Almost 6 Million Barrels of Crude Moved Through the Port of Corpus Christi in August

October 8, 2012 R.T. Dukes

Almost six million barrels moved through the Port of Corpus Christi in August. That's almost twice the amount of crude that moved through the port in all of 2011.

Through August, more than 15.8 million barrels have been sent out of the port bound for domestic markets in 2012. Even without complete figures for the year, the port's outbound crude oil movements so far this year are about 100 times the amount from five years ago.

Inland barges can carry 30,000 barrels and oceangoing barges carry up to 300,000. Future expansions of the port will allow it to handle larger oceangoing barges.

Eagle Ford Railroad Traffic on the Rise in South Texas

October 2, 2012 R.T. Dukes

Eagle Ford railroad traffic is on the rise. Operators are moving crude past pipeline bottlenecks, and moving frack sand and other products in to continue development.

The Hondo Railway, 30 miles west of San Antonio, serviced about 1,500 railcars per year on 13,000 ft of track a few years ago. The Railway terminal now serves 15,000 railcars per year and has expanded to 80,000 ft of track.

This year, an estimated 15,000 railcars will move through Hondo Railway LLC's 175-acre property — many of them carrying fracking sand bound for drilling operations in the Eagle Ford Shale formation.

The Hondo Railway isn't alone either:

What started at 1,600 feet of track has grown to 130,000 feet of track. Gardendale Railroad moves a mix of oil field commodities.
“The root of everything is sand,” Cundiff said. “We hadn't had any activity there in 15 years. We've gone from that beginning to 25 miles (of track) in just under 24 months.”
And at Port San Antonio, the East Kelly Railport is adding 15,000 feet of track to the existing 20,000 feet of track.
Spokesman Paco Felici said the rail port went from moving 2,594 railcars in the 2010 fiscal year to 4,556 railcars in the 2011 fiscal year.

The Port of Corpus Christi's rail expansion shouldn't be forgotten either. The port is adding the capacity to handle 100,000 railcars per year.

Port of Corpus Christi Expansion Driven by Eagle Ford Exports

September 27, 2012 R.T. Dukes

The Port of Corpus Christi is seeing growth not many expected due to the Eagle Ford Shale. Many oilfield products can be supplied by water and waterborne routes can provide needed flexibility for exports. The Gulf Coast has the largest refining and chemical complex in the world along the water's edge. If a pipeline out of the play can't quite get the product where it needs to be, there's a good chance a barge or tanker can. The M/V Pennsylvania, an oil tanker operated by Crowley Maritime Corporation, entered the Port September 26, 2012, for the first time. The ship has capacity to move 330,000 bbls of petroleum products and sails under the U.S. flag. The flag is significant because the Jones Act only allows domestic ships to move products between U.S. ports.

TX RRC Data - Eagle Ford Production Surging Ahead

September 24, 2012 R.T. Dukes

Texas Railroad Commission data from July shows the Eagle Ford produced approximately 310,000 b/d of crude oil. Unless the industry has gotten more timely at reporting figures, that number is likely conservative. If recent trends prove true, July's figures could be revised upwards by as much as 10%, which puts crude oil production near 350,000 b/d today. Railroad Commission data also shows the play produced over 50,000 b/d of condensate and 1.21 Bcf/d of natural gas. As pipeline and gathering systems expand, natural gas production will show itself to have considerable upside from where it stands now. Many wells are brought to production before natural gas pipelines are tied in, but that number is decreasing as midstream companies catch up to the operators.

Texas Oil Production Poised to Set New Highs

Texas oil production has risen to levels not seen since the early 90s and late 80s. The state has the potential to break 2 mmbbls/d of production by year-end. It has been more than 20 years since the state produced this much crude. Both the West Texas Permian Basin and the Eagle Ford are driving production growth and don't expect it to stop any time soon. I've seen predictions for Eagle Ford crude and condensate production to grow by as much as 400,000-500,000 b/d by year-end 2013

Chesapeake's Eagle Ford Midstream & Gathering Being Sold to Bridge Funding Gap

September 14, 2012 R.T. Dukes

Chesapeake Energy plans to sell Eagle Ford midstream & gathering assets as part of a larger deal with Global Infrastructure Partners for $2.7 billion. The bulk of the assets included in the deal are located in the Eagle Ford, Haynesville Shale, Utica Shale, and Niobrara Shale in the Powder River Basin of Wyoming. The company is also selling oil gathering assets in combination with other Mid-Continent assets for proceeds of $300 million. The $3 billion midstream deal was one of several divestitures announced earlier in the week that also included the sale of Permian properties for $3.3 billion. The company has planned $13-14 billion in asset sales in 2012 and announced $6.9 billion in sales so far in September 2012.

The assets sold in the third quarter included most of the company's Permian properties, almost all of the company's midstream assets, and non-core acreage in the Utica Shale. Permian properties were sold in three separate transactions with Shell, Chevron, and EnerVest. Midstream assets are being sold to Global Infrastructure Partners and oil gathering assets are being sold to an undisclosed buyer.