10 Things You Should Know About Oil and Gas Today
The Big Story
Moda Midstream, a liquids terminal operator headquartered in Houston, met a very timely milestone on Tuesday. The company announced the completion of its new, 10 million barrel-capacity crude oil storage factility located across Corpus Christi Bay from the Port of Corpus Christi in Taft, Texas.
Excerpt from the Fox40 report linked above:
“At a time when there is a pressing need for additional crude oil storage, the early delivery of the tanks is another example of Moda’s ability to consistently provide solutions to our customers,” said Moda President and CEO Bo McCall. “Bringing 10 million barrels of storage online in just over a year and a half is a major accomplishment.”
Construction has begun at MIEC on a new expansion phase of an additional 3.5 million barrels of crude oil storage. Moda expects to begin placing storage tanks from this expansion into service later this year. MIEC will have total storage capacity in excess of 15.5 million barrels upon completion of construction.
Moda also has obtained permits to construct additional crude oil storage capacity at both MIEC and the Moda Taft Terminal and is discussing further expansions with customers.
Given all the news lately about the U.S. running low on crude oil storage capacity, the completion of this facility and its announced expansion plans could not come at a better time.
Now, on to other stories in the news today…
After last week’s historic plunge in oil markets, the question hanging over the oil sector is when prices are going negative again.
And with world storage continuing to fill up, it’s not too far off, Rystad Energy’s Head of Oil Markets Bjornar Tonhaugen said Tuesday.
“The gap between supply and demand is still humongous,” he said. “Now, can we head to negative pricing soon, like last week? Absolutely, negative prices was a normal development and consistent with what we have been warning all along. When nobody wants the produced oil, when there is nowhere to store it, then it is like a hot ‘oily’ potato, that nobody wants to keep in his hands.”
But wait, it turns out that storage hasn’t been filling as rapidly as all the “experts” had feared, according to the most current data. The price for West Texas Intermediate jumped up by 25% in Wednesday morning trading as the result of this new data.
Texas releases plan to cut oil production – Excerpt:
Texas regulators released the details of a plan yesterday to cut oil production as other states looked for ways to reduce the impact of the coronavirus pandemic on the energy industry. The Texas Railroad Commission, which regulates the state’s oil and gas production, is scheduled to consider the production cuts Tuesday. The state is proposing to cut its oil production by 20%, according to an online agenda, but only after other state or national governments commit to making “complementary” reductions in addition to the oil cuts that have already been announced by the Organization of the Petroleum Exporting Countries.
Comment: Interestingly, I wrote about this exact coordinated effort between state regulators here at Shale Magazine a month ago. Good to know I was on the right track.
North Dakota to consider if oil output is waste as low prices hurt producers – An interesting piece on an upcoming hearing of the North Dakota Industrial Commission, which will consider whether to place limits on oil production in that state.
Point of View: Proposed oil proration hurts energy industry – With the Oklahoma Corporation Commission about to consider a similar proposal, this former Commissioner, Patrice Douglas, weighs in in oppostion.
Several multi-billion dollar industrial projects in the Coastal Bend will help keep the economy moving and won’t be strongly impacted by the hurting energy industry, Leske said.
Some of projects include, Cheniere Energy’s liquefied natural gas export terminal, ExxonMobil’s $10 billion Gulf Coast Growth Ventures plastics manufacturing plant project in Gregory and Steel Dynamics’s $1.9 billion flat roll steel mill near Sinton.
These projects have a long-term forecast that factors in drops in the oil industry.
“Corpus is about to go through an economic boom,” Leske said. “The hotel, dining (industry) is going to be affected in the short-term, but it will come back.
The Outlook for US Oil and Gas Production – Some good perspective here.
That’s all for today.