New Mexico Geological Society

Size: px

Start display at page:

Download "New Mexico Geological Society"

Allan Francis
6 years ago
Views:

New Mexico Geological Society Downloaded from: http://nmgs.nmt.edu/publications/guidebooks/1 Marketing of oil and gas from the San Juan Basin Van Thompson, 1950, pp.

1 New Mexico Geological Society Downloaded from: Marketing of oil and gas from the San Juan Basin Van Thompson, 1950, pp in: San Juan Basin (New Mexico and Colorado), Kelley, V. C.; Beaumont, E. C.; Silver, C.; [eds.], New Mexico Geological Society 1 st Annual Fall Field Conference Guidebook, 152 p. This is one of many related papers that were included in the 1950 NMGS Fall Field Conference Guidebook. Annual NMGS Fall Field Conference Guidebooks Since 1950, the New Mexico Geological Society has held an annual Fall Field Conference that visits some region of New Mexico (or surrounding states). Always well attended, these conferences provide a guidebook to participants. Besides detailed road logs, the guidebooks contain many well written, edited, and peer-reviewed papers. These books have set the national standard for geologic guidebooks and are an important reference for anyone working in or around New Mexico. Free Downloads The New Mexico Geological Society has decided to make our peer-reviewed Fall Field Conference guidebook papers available for free download. Non-members will have access to guidebook papers, but not from the last two years. Members will have access to all papers. This is in keeping with our mission of promoting interest, research, and cooperation regarding geology in New Mexico. However, guidebook sales represent a significant proportion of the societies' operating budget. Therefore, only research papers will be made available for download. Road logs, mini-papers, maps, stratigraphic charts, and other selected content will remain available only in the printed guidebooks. This will encourage researchers to purchase the printed guidebooks, which are essential references for geologic research in New Mexico and surrounding areas. Copyright Information Publications of the New Mexico Geological Society, printed and electronic, are protected by the copyright laws of the United States. No material from our website or printed and electronic publications may be reprinted or redistributed without our permission. Contact us for permission to reprint portions of any of our publications. One printed copy of any materials from our website or our print and electronic publications may be made for individual use without our permission. Teachers and students may make unlimited copies for educational use. Any other use of these materials requires permission.

2 This page is intentionally left blank to maintain order of facing pages.

NEW MEXICO GEOLOGICAL SOCIETY * FIRST FIELD CONFERENCE * SAN JUAN BASIN generally the posted price for 42 gravity oil in the Group 3 district and in addition the refinery pays the pipe line or

3 NEW MEXICO GEOLOGICAL SOCIETY * FIRST FIELD CONFERENCE * SAN JUAN BASIN generally the posted price for 42 gravity oil in the Group 3 district and in addition the refinery pays the pipe line or trucking costs from the field to the MARKETING OF OIL AND GAS FROM refinery. The demand for products from the re- THE SAN JUAN BASIN fineries is much greater than the oil production at the present time, and large quantities of gasoline By Van Thompson and fuel oil are shipped into the area from other Southern Union Gas Company sources. General Natural Gasoline Plants The marketing of oil and gas in the San Juan For many years, Continental Oil Company has Basin represents two separate problems because in operated a small stabilization and LPG (Liquified this area oil and gas are not produced in association Petroleum Gas) plant in connection with their operawith each other as in many other regions. The exist- tions in the Rattlesnake field. This plant produces ing oil wells produce no casing-head gas. The exist- about 2, 000 gallons of LPG per day, all of which is ing gas wells produce dry gas with small quantities marketed locally. of natural gasoline, butane, and propane. The first modern-design natural gasoline plant Oil can be marketed in trucks, tank cars, pipe in the basin was put in operation by Southern Union lines, buckets, cans, etc., and can be delivered to Gas Company in May, It is a conventional and from the refineries intermittently. The peak absorption type with a present daily capacity of demand for oil is in the summer months when gaso- 20, 000 MCF (thousand cubic feet) of gas through the line usage is heavy, absorber. The source of gas is the main pipe line to the Albuquerque-Santa Fe area, with the principal Natural gas can be marketed only by pipe lines, plant volumes originating in the Kutz Canyon-Fulcher and deliveries must be continuously maintained. Basin field. A total of about 17, 000 gallons of pro- The actual market demand, however, will vary from ducts is produced daily, including some 7, 000 gala factor of, say, one in the summer to over three Ions of 12# RVP gasoline; 4, 000 gallons of butane, times as great in the winter months. Pipe lines are and 6, 000 gallons of propane. built to supply the winter demand and every attempt is made by the owner to utilize this excess capacity A new debutanizer and reboiler are being added in the summer months by supplying gas to industrial to this plant and by October 1, 1950, it is expected customers who find it economical to use stand-by that 40, 000 MCF can be processed per day through fuels in the winter, the absorber and 3, 000 gallons per day of additional gasoline can be produced. This paper will treat the two subjects separately and in the case of oil, will deal primarily with Natural Gasoline existing refineries, their capacities being presently utilized and the excess capacity available, which is The natural gasoline is marketed as follows: due to a lack of oil rather than to a lack of market demand. (a) The Aerex Refining Company at Bloomfield, New Mexico purchases approximately 20, 000 gallons Oil Refineries per month. They in turn blend this natural gasoline with the products from their refinery and market it There are four oil refineries in the area which in the area as white gasoline, which is sold princirefine and market the oil produced in the area. All pally for tractor fuel. the producing oil fields are old, having been discovered in the 1920 s and 1930 s, with the exception (b) The Petroleum Products Refining and Proof the recent discovery at the Boundary Butte field, ducing Company of Prewitt, New Mexico, purchases Inasmuch as these oil fields have been producing for the balance of approximately 200, 000 gallons per a long time, they do not now produce enough oil to month. operate the refineries on a full-time basis. A 2# naptha concentrated with tetraethyl lead is The attached table shows the name, location, hauled by truck from Prewitt to the Southern Union design, capacity, present operating capacity, source Gas Company s natural gasoline plant at Bloomfield, of oil, and other operating details regarding these where it is blended with the 12# RVP natural gasorefineries, line to produce a very good grade of "house brand" gasoline. The gasoline is then sold to one of the Market Price of Oil major oil companies, where it is distributed to various filling stations in the San Juan Basin for resale The market price that is paid for the oil is to the general public. 135

I ~I11 t~il ii I NEW MEXICO GEOLOGICAL SOCIETY * FIRST FIELD CONFERENCE * SAN JUAN BASIN Butane and Propane activities, both developmental and exploratory; and second, until recently no commercial

4 I ~I11 t~il ii I NEW MEXICO GEOLOGICAL SOCIETY * FIRST FIELD CONFERENCE * SAN JUAN BASIN Butane and Propane activities, both developmental and exploratory; and second, until recently no commercial gas well in The butane and propane mixed product is sold the area lacked a market outlet and connection. To to the Phillips Petroleum Company who distributes illustrate, the Kutz Canyon-Fulcher Basin field has it in the San Juan Basin through their dealers in the increased from the original seven Pictured Cliffs area. At the present time a large quantity of this gas wells into a field of 105 producing gas wells material is being used by the drilling contractors for covering an area of some 24 miles in length by fuel in the motors of drilling rigs in the basin, approximately two miles in width. The stratigraphic nature of the field tended to retard development to Approximately one-third of the butane and pro- a slow, cautious expansion, which is still continuing. pane product is not sold in the area due to a lack of The pipe-line company s task of gathering and commarket. This material is disposed of in one of two pressing gas from these wells, which average less ways: (I) it is returned to the Pictured Cliffs forma- than 250 MCF per day, has required much effort tion in the Kutz Canyon field for possible future re- and investment. Production has been long lived clamation, or (2) it is vaporized and injected into with the exception of the gas reserves in the Dakota the gas pipe line downstream of the natural gasoline formation at Ute and Barker domes which suffered plant, early depletion. Present Natural Gas Pipe Lines The only large volume of gas developed to date is from the Paradox formation at Barker dome, In the spring of 1929, the Southern Union Gas first drilled in Inasmuch as this gas contains Company completed a four-inch pipe line from the 1 per cent H2S and 15 per cent CO2, it is market- Kutz Canyon field to Farmington, New Mexico. At able only after appropriate treatment. A Girbotolabout the same time, Mr. F. M. Butt built a four- type plant with some 30, 000 MCF of daily capacity inch pipe line from the Blanco field to Aztec, New has operated for four years and most of the gas that Mexico. Also in 1929, the Durango Natural Gas is treated goes directly into the pipe-line system. Company completed a six-inch pipe line from Ute During the summer, however, large volumes are Dome field to Durango, Colorado. stored in the Dakota formation at Barker dome to meet subsequent peak-load demands in the markets. In the fall of 1930, the Southern Union Gas Company completed a ten-inch and a twelve-inch pipe At the present time natural gas is being marketed line to Albuquerque, and an eight-inch pipe line to locally from the Fulcher-Kutz, Ute dome, Barker Santa Fe, New Mexico. In 1940 a five and one-half dome, and La Plata fields, and a twelve-inch gatherinch pipe line was extended from Albuquerque to ing line is scheduled to be completed by November, Belen, New Mexico. Since that date this system 1950 to the Blanco field. has been extended and greatly enlarged. Field Price of Natural Gas In 1932, a six-inch pipe line was built from Kutz Canyon to Ute dome so that gas from Ute dome During the 20-odd years of production and marcould be marketed in the Albuquerque area. With keting of natural gas in the San Juan Basin, the wellthe discovery of gas at Barker Creek field, this line head prices have consistently equaled or exceeded has been paralleled and enlarged, the prices from time to time prevailing in the Mid- Continent area. The current prices range from six All the above pipe lines are shown on the cents per MCF for Pictured Cliffs gas, taken at low attached map of the area. pressures and small well volumes, to nine cents per MCF for Point Lookout gas taken at a line pres- Local Markets for Gas sure of 650 pounds. Specific price increases in the future are already contracted, to become effec- The local market for natural gas from the San tive at five year intervals. Gas is sold under long- Juan Basin grew to more than 12, 000, 000 MCF from term contracts which now generally contain a 1929 to 1949 and is expected to increase at the rate "favored nations" clause to insure that any indiviof 2, 000, 000 MCF per year for the next few years, dual producer will receive the best price paid by the The daily peak demand grew to more than 80, 000 purchaser for gas of similar quality, pressure, and MCF per day by the winter A graph of the quantity. gas purchases in the area by years is attached with an estimate of the projected demand in the next few Future Markets years for the Albuquerque-Santa Fe-Durango area. In July, 1940, E1 Paso Natural Gas Company The problem of supplying this steadily expand- received a permit from the Federal Power Commising local market has had two significant results: sion to construct a twenty-four inch pipe line, with first, it has necessitated relatively constant drilling a designed capacity of 168, O00 MCF per day, from 136

5 NEW MEXICO GEOLOGICAL SOCIETY * FIRST FIELD CONFERENCE * SAN JUAN BASIN the San Juan Basin to California. According to The California-Arizona market and the New their testimony before the FPC, this pipe line is Mexico market will thus provide a demand of some planned to transport an average of 93, 000 MCF per 50 billion cubic feet of gas per year, with a peak day, 60, 000 MCF of which is planned to come from daily demand of more than 250 million cubic feet. Barker dome. In connection with the pipe line, a Furthermore, it can be expected to increase trenatural gasoline plant with approximately 65, 000 mendously if the natural gas can be discovered and MCF per day capacity will be constructed. This developed in the area. pipe line and appurtenant equipment is scheduled to be completed in L A P I. A T A SOUYH ItU UtlIOU e~.~ DUP.At~60 b~uctx oo..e ux..a...,~ / SAIITA IFII-AIJ&UQUNI~U OIST. snd TElUE TOD.Y o, EIkVEO ~.~ ~-%..-- -, L*,L,, ~,L,L~ I~EXlCO,$,2.T EG r~ IPI S AU ~ JUAU I 9, O A I1 9. I B,A I I 1I CUI~At: [ ~,. I,,..,...,r~ /,"-~-;- i.os ALAUOS I ", I " ~, ~--- c5! s,.oov. L i " j, _ [

NEW MEXICO GEOLOGICAL SOCIETY * FIRST FIELD CONFERENCE * SAN JUAN BASIN OIL REFINERIES OPERATOR LOCATION TYPE CAPACITY AVERAGE SOURCE OF PRODUCTS CRUDE Oriental Ref. Co.! Alamosa, Colo.

6 NEW MEXICO GEOLOGICAL SOCIETY * FIRST FIELD CONFERENCE * SAN JUAN BASIN OIL REFINERIES OPERATOR LOCATION TYPE CAPACITY AVERAGE SOURCE OF PRODUCTS CRUDE Oriental Ref. Co.! Alamosa, Colo. Distillation - il000 Bbl Bbl. Price, & Gasoline, Crack Chromo Ethyl, Fuel Oil, Kerosene & Diesel Petroleum Pro- Prewitt, N.M. Distillation Bbl Bbl. Hospah, Gasoline, ducts Ref. & Crack Boundary Ethyl, Fuel Producing Co. Butte, & Oil~ Kerosene Hargrave & Diesel Conoco Farmington, N.M. Distillation 750 Bbl. 350 Bbl. Hogback Gasoline and Rattlesnake, Fuel Oil Table Mesa Aerex Refinery Bloomfield, N.M. Distillation 100 Bbl. 15 Bbl. Bloomfield, Gasoline, Drip Gasoline Kerosene, Fuel Oil ~l ~ ~ U ~ ~ ~1 ~ ~9 ~ 41 A~ A% ~. ~ 4G al n L~ t~a 138

7 I I I ~ I I I I t I t I I I I i I I I I I I I I I I I I I I i o F ~ 0"~ ~. ~. "~.,,~ ~ ~.~ ~.~.~ #.t- 0"~. ~ ~ Ī ~ 0", co o o0a)co 00 co ru ro ~) ru ra r,0 to ~0 i~ fol,0,~ c~o ~ I~ a~- ~n I- ~ ~--~ ~o ~ ~o ~,~ o (~ oo~ N. r~ oooo oooo~.ooo~o~o~ ~ ~ ~ ~ o ~1~ I~1. ",.10"-.1 -.d o I ~, o~-~ o-o.o o.~o.~.~o~,,~o o o ~. ~ F -g 2 o ~,-~o~ f~... U~ ",~ ".O O 130".O O, ~,,D ro I-*

8 ij!je "...i =~ ~ =~ =~=~ =~/~q~:~t~ ~ :.:. I~ l~i 0",3 ~,~ ~ ~ ~ ~ ~ ~) =~ q~ ~1=~ ~0~ ~. 4~ to0 ~4~ ~ O~h -~ C~ ~01~ ~ L~ ~ ~ I-~ "~0 0 ~0 00~ C~O -O"O 0~0 PO (~g~-~ ~ ~0 ~ ~ 4~ 4~ ~ ~ I i I t l i I I I i t i i i I I I i I i i I i t i i I I I I I ii i s I i I i i I I I I I I I! i I! I i I I I i I! i i! i i i I I!! I I I! i I i i I I I I I I I I i I I i OOxDO0 === = _- = == = ===:.-:=:====-- ====== ==. ~.~.~.~1 &* ~),~,1.. D ao o.~ ~,1 ~o ~rt " ~ ] o,~.~ ~L,~.~ ro -,.~ t.-t ~-1~.1~ ~ i.~,~ I,~ L,~ o ~ ~.-~11.1~ r~) ~:~ ~" ~ ~ ~ ~,~ ~,.oo~o~,..~co~ co,~o0",...-= ~,,.~coo ~om~-,~,~. 0~o0o ~I. ~o~ o ~,..o "~ ~ oo 0-.~ o o o~o 00 ooo~)o o~o o o-~ o o ~-~ ~. o ~ o ~ o o o o o o o ~ ~ ~ o,~ ~... ~.-~,,, i.,~ co,,.~.~. oo,0~ -.,o~ o~ -.~ ". 8o~,o ~ ~ ~ o ~,~ ~ 1 o ~oo~,o,-o ~,~ ~,~ o,o,. & & u I...Ib~ 0 ~L~ ~ 0~.1,J O~ ~0~ 0~ ~ ro CO ~.~rl CoO 0~1~ 0 0~.~ 0~ ~0 ~ ~ 0.1~ 0 ~0

9 O0,-t gr ~0 It ~r,. r-i ~1~1 000 ~ 0000~ ~O,~,,o~oo0~,o...lOCOO,_loo~co~oo,0,~o~oor,~o,~ ~ O~ 0 C C~m.O 0 0~00 0".0 C. ~ O~O b- ~ 00000~--0 ~" 0 )-~,0,"~0 C- ~-I 0000~ O0 ~,l O0 [ -0 ~ ~0 ~ ~o~.-~ ~ ~c" e ~ OCO ~ ~ o~ 0 ~. ~o 0o ~ 0 [ -.~f 0 c~ c,.o.~ 0 ~ ~ ~ 0 u~co ~-- c~ u-. t-. u~ ~ ~.~r.~ O~ u.~o~.-4 o~ 0~ -"~0000 0~o~o ~ (",10~ 0 ~ 0 I:~-~0 0 0~0 ~t 0 0 : -I 0 0 G 0,~) g a~ ~l , I ~/J.,- ~L~... ~, 0 0o00", 5 ~,~..~..a.,..~~.~,~.~~ ~-~.,-.~..~--~ -,, ~-~- ~ ~ ~.~.~j~.~. Sl i iiiiiii!iiiiiii!iiiiiiiii!i!i!! i ii!ii!iiiii.oooo._...~.~o.o.ooo... of~of~oo T ~,~ ~1 ~"

10 i ~ [. llll ~/ o.,0,o~0o+ o+,,~,,,++~oo~ o~,~ o~o~,~-~,~, + ~+~ ~ ~o.o,~ 00 q" 0 -+,-I / I~ L +.,.I~,~I- p-4 ~lco O O OI O 1~ O ~. ~, ~ ~ ~+~. ~CO ~P ~1 ~1 ~O ~4+.D ~D ~ ~.~1F I ~1" O O +,IDO. C ~.~.I ~ C*.+ ~t P" ~ ~1" P- o +a0 ~ +-.-~ ~ e+ ~ u~ +--+ "ux e,+~ ~.+"qco 0 o,.4.-4 I>.,,0 r~ wx~l-,4~ ~ ~ +"~ CO~(~t~l ~ I I~O I~-Pe~O.D E+~-tr~o~O~ O t~nd ~, +--IO ~,o~ ~oo~o~,,z~o~.~ " o~o~ ~O ~ P++r~ ~ ~" ~ - ~t U~O ~,~+o<:,-,.,,,-+..*o,+ a- ~,:,~ ~-o, ~-,~,~ o ~c+--mu ++.,m+-eq~0 P... coe, +.,,t~::ocoos,4- ~ +I m +-I bo +-,.,I P,-I ~ t+~l i-+ u~o~.~.+~ ++ oo ~ ++.+ m,.-+ io o +" +,.+ + 4~, r~ ~ r~!" I t~oao ~ o~ m ~...,,,,,,,:,,,,,,...,,,,,,,, ~t!,n,+o ~.++o g ~1+-I a i i i i i i i i i i I i i ~ + + i I i I I I I I I I + +l I i ~.~r+ +-I oj+-i I, ~ ~ o ~ o ~i..~ ~o~l ~llz~l..-i I i i i I I I I I I l I I I.l~Pl..-.lo xo x I I I I I I I i I I OJOx 0 ~ t~lt~l ~ ~ ~" (~1 ~1" ml" ~ r-i P~+--I co 0 +-h.-.i "4 I I +,- # P -I,"+,.-+ e~,,,t ~, ++~ ~+.-I h ::-. "",:"+,"< I= c~.m +o 0~ ~-,=:~~,+ =, , +,,+. ~","," "-,+ t ~ =~ " " +" "+4 P+.0~ * +++ og. +;;;;; o+,+++++,++ ~ ~ ~t+-+ J" + ", + ",~ ~ "+

11 6 ~-~.~"~.~_,D~o,,o,~,~,~,~,~,,*c.oc--o,~,,~,~e~ e~o, me0,o o,r-,~, ~,0 ~ d ~u O o~ O,,D O ~ L -- O~,--I,-4,,,,,------,,,,, I -I I I I * - I --I! -I I I I I l E,-O r lol,,,.,~,~,,,,,,~,,coo,,,o-.~o,,o,, I I I... I I I I I I I I I I I I I I ~ 0,--I Ox. ~.?o0,.,.,. J~l,l ~ I I I I I --I I I I I I I I I I I I " I I -- --I I I I I I I 0 ~,,-~ ru trxxc ~o o ~~ ~O0,~m~ 0~0~ ~ -0 0 I-. c ~ m I~ 0o00000.,~ ~moooooooooommmo~mooooow ~mm~m ~oomm~ ~, mmmm ~mm~ 0 ~ 0 ~mmmmmm

Short Term Energy Outlook March 2011 March 8, 2011 Release

Short Term Energy Outlook March 2011 March 8, 2011 Release Highlights West Texas Intermediate (WTI) and other crude oil spot prices have risen about $15 per barrel since mid February partly in response