premium price at market.

Permalink Reply by Two Dogs, Pirate on December 8, 2013 at 11:11

I think would like to see the "Pegasus Branding Iron" on a gas to liquids plant in Louisiana.

Permalink Reply by Joe Aldridge on December 7, 2013 at 17:38

Jim,

Are you saying the NG consumption for that plant would be more than 800 billion cu. ft. per day not counting the overhead to produce the product? If you add the overhead in the NG consumption would be close to a trillion cu. ft. per day. Is this correct?

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Permalink Reply by dbob on December 7, 2013 at 18:03

Joe,

Without overhead, I think it would be in the range of 0.8 Bcf/day, or maybe around 1.5 BCf/day with overhead.  On par with some of the LNG projects.  But simply using LNG as transport fuel is a lot more efficient.

Permalink Reply by jim weyland on December 8, 2013 at 8:33

joe, dbob is spot on.

and, dbob, thanks for throwing inre: f-t process fuel requirements range.

i'm an aggie, but i'm not an aggie engineer so i have work things out old school style:

140,000 bbls X 6 Mcf/bbl = 840,000 Mcf

further: 840,000 Mcf X 1/1000 MMcf/Mcf = 840 MMcf

further: 840 MMcf X 1/1000 Bcf/MMcf = 0.84 Bcf

so: 840,000 Mcf = 840 MMcf = 0.84 Bcf

sorry to have taken so long to respond. that was a lot of fingers and toes to count up. and, besides, i messed up the first go around and had to start over.

Permalink Reply by Steve P on December 9, 2013 at 16:41

Skip:  here is a slightly more relevant "factoid."  I live in the SF Bay Area (but a Desoto Parish native).  Last week, the local utility, PG&E (a large utility), recorded the largest use of NG in it's more than 100 year history.  just one data point, but we are going through an extraordinary cold spell right now.  And the rest of the country?  well, just check out some of the stories on the internet.  But these are just singular data points.  but I think the price will hang above $4.00 for this winter.  to sustain this price, we need to see a steady conversion of the nation's 18 wheeler fleet to NG.  Longer term, the continued conversion of power plants to NG will help.  Export will help in the long run, but that's years from now.

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Permalink Reply by Skip Peel - Mineral Consultant on December 10, 2013 at 4:08

Steve, I'm unsure as to your comment.  "Slightly more relevant" than what?  Regardless of relevance ranking there is one fact that will supersede all others given that price is ultimately the expression of supply and demand.  In the era of generally unregulated natural gas marketing the bulk of supply has been associated with conventional reservoirs:  long life, shallow decline curves.  Unconventional supply has surpassed 30% of total domestic production and will continue to increase.  When it reaches 50%, in the next few years, there will be a new paradigm.  Considering the extremely high initial production of unconventional gas in the initial years of well life and the rapid decline thereafter operators will have the ability to react more quickly and efficiently to balance supply to demand.  A pause in drilling will significantly diminish production in a relatively short period of time. The caveat in this scenario as far as timing is the potential for discovery of major new unconventional plays because energy companies must drill to hold leases regardless of price.  Although it is a conservation problem imagine what the supply side of the nat gas equation would look like if all that Bakken gas was going into a pipeline instead of being flared.

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Permalink Reply by jim weyland on December 10, 2013 at 4:56

fwiw, there are freeze offs reported in the rockies and the midcontinent.

i don't a midcontinent data point.

but, for gas flow today(only) at the Opal hub in Lincoln Co, WY, the NGI index price is $7.06 MMBtu. for this past weekend, defined as gas days saturday through monday, at the same point, gas went for more than $5.00 MMBtu.

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Permalink Reply by Joe Aldridge on December 10, 2013 at 5:30

Jim,

Thanks for the report on that price. The price I'm looking for would be on the Henry Hub or the NYMEX. That price is a regional one but interesting to see the movement up. I think the price on the national markets will top out  at $6.50 this Spring and fall back to the upper 4's in Summer.

Thanks again for your input.

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