Magellan Midstream Partners and LBC Tank Terminals have formed joint venture Seabrook Logistics to build over 700,000 barrels of crude storage in the Houston area along the Gulf of Mexico, the companies said Monday. The partnership also calls for constructing a pipeline connecting the facility to a refinery that, according to sources, could be any one of three refineries in Texas City. Magellan is expected to be in charge of the pipeline, while LBC will manage the terminal assets, including the storage tanks.
The New York Department of Environmental Conservation on Monday officially banned high-volume hydraulic fracturing for natural gas in the state after seven years of health and environmental reviews. Karen Moreau, executive director of the American Petroleum Institute's New York State Petroleum Council, said fracking is "a proven, 60-plus-year-old process that has been done safely in over 1 million American wells," and gas production is a contributor to carbon emissions reduction in the U.S. She added that industry lawyers will weigh a possible legal challenge after looking into the decision.
Cheniere Energy is advancing its $550 million condensate export terminal in Texas as planned, Nelson Lee, the company's director of crude trading and origination, said Monday at a conference. "The reason why we're going ahead with that project is we think that we will have unfettered crude oil exports in U.S at some point, and there aren't the sort of logistics for the crude to exit the United States," he said. The terminal is expected to begin operations in 2017 with 2 million barrels of storage and dock infrastructure suited for Aframax vessels.
The Pennsylvania oil and natural gas industry is calling into question Gov. Tom Wolf's spoken support for shale natural gas development in the state. "This administration's words continue to be alarmingly detached from its actions as it relates to policy and regulatory matters," said David Spigelmyer, president of the Marcellus Shale Coalition. For instance, Wolf's proposed 5% severance tax on drilling would "amount to a de facto moratorium on the development of natural gas in the Commonwealth," said state House Speaker Mike Turzai, a Republican.
The Supreme Court has rejected an appeal by BP and Anadarko Petroleum over fines for the 2010 Gulf of Mexico oil spill. The rejection upholds U.S. District Judge Carl Barbier's ruling that the companies were automatically liable for the accident, as they owned the Deepwater Horizon oil rig from which the spill originated. BP could face up to $13.7 billion in fines, while Anadarko could face over $1 billion once Barbier renders a decision on the litigation.
Major oil companies around the world can boost their shareholder returns by 50% in spite of low oil prices by revising their business models, according to a report released Monday by Morgan Stanley and the Boston Consulting Group. These companies need "a truly cost-conscious culture" and a shift from a generalist mentality to a niche-driven mentality, the report said.
The U.S. last month exported between 120,000 and 140,000 barrels of condensate per day, up from approximately 60,000 barrels per day at the beginning of 2015, according to traders and data from ClipperData. "One of the main surprises is that the majority of the exports have been to Europe rather than anywhere else, when we thought the concentration would be to Asian markets," ClipperData Chief Operating Officer Abudi Zein said.
Royal Dutch Shell's oil exploratory program in Alaska's Chukchi Sea could start as early as July 15 upon melting of sea ice over the company's prospects, company spokesman Curtis Smith said Monday. "Our in-house experts are forecasting the third week in July will present the first opportunity to begin drilling operations over our Burger prospects," he said. The company, which still awaits four federal permits, could also start sending its drilling vessels to the site on Wednesday at the earliest.
NGL Energy Partners is partnering with Meritage Midstream Services II to develop crude oil gathering and water infrastructure for oil and natural gas operators in Wyoming's Powder River Basin. The joint venture "will combine NGL's expertise in wastewater disposal and treatment, solid waste disposal and crude oil logistics with the significant land position, pipeline infrastructure, and the outstanding customer base that Meritage already has in place," NGL CEO Mike Krimbill said. The partnership will also assess possibilities for pipeline connections.
Oil and natural gas drilling in the Rogersville Shale could generate economic benefits for West Virginia, industry observers say. The play has the potential to become one of the biggest formations in the Appalachian Basin, said Dick Wilson, National Association of Royalty Owners-Appalachia Chapter board member and owner of Wilson O&G. Drilling in such a play "could bring substantial newfound personal income and jobs to this region similar to what has happened in other oil and gas areas of the Northeast," he said.