Thursday, May 21, 2009

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]

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The Pipeline Place is a area to access and comment on all relevant information on standards and regulations specific to the North American pipeline industry. Sponsored by Energy Solutions, this blog includes feeds from government agencies, links to various standards bodies, and the latest reports and articles. There will be a monthly update highlighting new regulatory information as well as articles from our technical staff on pipeline simulation, leak detection, nominations & scheduling and gas forecasting. Please let us know what other topics you would like to read about. To subscribe to receive reminders on the monthly Standards update email: info@energy-solutions.com. Thank you!