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Significant Growth of MPLX; Pipeline Throughput Raised by 6%
08/24/2022![Significant-Growth-of-MPLX-Pipeline-Throughput-Raised-by-6](https://images2.rextag.com/public/blog/84Blog_MPLX_Marathon_Petroleum_Texas_Assets_2022_08.png)
According to U.S. midstream oil and natural gas company MPLX LP release on August 2, it has increased total pipeline throughputs by 6% in the second quarter of 2022 and terminal throughput by 4%, versus year-ago levels.
In an earnings statement of MPLX, the total pipeline throughputs were 5.9 million bbl/d, with terminal throughput of 3.1 million bbl/d for the second quarter.
Due to an increased utilization at refineries operated by its parent company Marathon Petroleum Co., MPLX’s upticks were mainly created.
Despite the market concerns about a potential global recession that would likely hurt consumption, MPLX is still bullish on energy demand.
The company reported a net income of $875 million and adjusted earnings of $1.457 million in the second quarter, both higher than in the same period of 2021. Also, it expects that there will still be room to run on the demand side, as demand itself is looking good and the inventories are low, so it is still a quite constructive environment for the company
Gathered volumes grew up by 11% from year-ago levels to an average of 5.6 Bcf/d. In the Marcellus region, gathered volumes fell 1% compared to year-ago levels to an average of 1.3 Bcf/d.
The company also announced Tuesday a program to repurchase an additional $1 billion in publicly traded units.
MPLX is expanding several projects, including in the Permian Basin where the Whistler pipeline is increasing from 2 Bcf/d to 2.5 Bcf/d, in addition to lateral pipelines into the Midland Basin and Corpus Christi domestic and export markets.
Furthermore, the company expects the significant growth of the Permian and considers that beyond even the announced expansions of the existing pipes such as Whistler, a couple of more pipes are going to be needed over the next 5-plus years.
Moreover, the construction is also maintained on the 200 MMcf/d Tornado ll processing plant, which MPLX anticipates coming online in the second half of 2022. Additionally, 68,000 bbl/d Smithburg de-ethanizer project in the Marcellus is expected to come online in the third quarter.
MPLX operates several natural gas gathering systems with the scope of services provided dependent on the composition of the raw or untreated gas. Its natural gas processing complexes remove the heavier and more valuable hydrocarbon components from natural gas.
Once natural gas has been processed, the heavier and more valuable hydrocarbon components, which have been extracted as a mixed NGL stream, can be further separated into their component parts for end-use sale through the process of fractionation. It sells basic NGL products, including ethane, propane, normal butane, isobutane, and natural gasoline.
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$465 Million for Stronghold Energy; Ring Energy Completes the Acquisition
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On August 31 Ring Energy Inc. purchased privately-held Stronghold Energy, adding operations that are mainly situated in Crane County, Texas, in the Permian Basin’s Central Basin Platform. According to a September 1 Ring Energy release, this transaction fully complements the conventional-focused Central Basin Platform and Northwest Shelf asset positions in the Permian Basin. The majority owned by Warburg Pincus LLC, Stronghold’s operations are concentrated on the development of about 37,000 net acres situated mainly in Crane County. In July Ring Energy entered into an agreement to buy Stronghold Energy II Operating LLC and Stronghold Energy II Royalties LP for $200 million in cash at closing and $230 million in Ring equity based on a 20-day volume weighted average price. Consideration also involved a $15 million deferred cash payment due six months after closing and $20 million of existing Stronghold hedge liability increasing the total transaction value to $465 million. Stronghold’s asset base is almost 99% operated, 99% working interest, and 99% HBP. In July, Ring announced the current net production of Stronghold’s asset base was approximately 9,100 boe/d (54% oil, 75% liquids).
Plains All American Expects 10% Increase in the Permian Oilfield Activity
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On 3 August the pipeline operator Plains All American LP raised its 2022 profit forecast for the second time this year, as it expects a huge demand on its pipelines transporting U.S. shale oil to the Gulf Coast. The company increased full-year adjusted earnings guidance by $100 million to approximately $2.38 billion, since it anticipates higher crude and natural gas liquids volumes. European buyers have snapped up the U.S. light sweet crude, the largest part of which is delivered in the Permian Basin of West Texas and New Mexico, as they depend on replacing Russian barrels. Average daily crude oil volumes in the second quarter grew 30% on its Permian Basin pipelines with oilfield activity trending about 10% exceeding its initial expectations. Its shares increased 3.6% in after-hours trading on August 3 to $11.19.
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The pipeline industry in the USA faced and still faces a range of regulatory challenges, including permitting delays, environmental requirements, and public opposition to pipeline projects. In recent years, pipeline projects like the Keystone XL and Dakota Access pipelines had legal and regulatory obstacles that delayed or canceled their construction. Keystone XL Pipeline, proposed by TransCanada in 2008, aimed to transport crude oil from Canada (around Calgary and Edmonton) to refineries on the Gulf Coast (Port Arthur). The project faced opposition from environmental groups and indigenous communities, who argued that it would contribute to climate change and pose a risk to water resources. In 2015, President Obama rejected the project, citing concerns about its environmental impact. However, in 2017, President Trump revived the project, leading to further legal challenges. In June 2021, U.S. President Joe Biden officially canceled the project on his first day in office.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/282_Blog_Renewable Natural Gas How RNG Changes the Industry.jpg)
The renewable natural gas (RNG) industry in the United States is showing promising signs of growth. As of 2019, the U.S. consumed 261 billion cubic feet (BCF) of RNG, primarily utilized by independent power producers, electric utilities, and various commercial and industrial entities. However, this figure represents only a small fraction of its potential. Research indicates that the U.S. could theoretically produce up to 2,200 BCF of RNG through anaerobic digestion alone, which would equate to about 11% of daily national natural gas consumption.
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Recently, the progress toward an energy transition is hitting a snag. Sales of electric vehicles are decelerating, and the growth in wind and solar power needs to be keeping pace with expectations. To make matters more challenging, electricity prices are climbing when they were expected to fall. Amidst these setbacks, the oil and gas sectors are proving resilient. According to BP's latest energy outlook, not only are these energy mainstays here to stay, but their demand is expected to remain relatively high even after reaching a peak. Interestingly, BP forecasts that oil demand will reach its zenith next year, marking a critical moment in energy consumption trends. This isn't the first time BP has projected a peak in oil demand. Back in 2019, their review anticipated a decline in demand growth, but the prediction fell flat. Instead, oil demand surged to unprecedented levels following the end of the global pandemic lockdowns, defying previous forecasts and underscoring the enduring dominance of traditional energy sources in the global market.