American Oil and Gas Reporter - April 2019 - 38

America: Energy Epicenter
XTO Energy subsidiary. "With this production growth, we are
well positioned to maximize value as increased supply moves
from the Permian to Gulf Coast refineries and chemical facilities
where higher-demand, higher-value products will be manufactured," she remarks.
ExxonMobil is investing $2 billion in expanding its crude
oil terminal at Wink, Tx., and upgrading regional infrastructure
to move its own and third-party oil and condensate production
from the Delaware and Midland basins south to Gulf Coast refineries and marine export terminals, Ortwein adds.
In South Texas, Raven Petroleum is seeking to develop a new
refinery in Duval County, near Laredo. The plant would refine
55,000 bbl/d of Eagle Ford production into gasoline, diesel,
naphtha and liquefied petroleum gas for export into Mexico
using direct rail access on the Kansas City Southern Railroad.
The design includes as much as 4 million barrels of on-site
storage and the capacity to accommodate two inbound and two
outbound unit trains each day, according to the company.
In West Texas, MMEX Resources says it is advancing its
two-phase refinery construction project in Pecos County, northeast
of Fort Stockton. Phase one consists of building a 10,000 bbl/d

crude distillation unit (CDU) with an output slate consisting of
No. 2 diesel, naphtha and residual fuel, with phase two constructing
a 100,000 bbl/d full-scale refinery with a full product slate of
transportation fuels. According to MMEX, the CDU will refine
Permian crude into products for the local drilling market (diesel)
and take them by rail to the Texas Gulf Coast market (naphtha
and residual fuel), while the full-scale refinery will seek to
export products to Mexico and Latin America.
One of the newest announced projects is Meridian Energy
Group's proposed 60,000 bbl/d full-conversion refinery in Winkler
County, Tx., to process local Delaware Basin oil into a full slate of
refined products for regional markets. Meridian says the facility is
being modeled on the company's new-build Davis Refinery in
Billings County, N.D. Davis was the first full-conversion "greenfield" refinery to be permitted as a synthetic minor source, demonstrating substantially lower emissions, Meridian indicates.
"The Winkler County refinery also will be permitted as a
synthetic minor source," the company stated in a news release
announcing the project. "Meridian believes that Davis, and now
Permian, will be the cleanest refineries on the planet when they
are operational."
❒

U.S. February Oil Output Sets Record
WASHINGTON-The United States set an oil production record
in February, with domestic output hitting 12.1 million barrels a
day, the American Petroleum Institute says, noting the feat confirms
the country's position as the world's leading oil producer. In
addition, API indicates, monthly petroleum demand was the
strongest for a February in more than a decade, at 20.4 MMbbl/d.
"High U.S. demand for gasoline, diesel and jet fuel is being met
right here at home with record U.S. oil production," applauds API
Chief Economist Dean Forman in API's March Monthly Statistical
Report. "America's natural gas and oil industry is driving safe and
responsible production to meet demand here and abroad."
API's report includes a number of other highlights:
· U.S. petroleum net imports fell to 1.1 MMbbl/d.
· Other oils (refinery and petrochemical feedstock) demand
(5.5 MMbbl/d) was the highest for a February on record.
· Gasoline demand increased 1.0 percent year-to-year,
hitting 8.9 MMbbl/d.
· Distillate demand, at 4.2 MMbbl/d, was the strongest for
February since 2015.
· Total petroleum inventories (1.26 billion barrels) were
4.1 percent above their five-year averages.
· Refinery throughput reached 16.1 MMbbl/d, while capacity
utilization was at 86.7 percent.
According to API, February's record oil production reflects the
rise in drilling activity during the past quarter. Baker Hughes
reported an average of 878 oil-targeted rigs in the fourth quarter
of 2018, API notes, a jump from 863 oil rigs seen in the third
quarter. The rig count slipped to an average of 853 rigs in February,
it adds. "Further production growth may hinge on the extent of
productivity and bringing down the backlog of drilled but uncompleted wells that the U.S. Energy Information Administration estimated hit a new high of 8,800 in January," the group says.
Natural gas liquids production was 4.7 MMbbl/d in February,
an increase of 17.4 percent year-over-year compared with
February 2018, API details.
38 THE AMERICAN OIL & GAS REPORTER

Domestic West Texas Intermediate crude oil prices averaged
$54.95 a barrel in February, API says, an increase of 6.9 percent
($3.57/bbl) from January, but a decrease of 11.7 percent
($7.28/bbl) from February 2018. It adds international Brent oil
prices averaged $63.96/bbl, up 7.7 percent ($4.55/bbl) from
January. As prices continued to rebound in February, the Monthly
Statistical Report notes, the difference between Brent and WTI
crude oil prices widened to more than $9.00/bbl in February, up
from the $8.00/bbl spread in January.
International Trade
API says international trade offers some of the month's most
interesting plots. On the heels of its record crude oil production,
U.S. crude exports eclipsed 3.0 MMbbl/d for the first time. Including
refined products, this propelled total U.S. petroleum exports to 8.1
MMbbl/d, the highest mark on record for the month of February.
At the same time, the Monthly Statistical Report says, crude
oil imports fell nearly 1.0 MMbbl/d between January and
February, with 200,000 barrels a day of the drop coming from
Canadian trade. The change in February imports ranked among
the largest monthly decreases on record since 1973, well beyond
typical seasonality, API says.
According to the institute, the combination of record exports
with the sharp fall in imports suggests U.S. net imports of petroleum fell to 1.1 MMbbl/d in February. That would be the
lowest monthly petroleum net imports since the 1960s if not for
official revisions to U.S. trade data extending back to November,
API observes. The most consequential revision was to refined
product exports, which on a revised basis for November were
800,000 bbl/d above the initial estimate for the month.
Consequently, API says the history of U.S. net petroleum
imports suggests the country was a net importer of 500,000
bbl/d in November and 800,000 bbl/d in December. Retroactively,
it reports, this is remarkably close to the United States becoming
a net exporter of petroleum as it already is for natural gas. ❒

American Oil and Gas Reporter - April 2019

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