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Last updateWed, 18 Jul 2018 2pm

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Unfractured Wells On the Rise in Permian Region

“The vast pipe networks that haul crude from the Permian basin are almost completely full thanks to a production boom in the oil-rich area of West Texas and New Mexico that rivals Saudi Arabia’s Ghawar field in massiveness. Explorers who’ve been drilling feverishly to cash in on an OPEC-driven price rally are now slamming on the brakes to let pipeline owners catch up,” Bloomberg reports.

“As a result, the number of Permian wells that were drilled but left unfinished surged to 3,203 last month, a 90% increase from a year earlier.” This could end up being “a harbinger of oil producers actually shutting down older wells.” 


U.S. Specialty Chemicals Markets Continue to Gain

The American Chemistry Council (ACC) reported that U.S. specialty chemicals market volumes continued to gain during the second quarter, increasing 0.5% in May after an upwardly revised 1% gain in April and a 0.4% gain in March. All changes in the data are reported on a three-month moving average (3MMA) basis. Of the twenty-eight specialty chemical segments ACC monitors, fifteen expanded in May, ten markets experienced decline and three featured no change. During May, large market volume gains (1% and over) occurred in oilfield chemicals and plastics compounding.

The overall specialty chemicals volume index was up 5.1% on a year-over-year (Y/Y) 3MMA basis. The index stood at 112.9% of its average 2012 levels. This is equivalent to 7.78 billion pounds. On a Y/Y basis, there were gains among twenty-three market and functional specialty chemical segments. Compared to last year, volumes were down in four segments.

Global LNG Trade Growing, Led by Australia and the U.S.

Global trade in liquefied natural gas (LNG) reached 38.2 billion cubic feet per day (Bcf/d) in 2017, a 10% (3.5 Bcf/d) increase from 2016 and the largest annual volume increase since 2010, according to the Annual Report on LNG trade by the International Association of Liquefied Natural Gas Importers. In 2017, there were 19 LNG exporting countries and 40 LNG importing countries. Australia and the U.S. were among the countries with the largest increases (2.7 Bcf/d combined) in 2017 LNG exports.

Besides Australia and the U.S., several other countries also increased LNG exports in 2017. Asian countries led the growth in global LNG imports, accounting for 74% (2.6 Bcf/d) of the increase in 2017. Japan remains the largest LNG importer, importing 11.0 Bcf/d in 2017. China had the largest growth in LNG imports globally (1.5 Bcf/d) and became the world’s second-largest LNG importer in 2017, surpassing South Korea. 

U.S. Natural Gas Production Could Grow 60% Over Next 20 Years

A decade since the start of a shale gas revolution that unlocked new supplies and resulted in a “wholesale turnaround” in U.S. production, the overall size of recoverable gas reserves continues to increase and the pace of production growth is only accelerating, a new report by IHS Markit says.

The most dramatic effect has been on the U.S. electric power industry, the report says. Where coal and nuclear had previously dominated the growth in share of U.S. electric power generation, natural gas has become a “backbone of electric generation” and regularly competes with coal for the largest share of total electric generation. By 2040, IHS Markit expects natural gas’ share to grow from almost one-third to nearly half of all electricity generated in the United States. 

Phillips 66 Plans $1.5 Billion Expansion in Texas

Phillips 66 is proceeding with an expansion of the company’s Sweeny Hub. This project includes the construction of two 150,000 barrel-per-day (BPD) natural gas liquids (NGL) fractionators in Old Ocean, TX, additional NGL storage capacity, and associated pipeline infrastructure. The project is expected to cost up to $1.5 billion and begin commercial operations in late 2020.

Upon completion of the expansion, the Sweeny Hub will have 400,000 BPD of NGL fractionation capacity and access to 15 million barrels of total storage capacity. 

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