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Robert Brelsford Downstream Technology Editor Wison Engineering Services Co. Ltd. (WES) completed delivery of all nine ethylene-cracking furnaces to be installed as part of the naphtha cracking unit at the first phase of Zhejiang Petrochemical Co. Ltd.’s (ZPC) 800,000-b/d integrated refining and petrochemical complex currently under construction in Zhoushan, Zhejiang Province, China (OGJ Online, June 5, 2017). WES—which was responsible for modularized design, construction, and installation of the project—along with affiliate Wison Offshore & Marine delivered the ninth modular ethylene-cracking furnace to the site at the end of October following delivery of the other eight similar.
The Canadian oil and gas sector is in a holding pattern in which spending and production growth can’t occur until new ways to get products to export markets are found, according to CIBC analyst Jon Morrison. The steep discounts being paid for Canadian heavy and light oil production compared with U.S. benchmarks won’t end soon and that means there’s no money for producers to increase their drilling budgets, he said in a report released Tuesday. Discount on Alberta oil reaches record levels LNG facility in BC good news for Alberta oil and gas Oil prices are growing, the loonie is low — for Alberta, that could mean $3 billion: BMO The report bodes poorly for Canada’s energy services sector as the industry enters the winter drilling season, its traditionally busiest time of the year as frozen ground allows more access to backcountry sites. “We believe this reality will start to percolate into 2019 capex budgets, with a number of producers likely to delay the issuance of formal guidance until January and then we believe many are likely to announce development programs that show little to no incremental production growth,” said Morrison in the report.
According to Net Energy Group, the difference between Western Canada Select bitumen blend prices and New York benchmark West Texas Intermediate for November delivery has averaged US$45.50 per barrel this month. The difference between Edmonton Sweet and WTI has been about US$27. Last week, the WCS-WTI differential widened to more than US$52 per barrel, at which point analyst Matt Murphy of Tudor Pickering Holt & Co. calculated bitumen producers were actually losing money because the light oil used to dilute their heavy sticky crude cost more than what the barrel was selling for. Western Canada will remain short of pipeline capacity even if Enbridge Inc.’s Line 3 replacement pipeline is completed by 2020, thus adding 370,000 barrels per day of capacity, CIBC notes. The short-term situation will improve but not enough to allow growth in activity if crude-by-rail exports double as expected to a record 450,000 barrels per day by the end of this year, the report says. Unusually wet weather in Alberta in September will contribute to soft third-quarter earnings reports from oilfield services companies, Morrison added. He said Canadian drilling rig utilization in the quarter ended Sept. 30 was about 32 per cent, higher than the 28.5 per cent achieved in the same quarter last year, while the number of operating days were about nine per cent higher..