Friday, November 14, 2014
Bakken standards imminent/ Push for Keystone XL
...The proposed order “sets operating standards for conditioning equipment to properly separate production fluids into gas and liquid. The order includes parameters for temperatures and pressures under which the equipment must operate to ensure that light hydrocarbons are removed before oil is shipped to market,” the NDIC said in a statement....
...The crux of the new standards is linked to Reid Vapor Pressure. Under new regulations, Bakken crude cannot be characterized with a RVP of more than 13.7 pounds per square inch. National standards are ususally near 14.7 psi and according to Helms, multiple studies have shown that roughly 80 percent of Bakken crude contains an RVP of roughly 11.8.
Although new standards will cost some portions of the Bakken industry money, the new standards don’t appear to be substantial, he said. “We really believe the vast majority of Bakken crude oil will fall well below the standard and that is because many operators are already implementing a thorough in-field operation,” Helms said..... read more here
Bakken shale play in North Dakota have improved, the price differential between Western Canadian Select (WCS), a heavy, sour crude, and Mexican Maya, a Mexican crude that is very similar to WCS, has tightened from around $34 a barrel last November to about $6.50 earlier this week. The differential between WCS and West Texas Intermediate (WTI), the U.S. benchmark light, , rose to $42 a barrel last November and fell to about $12.50 a barrel last month.
Even with the WCS discounts, Canadian producers that may be paying around $17 a barrel to transport their oil to the Gulf Coast still made money when transportation costs were added to the big discounts to Maya crude. Now that the discounts to Maya have shrunk, rail transport costs make it nearly uneconomical for producers to ship crude by rail from Canada to the Gulf Coast....
read more here