[ROCKMAN]

Got off the track in another thread with this. But then got a number of PM's from some folks who were honestly shocked. I guess I just assumed most understood the energy situation in Mexico. So here's some info that might be news to more folks then I would have guessed:

Many have a very incorrect picture of Mexico's energy situation because they are a significant source of OIL EXPORTS to the US. Mexico has became a net petroleum importer from the US for the first time in 40 years. They may export half a million bopd but they import everything else including motored fuels. Mexico doesn't export oil because they produce so much...they don't. They export it because they lack refining capacity. During just the first quarter of 2014 Mexico posted a $550 million petroleum deficit with the US according to the Bank of Mexico data. One can only speculate how different the story might be today had their gov't allowed foreign oil/NG operators in decades ago. As they say: Be careful what you wish for...you might get it. The Mexican public got what they've demanded for many decades: sole control of their domestic petroleum reserves. Sole control and sole responsibility. Today they sleep in the bed they made.

Mexico is far from being petroleum independent. Probably news to the vast majority of the American public. BTW Mexico also has a huge trade deficit with China. Which one more reason why the Mexican gov't has been entertaining overtures from China regarding Mexico's fossil fuel resources.

[ROCKMAN]

As is often the case the cure for NIMBYism is the prospect of a payday. Even for the original "stewards of nature":

AP — The new leader of North Dakota's oil-rich Three Affiliated Tribes is pledging to speed negotiations on a proposed pipeline through tribal land that would curb the wasteful burning of natural gas in the state by more than 10 percent. North Dakota's booming oil production has led to an unmanageable increase in the state's output of natural gas, which is a byproduct of oil production. Oneok Inc., the biggest operator of natural gas pipelines and processing plants in North Dakota, wants to build a 20-mile-long pipeline to capture natural gas from oil wells in Dunn County and move it to an existing pipeline network nearby. But the Three Affiliated Tribes has demanded environmental assurances and cash for permission for it to pass through land it recently acquired.

And: Reuters - A Canadian aboriginal community has signed a deal with British Colombia to allow a gas pipeline to be built in its territory, setting the stage for more pacts that could bolster liquefied natural gas (LNG) export projects in the coastal province. The province on Thursday signed a $5.3 million pipeline benefit agreement with the Nisga'a Nation and said it expects to complete similar deals with other aboriginal groups in the near future.

[ROCKMAN]

More "oil" that isn't "oil" heading for export terminals:

Reuters - Plains All American aims to expand its new Cactus Pipeline to move West Texas oil to Corpus Christi, increasing the company's ability to move super-light crude to the Texas Gulf Coast for possible export. The move further positions Plains to export minimally processed condensate if it chooses to do so. Pressure from oil producers to scrap the decades-old domestic crude export ban has grown as super-light condensate emerging from the U.S. shale oil boom overwhelms refineries with limited capacity to handle it. Plains will push the 250,000 barrels per day, 310-mile Cactus line's capacity to 330,000 bpd. The initial 250,000 bpd remains on track to start up in April, with the additional 60,000 bpd to come online in the fourth quarter next year.

[ROCKMAN]

Looks like the oil price drop is taking away some of the developing foreign market for the US shale players:

Reuters - The first Japanese purchase of U.S. oil from shale fields was priced at a discount of around $4 a barrel to comparable grades from the Middle East. The discount was possible because differentials between U.S. crude and Middle East oil were at about $5 when refiner Cosmo Oil Co bought almost 300,000 barrels of condensate in mid-July. A similar discount now would not be possible because the gap between Nymex crude and Qatar deodorised field condensate has narrowed to less than $1 and freight rates have increased. More cargoes of condensate from the United States are unlikely to flow to Asia in the near future unless differentials return to July levels, according to trading sources. That may not bode well for efforts to find an outlet for the ultra-light crude that U.S. refiners have little appetite for as output surges from domestic shale formations that are tapped by horizontal drilling and fracking.

Cosmo Oil said earlier it received its cargo at its Yokkaichi refinery on Oct. 9. The condensate was priced at a few dollars a barrel lower than similar Middle Eastern grades, a source said at the time. The cargo was priced at $106.22 a barrel on a delivered cost-insurance-and-freight (CIF) basis, according to Reuters calculations based on government trade data.

[Keith_McClary]

The Ukrainian Supreme Commercial Court of Appeal has upheld the nationalization of 1,433 kilometers of pipeline through the country which it says was illegally registered in the name of a subsidiary of Russia’s Transneft.

A spokesman for Transneft, Igor Demin, told TASS that the company intends to appeal the decision, and added that it will lead to a decline in the transit of product, and "the pipeline asset will turn into a pile of iron."

The nationalization primarily concerns the Samara of westerly direction pipeline, which is owned by part of Southwest Transnefteprodukt, a subsidiary of Transneft. The company also owns a part of the Grozny-Armavir-Trudovaya pipeline which is currently out of service.

Ukraine and EU countries get Russian diesel fuel through these pipelines.

In October, the President of Transneft Nikolay Tokarev said the company wouldn’t pump oil through Ukraine towards Hungary if the government went through with the nationalization of the pipelines. He said if that were the case Transneft would pump preservative solution into the pipes.

http://rt.com/business/209147-ukraine-n ... -pipeline/

[Tanada]

The Ukrainian Supreme Commercial Court of Appeal has upheld the nationalization of 1,433 kilometers of pipeline through the country which it says was illegally registered in the name of a subsidiary of Russia’s Transneft.

A spokesman for Transneft, Igor Demin, told TASS that the company intends to appeal the decision, and added that it will lead to a decline in the transit of product, and "the pipeline asset will turn into a pile of iron."

The nationalization primarily concerns the Samara of westerly direction pipeline, which is owned by part of Southwest Transnefteprodukt, a subsidiary of Transneft. The company also owns a part of the Grozny-Armavir-Trudovaya pipeline which is currently out of service.

Ukraine and EU countries get Russian diesel fuel through these pipelines.

In October, the President of Transneft Nikolay Tokarev said the company wouldn’t pump oil through Ukraine towards Hungary if the government went through with the nationalization of the pipelines. He said if that were the case Transneft would pump preservative solution into the pipes.

http://rt.com/business/209147-ukraine-n ... -pipeline/

How long until the consumers figure out they are not in the drivers seat? I am guessing a couple cold months will use up reserves, then they will have to rethink their positions.

[ROCKMAN]

"In October, the President of Transneft Nikolay Tokarev said the company wouldn’t pump oil through Ukraine towards Hungary if the government went through with the nationalization of the pipelines." I doubt this is an idle threat even if Tokarev believes it so: given Putin's ego I can't imagine him not making shipping oil through the line to Hungry "illegal". And what asset loss the line may represent I would guess he'll just add it to the NG bill the Ukraine already owes Russia...a bill the EU has been forced to guarantee

[beancounter123]

Don't see how to move this to right post - you guys are good here, just an interesting article

Recognize this is about gas not oil, but interesting and perhaps applicable in that the same "control" over resources is being practiced - in this case it seems pipeline infrastructure and gas, versus refining and oil. The EU was trying to control and Russia said nyet.

From the conspiracy bug front, it was talked about as GASPEC versus OPEC and appears to be proceeding; I would guess this opens up more possibilities for the Syrian and Israeli gas, and makes the Qatar/Saudi routes a little more difficult. Anyway way beyond my pay-grade. FYI Rockman

http://vineyardsaker.blogspot.ca/2014/1 ... south.html

The Importance Of The Cancellation Of South Stream by Alexander Mercouris

The reaction to the cancellation of the Sound Stream project has been a wonder to behold and needs to be explained very carefully.

In order to understand what has happened it is first necessary to go back to the way Russian-European relations were developing in the 1990s.

Briefly, at that period, the assumption was that Russia would become the great supplier of energy and raw materials to Europe. This was the period of Europe's great “rush for gas” as the Europeans looked forward to unlimited and unending Russian supplies. It was the increase in the role of Russian gas in the European energy mix which made it possible for Europe to run down its coal industry and cut its carbon emissions and bully and lecture everyone else to do the same.

http://itar-tass.com/en/economy/764957

MOSCOW, December 3. /TASS/. Russia is ready to continue talks with Austria, Hungary and Serbia on ways out of the situation that developed as a result of the closure of the South Stream project, Russia’s Ambassador to the European Union Vladimir Chizhov said Wednesday.

[sparky]

.
This is the "Energy war" not cold war 2

[ROCKMAN]

sparky - Energy war: a useful term. Remember when folks were claiming that some ME folks were withholding oil production in order to force the west to pay more? In essence they were at war with us and using high oil prices as a weapon. And now we have another "energy war" where low oil prices are being used as a weapon. Does that mean that oil priced some where between $110?bbl and $70/bbl is "peacetime"?

[Subjectivist]

sparky - Energy war: a useful term. Remember when folks were claiming that some ME folks were withholding oil production in order to force the west to pay more? In essence they were at war with us and using high oil prices as a weapon. And now we have another "energy war" where low oil prices are being used as a weapon. Does that mean that oil priced some where between $110?bbl and $70/bbl is "peacetime"?

A lot of people I have met over the years who worked or still work in the oil industry consider the KSA engineered oil crash of 86-87 to be an oil war. After all it destroyed every high cost oil project in America. There was a storm ton of money being invested in shale, coal to oil, biofuel and other projects in 1980-1986. When KSA crashed the price many of them had too much invested to recover from their losses. I have met several people who were oil field workers with a bright future in 1985 and looking for any decent job they could find in the fall of 1986. I even met a couple Iranian exchange students who had to go home from college in 1987 before fnishing their degrees. I remember them because they aggressively proclaimed they were Persians from Persia to avoid the stigma of being Iranians after the hostage crisis soured relations.

[ROCKMAN]

Just a quick update on the US govt's "ban on oil exports". The Oct numbers show we are shipping out oil at the rate 137 MILLION BBLS per year.

Reuters - U.S. crude oil exports reached as high as 376,000 barrels per day (bpd) in October, up 27,000 bpd from the month prior. Most of the exports headed to Canada, which saw a big jump to 351,000 bpd compared with 281,000 bpd in September. Exports to Spain were nearly 17,000 bpd compared with no exports month over month. Exports to Switzerland were nearly 8,000 bpd, a fall from the 16,000 bpd from the previous month. A U.S. law dating back to the oil shortages of the 1970s generally bars exports of domestically produced crude, but shipments to Canada are broadly allowed, are as re-exports of foreign oil. The figures combine domestically produced and re-exported crude oil.

Note: "re-exported crude oil". IOW in theory every one of the 1 BILLION BBLS of Canadian production shipped into the US yearly can be exported under current laws.

[Tanada]

ROCKMAN do you have any updates on the refineries you talk about in this thread? Are they all still on schedule, shouldn't some of them be in full refining mode by now? How is this impacting world trade in refined products?

[ROCKMAN]

T - Will check now.

[ROCKMAN]

T -

From last March: Plans are moving forward to build the biggest new refinery in 40 years in the U.S. at a time when gasoline consumption is expected to break an all-time record in 2016. California-based Meridian Energy Group is expected to begin construction soon on the planned Davis Refinery in North Dakota that would take advantage of the Bakken shale play and process up to 55,000 barrels of oil a day. The project comes on the heels of the 2015 opening of the 20,000-barrel-a-day Dakota Prairie Refinery that represented the nation’s first new refinery since 1976.

From May 2015: Refinery closures could hit 2 million b/d by yearend 2016

Global refinery closures by yearend 2016 could be more than the previously announced 1 million b/d of capacity, Energy Security Analysis Inc. reported. “The total capacity at risk of closure by that time is as high as 2 million b/d,” ESAI Refining Manager Christopher Barber said. Weaker refining margins in Europe and Asia will put more pressure on marginal operations as changing government policies put even more capacity at risk in Asia and Russia, the Wakefield, Mass., energy and power market research and strategic advisory firm said in its latest Global Refining Outlook.

ESAI said refiners in Europe already plan to rationalize 320,000 b/d of capacity by yearend 2016, while petroleum product manufacturers in former Soviet Union countries intend to shut another 280,000 b/d. Refiners in Taiwan, Australia, and Japan plan to cut another 420,000 b/d, the analysis said. Reports also suggest that Saudi Aramco is planning to close its 88,000-b/d Jeddah refinery, now that two new joint venture refineries are operating. Altogether these announced capacity rationalizations total 1.1 million b/d, ESAI said. “On top of announced cuts, policy changes in Japan, China, and Russia put as much as an additional 700,000 b/d of capacity at risk of closure by the end of 2016,” Barber said.

Another round of rationalization is expected in Japan by March 2017 under a new directive from the country’s Ministry of Economy, Trade, and Industry, putting as much as 300,000 b/d at risk of closure before the March 2017 deadline, he said. A new crude import quota policy for independent refiners in China will put as much as 240,000 b/d of additional capacity at risk of closure, Barber said. ESAI also has identified another 160,000 b/d of capacity at risk in Russia, as changing product export duties mean refiners there are less protected from international price dynamics, he noted.

And a bunch more:

Lukoil wraps unit revamp at Perm refinery
Oct 7, 2016 PJSC Lukoil has completed a project designed to expand production of Euro 5-quality diesel at subsidiary OOO Permnefteorgsintez’s 13.1 million-tpy Perm refinery in Russia’s North Urals region, on t...
Pertamina lets contracts for Indonesian refineries

Oct 6, 2016 PT Pertamina (Persero) has entered a series of licensing agreements with Axens SA, Rueil-Malmaison, France, for technologies to be implemented as part of modernization and upgrading projects at the...
Singapore Refining lets contract for Jurong Island complex

Oct 5, 2016 Singapore Refining Co. Private Ltd. (SRC), a joint venture of PetroChina Co. Ltd. subsidiary Singapore Petroleum Co. Ltd. and Chevron Corp., has let a contract to Amec Foster Wheeler PLC (AFW) to p...
Repsol’s Peruvian refinery starts up unit, low-sulfur fuel project

Oct 5, 2016 Praxair Inc., Danbury, Conn., has commissioned a previously announced hydrogen plant built to supply industrial gas to Repsol SA unit Refineria La Pampilla SAA’s 102,000-b/d La Pampilla refinery in...
Chevron’s Salt Lake City refinery plans alkylation unit revamp

Oct 4, 2016 Chevron Corp. is planning to convert the existing 4,500-b/d hydrofluoric acid (HF) alkylation unit at its 53,000-b/d refinery in Salt Lake City, Utah, into the first-ever alkylation unit in the US ...

Chevron’s Salt Lake City refinery plans alkylation unit revamp
Oct 4, 2016 Chevron Corp. is planning to convert the existing 4,500-b/d hydrofluoric acid (HF) alkylation unit at its 53,000-b/d refinery in Salt Lake City, Utah, into the first-ever alkylation unit in the US ...

Canada expands review of proposed BC grassroots refinery project
Oct 3, 2016 The Canadian government has called for the creation of an independent review panel to evaluate the environmental assessment (EA) for Kitimat Clean Ltd.'s Kitimat Clean Refinery Project (KCRP), a pr...
IOC approves projects for Barauni, Panipat refineries

Sep 30, 2016 State-owned Indian Oil Corp. Ltd. (IOC) has reached final investment decision on its previously announced proposal to increase oil processing capacity at the company’s 6 million-tonne/year Barauni ...
Singapore Refining lets contract for Jurong Island refinery

Sep 21, 2016 Singapore Refining Co. Private Ltd. (SRC), a joint venture of PetroChina Co. Ltd. subsidiary Singapore Petroleum Co. Ltd. and Chevron Corp., has let a contract to Jacobs Engineering Group Inc., Pas...
HollyFrontier, HEP ink dropdown deal for Woods Cross refinery units

Sep 20, 2016 Independent refiner HollyFrontier Corp., Dallas, has entered an agreement in principle to sell newly built crude, fluid catalytic cracking and polymerization units at its 45,000-b/sd Woods Cross re...
Petronas lets contracts for Pengerang complex

Sep 20, 2016 State-run Petronas has let contracts for industrial gas and power supplies and equipment for its long-planned Pengerang integrated complex (PIC) and refinery and petrochemical integrated developmen...