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Originally Posted by Mr.Coffee
Ok I am certain I am not understanding this correctly... can you please be more specific? Because as far as I know gas liquid yields are what's driving today's deep basin economics. If you're talking about something else, I apologize but I am reading "gas hydrates" as all your "anes" (propane / butane / pentane etc etc etc) and not only are they the key to economics today they're in very high demand, only to go higher in demand if oil prices remain strong. Am I totally out to lunch on what you're referring to as gas hydrates??
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Gas hydrates are a type of gas "ice". Solid methane usually in the pores of soil, entraned by ice crystals that are at very low temperatures or high pressures (i.e. permafrost or deep sea).
http://woodshole.er.usgs.gov/project...ates/what.html
What you're referring to are the natural gas liquids, or NGLs, when you talk about the C5+ fractions of gas. These are also commonly referred to as "condensates" as they are the liquid fraction that will drop out of gas streams at standard conditions (i.e. they have higher boiling points at lower pressures).
Quote:
Originally Posted by Mr.Coffee
Here's what's happening in oil and gas, shale gas unlocked enough gas for the rest of our lives plus our kids and their kids. Nobody in AB drills for gas, they drill for oil or for liquid yields. Liquids are then sold as a diluent to oilsands oil (mixed with crappy bitumen oil to create a higher quality synthetic oil and then subsequently marked up and sold). There isn't enough infrastructure right now for NG liquids, this is a huge problem. Depending on oil prices holding, (although I suspect it's going to continue to fall in the next couple months), NGL prices will remain strong.
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I think you would enjoy reading about the history of the oil & gas industry in Alberta. It was built on the backbone of nautral gas development, and our economy has really been suffering in the last 7 years because of depressed gas prices. The truth is that LOTS of companies depend on gas - drilling, production, services, storage, marketing, pipelining, petrochemicals, distribution and sale, etc... is HUGE in Alberta.
The condensate diluents you're referring to do not create a higher quality synthetic crude oil. They simply reduce the viscosity and density of the overall product so that it can be pumped in the sales line easier. The diluted bitumen (Dilbit) has the condensates seperated out, and then the heavy bitumen is subjected to the normal upgrading process. The producer receives a gate price for Dilbit at the market and it is based on a combination of a discounted price for the condensate (i.e. the producer loses some $ on each bbl of diluent it uses), and the value of the bitumen, which is usually based on the heavy oil differential being applied to the WTI benchmark - this is to protect the profit margin of the upgraders who sell their synthetic crude to refineries in the US. It's not as simple as selling a "marked up" barrel of bitumen. The same kind of process applies to producers who blend their bitumen with synthetic crude oil. Nexen long lake upgrades their own product on site, so I guess they step around this.
I agree with you on a lack of NGL infrastructure. There are major lines being contemplated out of Edmonton to the Athabasca development area. The supply/demand gap for NGLs is also growing, so I agree the NGL price demand should stay very strong.
Quote:
Originally Posted by Mr.Coffee
Quite frankly, the conversion to NG is a very good idea for AB. Not only will it keep people employed, but it will be cleaner and AB needs the leverage as environmentalists the world around continue to piss on our province because of the oilsands and it's ridiculous terrible image.
If AB refuses to properly market the oilsands environmentally (because it can't), then you might as well offset your emissions with NG alternatives and use this insanely abundant, extremely cheap energy source.
AB has a really amazing opportunity, it should move to NG.
PS- AB also has a crap ton of gas.
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Totally agree. And there are other interesting options to provide process heat without burning natural gas at all, so there is another positive environmental step change possible. PM me if you are interested in more, I don't want to derail the discussion on NG.