Plains All American is Buying US Dev Group’s Eagle Ford Crude Terminal

Plains Adds 40,000 b/d of Rail Capacity at the Gardendale Railroad
Gardendale Rail Map

Gardendale Rail Location | Click to Enlarge

P lains All American Pipeline (PAA) has reached a $500 million deal to buy four rail facilities from U.S. Development Group. One of those facilities is part of the Gardendale Rail System near Cotulla, TX.

The four facilities are rail terminals:

The three crude terminals have daily loading capacity of 85,000 b/d and the rail terminal at St. James has unloading capacity of 140,000 b/d. An unloading facility is also planned for Bakersfield California. [Read more…]

Eagle Ford Oil Prices Trade at a Premium to WTI – Condensate Weaker

Eagle Ford crude oil prices have been $10/bbl better than WTI at times this year

Eagle Ford oil prices realize a nice premium to WTI and higher API condensates trade at a discount. One of the great advantages the Eagle Ford has over other shale plays is location, location, location. A short commute to the nation’s petrochemical backbone means operators realize better oil prices than most areas of the U.S.

Eagle Ford Shale Oil Price Premium

Eagle Ford oil prices trade at a premium to WTI or a discount to LLS depending on who you talk to. Over the past two months, posted Eagle Ford prices have traded at a ~$6-8 premium to WTI and a ~$6 discount to LLS posted prices. That’s after spending part of April and May at >$10 premium to WTI and almost parity with LLS.

Eagle Ford Condensate Prices Trade at a Discount to Crude Oil

Oil Drum ImageIn 2011, over 36% of reported liquids production from the Eagle Ford was considered condensate and as much as 50% of production today is estimated to be condensate. That’s a significant portion of production, so it’s important to understand its pricing. [Read more…]

Eagle Ford Crude is Pushing Out African Imports

Eagle Ford crude production is pushing out African imports. The Gulf Coast region alone is importing 400,000 barrels per day less than it did at this time in 2010.

Domestic oil production is on the rise and foreign crude will continue to be displaced by locally sourced Bakken, Eagle Ford, and Permian crudes. Don’t expect that trend to slow as the Bakken and Eagle Ford are on pace to produce 1 mmboe/d each in less than five years.

Don’t underestimate the advantages of domestic crude. There are a lot more jobs on the upstream side of the business. It takes multiples more to drill and produce than it does to refine oil. The oil patch is a bright spot in what has been a rather dim jobs market over the past couple of years. As long as oil prices support development, this trend isn’t going to change any time soon.

[Read more…]

Crude Oil – Condensate – NGLs Are Top Eagle Ford Well Targets

The following Eagle Ford well map (source EIA) gives a good visual representation of the density of drilling across the region. Wells have largely targeted the condensate, oil, and wet-gas portions of the play. The greatest density of wells is visible in the Karnes – DeWitt area and down into northern Webb County.

2006-2010 Eagle Ford Well Images

[Read more…]

Eagle Ford Barges Taking Crude to Houston – New Orleans – Port Arthur

Barges are being utilized to move Eagle Ford crude oil to refining markets in Houston, New Orleans, and Port Arthur. Kirby Corp, a company that operates inland barges, said yesterday that as many as 140 barges across the U.S. are being used for crude oil. (That’s in all areas and not just the Eagle Ford). The 140 represents a ten-fold increase from a decade ago.

Moving oil on barges had become an almost non-existant business until plays like the Eagle Ford began producing oil in areas without spare pipeline capacity. Without pipelines, you begin looking for the next best thing. Utilization rates for trucks, tanks, and barges are at modern day highs. [Read more…]