The Disclaimer: Energy Tidbits is intended to provide general information only and is written for an institutional or sophisticated investor audience. It is not a recommendation of, or solicitation for the purchase of securities, an offer of securities, or intended as investment research or advice. The information presented, while obtained from sources we believe reliable as of the publishing date, is not guaranteed against errors or omissions and no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. This publication is proprietary and intended for the sole use of direct recipients from Dan Tsubouchi and SAF Group. Energy Tidbits are not to be copied, transmitted, or forwarded without the prior written permission Dan Tsubouchi and SAF Group. Please advise if you have received Energy Tidbits from a source other than Dan Tsubouchi and SAF Group. Energy Tidbits Dan Tsubouchi Principal, Chief Market Strategist [email protected]Aaron Bunting Principal, COO, CFO [email protected]Ryan Dunfield Principal, CEO [email protected]Alan Cooper Vice President [email protected]Ryan Haughn Principal, Energy [email protected]Produced by: Dan Tsubouchi August 25, 2019 Supplemental Documents
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The Disclaimer: Energy Tidbits is intended to provide general information only and is written for an institutional or sophisticated investor audience. It is not a recommendation of, or solicitation for the purchase of securities, an offer of securities, or intended as investment research or advice. The information presented, while obtained from sources we believe reliable as of the publishing date, is not guaranteed against errors or omissions and no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. This publication is proprietary and intended for the sole use of direct recipients from Dan Tsubouchi and SAF Group. Energy Tidbits are not to be copied, transmitted, or forwarded without the prior written permission Dan Tsubouchi and SAF Group. Please advise if you have received Energy Tidbits from a source other than Dan Tsubouchi and SAF Group.
https://www.reuters.com/article/us‐usa‐crude‐pipelines‐exclusive/exclusive‐lotus‐midstream‐mulls‐reversing‐west‐texas‐to‐cushing‐pipeline‐sources‐idUSKCN1VA1ZL BUSINESS NEWS AUGUST 20, 2019 / 12:35 PM / UPDATED AN HOUR AGO
Exclusive: Lotus Midstream mulls reversing West Texas to Cushing pipeline - sources
Collin Eaton 4 M I N R E A D
HOUSTON (Reuters) - Pipeline operator Lotus Midstream LLC may reverse flows on a line now sending crude from West Texas to Cushing, Oklahoma, the main hub for pricing U.S. crude futures, three people familiar with the matter said on Tuesday, an unusual move that could lift U.S. benchmark prices by draining supplies.
FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford/File Photo
Reversing the flow on a portion of Lotus’s Centurion pipeline would send oil on a circuitous route from the country’s main storage hub at Cushing to the its top shale field in West Texas and then via new pipelines into Gulf Coast export hubs, they said.
But with the operators of the new pipelines offering discounted prices to attract shippers and as oil in West Texas fetching higher prices than in Cushing, the reversal would be lucrative for shippers, traders and analysts said.
“Centurion is always evaluating the best ways to serve its shippers,” said Lotus spokeswoman Casey Nikoloric, declining further comment.
Centurion, which consists of two lines rated at 170,000 barrels per day (bpd) combined, had the smaller line flowing to West Texas. But in 2014 former owner Occidental Petroleum shifted its direction to Cushing to take advantage of the then-deep discounts on shale in the Permian Basin.
For a graphic showing storage levels at Cushing, see here
Lotus is considering reversing the flows on either its Centurion North Line, which has 110,000 bpd of capacity, or the South Line, with 60,000 bpd capacity, the people said.
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Permian output has risen to 4.3 million bpd from 1.68 million bpd since that reversal, helping drive U.S. crude exports this year above 3 million bpd, according to U.S. government data. Three new pipelines from the Permian will increase existing capacity by two-thirds, with about 2.5 million bpd in additional space.
Reversing one line would support crude prices at Cushing as storage there is drained, and restrain Midland prices that have risen with the startup of new Plains All American Pipeline LP (PAA.N) and EPIC Midstream Holdings LLC’s lines, traders and shippers said.
“The Midland differential to Cushing would be a lower premium than expected,” one U.S. trader said. “The reversal would help pull down Cushing (inventories) faster,” he added.
Inventories at Cushing fell to 44.8 million barrels in the week ended Aug. 9, after peaking at 53.5 million in mid-June.
On Tuesday, Midland crude for October delivery traded 25 cents a barrel above the Cushing benchmark, traders said. Houston prices for September delivery traded at a $2 per barrel premium.
“It would actually have an enormous psychological impact on market even if the flow isn’t huge,” an oil trader said. “To be able to swing from Cushing back into Midland would be very, very interesting.”
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Crude volumes on the Centurion pipeline fell to 126,000 bpd last month from a 2019 peak of 230,000 bpd in February, according to market intelligence firm Genscape. February volumes were boosted by the use of drag reducing agents, it said.
“We expect flows to taper off as spot shipments favor new capacity to the Gulf, and the Centurion pipeline has been the canary in the coal mine for that,” said Ryan Saxton, Genscape’s director of oil and midstream.
Reporting by Collin Eaton in Houston; Editing by Marguerita Choy Our Standards:The Thomson Reuters Trust Principles.
OMAHA, Neb., Aug. 23, 2019 (GLOBE NEWSWIRE) -- TC Energy Corporation (TSX, NYSE: TRP) (TC Energy or the Company) today announced the Nebraska Supreme Court has affirmed the November 2017 decision by the Nebraska Public Service Commission that approved the Keystone XL Pipeline route through the state.
“The Supreme Court decision is another important step as we advance towards building this vital energy infrastructure project,” said Russ Girling, TC Energy’s President and Chief Executive Officer. “We thank the thousands of government leaders, landowners, labor unions and other community partners for their continued support through this extensive review process. It has been their unwavering support that has advanced this project to where it is today.”
TC Energy and its affiliates deliver the energy millions of people rely on every day to power their lives and fuel industry. We are not only focused on what we do, but how we do it – guided by core values of safety, responsibility, collaboration and integrity, our more than 7,000 people are committed to sustainably developing and operating pipeline, power generation and energy storage facilities across Canada, the United States and Mexico. TC Energy’s common shares trade on the Toronto (TSX) and New York (NYSE) stock exchanges under the symbol TRP. Visit TCEnergy.com and connect with us on social media to learn more.
Trans Mountain Re-Starts Construction on Expansion Project Home › News Aug 21, 2019 Trans Mountain has issued ‘Notice to Proceed’ directives to some of its prime construction contractors triggering mobilization of the initial workforce necessary to build the Trans Mountain Expansion Project. The directives give the contractors 30 days to mobilize equipment and commence the process of hiring workers, procuring goods and services, and developing detailed construction work plans.
Construction work will soon begin in communities along the route, including along the right-of-way in Alberta between Edmonton and Edson, and in the Greater Edmonton area. This includes an immediate return to work at Burnaby Terminal and on land at Westridge Marine Terminal. Specific start dates in the remaining construction areas are subject to final regulatory approvals and permits.
“I am pleased to announce another significant milestone for the Trans Mountain Expansion Project with the commencement of construction activities and the issuance of the notice to some contractors to begin mobilizing equipment and crews in select areas in August and September 2019. With the first wave of regulatory approvals complete, we are confident that we have a path forward by which the Expansion Project construction can commence,” says Ian Anderson, President and CEO of Trans Mountain Corporation.
Over the coming months Trans Mountain expects it will receive clearance of all other outstanding regulatory approvals and permits for the remaining construction areas. The timelines for approval of all outstanding regulatory matters could have an impact on Project costs, schedules and final in-service dates; however, if approvals are received as anticipated, the Trans Mountain Expansion Project will be in-service by mid-2022.
Trans Mountain remains committed to prioritizing and maximizing Indigenous, local and regional hiring to the greatest extent possible. Hiring by prime contractors is underway, with approximately 4,200 workers expected to be employed in various communities along the corridor in the fourth quarter of 2019.
“Over the coming months, we will continue our engagement with Indigenous communities along the construction corridor,” added Anderson. “We are committed to ensuring the Project incorporates all appropriate measures to protect the cultural, environmental and local Indigenous interests in the lands and waters through construction and into operation.”
“Clearly this Project has been subjected to numerous delays and setbacks over the past several years. With today’s announcement on the commencement of construction, I firmly believe that we are finally able to start delivering the significant national and regional benefits we have always committed to,” adds Anderson.
Trans Mountain will continue to provide updates on its construction activities as the Project proceeds.
https://www.alberta.ca/release.cfm?xID=64334E345B437-9D7E-8BAA-1B711C38AC1D4891 Aug 20, 2019
Media inquiries
Protecting the value of Alberta’s energy exports
Enhancements to the curtailment policy will help ensure Alberta gets fair value for its oil while
continuing to fight for increased market access.
Because of continuing pipeline delays, including Enbridge Line 3, these changes provide government a way to work with affected producers to manage production through 2020, as required. The updated policy provides more flexibility for industry – including providing oil producers with more advanced notice of changes to production limits and doubling the base limit for curtailment.
Without curtailment, we expect production to exceed takeaway capacity – the amount that can be shipped for export – by about 150,000 barrels per day. By more closely aligning production with takeaway capacity, curtailment is expected to help prevent extreme widening of the light-heavy differential. Without curtailment, large discounts for Canadian crude would be projected. “Our government is standing up for Alberta by fighting for pipelines, the economy and good jobs. We have listened to industry feedback and these adjustments to the curtailment policy will better position companies to make timely business decisions. We committed to protecting the value of our resources while boosting investor confidence and these enhancements will do just that, while creating good jobs for Albertans in the process.” Sonya Savage, Minister of Energy
Increasing the base limit for curtailment from 10,000 to 20,000 barrels per day will mean that only 16 of more than 300 producers in Alberta will be subject to the updated production limits. This will allow small producers to increase investment and production, without having a significant impact on overall provincial output. These changes will take effect in October 2019.
Quick facts The most significant changes to the curtailment policy include:
Moving the curtailment end date to Dec. 31, 2020, with possible earlier termination.
Increasing the base deduction from 10,000 to 20,000 barrels per day and adjusting the curtailment formula accordingly, resulting in an overall increase of about 25,000 barrels per day to the allowed production limit for October.
Providing 60 days’ notice of any changes.
Adding ministerial discretion to set production limits after a merger or acquisition.
Extending the provision for single-operator oil sands facilities’ minimum operations in winter to Dec. 31, 2020 and include December 2019.
Reducing the number of affected producers from 29 to only 16 of more than 300 producers in the province.
Reducing red tape for small producers.
Related information Oil production limit
https://kcc.ks.gov/news‐8‐21‐19
For more information contact: Linda Berry, (785) 271-3269
August 21, 2019
KCC launches investigation into Hutchinson earthquakes
The Kansas Corporation Commission (KCC) is collecting data and analyzing recent injection well activity in Reno County in an effort to uncover the cause of a series of earthquakes in the Hutchinson area. Amid damage reports and a concern for public safety, the KCC is conducting an investigation and will evaluate whether additional action is needed to safeguard Kansans.
In 2015, the KCC issued an order reducing injection rates in portions of Harper and Sumner counties after the number of earthquakes in that area began to trend upward. In 2016, the Commission issued a second order limiting injection in additional areas of Harper and Sumner as well as parts of Kingman, Sedgwick and Barber counties when earthquake activity there started to rise.
The area currently under study in Reno County focuses primarily on Arbuckle Formation depth wells and involves both Class ll oil and gas industry injection wells regulated by the KCC and Class l wells regulated by the Kansas Department of Health and Environment (KDHE).
Class ll wells are used to inject fluids associated with oil and natural gas production into deep confined rock formations. There are two types of Class ll injection wells: disposal wells and secondary/enhanced recovery injection wells. Disposal wells are used to inject produced fluids into rock formations that do not produce oil or gas. Typically, the injection formations are isolated from usable quality groundwater and are sealed above and below by cementing steel casing into the unbroken and impermeable well bore and rock formations within the well. Secondary/enhanced recovery injection wells are used to inject produced fluids back into formations/reservoirs that contain oil or gas. These formations are also isolated from usable quality groundwater. The injection of produced fluid back into potentially productive formations often allows for the increased recovery of oil or gas reserves.
Class l wells are used to inject hazardous and non-hazardous industrial and municipal wastewater into deep, confined rock formations. Disposal typically occurs thousands of feet below the lower most underground source of drinking water (USDW). Industries that utilize Class I wells include: refining, metal production, chemical manufacturing, pharmaceutical industry, commercial disposal, food production and municipal wastewater treatment.[1] Nearly all Class I disposal wells in Kansas inject into the Arbuckle Formation.[2]
To fully evaluate all injection activity in Reno County, the KCC staff is working with other state agencies to collect information regarding well construction, depths, injection volumes, pressures, maintenance practices and any new injection well activity in the area. This investigation and evaluation process is ongoing and dependent upon the complexity of the evolving fact finding process. Accordingly, a precise timeline for completing the investigation has not yet been determined.
Netanyahu: We are working against Iran in Iraq PM confirms Israel actively working to prevent Iranian military consolidation in Iraq.
Gary Willig, 22/08/19 22:28
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Binyamin Netanyahu
Reuters
Prime Minister Binyamin Netanyahu stated Thursday that Israel is working to prevent Iranian military consolidation in Iraq in the first such admission of Israeli activity in Iraq.
"We are working against Iranian consolidation - in Iraq as well," Netanyahu said in an interview with Channel 9 News.
On Wednesday, he Arabic-language Asharq Al-Awsatnewspaper reported that the bombing of Iranian weapons warehouses in Iraq in recent weeks, which has been attributed to Israel, was carried out with permission from the United States and Russia.
A Western diplomatic source quoted in the article told the newspaper that the understanding stresses that Israel should not officially declare its raids in order to control regional tension.
The understanding stipulates that “Israel’s security is a priority as well as pursuing Iran in Iraq and Syria,” the London-based newspaper reported.
The most recent attack came on Tuesday night, when a weapons depot belonging to the state-sanctioned paramilitary Popular Mobilization Forces at al-Balad military base in Saladin province was targeted, allegedly by Israeli drones.
Last week, an explosion at an ammunition warehouse in southern Baghdad run by the Popular Mobilization Forces injured 13 people.
Last month, an unmanned drone dropped explosives on a base belonging to the Popular Mobilization Forces in northern Iraq.
Israel had not commented on the reports before Thursday. On Monday, Netanyahu stated that Israel would respond to Iranian aggression anywhere without specifically admitting to Israeli activity in Iraq.
The Israeli government has confirmed that it has carried out numerous airstrikes in Syria aimed at preventing an Iranian military consolidation in the war-torn nation.
Excerpts From Bloomberg @TheTerminal BN 08/25 12:11 Macron Says No Coordinated Boost for Global Economy: G‐7 Update ________________________________________ Trump Forces Macron to Backtrack Over Iran Message: G‐7 Update 2019‐08‐25 11:33:34.821 GMT Trump Pulls Macron Back Over Iran (12:34 p.m.) Macron touting an agreement to send a joint message from the G‐7 to Iran as one of his victories from last night’s dinner. “We’ve enacted a common communication, which in my view has a lot of value,” he said this morning in a French television interview. But Trump cast doubt on how much authority Macron will have. “We’ll do our own outreach,” he said. “But I can’t stop people from talking.” Here is Macron’s response, which basically confirms that indeed has no mandate to speak on Iran of behalf of all: "Firstly, no member of the G‐7 wants Iran ever to be able to have nuclear weapons. Secondly, all the members of the G‐7 are profoundly attached to stability and peace in the region, and so don’t want to do anything that will harm this.” “The G‐7 is an informal club. No mandate is given in the context of the G‐7.” Macron Is Talking Up Progress on Iran (11:50 a.m.) The French president is trying to show that he’s achieved something on the geopolitical issues he’s raised. He told TF1 television Sunday that leaders agreed they need to stop Iran developing nuclear weapons and destabilizing the region – which was the state of play before talks began. The G‐7 also agreed on a common way of communicating over Iran and a decision on action that enables them to “reconcile their positions a bit,” he said. What is Macron’s Plan for Iran? (11 a.m.) After their 3‐hour informal Saturday dinner where they discussed matters including Iran, leaders of the G7 gave Macron ‐‐ as chair of the Group ‐‐ the authority to hold talks and pass on a message from them to the Persian state, according to a French official. Trump Unlikely to Support Macron’s Plan to Revive Iran Deal The official added that the message, based on the content of leaders talks Saturday, hadn’t yet been passed on. The official didn’t respond to request for details on the content of the message and of last night’s talks content.
China's July Venezuela oil imports fall over U.S. sanctions
3 M I N R E A D
BEIJING (Reuters) - China’s crude oil imports from Venezuela plunged 62% in July from the previous month, Chinese customs data showed on Sunday, as growing tension between Washington and the Maduro government made buyers wary of taking oil from the South American exporter.
FILE PHOTO: A crude oil tanker is seen at Qingdao Port, Shandong province, China, April 21, 2019. REUTERS/Jason Lee
Arrivals of crude oil from Venezuela were 703,742 tonnes last month, or 165,720 barrels per day (bpd), data from the General Administration of Customs showed. That is down from 275,646 bpd in June.
With U.S. sanctions on Venezuela having already driven away many of its oil buyers, the Trump administration in early August kept up the pressure by threatening sanctions on any company that works with Maduro’s government.
Venezuela’s oil exports fell 17.5% in July to their second-lowest since Washington imposed the sanctions in January, according to internal data from the company and Refinitiv Eikon.
China National Petroleum Corp, a leading buyer of Venezuelan oil, has halted loadings in August amid concerns over potential hits by the secondary sanctions.
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Refinitiv Oil Research showed only three cargos carrying a total 540,000 tonnes of crude have left from Venezuela for China so far this month, half of the figure in July.
For the first seven months of the year, China’s imports of Venezuela crude oil fell 13.4% on a year earlier to 9.37 million tonnes, or 322,601 bpd.
Crude shipments from Iran rose in July to 926,119 tonnes, or 218,086 bpd, despite U.S. sanctions on the country. Last week, Reuters exclusively reported that a China-owned oil tanker, cited by the U.S. government as carrying Iranian oil, changed name in an apparent effort to evade U.S. sanctions.
Saudi Arabia remained China’s top oil supplier last month. It sold 6.99 million tonnes, or 1.65 million bpd, to China, customs data showed. That compares with 1.88 million bpd taken from Saudi Arabia in June.
Arrivals from Russia were at 5.67 million tonnes, or 1.34 million bpd, up 6.5% from a year earlier but down 23% from June.
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Imports of U.S crude doubled in July from a month earlier at 1.5 million tonnes. But shipments for the January-July period fell 63.4% from year-ago levels to 3.65 million tonnes or 125,745 bpd, as the lingering Sino-U.S. trade dispute hampered oil business between the two countries.
China on Friday said it would impose tariffs on U.S. crude oil imports for the first time, by 5% from Sept. 1, as its latest retaliatory measures after U.S. President Donald Trump threatened to slap a 10% tariff on $300 billion worth of Chinese imports.
Trump soon lashed back at a new round of Chinese tariffs by heaping an additional 5% duty on some $550 billion in targeted Chinese goods.
Reporting by Muyu Xu and Aizhu Chen OurStandards:TheThomsonReutersTrustPrinciples.
China's end‐July implied crude stocks rise 33 mil barrels on month
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Oil
Singapore — China's implied crude oil stocks at the end of July were 33.29 million barrels higher compared with the end of June, according to S&P Global Platts calculations based on official data.
In contrast, the country's implied crude oil stocks' increment in July 2018 was 8.68 million barrels. The July implied stock build was higher than the previous expectation, as reported throughput in July retreated month on month despite less refinery outage and improving refining margin activities.
Satellite data from Ursa, which can observe changes in surface‐based storage facilities, showed that China's crude stocks stood at 669.6 million barrels at end of July. This was 2.18 million barrels lower than that in end‐June, but 34.78 million barrels higher than the level a year ago.
China does not release official stocks data. Platts calculates the country's net build or draw in implied crude stocks by subtracting official refinery throughput data from the country's crude supply data. The latter takes into account net crude imports and domestic production.
The implied crude stocks that Platts calculates do not take into account China's crude oil consumption for any usage other than refining, due to a lack of official data.
China's overall crude supply in July gained 10.4% year on year to 405.34 million barrels, or 13.51 million b/d. But the volume edged down 0.4% from June, led by a 2.1% decline in domestic crude output.
Meanwhile, crude throughput declined by 2% month on month despite rising 4% from a year ago, data from the National Bureau of Statistics showed.
SLOWER PACE IN AUG
Looking ahead, it is likely that stocks will build at a slower pace, or even decline in August, analysts said.
"In August, China's crude oil throughput in August was likely to go up from July amid less outage and improving refining margin to prepare for the peak season in September and October, while crude oil imports will be almost flat to last month," a Beijing‐based analyst said.
Platts Analytics forecast the country's throughput during this month to reach about 12.73 million b/d, up 2.3% from July, despite a few independent refineries in Shandong getting hit by typhoon Lekima over the last weekend, while a few of them in Zibo region remained impacted by flood.
"Throughput at several independent refineries in Shandong were impacted by flooding though we expect other players to provide offset quickly," Platts Analytics said in an August 13 report.
"The small‐scale independent refiners suffered from negative margins in June which prevented them from...buying for August delivery," a crude oil trader said.
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Weekly traffic data for the detailed commodity groups are available in the AAR's Weekly Railroad Traffic report.Monthly traffic data for the detailed commodity groups are available in our Rail Time Indicators report, whichcosts $60 for 12 monthly issues. RTI can also be purchased with a spreadsheet containing monthly traffic databy country and commodity for $120. Weekly Railroad Traffic and Rail Time Indicators may be ordered at www.aar.org/Pages/AllProducts.aspx.
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- Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.
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