June 2009 Update

In the news...

• Guarantees Not Offered for Mackenzie Line - Canada (6/24/2009) Concerned about competition from the proposed Alaska gas pipeline, officials from the Northwest Territories of Canada said Ottawa may need to provide loan guarantees up to C$24 billion for the Mackenzie Valley gas pipeline project. The U.S. Senate introduced a bill that would increase loan guarantees for the Alaskan natural gas pipeline to $30 billion. However, Canadian Environment Minister, Jim Prentice, said the government of Canada has not discussed giving loan guarantees or whether they might be considered in the future. Officials from the Northwest Territories are hoping the loan guarantees might jump start construction on the proposed pipeline, which would carry up to 1.9 billion cubic feet of gas per day from the Mackenzie River Delta located on the Beaufort Sea to Alberta, Canada. The project has languished for years and construction of the Alaska pipeline would likely eliminate any chance of it being built. [More here]
  

• Green Group Asks U.S. to Bar Canada Oil Sands (6/24/2009) Environmental group, ForestEthics, has asked U.S. Secretary of State Hillary Clinton to deny permits for pipelines that would transport oil extracted from Canada's oil sands (also known as tar sands) to refineries in the United States. The green group has especially targeted Enbridge Energy Partners LP's Alberta Clipper pipeline. The group says oil from the tar sands generates up to five times more greenhouse gas emissions than oil from conventional sources. Enbridge spokeswoman Denise Hamsher said the pipeline is the basis for the U.S. State Department's decision not the source of oil production, adding that 1 million barrels a day of oil from Canada's oil sands is currently exported to the United States. State Department spokesman Andrew Laine said the State Department was reviewing the Alberta Clipper pipeline project "and it is premature to comment while the review process is ongoing." [More here]
  

• Keystone Pipeline Work Bogged Down by Weather (6/23/2009) After having ideal weather conditions in May, construction efforts on TransCanada's Keystone oil pipeline have been stymied by an unusually wet June. Work on the 130-mile, 30-inch section that runs west of Seward, Nebraska to the Kansas border has been hindered by standing water in deep trenches excavated for the pipeline. Keystone spokesman Jeff Rauh said they were at least a week away, possibly longer, from laying pipe in the mud filled trench. Keystone builders expect to finish work on the Nebraska section of the $5.2 billion pipeline by the end of 2009. [More here]

• Aboriginal Group Turns to Ottawa on Pipeline (6/23/2009) The North West Territories (NWT) first nations and Inuit groups who make up the Aboriginal Pipeline Group (APG) are seeking a larger stake in the C$16.2 billion Mackenzie gas pipeline project. The move, which would require huge federal loan guarantees, could eventually give the group a majority share in the project and allow the Canadian government to impart substantial fiscal incentives to construct the long-delayed pipeline project. Currently, APG has rights to one third of the 1,220-kilometer pipeline that will be filled with natural gas produced by Imperial Oil Ltd. (of which 70 percent is owned by ExxonMobil), Royal Dutch Shell PLC, ConocoPhillips Canada (North) Ltd. and ExxonMobil Canada Properties Ltd. Environment Minister Jim Prentice, who is accountable for the pipeline project, said AGP will increase its ownership share by financing more of the project's construction costs but it is not readily apparent how AGP will pay for those costs. [More here]

• Ruby Pipeline Clears Step (6/22/2009) The U.S. Federal Energy Regulatory Commission (FERC) has issued a draft environmental impact statement (EIS) for the proposed Ruby Pipeline project, noting most adverse environmental impacts could be mitigated. According to the EIS draft, the 678-mile pipeline that would transport natural gas from the Opal hub in western Wyoming through parts of Utah, Nevada and Oregon, spans large greenfield areas that currently do not have linear infrastructure such as existing pipelines, roads or power lines. The Ruby Pipeline, an entity of El Paso Corp., is competing against proposals from other pipeline companies and still needs FERC approval on terms of service and shipping rates. If built, the pipeline will have a capacity of 1.5 billion cubic feet of gas per day and be able to serve 150,000 homes a year in West Coast markets. [More here]

• OSD Pipelines Purchases Network License for PipelineStudio Design and Simulation Software (6/17/2009) Houston-based Energy Solutions International, Inc. (ESI), which supplies software solutions to optimize operational and commercial pipeline performance will deploy itsPipelineStudio® design and off-line simulation software for the oil and gas division at OSD pipelines. OSD, a global pipeline engineering services company based in Australia, purchased a network license based onPipelineStudio's "ease of use, speed and accuracy of its results." [More here]

• New Pipeline Aims to Take a Bite Out of Oilsands Emissions (6/17/2009) Williams Co. plans to build a 260-mile, 12-inch natural gas liquids pipeline in Alberta, Canada from its extraction plant located in Fort McMurray to its processing facility in Redwater. “The pipeline will support the future removal of ethane from the oilsands off-gas, which will further decrease greenhouse gas and sulfur dioxide emissions and it provides a critical feedstock for Alberta chemical companies,” said Alan Armstrong, president of Williams’ midstream business. Currently, Williams is the only processor of oilsands off-gas. Construction of the $283 million pipeline will allow the company to reduce emissions of carbon dioxide (CO2) by 219,000 tons per year and sulphur dioxide (SO2) by 3,200 tons per year. The pipeline is expected to be completed by April 2012. [More here]

• TransCanada Pays $550 Million for Rest of Keystone Line (6/16/2009) TransCanada is purchasing all of ConocoPhillips interest in the Keystone pipeline for $550 million as well as the assumption of $200 million in short-term debt. The deal gives TransCanada complete control over the 2,148-mile, $5.2 billion crude oil pipeline that runs from Alberta, Canada to southern Illinois in the U.S. and is designed to carry 435,00 barrels of crude per day. The company also sold C$1.6 billion in stock to help finance the deal, which is expected to be completed in the third quarter. [More here]

• Demand for Arctic Gas Dries Up (6/14/2009) ................ After years of worrying about natural gas supply shortages, recent discoveries of approximately 1,200 trillion cubic feet of gas in shale deposits located in the continental U.S. and increasing imports of liquefied natural gas has led one energy executive to conclude demand for Arctic gas will be pushed back by 15 years. Steve Letwin, Enbridge Inc.’s executive vice president of gas transportation and international, says the North American natural gas industry is now "overbuilt." “The biggest issue that we now have is [insufficient] demand,” said Mr. Letwin. “And in the absence of demand, you are going to see a price for gas that is going to be kept between $5.00 and $7.00 for a long time to come.” Since the beginning of the year natural gas prices have fallen 30 percent to $3.857per million British thermal units . Although continental U.S. shale producers can make money at low gas prices, it won't be until 2025 when gas from the Arctic region will be economically viable - given the high cost of transporting the gas -- be it from Canada's Mackenzie Delta or Alaska. [More here]

• 'Big Gorilla' Exxon Joins $26 Billion Alaska Pipeline (6/11/2009) After sitting on the sidelines, Exxon Mobil Corp. has decided to help TransCanada Corp. finance and construct a $26 billion, 1,700-mile pipeline to carry natural gas from Alaska's North Slope to conduits in Alberta, Canada. In addition, the company will own a minority stake in the project. The announcement comes less than six months after Alaska state officials decided not to pursue the eviction of Exxon and its partners, including BP Plc and ConocoPhillips, from the Point Thomson field after decades of inaction. “Exxon Mobil has always been considered the ‘big gorilla’ necessary for this project to succeed, so their willingness to get involved and make a substantial financial investment is warmly welcomed,” U.S. Senator Mark Begich, an Alaska Democrat. Last year, TransCanada won state government support and $500 million subsidies for the project. The Denali pipeline, a proposal from BP and ConocoPhillips, is still competing for the business. Exxon expects to begin production at the Point Thomson field, located 50 miles east of Prudhoe Bay, in 2014. [More here]

• Energy Solutions International and ECIL Work Together on Expansion of PipelineManager® in India (6/10/2009) Energy Solutions International, Inc. (ESI), a world-leading supplier of software solutions that optimize operational and commercial performance of oil and gas pipelines, announced that ECIL had chosen PipelineManager® to expand and upgrade their client pipeline management systems. "We are very happy to continue our strong working relationship with ECIL," said Siva Rao, Vice President, Energy Solutions International (India) Pvt. Ltd. "We believe that working together we will deliver the highest quality pipeline technology to our customers, BPCL and PCCKL." [More here]

• Crosstex Energy to Sell Some Pipeline Assets for $220 Million (6/10/2009) Crosstex Energy LP, a partnership partly owned by Crosstex Energy Inc., is selling pipeline assets located in Mississippi, Alabama, and South Texas to Southcross Energy LLC for $220 million. The deal is expected to be completed on July 31. Proceeds from the sale will be used by Crosstex Energy to reduce debt. [More here]

• Key US Crude Oil Link Capline Restarted (6/9/2009) Capline, a major crude oil pipeline operated by Shell Pipeline Co. LP, was restarted after crews repaired a minor valve leak. The 632-mile pipeline travels from the U.S. Gulf Coast to the Midwest and transports up to 1.1 million barrels per day of oil. Customers were not affected by the brief shutdown because Shell had enough crude in storage. The pipeline is owned by several companies, including Marathon Oil Corp and BP PLC. [More here]

• South Dakota Sets November Hearing for Keystone Oil Pipeline (6/9/2009) The Public Utilities Commission (PUC) of South Dakota will hold a formal hearing on November 2 for TransCanada's application to build its proposed Keystone XL Pipeline through western South Dakota. The 313-mile, 36-inch section of the proposed crude oil pipeline will enter South Dakota at the Montana border in Harding County and exit to Nebraska at Tripp County. The South Dakota section is estimated to cost $920 million and is part of a project that will transport oil from the Alberta tar sands to refineries and terminals located on the Texas Gulf Coast. The company hopes to begin construction of the pipeline in 2011 with operations commencing in 2012. [More here]

• US Bill to Raise Alaska Gas Pipeline Loan Guarantee (6/8/2009) Several leading legislators in the U.S. Senate have reached an agreement to increase the loan guarantees for building a huge pipeline to transport natural gas from Alaska to the lower 48 States. Senator Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Commitee and Senator Lisa Murkowski (R-AK) have agreed to a deal that calls for raising the 2004 loan guarantee from $18 billion to $30 billion. Under the new agreement the federal government will repay loans up to 80 percent of the cost for the pipeline project in the event the owners default on the financing. TransCanada Corp was awarded a state licence in December from Alaska to build the pipeline, but a competing proposal from BP Plc and ConocoPhillips is also in the works. [More here]

• Atlas Pipeline Partners Forms Joint Venture With Williams (6/2/2009) Atlas Pipeline Partners, L.P., and a subsidiary of The Williams Companies, Inc. have finalized their agreement to form a joint venture company - called Laurel Mountain Midstream, LLC. The joint venture owns, manages and operates all of Atlas Pipeline's northern Appalachian assets as well as two natural gas processing plants and associated pipelines located in southwestern Pennsylvania. In exchange for $100 million and a $25.5 million note payable to the joint venture, Williams retains 51% ownership interest while Atlas owns 49% of the joint venture. [More here]

• SemGroup's White Cliffs Pipeline Begins Commercial Operation (6/2/2009) SemGroup, L.P.'s White Cliffs Pipeline has started operations. The 12-inch, 525-mile pipeline will transport crude oil from a location near Platteville, Colorado to company owned and operated storage tanks located in Cushing, Oklahoma. The current capacity of approximately 30,000 barrels per day (bpd) can be increased up to 50,000 bpd. White Cliffs Pipeline is indirectly owned 99.17% by SemGroup, L.P., 0.415% by Anadarko Wattenberg Co., LLC, and 0.415% by Samedan Pipeline Corp. . [More here]

• DNV, Gassco Develop New Gas Pipeline Inspection Technology (5/29/2009) Norway based Det Norske Veritas (DNV) and gas pipeline operator Gassco have developed an economical way to inspect natural gas pipelines utilizing acoustic resonance. According to the companies, the technology allows measurements to be taken without reducing gas flows. Trials on Gassco's pipelines were so successful that Gassco and DNV have entered into a joint venture to commercialize the technology. "For us, this means that inspection and maintenance costs can be sharply reduced while enhancing the quality of the inspections," said Gassco's Chief Executive Brian Bjordal. [More here]

• Tulsa-Based 798 Welders Built the Alaska Pipeline (5/29/2009) In 1968, the largest oil field in North America was discovered in Prudhoe Bay, Alaska by Humble Oil and Refining Company (now Exxon) and Atlantic Richfield Company (ARCO). But it wasn't until the OPEC oil embargo in 1973 that serious consideration was given to developing the find. The only feasible way to transport the oil to market required the constructions of a 48-inch, 800-mile pipeline that needed 108,000 perfect and, at times difficult "girth" welds. Tulsa, Oklahoma-based Pipeliners Local Union 798, a team of journeymen welders, who spent years perfecting their craft were tapped to do the mammoth job. “Every weld was challenging in one way or another. The cold was always a big factor. The pipe sections had to be heated up in order to get a good weld. The lineup clamps would freeze to the inside wall of the pipe and we’d have to thaw them loose. The wind, the terrain, blizzards, everyday was a challenge,” according to Tulsa 798er, Kevin Leeper. The project culminated when the last thousand feet of pipeline required the scaling of a steep and jagged rock cliff. On June 20, 1977, oil began to flow from Prudhoe Bay helping to meet the energy demands of the lower 48 states. [More here]

May Update 2009

In the news...

• Updates to PipelineStudio® Design and Off-line Simulation Software (5/25/2009) Energy Solutions International Inc. is now offering version 3.2 of its industry-leading PipelineStudio software, which helps pipeline operators and engineering firms to design facilities and plan operations. PipelineStudio 3.2 features many new enhancements requested by customers. [More here]

• Transco Pipeline Celebrates 60 Years (5/23/2009) ....... The longest single-project construction venture ever attempted in 1949 celebrates its 60th year in operation. Construction on Transcontinental (Transco) Gas Pipeline’s Texas-to-New York gas line began on May 23, 1949 and has grown from delivering 350 million cubic feet per day (cfpd) in 1951 to a current design capacity of 8.2 cfpd over a 10,500-mile system. The pipeline was officially in operation after gas was delivered to New York City on Jan. 16, 1951. Transco celebrates the 60th anniversary with a history of the pipeline and its development. [More here]

• Gas Explosion Rocks Howard County, Fire Crews Investigate (5/21/2009) A natural gas pipeline ruptured causing a 100-foot fireball in Howard County near Fayette, Missouri. Panhandle Eastern Pipeline, operator the 24-inch pipeline, shut down an eight-mile section while crews from the company determined what caused the explosion. No one was injured and no buildings were damaged by the fire. [More here]

• Spectra May Boost Investments to $1 Billion in 2010 (5/21/2009) Greg Ebel, Chief Executive Officer of Spectra Energy Corp., said the company may increase spending on new infrastructure by about 54 percent, to $1 billion next year. The increase comes after the company cut its capital expenditures to $650 million this year, from $1.8 billion in 2008 after commodity prices and Spectra's earnings declined. In an interview at Spectra’s headquarters in Houston, Ebel said, “The need for gas infrastructure is still very strong in North America, driven by a couple of factors.” Ebel estimates that gas prices will be $4 to $6 per million British thermal units (Btus) in the coming years. He also believees there will be an increasing use of natural gas for power generation and dynamic changes in supply due to unconventional sources such as shales. Spectra is currently expanding its gathering and processing capacity to handle gas from the Horn River shale in British Columbia and also adding storage caverns in the U.S. Gulf Coast region. ..... [More here]

• TrancsCanada to Sell North Baja Pipeline to TC Pipelines, LP (5/20/2009) TransCanada Corporation has agreed to sell North Baja Pipeline, LLC to an affiliate of TransCanada - TC Pipelines. In exchange for the North Baja Pipeline TransCanada will receive around $200 million in cash and 6,371,680 common units boosting TransCanada ownership of the partnership to 42.6 percent. The total selling price estimated is to be worth $395 million and proceeds from the sale will be used to help finance TransCanada's $19 billion capital program. TransCanada, which acquired the pipeline in 2004, will continue to operate the 80-mile, 30 and 36-inch natural gas pipeline that extends from Southwestern Arizona to location on the California/Mexico border before connecting to a pipeline system in Mexico. [More here]

• PipeLine and Gas Technology Magazine to Host 2nd Annual Pipeline Leak Detection & Monitoring Conference (5/20/2009) Hart Energy Publishing's PipeLine and Gas Technology magazine will host its 2nd Annual Pipeline Leak Detection and Monitoring Conference on October 28-29, 2009 at the Omni Woodway Hotel in Houston, Texas. The event is designed to bring experts, professionals and industry personal together to discuss topics ranging from pipeline leak detection and monitoring to real-world implementation and optimization. The event will host its first Pipeline Repair Workshop. [More here]

• FERC Issues Draft EIS for Downeast LNG Project in Maine (5/18/2009) The Federal Energy Regulatory Commission (FERC) issued a draft environmental impact statement (EIS) for a project sponsored by Downeast LNG Inc. Impacts from the construction and operation of an LNG terminal and related pipelines in Maine "... reduced to less-than-significant levels with the implementation of the applicants' proposed mitigation measures and the additional measures we recommend in the draft EIS," said FERC's staff in the draft released on May 15. Ifthe project is approved Downeast will construct a terminal on the south side of Mill Cove on Passamaquoddy Bay in Robbinston, Maine and a 30-inch, 29.8-mile pipeline to a planned interconnection at an existing pipeline near Baileyville that is owned by Maritimes and Northeast Pipeline LLC. Construction on the pipeline will start next year and is expected to be completed by 2012 and begin operating in 2013. [More here]

• Pipeline Company Rebuts Picketers' Claims of Substandard Wages (5/18/2009) At least two union groups have been picketing Willbros Group in Cherokee County, Texas over work the company started in March. Willbros is constructing a 143-mile gas pipeline for Energy Transfer that will run from Maypearl to Minden, Texas. The picketers are protesting the company's hiring practices. Harry New, Willbros' project director for the Cherokee portion of the pipeline said the company has a history of hiring non-union. “All the people we hire are legal to work in the U.S. We’ve also implemented a 401(k) and offer benefits. It’s up to the employee to elect to take advantage of them,” he said. At least one city in Cherokee County has benefited from the pipeline construction. Jacksonville City Manager Mo Raissi said, “Considering the economic troubles that everyone is having, this is the perfect time for (the company to be in Cherokee County); it is really helping us through a tough time.” Weather permitting the pipeline is expected to be fully operational by September 1. [More here]

• Williams Receives FERC Approval to Provide Additional Natural Gas Service to Southeast by 2010 (5/14/2009) The Federal Energy Regulatory Commission approved a proposal by Williams to expand their Transco natural gas pipeline to better serve markets in the southeastern U.S. Once completed in the second quarter of 2010 the project will create 253,500 dekatherms of southbound capacity on their Mobile Lateral from Transco's mainline at Station 85 near Butler, Alabama. [More here]

• Pipeline Would Put 2,000 to Work in Region (5/13/2009) Enbridge is on the verge of spending another $1.5 billion and employing an estimated 2,0000 people to complete the U.S. portion of its "Alberta Clipper" project and part of its "Southern Lights" project this year. Construction will occur in the states of Minnesota and Wisconsin. However, the company still needs some federal and Wisconsin permitting. It also faces a federal court challenge from the Minnesota Center for Environmental Advocacy. Enbridge spokeswoman Denise Hamsher predicts the construction will start mid-summer despite the current obstacles. When completed, at a cost of around $1.2 billion, the Alberta Clipper 990-mile, 36-inch diameter crude oil pipeline will run from Hardisty, Alberta to Superior, Minnesota. The $300 million Southern Lights pipeline will eventually transport light hydrocarbons or diluents. [More here]

• Pipeline Pressure Fully Restored (5/13/2009) ........ Williams Pipeline Transco was given federal approval to restore normal operating pressures to its line C. This is the final of three lines to return to service. Line B ruptured near Oakville Road, Route 26 in Appomattox County, Virginia on September 14, 2008. Rupture of the 54-year old, 30-inch pipeline caused an explosion that destroyed two homes, damaged another 100 and injured five people. Line A was returned to service in November 2008. Line B returned to service in December 2008 after the company cut out old pipe and replaced it with 2,500 feet of new pipe. The pipeline system totals 10,500 miles and runs from the Gulf of Mexico to New York. [More here]

• Flying J Financing, Restructuring Update (5/13/2009) .... The U.S. Bankruptcy Court for the District of Delaware has approved $20 million in debtor-in possession (DIP) financing from Pipeline Investors Capital for Flying J Inc. and its affiliated companies. The court also approved a $1.5 million increase to $10 million of DIP financing from Merrill Lynch Commodities Inc. The refiner and truckstop retailer--along with Longhorn Partners Pipeline LP, Big West Oil LLC, Big West of California LLC, Longhorn Pipeline Inc., Big West Transportation Inc. and Longhorn Pipeline Holdings LLC--filed for Chapter 11 bankruptcy protection in late December 2008. In a restructuring update the company said "Overall, our restructuring efforts are progressing well.We are continuing separate processes to sell both the Longhorn Pipeline and the Bakersfield Refinery. We have contracted with investment bankers to assist in those processes. Interest in both assets has been good, but there is still much work to do." [More here]

• Energy Solutions International Releases Version 5.2 of PipelineOptimizer Liquids Pipeline Optimization Software; Hosts Product Forum at PSIG Conference (5/12/2009) Energy Solutions International, Inc. (ESI), a world-leading supplier of software solutions that optimize operational and commercial performance of oil and gas pipelines, introduces at the 40th Annual PSIG Conference the latest version of PipelineOptimizer® software for optimizing the financial performance of liquids pipeline assets. Version 5.2 features completely updated and validated functionality to assist pipeline operators in more efficiently operating pipelines for greater savings. ......... [More here]

• El Paso's Southern Natural Gas Works On Line in Alabama (5/11/2009) Southern Natural Gas Co., a division of El Paso Corp. has removed from service a part of its 24-inch north main line for repairs. The natural gas pipeline located in central Alabama between their Providence and Tarrant stations is expected to be out of service for several days. The company said some interruptible services - customers who pay a reduced shipping fee in exchange for possibility of volumes being curtailed during periods of peak demand or unplanned outages - may be affected at points downstream from the Providence station. [More here]

• Keystone Pipeline Breaks Ground in Yankton (5/7/2009) TransCanada Pipeline is expected to begin constructing part of its Keystone oil pipeline project in the community of Yankton, South Dakota in the next few weeks. The location will serve as one of the Midwest hubs for the pipeline that will eventually deliver 500,000 barrels of crude per day to refineries in Kansas, Illinois and Oklahoma. TransCanada expects the pipeline, which will bring oil from Canada, to be in service by the first quarter of 2010. [More here]

• Enbridge Outlines Plans for Four Pipeline Projects (5/6/2009) During Enbridge Inc.'s first quarter conference call, chief executive Pat Daniel, outlined four crude oil pipeline projects as expansion opportunities for the company after 2012. The first possibility involves linking Edmonton, Alberta with Alberta's Athabasca oil sands. Two projects, Imperial Oil Ltd.'s Kearl development and Husky Energy Inc. and BP PLC's Sunrise project, are likely to spur pipeline construction. Another possibility for more pipeline projects involves connecting Cushing, Oklahoma - a major oil oil hub - with Gulf Coast markets. Currently Enbridge and BP are working towards a solution for this opportunity. A third prospect would expand east to Toledo, Ohio and Detroit, Michigan if Enbridge can win all the business for expansion projects by Marathoon Oil Corp. and Husky. The final possibility is Enbridge's Northern Gateway Project that connects Edmonton to a new marine terminal in Kitimat, B.C., giving producers access to Asian markets and pricing power. "Probably in that order, those would be the areas of focus for us," said Daniel. [More here]

• Pipeline Explosion Sends Flames '700 Feet' into Sky (5/6/2009) A natural gas pipeline exploded around 4:30 p.m. in Parke County near Nyesville, Indiana. According to Parke County Sheriff, Mike Eslinger, the flames reached as high as 700 feet into the air and were seen from miles away. The 36-inch diameter section is part of a 6,500 mile pipeline system owned and operated by Panhandle Eastern Pipe Line Co. The company immediately dispatched workers to shutoff the pipeline. Elsinger praised the response from emergency departments throughout the region noting, "the response we had from surrounding counties was tremendous.” The fire was quickly contained and no injuries were reported. [More here]

• Subsea 7's New Pipeline Spoolbase on Target to Open This Summer (5/5/2009) .Subsea 7 is on schedule to complete by June 2009 its new pipeline fabrication spoolbase in Port Isabel, Texas. The new facility, 1.5km in length, consists of a 1.2km stalk rack and a .3km fabrication building. The spoolbase will have the ability to fabricate and store gas and oil pipelines up to 1.2km in length and 20 inches in diameter (16-inch steel plus 4-inch insulation coatings) for spooling onto reeled pipelay vessels. The site will be able weld steel line pipe material ranging from traditional carbon steel to exotic material and be able to complete fabrication of plastic-lined pipelines, pipe-in-pipe systems and steel catenary risers. Work on a 58km pipeline for Marathon's Droshky development, the facilities firsst project, will start in early June. [More here]

• Investigators Begin Probe into Martin County Pipeline Rupture (5/5/2009) Federal officials said an investigation into the cause of a natural gas pipeline rupture south of Palm City, Florida could take up to a year to complete. According to National Transportation Safety Board spokesman, Terry Williams, there is an initial report on the cause, but the investigation could take several days and the final report likely not completed for another nine to 12 months. The pipeline, operated by Florida Gas Transmission Co., is part of an approximately 5,000-mile system that runs from south Texas to the Florida Panhandle and onto Florida's east and west coasts. No fire broke out after the pipeline ruptured, but 80 people where forced from their homes,and a local high school and parts of both Interstate 95 and Florida's Turnpike south of Palm City were temporarily closed. [More here]

• Frost & Sullivan Recognizes Energy Solutions International for Excellence in Customer Value (5/4/2009) .....................................................................................
  

• Issues Opinion on Southwest Oregon LNG Pipeline (5/3/2009) A report released by the Federal Energy Regulatory Commission (FERC) has concluded there will be minimal environmental impact if a proposed liquefied natural gas terminal and pipeline are built in southwest Oregon. The 230-mile, 36-inch diameter Pacific Connector Natural Gas Pipeline would start at the proposed Jordan Cove terminal in Coos Bay and run through the Upper Rogue corridor before ending in Malian (located at the southern end of the Klamath Basin). Project applicants - Williams Pacific Gas Operator, Pacific Gas & Electric Corp. and Fort Chicago Energy Partners - will have to incorporate mitigation measures from their proposal as well as other measures recommended by FERC to limit environmental impact. The project entails crossing 30 miles of national forest, 40 miles of U.S. Bureau of Land Management property and 218 bodies of water. Numerous property owners in the region oppose the project as well as environmental groups. After reviewing the report, Lesley Adams of the Ashland, OR-based Klamath-Siskiyou Wildlands Center said, "At first glance, we have some really significant concerns about water quality and coho salmon impacts. We are also very concerned about the multiple impacts on public land. We share the concerns of affected private land owners." Others, however are in favor of the project since it will create jobs and boost the regional economy. No timetable has been set by FERC for a decision on the proposal. [More here]

• Pipeline-Expansion Talk Begins (5/2/2009) .................. St. Lawrence Gas company officials and New York State legislators have started talks concerning a proposed $20 million expansion of an existing natural gas pipeline located in northeastern New York. The company is seeking funds for a 48-mile extension of the pipeline from the Town of Stockholm in St. Lawrence County to the Village of Chateaugay in Franklin County. St. Lawrence Gas has committed $13 million of the cost to the project with another $3.452 million in local and state government funding leaving a $3.75 million shortfall. The company is seeking funds from St. Lawrence County and the new $1 billion Upstate Revitalization Fund administered by the Empire State Development agency. Construction on the project is scheduled to begin in 2010. [More here]

• Williams Plans Oilsands Pipeline (5/2/2009) ................. The Williams Co. is planning to start construction of a $283 million natural gas liquids and olefins pipeline in the oilsands region of Alberta, Canada in 2010. The more than 250-mile pipeline will run from Williams' extraction plant located in Fort McMurray to its Redwater processing facility. Once completed the pipeline will have a capacity of 43,000 barrels per day of off-gas liquids. The project has anticipated in-service date of April 2012. [More here]

• Officials Lobby for Oil Pipeline; Project Might Start in Early Summer (4/29/2009) Don Thompson, president of The Oil Sands Developers Group and Canadian consul general George Rioux met with Illinois Governor Pat Quinn to seek support for the construction of the final phase of an Enbridge pipeline. The $350 million project started three years ago and the final phase would extend a 36-inch diameter underground oil pipeline from Flanangan, northeast of Peoria to a major refinery at Patoka, near East St. Louis, Illinois. The project faces opposition from environmental groups and some landowners, who claim the pipeline encourages reliance on petroleum products and violates property rights. Rioux said the company is in the final stages of negotiating property rights for the remaining section of the Illinois pipeline. However, he added the visit to Springfield and with Gov. Quinn is intended to intercept long-term measures such as the “low-carbon” fuel rules recently approved in California and currently under consideration by Congress. “Right now, about 50 percent of the oil coming into the Midwest is coming from Canada. That’s going to go up in the next 10 years to about 75 percent,” said Rioux. Illinois Petroleum Council executive director Dave Sykuta, who accompanied Thompson and Roux during their visit, added, “We can talk about ethanol and all the alternatives, and that’s fine, but in the end, the heavy lifting for the Illinois and U.S. economies is still going to be done by oil and natural gas-based products.” Enbridge hopes would like to complete construction by early 2010. Initial capacity for the pipeline will be 400,000 barrels per day (bpd) which can be increased up to 800,000 bpd....... [More here]

• Kinder Mulls Sending Ethanol on Plantation Line (4/22/2009) ..As a result of increasing demand for alternative motor fuels, pipeline company Kinder Morgan Energy Partners is investigating the option of sending ethanol through its Plantation pipeline which runs from Louisiana to Virginia. "We are evaluating the Plantation pipeline ... as the next possible pipeline system that can handle ethanol," Jim Lelio, a renewable fuels business development director at the company, told the Alternative Fuels & Vehicles conference in Orlando, FL. Towards the end of 2008 the company began transporting batches of biofuel through its 105-mile petroleum products pipeline in Florida based on demand from customers wanting to reduce costs incurred via traditional transportation methods utilizing rail and trucks. Converting the Florida line took 18 months and cost more than $10 million to evaluate. Lelio said the company faces much greater challenges and costs in sending ethanol through a pipeline as large as the Plantation line. Problems include water absorption by the ethanol and damage to the pipeline caused by stress corrosion cracking. Later this year, Leilo said Kinder will start the engineering evaluation on Plantation "and potentially the cleaning process, which is a major factor in putting ethanol in the pipeline.", [More here]

• Pipeline Project to Deliver Jobs, Cash (4/19/2009) ..... Construction on the Nebraska portion of the 2,148-mile 30-inch diameter Keystone pipeline will start by mid-May. A 215-mile section of the $5.2 billion pipeline will cross the state north to south from Cedar County near Yankton, South Dakota to Steele City near the Kansas border and cost $490 million. The project will be a boon to the state and mean six months of full-employment for 150 members of the statewide union of heavy equipment operators of which 125 are currently idle. So great is the financial impact on communities, that the construction of the pipelines have been called a traveling stimulus packages. "You get guys staying in motels, eating out, buying groceries, not to mention going to the bars at night," said Rod Marshall, business manager of the International Union of Operating Engineers, Local 571 in Omaha. The project is not without problems. While all but a dozen or so of the 478 property owners along the pipeline have accepted a one-time payment compensating them for the use of their land, one case still blocks construction of the pipeline. A Colfax County landowner declined a $106,000 offer from TransCanada but the company expects the appraisal board to make a decision before they begin construction. In addition, there are some environmental concerns, especially in Seward, Nebraska where the pipeline passes near wells that supply the city's drinking water. "I don't want oil in my water, thank you very much,” said community activist Bonne Kruse. “Pipes break, leak and spill." TransCanada says the company has in place safety measures including anti-corrosion polymer coatings, shut-off valves, 24/7 flow monitoring and deeper burial to avoid accidental damage. Company spokesman Jeff Rauh said officials can quickly detect problems, from "ruptures to a pinhole leak." Once approved the work is expected to be completed by this fall. [More here]

• Alaska's Gas Pipeline Plans Hit by Downturn (4/17/2009) The severe economic downturn, credit squeeze and falling commodity prices have struck a blow to Alaska's efforts to promote interest in a natural gas pipeline to the continental US. A conference designed to encourage investment, by the oil and gas industry in the state's large pool of natural gas, has been shifted from April to September. “As the conference approached, it became evident that with more time we could make more of an impact,” said Harold Heinze, chief executive of the Alaska Natural Gas Development Authority. “The rapidly changing landscape has necessitated some further research and planning.” Both companies competing to build the pipeline - Denali, a company owned by BP and ConocoPhillips, and TransCanada - have said they plan to hold an open season in 2010. Before the 3,500-mile pipeline can be built by either company, commitments by other companies to buy the gas are required. Given that US natural gas prices have recently fallen below $4 per million British thermal units (Btus) from a high of $13.50 in July 2008 many of those companies are now scaling back projects and reducing staff.“It’s a challenging time to get the parties together,” said Bill Popp, chief executive of the Anchorage Economic Development Corporation and conference chairman. “We have to remember that the decisions made to invest in this project are long term in nature and they go beyond these current economic times.” [More here]

• Proposals Would Reform Gas-Pipeline Approval (4/17/2009) Legislation backed by U.S. Representatives Jim Gerlach (R-Penn.) and Joe Sestak (D-Penn.) was drafted to address their Chester County constiuents' concerns about plans to build or expand natural gas pipelines throughout the area. Currently there are three projects in various stages of the approval process. The Williams Transco's project to expand a 2,600-foot pipeline in the region has resulted in the company taking 53 property owners to court to acquire land through the use of eminent domain. The first part of the measure establishes an independent "Office of Public Advocate" with the federal Justice Department to listen to citizens' input and evaluate decisions made by the Federal Energy Regulatory Commission (FERC). The second proposal insists FERC hold at least one public meeting before approving a project on either private or public land. “They are not required to hold any public hearings, so that’s why congressman Gerlach’s been out in front on this,” Gerlach spokesman Kori Walter said. “Let’s get it in writing. Let’s not just go on the goodwill of FERC.” Pennsylvania Senators Arlen Specter (Dem.) and Bob Casey (Dem.) have also introduced matching legislation in the Senate. [More here]

April 2009 Update

In the news...

• Gazprom, ConocoPhillips Discuss Alaska Offshore Exploration (4/15/2009) CEOs James Mulva of ConocoPhillips and Alexei Miller of Gazprom met in Moscow to discuss Alaskan offshore exploration and liquid natural gas (LNG) projects. "Gazprom's experience could be useful in realizing new gas projects in the United States," said Miller. Last October the two companies met in Alaska to discuss a broad spectrum of business opportunities in the largest U.S. state. Gazprom also approached BP and ConocoPhillips about joining forces to work on Alaska's Denali pipeline project, said Miller. However, during the same time, Gazprom also indicated interest in working on a rival pipeline proposal backed by TransCanada. [More here]

• A Powerful Ally Against LNG Plan (4/14/2009) ............. .. Any chance for the construction of the Broadwater Project - a controversial plan to build a huge floating liquefied natural gas platform and pipeline in the Long Island Sound - may have been thwarted this week. The U.S. Commerce Department has concluded that "adverse coastal impacts outweighed [the project's] national interest." The ruling presents a tremendous obstacle to Shell Oil and TransCanada Pipeline - backers of the plan, while bolstering the efforts of those opposed to the project including a coalition of local residents, fishermen, environmentalists, state and local officials from both New York and Connecticut. If built, the natural gas platform would be around eight stories high and almost a quarter of mile long. It would also require costly Coast Guard escorts and restrict marine activity during LNG tank deliveries due to the narrow opening of the Sound into the Atlantic Ocean. [More here]

• Atlas Pipeline Raising Cash: Company Sells Ozark Gas, Joins Williams Cos. in Venture (4/9/2009) In an effort to reduce corporate debt, Atlas Pipeline Partners LP has sold Noark Gas Pipeline LP to Spectra Energy Partners LP for $300 million pending regulatory approval. The company also announced a $100 million joint venture with Williams Cos. Inc. on Atlas' existing 1,800-mile pipeline and gathering system in the Marcellus Shale region of Appalachia. Together the two deals will allow Atlas to pay off around $400 million in debt. "We continue to work on other transactions, which should generate additional cash and further de-lever our company," said Atlas CEO Gene Dubay. Atlas Pipeline Mid-Continent LLC, a Tulsa-based subsidiary of Atlas Pipeline Partners, held a majority interest in the Noark natural gas gathering and transmission system that includes Ozark Gas Transmission, a 556-mile pipeline that runs from southeastern Oklahoma through Arkansas and into southeastern Missouri. [More here]

• USW Challenges TransCanada Keystone Pipeline Permit for Safety (4/9/2009) The United Steelworkers of America (USW) is challenging a pending federal permit for the construction of TransCanada's Keystone Pipeline that will transport oil from Alberta, Canada to Houston, Texas. According to USW International Vice President Tom Conway, TransCanada's $5.4 billion 2,000-mile pipeline, is using a 36-inch thin-wall pipe that will be used at a higher maximum operational pressure than permitted under existing safety regulations. "Our members work hard to produce quality steel and large diameter crude oil transmission pipe right here in the U.S. that meets all safety requirements," said Conway. He added that USW workers "do not want to be denied the opportunity to provide that quality pipe based on a waiver of a fundamental safety regulation promulgated under the normal rulemaking procedures." USW's concerns came to light after pipe imported from India is being used to construct another TransCanada pipeline to a ConocoPhillips refinery in Wood River, Illinois. At a nearby US Steel Granite City mill 2,000 steelworkers have been laid-off since December with several thousand more workers on long-term layoffs at pipe mills across the U.S. A formal complaint was filed with the U.S. Department of Transportation on April 6. [More here]

• FPL Proposes $1.5 Billion for 300-Mile Natural Gas Pipeline (4/7/2009) Florida Power & Light Co. (FPL) has filed a proposal to build an underground pipeline with the Florida Public Service Commission. If approved the $1.5 billion project will be the company's third major natural gas pipeline. The 300-mile, 30-inch pipeline will cross the peninsula from Palm Beach County to Bradford County in north-central Florida and help fuel a new block of power plants in Riviera Beach and Cape Canaveral. According to company spokeswoman, Jackie Anderson the pipeline will be buried four feet below ground following a route, 90 percent of which FPL currently has an existing right-of-way. "Our intent is to locate the pipelines in areas with minimal or no development. These are going under transmission routes. These are grassy open fields," said Anderson. The company's two other pipelines from off-shore sources in the Gulf of Mexico. The new pipeline will deliver natural gas from on-shore areas in Texas, Louisiana and Arkansas and make Florida less dependent on sources of fuel from hurricane-vulnerable areas of the Gulf of Mexico said Anderson. The company wants to finish construction and begin operation of the pipeline by 2014. Utility regulators have yet to set a timetable for review FPL's proposal. .. .... [More here]

• Enbridge Seeks Shippers for Proposed U.S. LaCrosse Pipeline (4/1/2009) Enbridge Inc., Canada's largest energy pipeline operator, will conduct a non-binding open season from April 13 to May 15 to seek energy producers to ship natural gas through the its proposed LaCrosse pipeline. If built, the approximately 300-mile pipeline will start from Enbridge's Carthage hub in Carthage, Texas and end at an interconnection with the Sonat pipeline at Washington Parish in southeastern Louisiana. Up to 12 pipeline interconnections can be added along the route, depending on shipper interest. "We anticipate this pipeline could move at least one billion cubic feet a day of natural gas from the Carthage area and the Enbridge Carthage Hub and the Haynesville Shale producing basin to various interconnections with market-area pipelines located across Louisiana," said Pat Daniel, president and CEO of Enbridge. "The Haynesville Shale is one of the most active gas plays in the United States. Our proposed LaCrosse Pipeline provides a creative and flexible solution to relieve market constraints affecting producers in the booming region." The pipeline is expected to be built by late 2011 or early 2012. [More here]

• Obama Signs Far-Reaching Public Lands Bill (3/31/2009) President Barack H. Obama has signed into law the bipartisan supported legislation HR 146 -- a far-reaching public lands bill into law. The measure, composed of 160 smaller bills calls for the addition of 2 million acres to the federal wilderness system, involves historic sites, and removes more federal acreage from being used for oil and gas leasing and also as an alternative energy generation sites among other provisions. Lisa Murkowski (R-Alaska) said the new law also includes an amendment to the Alaska Natural Gas Pipeline Act authorizing the federal coordinator to establish fees that could be spent without further congressional appropriation for activities authorized under current law. [More here]

• Pennsylvania Seeks More Say on Shale Pipeline (3/29/2009) Because development of the Marcellus Shale formation may last 50 years, Pennsylvania state regulators are seeking to extend the Public Utility Commission's (PUC) authority over non-utility pipelines to ensure underground pipelines transporting natural gas are properly maintained and safe. The Marcellus Shale region lies beneath a large section of Northeast and Western Pennsylvania and PUC officials forecast a large increase in construction of non-utility natural gas pipelines as the area is developed. PUC Chairman James Cawley said the agency is seeking authority to inspect pipelines owned by commercial natural gas producers - normally outside its traditional jurisdiction over public utilities - and increases in fines for pipeline safety violations. "There will be a need for new (Marcellus Shale) pipelines in the future to accommodate the anticipated volume of gas," said Stephen Rhoads, president of the Pennsylvania Oil and Gas Association. Although he has not seen PUC's proposal he suggested the small "gathering" pipelines don't necessitate the type of regulation the agency is considering because the industry already has its own inspection and maintenance programs. "You don't want to lose your marketable commodity," Mr. Rhoads said. "Every leak is a dollar lost. It would be silly for us not to maintain the integrity of our pipeline system." [More here]

• Frost & Sullivan Recognizes Energy Solutions International (3/24/2009) Energy Solutions International, Inc. (ESI), a world-leading supplier of software solutions that optimize operational and commercial performance of oil and gas pipelines, has won the 2009 Excellence in Customer Value of the Year Award in the Global Pipeline Management Solutions category from Frost & Sullivan. In conferring the award, Frost & Sullivan recognized ESI for ingenuity “in addressing the challenges of pipeline management firms by managing the total life cycle and operations.” ESI markets its software solutions both as standalone deployments and as an integrated suite that optimizes the complete spectrum of pipeline operations. It is this inclusive approach, addressing the markets’ need to optimize assets while reducing costs, which earned ESI the Customer Value award. [More here]

• POET Partners Up for Proposed Dedicated Ethanol Pipeline (3/14/2009) Magellan Midstream Partners, L.P. has signed an agreement with POET, LLC to continue examining the feasibility of constructing a dedicated ethanol pipeline from the U.S. Midwest to distribution terminals in the Northeast. “POET adds valuable experience as a leader in ethanol production, marketing and logistics to this project,” said Don Wellendorf, Magellan’s president and chief executive officer. POET is the world's biggest ethanol producer and manufactures more than 1.8 billion gallons each year. “This agreement with Magellan is an important step in improving long-term transportation economics for our facilities and consumers,” said POET chief executive officer Jeff Broin. “A project of this nature would provide benefits throughout the ethanol industry, agricultural community and the economy in general. It would also represent another major step forward in the efficiency of producing and delivering ethanol to the marketplace.” If built, the proposed $3.5 billion, 1,700-mile pipeline would collect ethanol from production facilities located in Iowa, South Dakota, Minnesota, Illinois, Indiana and Ohio and efficiently transport it to terminals in major Northeastern markets. [More here]

March 2009 Update

In the news...

• TransCanada Challenged on Alaska Pipeline License (3/14/2009) In light of current economic conditions, two Alaskan state legislators have called for a review of TransCanada Corp.'s license to build a $26-billion natural gas pipeline. Representative Jay Ramras (R-Fairbanks) and Craig Johnson (R-Anchorage) introduced the resolution in the Alaska House because of concerns about the project’s financing given the current global recession. If passed the motion would require Gov. Sarah Palin and the attorney general to review the application and present their findings within six months. TransCanada has secured approximately $4 billion (U.S.) for the project and maintains low commodity prices will not affect the project. "A change in the natural gas market price over the last six months does not swing whether or not this project is viable," said Tony Palmer, head of TransCanada's Alaska project. "In the best case, we will be in service in the fall of 2018, and then we will be in-service for 25 to 50 years beyond that. It's the price of natural gas at that time that is critical, not today's price." Last year TransCanada received an exclusive license for the proposed 2,761-kilometer pipeline system that will transport an estimated 35 trillion cubic feet of gas from Alaska's North Slope. The license includes $500 million in Alaska state tax incentives for the company. [More here]

• Alaska Legislature Considers Uncoupling Oil and Natural Gas Taxes to Boost State Revenue (3/13/2009) Alaskan Senator Bert Stedman (R-Sitka and co-chair of the Senate Finance Commitee) wants to decouple taxes on gas production and oil production. “The end goal is to protect the state revenue stream and to offer stability and predictability to the industry, and encourage development and production,” Stedman said. Alaska uses a progressive tax structure for oil with higher oil prices netting a higher tax burden. Currently, oil and gas taxes are combined so when producers earn large profits from oil, they can use profit on gas (which is usually less profitable by volume than oil) to reduce the total amount of taxes paid to the state. Stedman argues that under certain market conditions tax revenues will be diluted creating an unstable tax environment. However, Alaskan State Department of Revenue Commissioner, Pat Galvin, disagrees. “Our analysis indicates that no changes are needed, that the taxes are appropriate both for the state and for the producers. Part of that profitability is that they (producers) are reducing the tax burden on oil.” He warned that changing the current tax laws could open a Pandora's box with the state losing out in the end. Changes to the tax structure could be made as soon as the start of the 2010 legislative session and in time for open season later in the year. [More here]

• ConocoPhillips: Alaska Gas Pipeline to be in Service by 2019 (3/11/2009) The Denali pipeline, proposed by ConocoPhillips and BP, can be brought into service by 2019 said a ConocoPhillips executive during a recent analyst meeting. The estimated $30 billion, 2,000-mile pipeline is expected to start accepting bids for gas transportation next year. The pipeline could transport 2 billion cubic feet of gas a day or around 7 percent of the total U.S. daily consumption. The companies are also considering the construction of a 1,500-pipeline from Alberta, Canada to Chicago, Illinois. [More here]

• GE: Sticks with That Old Energy Religion (2/27/2009) ...... General Electric has announced it will invest $276 million in U.S.-based oil and gas projects. The total includes $126 million in funds for Regency Energy Partners to complete the Haynesville natural gas pipeline in North Louisiana. “This project will improve the overall energy security and independence of the United States by alleviating a transportation bottleneck experienced by many producers in the Haynesville area,” said Dan Castagnola, managing director at GE Energy Financial Services. The remaining $150 million will be used to fund the operation of a floating oil and gas rig located in the Gulf of Mexico. The rig will be operated in partnership with ATP Oil & Gas Corporation. [More here]

• TransCanada Pleased with NEB Decision to Federally Regulate Alberta System (2/26/2009) The National Energy Board (NEB) of Canada has approved TransCanada's application for the federal regulation of its Alberta System pipeline. The decision gives the company more flexibility to transport natural gas to North American markets and draw new gas supplies. "The decision is good news for our customers, Alberta System stakeholders and our company," said Hal Kvisle, TransCanada president and CEO. "Having the Alberta System federally regulated means TransCanada can extend the pipeline across provincial borders, allowing us to provide potential customers a direct connection to the pipeline network, and provide attractive service options and rates to producers in British Columbia (B.C.) and the Northwest Territories." The regulatory oversight change increases the chance that B.C. and Northern gas will directly integrate with the Alberta hub -- North America's largest trading point. Kvisle said TransCanada expects to file additional applications seeking approval to expand the Alberta System into northeastern B.C. If approved, a 77-kilometer (Groundbirch) pipeline for the Montney, B.C. area could be operational by the fourth quarter of 2010 and a 155-kilometer Horn River line could transport gas by the first half of 2011. [More here]

• Epsilon Energy Commences Construction of the Highway 706 Pipeline (2/25/2009) Epsilon Energy Ltd. has begun the construction of a natural gas pipeline and related production infrastructure within its Highway 706 project in Pennsylvania. The U.S. Department of Environmental Protection has given the company an ESCGP-1 permit to begin build-out of a compression facility and gathering system to bring natural gas production to a sales point on the Tennessee Gas pipeline. So far, Epsilon has obtained more than 25 miles of right-of-way for pipeline construction and expects to start natural gas production at the end of June 2009. [More here]

• Willbros Announces New Project Awards (2/25/2009) ...... The Willbros Group Inc. as bean awarded two new projects valued at approximately $181 million. The first contract awarded to Willbros U.S. Construction division is for the construction of the Texas Independence Pipeline by Energy Transfer Fuel, L.P. - a subsidiary of Energy Transfer. The project involves building a 143-mile, 42-inch pipeline from Minden in Rusk County, Texas to a location near Maypearl in Ellis County, Texas. Work is scheduled to begin in March 2009 and be finished in time for a third quarter 2009 in-service date. In addition Willbro's Downstream segment, InServ, has been given verbal commitment from the National Cooperative Refinery Association (NCRA) for the extension through September 30, 2011 of its current contract for Program Management Services associated with part of a planned Heavy Crude Expansion Project (HCEP). Willbros President and CEO Randy Harl said, "We are pleased to announce these two awards which demonstrate our potential market opportunities. Both Energy Transfer and NCRA are valued customers for which we have performed multiple successful projects. We appreciate their confidence in our execution abilities and look forward to completing two more important projects on their behalf." [More here]

• Gas Pipeline Expansion Put on Hold (2/24/2009) ........... Georgia-based Colonial Pipeline spokesman Sam Whitehead said a proposed 460-mile petroleum products pipeline has been put on hold indefinitely. The expansion, announced in 2006 and scheduled for completion in 2012, would have added a third pipeline between Baton Rouge, Louisana and Atlanta, Georgia. "The urgency of doing this now is not as clear as it was in 2006," Colonial President and CEO Tim Felt said in a press release. The original cost estimate for construction of the pipeline was $3 billion. Despite the poor economic climate, the company continues to seek permits for construction of the pipeline. When asked if delaying the expansion would create supply problems in the future, Whitehead said, "It's too early to tell. It certainly could if things come back as quickly as they went down-hill."... [More here]

• Pipeline Could Bring $750 Million and 2,000 People to West River, South Dakota (2/19/2009) The TransCanada Keystone XL pipeline project is expected to bring up to 2,000 crude oil pipeline workers, their families and $750 million of investment into northwestern South Dakota over the next two years. The 2,000-mile, 36-inch diameter steel pipeline will link to an existing pipeline in Kansas and transport oil from Alberta, Canada to the Gulf Coast of Mexico refineries. When completed by 2012 or 2013, at an estimated cost of $7 billion, the pipeline could be the longest in North America. [More here]

• Stealth Energy Announces Pipeline Completion Phase (2/18/2009) Stealth Energy Inc. has redeployed it crews to finish construction of its gas pipeline project in Stillwater County, Montana. The company had to halt construction of the last two miles of the pipeline for three months due to adverse winter conditions. When completed the pipeline will be used to transport and sell gas from three shut in commercial wells: Hailstone 1-23, 2-23 and Copulous 1-18. It will eventually connect to further wells. [More here]

February 2009 Update

In the news...

• Denali Group to Build Gas Treatment Plant (2/15/2009) The Denali pipeline group (owned by ConocoPhilips and BP) has awarded an engineering contract for a $2 billion gas treatment plant in Prudhoe Bay, Alaska to Fluor WorleyParsons Arctic Solutions. The engineering firm, a joint venture between Fluor and WorleyParsons, has retained CH2M Hill as its subcontractor for Alaskan support services during the design phase of the project. The size of the contract is confidential, but according to Denali spokesman, Dave MacDowell, "It is in the range of several million dollars." Technical studies for the plant will include cost estimates, execution planning, project design and anything else needed to move the project forward, MacDowell said. The plant will be a part of the planned $30 billion Alaska natural gas pipeline project that will run from Alaska's North Slope to Alberta, Canada. If built the gas treatment plant will be the largest of its kind in the world and be responsible for removing hydrogen sulfide, carbon dioxide and other impurities as well chill and compress natural gas before being sent to the pipeline. [More here]

• Enbridge Has Plans for Big Gas Pipelines (2/14/2009) ... As a result of a number of oil pipeline projects being delayed or set aside, Enbridge Inc. is now considering large-scale natural gas pipeline projects to fill the void. The company has already delayed its plans to build the Fort Hills oil pipeline. "It is fair to say we will see some delay and push-out beyond ... our long-range plans on some of the oil projects, and some gas projects to fill it in," said Pat Daniel, Enbridge's chief executive. "We're very active on the gas side already in developing alternate opportunities." Projects such a proposed Rockies Alliance Pipeline that would connect Chicago with the natural gas fields in the Colorado Rockies could take a more significant role in the company's plans after 2012. [More here]

• State Agency OKs New Pipeline Rules After Calls from Residents, Officials in Barnett Shale (2/14/2009) ............. In response to citizen's concerns about the Barnett Shale field, the Texas Railroad Commission has approved a set of new rules for natural gas pipelines in the state of Texas. The state commission, which oversees gas, oil and pipeline industries, has approved new rules that state safety regulations for low-pressure production and flow lines that connect gathering lines that run through heavily populated areas. Previously, the pipelines were virtually unregulated and were only inspected after a complaint or problem was noticed during inspections of a well or lease. Inspections will take place on an annual basis. In addition, gas distribution systems will now have to report any leaks and any unrepaired lines to the commission every six months instead of just writing reports without submitting them. Funding has been requested by the commission for 13 more pipeline inspectors and 21 more gas and oil well inspectors. [More here]

• Obama Will Discuss Proposed Alaskan Gas Pipeline with Canadian Leaders (2/12/2009) President Barack Obama promised to discuss Alaska's proposed gas pipeline with Canadian leaders during his trip to Ottawa on February 19. "It's a project of great potential and something I'm very interested in... as I mentioned during the campaign, I actually think that for us to move forward on the natural gas pipeline as part of a comprehensive energy strategy - that includes both more production as well as greater efficiency - makes a lot of sense," Obama said. "As it happens, Prime Minister Harper, as well as President Calderón of Mexico, have a great interest in energy. Obviously, Canada is one of the biggest energy players in the world. They share an interest in not only the production side, of the economic benefits, but I think they're also interested in a broader conversation about efficiency and how it relates to issues like climate change." Alaskan Gov. Sarah Palin wrote a letter to Pres. Obama earlier in the month requesting he discuss the pipeline with Prime Minister Stephen Harper during his visit. The Alaska legislature granted a Canadian company, TransCanada, an exclusive state license to build the pipeline last year. [More here]

• TransCanada CEO Downbeat about Mackenzie Line (2/11/2009) Despite years of planning and rising costs, regulatory delays have increased the chances that the Mackenzie natural gas pipeline will not be built according to TransCanada's CEO. "I confess to some pessimism on the Mackenzie project, and it may well not proceed," Harold Kvisle said. The most recent setback came at the end of last year when two regulatory panels said they expected to deliver their reports on the project months later than originally scheduled. TransCanada currently does not have a stake in the pipeline but can acquire 5 percent through the native-owned Aboriginal Pipeline Group, which aims to control a third of the project. In January, the Canadian government offered financial aid for the proposal to cover pre-construction costs, roads and airstrips. "I have great sympathy for the current government of Canada, which is doing everything it can to move the project forward," Kvisle said. "But it inherited a mess that's been building up for a couple of decades." Despite Kvisle negative comments, Canadian Environment Minister, Jim Prentice, told reporters in Ottawa, "I continue to be optimistic about the project. It's a very important project for our country." The proposal, led by Imperial Oil Ltd, calls for the construction of a 760-mile pipeline through the Northwest Territories to Alberta and will be able ship up to 1.9 billion cubic feet of natural gas a day. [More here]

• Massive Gas Release on North Slope Could Have Destroyed Pump Station, Officials Say (2/8/2009) According to investigators, on a January 15, a massive release of Prudhoe Bay natural gas that filtered into Trans-Alaska Pump Station 1, the gas could have destroyed the building and shutdown Alaska's North Slope oil fields. The incident occurred, when a "bullet shaped" cleaning pig (a device used to scrape walls and detect problems) became stuck after workers "lost track of its exact location" along the pipeline. Workers for BP PLC were using pressurized natural gas to move the pig through a corroded 34-inch pipeline. The pig was being to used to swab oil out of the pipeline in preparation for its decommission. After the release, Pump Station 1 (through which all oil from the North Slope must pass) was shut down from 3:06 PM to 3:41 PM. Alyeska Pipeline Service Co., operator of the 800-mile pipeline, said the pipe section was among the major Prudhoe trunk lines found to be severely corroded because of BP's lack of proper maintenance. Alyeska acknowledged an explosion or fire could have jeopardized the safety of over 60 workers at the pump station and caused shutdown of the oil fields. The incident, which alarmed regulators, BP and Alyeska workers, was not reported to the authorities until January 20 - five days after it happened. The U.S. Pipeline and Hazardous Material Safety Administration, the Joint Pipeline Office - an Anchorage umbrella agency for federal and state regulators overseeing Alaskan pipelines and Congressional offices with oversight over energy development and safety are investigating the matter. [More here]

• Lawmaker Sends Note to Hillary Rodham Clinton on Gas Pipeline (2/5/2009) Texas State Rep. Chente Quintanilla has sent a letter to Secretary of State Hillary Rodham Clinton asking her to determine why a presidential permit was granted last October for the construction of a gasoline pipeline from El Paso, Texas to Juárez, Mexico without a proper review of an environmental impact study. Specifically the letter requests she provide answers as to why the interests of PMI Service North America - a U.S. subsidiary of Mexico's national oil company Pemex - had more priority than those of U.S. citizens. "Our arguments were ignored," Quintanilla wrote. "What is worse, those individuals in the State Department who are charged with protecting the interests of U.S. citizens allowed Pemex to use our arguments in making their case against our interests." PMI officials have said the pipeline is a safer way to transport diesel and gas than the trucks they currently use. Work has started on the pipeline and it is expected to be in operation later this year. [More here]

• Butte County Could Host New Natural Gas Pipeline (1/29/2009) American Oil & Gas is seeking to install a new natural gas pipeline along county roads in the north central section of Butte County, South Dakota. According to company engineer, Neal Neumiller, a six-inch diameter steel pipeline would be buried five to six feet underground following the public right of way. The 20-mile line would travel from wells and a compressor located near U.S. Highway 85 west to the Williston Basin Instate pipeline. If the project is approved by the Butte County Commission, an American Oil & Gas land agent said the county will receive a one-time fee of $60,000 for the access. [More here]

• Aboriginal Leaders Applaud Mackenzie Delta Pipeline (1/26/2009) Mackenzie Delta aboriginal leaders cheered and celebrated the start of the northern pipeline hearings in Inuvik, North West Territories. "We're ready,'' said Fred Carmichael, president of the Gwich'in Tribal Council and chairman of the Aboriginal Pipeline Group (APG). "We've had 30 years to get ready since (Thomas) Berger,'' he added, in reference to the 1970s commissioner who stopped the first attempt at constructing the pipeline so the northern communities could gain strength to deal with the gas industry. APG owns one-third of the $4.8 billion proposed natural gas pipeline that will run 1,200 kilometers through the Mackenzie Valley to Alberta. National Energy Board (NEB) chairman Ken Vollman called the $7 billion Mackenzie Gas Project "an historic undertaking" that is the largest proposal to seek NEB's approval. Project manager Randy Ottenbreit said, "The Mackenzie Gas Project needs all the components in order to succeed," including the approval of a $2.2 billion Mackenzie Delta production facility or nothing will go ahead. In an area with unemployment approaching 40 percent Mackenzie Delta residents seek jobs that require 12-hour days in -40 degrees F winter weather. "The biggest challenge is to get our people off dependence on government,'' Carmichael said. "That creates a terrible society. The only way out I see is to become self-sufficient.'' Despite most residents' enthusiasm for the project several groups oppose it including the Sierra Club of Canada and the Deh Cho - a lone aboriginal holdout who is not participating in ownership of the pipeline. The environmentalists claim protecting the northern boreal forest from destructive development will preserve the value of the forest they estimate to be around $93.2 billion a year or more than double the expected $37.8 billion net revenue generated from resource extraction. [More here]

• BP Official: Alaska Natural Gas Pipeline Prospects Dim (1/23/2009) The overall economic collapse, declining energy prices and the emergence of unconventional energy sources has dimmed prospects for constructing a pipeline from Alaska's North Slope according to a senior BP executive. "It's not a pretty story right now in terms of North American natural gas markets," said Brian Frank, president of BP Energy Co and BP's North America Gas and Power at an annual industry conference in Anchorage, Alaska. BP and ConocoPhillips - two of the three major North Slope oil producers - are competing with their Denali proposal against TransCanada to build a pipeline around 1,700 miles long from the North Slope to Alberta. Although TransCanada, which has an exclusive license for the project from the state of Alaska, estimates the project will cost $26 billion, Frank thinks the cost will be in the $30 to $40 billion range. "It's very difficult to find the financing and funding for projects and infrastructure," he said. In fact economic conditions are so bad that each week several major customers for BP's natural gas are filing for bankruptcy and others are now on prepayment plans "because they are not credit worthy," he said. The project also faces competition from shale gas produced in the Rocky Mountain and Midwest states. Despite the adverse conditions, Frank believes the project can move forward but only if there is a "stakeholder aignment" that includes regulatory and fiscal "reliability" from the state of Alaska. "How do you know the economics for your project if you don't know what you're going to pay in taxes?" he said. Both the Denali and TransCanada proposals would seek a license from the Federal Regulatory Energy Commission in 2014 and then financing for the project assuming economic conditions have recovered by that time. [More here]

• Scientist: New Fault Could Mean Major Arkansas Temblor (1/21/2009) A recently discovered fault near Marianna in eastern Arkansas could trigger a magnitude 7 earthquake with an epicenter located near a major natural gas pipeline. According to Haydar Al-Shukri, director of the Arkansas Earthquake Center at the University of Arkansas at Little Rock, the fault is separate from the New Madrid fault responsible for several quakes in 1811-12 that caused the Mississippi River to flow backwards. The fault is thought to have formed in the last 5,000 years and already experienced at least one magnitude 7 earthquake. "This is a very, very dangerous (area) at risk of earthquake," Al-Shukri said. "When you talk about (magnitude) 7 and plus, this is going to be a major disaster." Al-Shurkri did not say when a quake may happen though he did predict it would affect Little Rock, Tennessee and Mississippi. Although he declined to name an owner of the pipeline, an Arkansas Public Service Commission map of the area indicates Arkla Energy Resources has a pipeline in the area. Rebecca Virden, spokeswoman for CenterPoint Energy Inc. which owns Arkla, said pipes are "all over the place... We, CenterPoint Energy, or someone else has a pipeline everywhere." Several quakes occur each year in Arkansas near the New Madrid Seismic Zone but so far none of the temblors have been connected with the Marianna fault according to Al-Shukri. [More here]

January 2009 Update

In the news...

• EnCana Offers Up to $500,000 for Info on B.C. Pipeline Bombings (1/14/2009) A week after the fourth attack on a pipeline near Dawson Creek, British Columbia, the Royal Canadian Mounted Police (RCMP) have identified "persons of interest". RCMP Sgt. Tim Shields said although those people are not co-operating with the ongoing investigation, "We are asking that they do the right thing." The comments were made during a news conference at which EnCana Corp. - one of Canada's largest energy companies and operator of the bombed pipeline - offered a $500,000 reward for information leading to the arrest and prosecution of those responsible for the attacks. EnCana executive Mike Graham said the company is grateful no one has been seriously hurt up to now. "But if the attacks continue there is a serious risk of injuries or even death," Graham said. He went on to say, "After consulting with the RCMP and the Crown assigned to the prosecution, EnCana will determine the monetary value, if any, of the information provided to the investigation." [More here]

• Iroquois Announces 08/09 Expansion Phase 2 In-Service (1/14/2009) Iroquois Gas Transmission System, L.P. has constructed Phase 2 of its 08/09 Expansion Project - two new 10,300 horsepower (hp) compressor units at its Milford, CT compressor station. Phase 1, a 1.6-mile pipeline in Newtown, CT, was completed on November 14, 2008. After completing the third phase of the project, a second 10,300 hp compressor at their Brookfield, CT compressor station, Iroquois will be able to receive and additional 200 million cubic feet per day of natural gas at its interconnect with the Algonquin Pipeline in Brookfield, CT. [More here]

• Inter Pipeline Slashes 2009 Capital Spending (1/13/2009) After almost completing its Corridor pipeline expansion project, Inter Pipeline Fund is cutting its 2009 capital budget to C$209 million from C$628 million a year ago. The $1.8 billion Corridor expansion consists of an approximately 470-kilometer, 42-inch diluted bitumen pipeline and related facilities between the Muskeg River mine and Scotford up-grader in Canada's oilsands region near Edmonton, Alberta. When completed and in-service by 2010, the pipeline will boost bitumen capacity to 465,000 barrels per day from 300,000 bpd. The expansion project is a joint venture between Shell Canada (60 percent stakeholder), Chevron Canada and Marathon Oil Canada Corp. (each with 20 percent). After acquiring the Corridor system almost two years ago for C$760 million from Kinder Morgan, Inter Pipeline became the largest bitumen transporter in the Alberta oilsands region moving half of all production. [More here]

• Oil Market Manipulation Alleged (1/10/2009)........... . Several weeks after Flying J filed for Chapter 11 protection, a memo written by a union official at the company's Big West refinery located in Bakersfield, CA, has led to accusations that Shell Oil is trying to manipulate California's gasoline market. The memo states "the refinery is out of crude oil" and blames Shell for closing a pipeline that brings crude into the plant, thus depriving it of raw material. In 2004, Shell owned the refinery and threatened to close it, claiming it wasn't profitable. At the time California politicians suspected Shell was seeking to raise gas prices by reducing gasoline supplies and the company was pressured to sell the plant instead. Sen. Barbara Boxer has asked Attorney General Jerry Brown to investigate the memo's accusations. "The Big West Refinery supplies our state with 2 percent of its gasoline and 6 percent of its diesel fuel, and in these tough economic times, Californians can't afford high gas prices stemming from refinery closures," Boxer, D-Calif., wrote in a letter to Brown, who said he'd "take a hard look at the situation." Shell spokeswoman Alison Chassin responded that Flying J owes Shell "tens of millions" of dollars for crude already delivered to the plant and, although Shell is no longer shipping oil, other suppliers are free to use the pipeline. She also said the refinery has another pipeline not owned by Shell that supplies crude. [More here]

• TransCanada Completes $2-Billion Debt Issue (1/10/2009) Pipeline and power company TransCanada Corp. has completed a $2-billion debt financing. The offering done in the U.S. through TransCanada Pipelines Ltd., consisting of $1.25 billion in 30-year notes and $750 million in 10-year notes that will be used to partially fund capital projects and retire maturing debt. [More here]

• Alaskan Gas Pipeline Tops P&GJ's Pipeline Opportunities Conference (1/8/2009) The fifth annual Pipeline Opportunities Conference, slated for March 11, 2009 at the George R. Brown Convention Center in Houston, TX will highlight the most recent developments in the Alaskan natural gas pipeline project. Jeff Share editor of Pipeline & Gas Jouranal and conference chairman, said the conference provides a rare opportunity to bring together for the first time executives from TransCanada Pipelines and the Alaskan Natural Gas Development Authority (ANGDA) with officials from Gov, Sarah Palin's administration and the Office of Federal Coordinator - who are all involved in the project. “On one issue Gov. Palin and President-elect Obama agree: they want that pipeline built," Share said. "Alaska needs that revenue and the lower 48 needs that gas and the jobs it will create.” [More here]

• Pipeline Build-Out Helped State Avoid Economic Disaster in 2008, but Future Is Uncertain (1/7/2009) Wyoming managed to avoid economic disaster in 2008, in large part due to a six-year, $9 billion natural gas pipeline build-out. The state's natural gas production has grown from 4 billion cubic feet per day (cfd) in 2002 to 6.5 billion cfd this year, resulting in an increasing reliance on natural gas revenues. However, the future outlook is perplexing. "I've been through three downturns, but this has just been an unbelievably rapid change from $150 per barrel in July to $50 per barrel," said Don Likwartz, outgoing supervisor of the Wyoming Oil and Gas Conservation Commission. Spot price for Wyoming gas has proven to be just as volatile. Even though the Rockies Express substantially increased export capacity, natural gas production continues to outpace export capacity. When the Rockies Express was taken off-line last September for hydrostatic testing, 800 million cubic feet of daily capacity was lost, causing Wyoming's wholesale price to plunge to $1.78 per thousand feet while the price on the NYMEX was $8.39. Even though there are nine new pipeline projects planned to expand the regions natural gas export capacity, none are on schedule. If construction is not accelerated, Wyoming may face another regional price collapse in the 2009-2010 time frame....... [More here]

• Fourth Pipeline Blast - EnCana Targeted with Another Explosion Near Tomslake, B.C. (1/6/2009) The fourth in a series of bombings striking EnCana Corp.'s pipeline and facilities partially destroyed a metering shed at a wellhead near Tomslake in northeastern British Columbia. The most recent attack occurred 20 kilometers southeast of Dawson Creek and approximately 5 kilometers from the site of the third explosion in October. Royal Canadian Mounted Police (RCMP) Sgt. Tim Shields considers the latest attack directly linked to the previous ones. “The explosive sites have been successively closer and closer to nearby residents ... the previous explosion occurred about 800 meters away from the nearest house. This explosion took place 250 meters away from the nearest house ... This poses a very real risk to the public,” said Shields. No motive for the attacks has been determined. “We don’t know if this is some type of message that the suspect or suspects is trying to send to the public, but what it does solidify in the mind of our investigators is that we need help from the public. There must be someone out there who knows exactly who it is that’s setting off these explosions,” said Shields. EnCana community advisor, Brian Lieverse, said he had no idea why the company was being targeted. Although no sour gas leaks have resulted from the attacks Lieverse said there are safety protocols in place at all of EnCana's facilities in the event a leak does occur. [More here]

• Show Us Mackenzie Pipeline Decision in March: Agencies to Panel (1/5/2009) Two of the three agencies responsible for creating a panel to review the proposed Mackenzie Valley natural gas pipeline in the Northwest Territories have called on the panel to release a "decision document" by March 31, 2009. The report on potential impacts along the route of the proposed pipeline on people and the environment along its route was scheduled to be released in December 2009. However, a letter to panel chairman Robert Hornal from chairmen of the Mackenzie Valley Environmental Review Board and the Unuvialuit Game Council (Rick Edjericon and Frank Pokiak) demanded the Joint Review Panel release its decision on the pipeline by March with a final published report by the end of June 2009. After concluding public hearings in November 2007, the panel has been silent on the subject, only saying the report would be released sometime in 2009. A consortium of companies led by Imperial Oil wants to build a 1,200-kilometer natural gas pipeline through the Northwest Territories to the Alberta connecting to existing pipelines serving southern markets. [More here]

• Oil Company Flying J Files for Bankruptcy (12/22/2008) Pipeline operator, oil producer and refiner, Flying J, has filed for Chapter 11 bankruptcy protection. The privately held company cited weak oil prices and financial turmoil in the credit markets has the reason for the filing. "With this sudden and unanticipated inability to meet our liquidity needs, we regret that we had no other choice than a Chapter 11 filing to enable us to stabilize our financial base," J. Phillip Adams, president and chief executive, said in a statement. The company has around 200 oil and gas wells in the Rocky Mountain region, a 70,000-barrels-per-day refinery in Bakersfield, California, a 35,000-bpd refinery in Utah, a 700-mile refined products pipeline owned by its Longhorn Pipeline Holdings unit and 250 retail outlets. Last year the company had sales of more than $16 billion. The company does not expect to layoff any employees as a result of the bankruptcy filing. [More here]

December 2008 Update

In the news...

• Environmental Impact Statement Underway for Gas Pipeline Between Fairbanks, Beluga Gas Field ............ (12/14/2008) The Alaska National Gas Development Authority (ANDGA) has awarded a contract to prepare an environmental impact statement (EIS) to URS Corp. for a planned natural gas pipeline in Alaska. If built the 480-mile pipeline will run north from the Beluga gas field located west of Anchorage to Fairbanks, Alaska - with 90 percent following existing rights-of-way and easements. ANGDA's plan calls for 20-inch steel pipeline from the gas field to Delta Junction and an eight-inch plastic pipeline carrying gas from Delta Junction to Golden Valley Electric Association's North Pole power generation plant. If a large diameter gas pipeline is built from Alaska's North Slope the flow direction will be reversed to carry gas south and eventually feeder lines and take-off points will be added to meet Alaska's needs. ANGDA's plan comes after a request from Gov. Sarah Palin that the state authority find a way to get gas to Fairbanks before the North Slope pipeline is built, estimated at the earliest by 2018. [More here]

• Post-Hurricane Gas-Line Fixes Slow Return of US Gulf Oil (12/12/2008) Three months after Hurricanes Gustav and Ike, 14.9 percent of Gulf oil output and 21 percent of gas output were still shut as of December 3 awaiting repairs, according to the U.S. Minerals Management Service (MMS). "We had some major impacts to gas transmission lines. That's what we still see, at this point, being the holdup on the gas as well as associated oil," said Lars Herbst, the MMS Gulf Region director, adding, "If you can't get the gas flowing in those transmission lines, the oil associated with that platform is also curtailed or shut in." Burning off gas to facilitate oil production is forbidden by the MMS. Almost all pipeline damage was caused by the toppling of platforms by towering waves generated by the storms. This experience may cause relocation of pipelines and tighter standards on construction of pipeline junction platforms. Herbst said the pipeline breaks affecting TransCanada ANR Pipeline Co.'s Central Gulf Gathering System kept 66,000 barrels of oil per day off line. Natural gas transportation through Williams Transcontinental Gas Pipeline Corp and Southeast Louisiana Lateral pipelines kept an unspecified amount of gas out of production. Herbst did not indentify oil companies whose production is affected by the repairs. [More here]

• New Alaska Senator Doubtful on Natural Gas Loan Guarantees (12/11/2008) Alaskan Senator-elect, Mark Begich, said he doubts the U.S. Congress will give additional loan guarantees to TransCanada Corp. to back the company's plan to build a natural gas pipeline from Alaska's North Slope. Although he supports the $18 billion federal loan-guarantee provision that includes an inflation clause, he was "troubled" by reports TransCanada wants additional loan guarantees. Adding the inflation clause to the 2004 legislation "has already increased the loan guarantee by $2 billion over the last four years," Begich said. "In this economic condition the country's in, getting loan guarantees and these kinds of things is very difficult," he said. Last week TransCanada, Gov. Sarah Palin's choice as the project sponsor, was awarded a state license to construct and operate a 1,715-mile natural gas pipeline that will run from Prudhoe Bay to an existing pipeline hub in Alberta. The company estimates the pipeline will cost $26 billion....... [More here]

• Striker Oil & Gas Announced Completion of 4-Mile Gas Pipeline on Its Catfish Creek Prospect (12/11/2008) Striker Oil & Gas have finished installing a 4-mile pipeline connecting its gas production from its Catfish Creek Prospect. Pressure testing and final mechanical hook-up were expected to be done in 7-10 days allowing new gas production. Upon completion, the company will own a 25% working interest in the pipeline. [More here]

• Pipeline Companies Weather Darkest Hour; Executives Say Crisis Worst in Canada's Oil Patch History (12/9/2008) According to the leaders of Canada's oldest and largest oil pipeline companies, Calgary's energy sector is in the midst of its worse economic decline in its history - even worse than the devastating collapse of the 1980s. Enbridge CEO, Pat Daniel said emphatically, "I think -- no, I won't think -- this is the worst I've experienced in my entire career. When you go from$150 (US) crude to $50, that's the biggest absolute drop in history. This is the worst of the hard times we've ever had . . . I hope we've seen the worst of it, but it's really hard to know." The combination of falling commodity prices and the continuing financial crisis has lead to the oil patch's darkest hour. Hal Kvisle, TransCanada's president, said, "Clearly we're in a 12-to 24-month period of contraction--in everything," he said. "Financial markets are in as difficult shape as I've ever seen them." Even though pipeline companies are usually unaffected by the daily fluctuations of the financial markets, theirr customers are not. Large oilsands producers such as Shell Canada, Petro-Canada, Nexen Inc. and others have delayed major new projects and expansion of existing ones because of the economic uncertainty. Despite the economic turmoil, TransCanada easily sold a $1.16 billion share offering and Enbridge is one of the top performing stocks on the TSX, losing only 1.7 percent year-over-year vs. the TSX main board's 41 percent loss and the TSX's capped energy index loss of 56 percent since June. [More here]

• The Alaskan Pipeline - A Wolf in Sheep's Clothing? (12/10/2008) The recent Alaskan gas pipeline license awarded to TransCanada Corp. may have a negative long-term impact on Canada's natural gas industry according to a firm that specializes in evaluating the economic impact of oil and gas reserves. According to Ralph Glass, VP Operations of AJM Petroleum Consultants, said, "While construction of the Alaskan pipeline will likely have a positive impact on Canada's economy in the shorter term, once it is up and running it will make Alaska into a direct and effective competitor for Alberta and British Columbia's natural gas industry. Looking ahead we have to consider the fact that the Alaskan pipeline will increase natural gas volumes in the US market. That could keep natural gas prices low in future years; low natural gas prices will have a significant impact on future drilling here in Canada." Glass recommends Canada reduce its dependency on the US market and aggressively pursue an LNG and oil export terminal on British Columbia's coast to gain access to world markets. [More here]

• Palin to Sign State Pipeline License, Giving $500 Million to TransCanada (12/7/2008) Calgary based company TransCanada Corp. has been awarded the Alaska Gasline Inducement Act license (AGIA) to build a more than $30 billion natural gas pipeline to Alaska's North Slope. The license includes up to $500 million in state grants that will pay for up to half the company's costs in preparing for a 2010 open season. Because of the limited time in preparing for the open season, TransCanada's vice president, Tony Palmer, said the company has already started preliminary environment and engineering work as well as taken aerial photographs along two possible routes. He also said the project has not been affected by current difficulties in the financial markets. A rival project - the Denali pipeline - led by BP and ConocoPhillips also plans to have an open season in 2010 to solicit customers. The 1,715-mile pipeline from the North Slope to Alberta, is "huge, but not unprecedented for TransCanada," said Palmer adding the company's legacy pipeline system built across Canada 50 years ago was larger and technically more challenging. The company's Keystone project, currently being built in the continental U.S., will have 4,000 miles of new pipe when completed in 2010. If completed the Alaska project will represent on approximately 5 percent of TransCanada's exiting pipelines. [More here]

• Mackenzie Pipeline Going Ahead: Prentice (12/4/2008) Construction of the proposed $16.2 billion Mackenzie Valley Pipeline in the Arctic has faced numerous regulatory delays, negotiations with aboriginal groups and prolonged discussion over fiscal breaks for the lines backers. Despite these setbacks, Canada's Minister of the Environment, Jim Prentice said he is "actually very optimistic because a lot of the work that needed to be done has now been done." Prentice expects to receive a report on the environmental and social impacts of the pipeline between March and May of 2009 and felt the Mackenzie project was now most likely five to six years ahead of the proposed Alaska gas pipeline. The 1,200-kilometer Mackenzie pipeline will transport 1.9 billion cubic feet of gas a day along the Mackenzie River Valley in the Northwest Territories to Alberta, where it will link to existing lines serving U.S. and Canadian markets. It is expected to be in operation by the middle of the next decade. [More here]

• U.S. Supreme Court Rejects Pipeline (12/2/2008) ... The U.S. Supreme Court ruled in favor of a decision by the Connecticut Department of Environmental Protection to deny environmental permits necessary for the construction of a 50-mile pipeline crossing Long Island Sound. The court rejected an appeal by Islander East, an interstate natural gas pipeline company, thus forcing the company build the pipeline without crossing the Sound. Connecticut Gov. M. Jodi Rell said in a press release it was and environmental victory not only against this pipeline but also the 2007 Broadwater proposal to build an LNG storage and re-gasification facility in the Sound. “First Broadwater — now Islander East: With today’s Supreme Court announcement, we have succeeded in turning back two ill-conceived energy projects,” she said in a press release. [More here]

• Enbridge Gets Go Ahead for Pipeline (11/25/2008) Despite environmental concerns by the Minnesota Center for Environmental Advocacy (MCEA), the Minnesota Public Utilities Commission voted unanimously to approve Enbridge Energy's request to build nearly 1,000 miles of oil pipeline between Alberta, Canada and Superior, Wisconsin. MCEA opposes the project arguing it contradicts Minnesota's goals to reduce green house gas emissions and increase energy efficiency. Enbridge Energy spokesperson, Denise Hamsher, countered that the company had already taken environmental issues into account. "Think about tens of thousands of trucks on Highway 2, the government would have to expand the highway,' she said. "This is a much safer alternative for transporting oil underground. It is not without risk, we wish it would be absolutely risk free, but we do everything we can to reduce that risk and have shown again year after year that pipeline transportation is by far the safest mode of transportation." MCEA representatives said they are investigating other options to stop construction of the pipeline, including taking their case to the court of appeals. [More here]