Last updateThu, 05 Dec 2019 8pm

U.S. Shale to Set Another Output Record

According to the U.S. Energy Information Administration’s monthly drilling productivity report, “U.S. oil output from seven major shale formations is expected to rise by 74,000 barrels per day (bpd) in October to a record high 8.843 million bpd,” Reuters reports.

“The largest change is expected in the Permian Basin of Texas and New Mexico, where output is seen climbing around 71,000 bpd to a record high 4.485 million bpd in October. That would be the ninth consecutive month of increases in the basin, its longest streak since December 2018.”

American Gas Supply Now 20% Larger

The Potential Gas Committee (PGC) released the results of its latest biennial assessment of the nation’s natural gas resources, which indicates that the U.S. possesses a total mean technically recoverable resource base of 3,374 trillion cubic feet (Tcf) as of year-end 2018. This is the highest resource evaluation in the committee’s 54-year history, exceeding the previous high assessment (from year-end 2016) by 557 Tcf (increase of about 20%). This is also the largest two-year increase in absolute resources between evaluations in the PGC history. The increase resulted from reassessments of shale gas resources in the Atlantic and Mid-Continent areas and conventional and tight gas in the Mid-Continent and Rocky Mountain areas.

API Issues Three New Standards for Offshore Oil, Gas Production

The American Petroleum Institute (API) has published three new Integrity Management (IM) standards to ensure the continued reliable and efficient operation of offshore floating production platforms, including facilities designed to produce natural gas and oil, and export liquefied natural gas (LNG). The new IM standards are outlined in a series of three recommended practices that address key structures at offshore natural gas and oil facilities.

API will be holding a workshop on November 5, 2019 at the University of New Orleans in Louisiana to address how IM standards are intended to apply to regulatory issues. A second workshop will follow on November 7 at the Lone Star College in Houston to address how they are intended to apply to engineering practices.

Chemical Activity Barometer Down in August

The Chemical Activity Barometer from the American Chemistry Council fell 0.1% in August on a three-month moving average (3MMA) basis following a similar drop in July and four months of gains. On a year-over-year basis, the barometer was flat at 0.0% (3MMA).

Production-related indicators in August were slightly positive. Trends in construction-related resins, pigments and related performance chemistry were slightly positive and suggest slow gains in housing activity. Plastic resins used in packaging and for consumer and institutional applications were also slightly positive. Performance chemistry was soft and U.S. exports were mixed. Equity prices dropped this month, as did product and input prices. Inventory and other indicators were positive.

Plans for First-of-its-Kind Diesel Plant Under Way in Port Arthur

Darling Ingredients and Valero are addressing the growing demand for renewable diesel in global, low carbon markets by initiating an advanced engineering and development cost review for a new plant in Port Arthur, TX. The proposed facility under review would be designed to produce 400 million gallons of renewable diesel annually as well as 40 million gallons of renewable naphtha. The new plant would be owned and operated by Diamond Green Diesel Holdings LLC (DGD), the 50/50 joint venture between Darling Ingredients and Valero.

The proposed Port Arthur plant, the first renewable diesel facility in Texas, would be in a location to leverage Valero's existing refinery and optimize logistics management. The production from this new plant would increase DGD's annual renewable diesel production to approximately 1.1 billion gallons with nearly 100 million gallons of renewable naphtha production. The final investment decision on the project is expected in 2021, subject to further engineering, obtaining necessary permits, and approval by the boards of Darling and Valero. If the decision is made to move forward, new plant construction could begin in 2021, with expected operations commencing in 2024.


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