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]

November 2008 Update

In the news...

• Study Shows Alaska Holds Another Source of Energy (11/16/2008) The U.S. Geological Survey has determined hydrates found 2,000 feet below Alaska's North Slope contain as much as 85.4 trillion cubic feet of recoverable natural gas. The Department of Energy describes hydrates as "ice-like solids that result from the trapping of methane molecules within a lattice-like cage of water molecules." Advances in techniques used to access more conventional fuel sources may open up the possibility of recovering this potential energy source. Government research shows depressurizing deposits through drilling and other techniques is enough to release natural gas found in the hydrates. Globally "hydrates have more potential for energy than all other fossil fuels combined," according to Interior Secretary Dirk Kempthorne. Large hydrate deposits also exist in the Gulf of Mexico. Along with the estimated 35 trillion cubic feet of proven natural gas reserves, the hydrates could add to the utility and lifespan of the planned natural gas pipeline from Alaska's North Slope. [More here]

• Alberta Ranchers Want Moratorium on Proposed Pipeline (11/12/2008) Concerned about a proposed Petro-Canada pipeline running through Kananaskis County, Alberta, local ranchers are seeking a moratorium on oil and gas development. Petro-Canada is applying to build a 56-kilometer (35-mile) pipeline and drill 11 sour gas wells on the Southeastern slopes of the Canadian Rockies. "The potential impact of this pipeline goes far beyond the miles of trenches. Everywhere a pipeline has been built, it's been followed by weeds, motorbikes, ATVs, trespass, clearcuts, more wells, more roads, and more industrialization," said Mac Blades, president of the Pekisko Group (a group of local families who view themselves as stewards of the land). Currently the area is inaccessible to vehicles. The group is also concerned about possible damage to the 72 water courses in the Willow Creek and Pekisko Creek drainage areas which are home to Alberta's provincial fish, the Bull Trout - considered a "species at risk" by the Alberat Ministry of Sustainable Resources and Development. Hearings on Petro-Canada's application began on November 12 in High River. [More here]

• $40 Million Going into Ethanol Project (11/11/2008).. Kinder Morgan Energy Partners (KMEP) will begin shipping ethanol through a 106-mile Florida pipeline running from Tampa to Orlando starting mid-November. As many as 40 fuel trucks a day will be eliminated from area highways and transportation savings will be approximately 3 cents per gallon. So far the company has spent $30 million on improvements to facilities and equipment located in Tampa and Orlando. KMEP also spent another $10 million on fortifying the existing gasoline pipeline to enable it to transport the more corrosive ethanol. “This sets the precedence for pipeline ethanol distribution,” said Bradley Krohn, president of U.S. EnviroFuels LLC in Riverview. “I don’t know of it being shipped through pipeline distribution anywhere else in the U.S. now.” [More here]

• Enbridge Expansions to Go Ahead Despite Falling Oil Prices, Credit Crunch (11/5/2008) Pat Daniel, Enbridge Inc. CEO, said plans for $12 billion in pipeline projects will not be derailed by distressed financial markets and declining oil prices. The company had a 90-percent increase in third quarter earnings thanks to some major projects entering service earlier this year. "This increase in earnings is primarily due to the progress that we've made on our first wave of liquids pipeline projects," said Danial, adding, "Wave 1 projects are commercially secured and under construction and this drop in crude prices will in no way affect their in-service dates or their earnings profiles once they're placed into service." He went on to caution it was too early to know if Enbridge's Wave 2 projects, worth $15 billion, will be affected by current market conditions. However, Daniel remains optimistic the expansions will begin construction in 2012 and beyond. "Just as producers didn't use $150 a barrel as a planning benchmark during the price run up earlier this year, we're probably not going to be using $65 per barrel crude oil long term... In a lot of ways these longer-term projects make even more sense," Daniel said. [More here]

• Flint Announces Oilsands Pipeline Maintenance Contract Award (11/3/2008) FT Services, a 50 percent-owned Flint Energy Services Ltd. joint venture, has been awarded a C$12 million, 2-year contract to provide pipeline maintenance services for Canadian Natural Resources Ltd's Horizon Project near Fort McMurray, Alberta. "This new contract builds upon our current maintenance capabilities with Canadian Natural and excellent performance to-date," said Andy Mackintosh, President and CEO, FT Services. "The addition of the pipeline maintenance work demonstrates our capabilities and growing relationships with our customers in the Fort McMurray oil sands region." Between 50 and 60 personnel will be employed by FT Services to do pipeline maintenance services starting in mid-December. [More here]

• B.C. Pipeline Bombings May Not Be Eco-terrorism: Says Expert (11/3/2008) According to University of Alberta sociology researcher, Paul Joosse, extreme frustration over property rights and sovereignty - and not environmental radicalism - is likely the reason behind three recent attacks on a natural gas facility in northeast British Columbia. "This person, I would say, is ensconced in their own local struggle and probably started to use these tactics after being frustrated for years in their community with a lack of success at getting results." The first two attacks targeted a natural gas pipeline running south of Dawson Creek, B.C. on the Alberta border. The most recent bombing occurred at a natural gas wellhead operated by Encana Corp. in the same area. Joosse a PhD student whose research focuses on radical environmental groups including EarthFirst! and the Earth Liberation Front (ELF), said the Dawson Creek bomber profile doesn't fit that of the typical "eco-terrorist." Groups like ELF tend to focus their efforts on more expansive issues like clearcut logging, are quick to broadcast their affiliation and even offer manuals on how to place incendiary devices to achieve maximum damage said Joosse. Except for an unsigned handwritten letter warning Encana to close its operations and to leave the area no public attention has been sought. Furthermore, Sgt. Tim Shields of The Royal Canadian Mounted Police said police believe they are dealing with a local person, or group of people, "because of their familiarity with the community as well as a knowledge of oil and gas." So far, the blasts have done minimal damage and no one has been injured. Encana released a statement saying crews had sealed "a small leak" by injecting cement into the damaged wellhead. [More here]

• Alliance Pipeline Receives FERC Waiver Approval (10/30/2008) The Federal Energy Regulatory Commission (FERC) approved a revision to Alliance Pipeline LP's tariff allowing the company to waive a gas quality specification on "a first come, first served basis". Consequently, EOG Resources, Inc. subsidiary, Pecan Pipeline Inc., can now flow dense phase rich gas outside the liquefiable hydrocarbon specifications currently found in Alliance's FERC Gas Tariff. "The FERC's decision shows a strong commitment to swiftly and effectively develop North Dakota's natural gas resources by utilizing existing infrastructure," said Murray Birch, president and chief executive officer, Alliance Pipeline. "We are very pleased, and appreciative of, the support we received for this application." [More here]

• TransCanada Boosts Keystone Stake, Profit Rises (10/28/2008) TransCanada Corp has increased by almost 30 percent its stake in the $12 billion Keystone pipeline project and despite the global credit crisis expects to have financing in place by the end of the year. The other stakeholder in the project - ConocoPhillips - now holds only 20.1 percent. However, TransCanada said it will give other shippers an opportunity to acquire up to a 15 percent stake in the project. The $5.2 billion first phase of the of pipeline running to Illinois and Oklahoma is expected to be in service next year and will carry 590,000 barrels per day (bpd) of oil. Keystone's $7 billion second phase is will carry another 500,000 bpd of oil to refineries based on the Gulf Coast and is expected to be completed by 2012 or 2013 at the latest. TransCanada's also reported profits increased by 20 percent in the third quarter. [More here]

• Engineer Pitches Denali Pipeline (10/24/2008) ................. Since announcing their intention in April to build a private natural gas pipeline from the North Slope to the continental U.S., BP and ConocoPhillips have have spent $40 million on summer field work. Speaking at an Anchor Point, Alaska Chamber of Commerce luncheon, John White, an engineer with BP said, "We've got a team mobilized and it's growing every day. I'd say we have the critical mass to actually get the project started." He went on to say that the proposed Denali gas line will follow the Trans Alaska oil pipeline to the Delta Junction, at which point it will then follow the Alaska Highway crossing the Alberta border into Canada and connecting with existing infrastructure in Alberta. In total, the pipeline will travel around 2,000 miles and require 2 million to 3 million tons of steel. Most of the steel will have to be produced overseas as the U.S. currently does not have the manufacturing capacity to make the pipe. The project may also add another 1,500 miles of pipeline traveling from Alberta to the U.S. The pipeline will transport 4 billion cubic feet per day (cfpd) of natural gas or approximately 7 percent of U.S. daily consumption. The project consists of four phases - the first phase will be an open season targeted for 2010, with filing of applications for permits by year end, followed by development of detailed designs during the permit approval process. The third phase involves equipment and material contracts. The fourth and final phase will need five years - a year for material procurement, a year for mobilization, and three years for construction. "That sounds like a long time, but that is a tight timeline," White said adding "It's all about regulatory process and how fast that goes." Although Denali is competing with TransCanada Corp.'s pipeline proposal, White said he thinks the two projects will combine. "Ultimately, there can only be one pipeline," White said. [More here]

• Enbridge Mulls Pipeline Stake for Native Groups (10/24/2008) In order to gain support for its proposed Northern Gateway oil sands export pipeline, Enbridge Inc. may offer aboriginal groups an equity stake in its 525,000 barrels-per-day pipeline. Details have yet to be decided on the size of the stake to be offered to native communities residing along the pipeline's route from Edmonton, Alberta to Kitimat, British Columbia, as well as how to finance the stakes have yet to be decided. Another project - the C$16.2 billion Mackenzie Valley natural gas pipeline - by Imperial Oil has included native groups as a partner (the Aboriginal Pipeline Group) since 2000. However, the Mackenzie project still has not been constructed due to regulatory delays and cost overruns. The Northern Gateway pipeline is estimated to cost more than C$4.5 billion and is expected to be completed by early 2015. [More here]

• Plateau Mineral Development, Inc. Announce Building of a Pipeline to Produce Significant Revenues (10/21/2008) Plateau Mineral Development, Inc, (PMD) and its partner Plateau Mineral Development LLC. has completed a 6.16-mile long pipeline with a six-inch and four-inch main trunk line which in turn are fed by an additional four miles of two-inch pipeline. The pipeline system, located in Morgan County, Tennessee, is capable of gathering and delivering 300,000 cubic feet of natural gas per day from twelve gas wells to a PMD Compressor Station that feeds gas into the 24-inch east-west SPECTRA high-pressure main pipeline Further expansion of the pipeline will allow production from fields that have been shut in for more than 20 years. Robert Matthews, President of Plateau Mineral Development, said, "This pipeline is a major step towards increased revenue for our company. We look forward to reaping its benefits." [More here]

June 2008 Update

In the news...

• Oil and Gas Industry Veteran Fackrell to Lead Producers' Alaska Gas Line Project (6/12/2008) ConocoPhillips and BP PLC selected oil and gas industry veteran Bud E. Fackrell to be the first president of Denali-The Alaska Gas Pipeline LLC. In April, the two companies announced the project to compete with TransCanada Corp. proposal currently under review by the Alaskan Legislature. "This is a real project for us," Fackrell said. "We are moving forward. We have made a $600 million commitment. The Alaska market is an important piece for us." He added Denali will continue to build its executive team in addition to the 50 field workers collecting data in Tok. By year's end, the goal is to have a 150 employees made up of workers from BP, ConocoPhillips and outside contractors. [More here]

• Some Alaska Lawmakers Seek Quick Vote on Pipeline (6/11/2008) After completing a first round of hearings on a natural gas pipeline project, some lawmakers want to vote now on Gov. Sarah Palin's recommendation to give TransCanada a license for the pipeline and up to $500 million in subsidies. Although the Legislature has until August 1 to back or reject the governor's proposal, State Sen. Con Bunde said money could be wasted if lawmakers take the full 60 days granted by the Alaska Gasline Inducement Act. He added the Legislature's consultants hired to analyze the proposal concluded no harm could come from the license. However, Sen. Charlie Huggins said there is still too much to learn and a vote now implied the Legislature is only rubber-stamping Gov. Palin's proposal. House Minority Leader Beth Kerttula said each argument has merit, but added, "Let's hear all of it out." "Would I like to get a vote on this now and save all the time, energy and money? Absolutely," she said. "But am I willing to go through the slides, the presenters and all the information. That's probably the wisest." [More here]

• U.S. EPA Rejects ConocoPhillips Refinery Expansion (6/10/2008) The U.S. EPA upheld a challenge to air permits granted by the Illinois EPA and required by ConocoPhillips to expand its largest U.S. refinery - Wood River Refinery - in Roxana, Illinois. The legal challenge by environmental groups and led by the Natural Resources Defense Council (NRDC) argued that harmful air pollution from the refinery was not being adequately controlled. NRDC senior attorney, Ann Alexander said "Excessive emissions from this expanded refinery would have harmed the health of everyone in the region." She added "We are not asking for hugely complicated or costly measures... Holding flare emissions down just requires sound engineering and responsible operating practices." The Wood River Refinery expansion is tied to the proposed 1,840-mile pipeline from Hadisty, Alberta. The pipeline, to be jointly developed with TransCanada, will be used to transport crude oil from Canadian tar sands. Without the proposed expansion, Wood River refines around 306,000 barrels of oil per day. [More here]

• TransCanada Bewildered by Gazprom's Alaska Offer (6/10/2008) TransCanada is surprised about reports claiming OAO Gazprom, Russia's natural gas exporter and operator of the world's largest gas pipeline network, wants to talk about TransCanada's proposed $26 billion Alaska pipeline. "All I've seen are the press articles. TransCanada has not been approached by Gazprom," said Tony Palmer, TransCanada's vice-president of Alaska development. "TransCanada has offered parties that commit gas in the initial open season that we're prepared to offer equity to and, to this point, we don't know if producers will take us up on that offer. But those are the parties we would be approaching first to become potential partners in the project," he added "(Gazprom) is not a producer in Alaska today." According to Bloomberg, Gazprom is in talks with ConocoPhillips and BP PLC about partnering on a competing pipeline proposal. Bloomberg also reported Alexander Medvedev, Gazprom's deputy chief executive, says they are in talks with BP and ConocoPhillips and his company will "soon" begin talks with TransCanada. He went on to say "We don't just want to participate; we want to bring value," adding either project will cost "dozens of billions of dollars". Edward Jones energy analyst Lanny Pendill thinks Gazprom is using any means to get access to the United States gas market. He said a partnership would allow the company to "get its foot in the door". Last month Gazprom struck a deal with Enbridge Inc., Gas Metro and Gaz de France to supply a 500 million cubic feet per day of gas to the proposed $800 million Rabaska liquefied natural terminal east of Quebec City in exchange for an equity stake in the project. [More here]

• Oil Will Peak at $150-200 - Barron's Interview (6/8/2008) Barron's magazine interviewed Goldman oil strategist Arjun Murti, who among other things, in 2004 predicted the current oil "super spike." He now sees oil peaking somewhere between $150 and $200 a barrel or, in other words, $5.75 a gallon. Murti says pipeline companies such as Oneok and El Paso stand to benefit from the United States' need to expand its pipeline infrastructure. Ultimately he does not believe $150-200 is sustainable and expects prices to fall back to $75 a barrel after people have changed their energy consumption behavior (e.g. driving less) - some time in the next 20 years. How long prices stay high is anyone's guess. [More here]

• Pipeline Will Be Finished on Time, Brunswick Vows (6/8/2008) Emera-owned Brunswick Pipeline says its controversial natural gas pipeline will be completed on time. The 145-kilometer pipeline that runs through southwest New Brunswick (NB) to connect with the Maritimes and Northeast Pipeline at the U.S.-Canada border near St. Stephen, NB will deliver natural gas from the Canaport LNG facility near Saint John. The proposed route caused a public outcry from Saint John area residents because it is due to run through parts of Saint John, including Rockwood Park and across the St. John River. Company spokeswoman Susan Harris said crews are restoring the park and preparing for the pipeline's crossing of the St. John River. She said the company hopes to have gas flowing through the pipeline for its November in-service date. [More here]

• Temple University Study of Pulsed Electromagnetic Fuel Treatment Yields Dramatic Results in Reducing Oil Viscosity (6/5/2008) Save the World Air, Inc. (STWA) has concluded tests conducted by Temple University's Department of Physics and sponsored by a major international engineering and oil refinery construction company. The results confirmed earlier tests showing substantial reductions in the viscosity of heavy crude oil, when treated with a patent-pending pulsed electromagnetic device. Crude oil densities are measured using American Petroleum Institute (API) gravity. The higher the number the less dense or the "lighter" the crude oil is. Oil API gravities of less than 21.5 are considered to be "heavy crude" while Brent crude's API of 38 is considered to be "light crude." Researchers using pulsed electromagnetic technology, without the heat factor, were able to reduce viscosities by 16% for API 11 and 19% for API 21. The results indicate heavy crude oil can be moved faster and more efficiently through pipelines from the wellhead as well as other applications in the transportation and refining process. Temple Physicist Dr. Rongjia Tao stated in his report, "We are very confident that STWA's licensed technology will be able to reduce the viscosity of crude oils, similar to API 21 by 30% with the electromagnetic treatment technology." The technology can be very beneficial to the oil industry, given the quantity of heavy crude available throughout the world, which up to now has been prohibitively expensive to extract. [More here]

• Enterprise's Repair of Independence Pipeline May Cut Gas Prices (6/4/2008) A leak in the 134-mile 24-inch diameter Independence Trails pipeline has been fixed after 55 days of repairs. The $286 million natural gas pipeline owned by Enterprise Products Partners LP moves gas from the Independence Hub, located under 8,000 feet of water in the Gulf of Mexico. The Hub when fully operational produces 1 billion cubic feet a day or 2 percent of U.S. gas supplies and represents 10 percent of all deliveries from the Gulf. The leak originated in an O-ring gasket on a pipeline flex joint under 85 feet of water causing the shutdown of the pipeline on April 9. Natural gas futures have risen 26% to $12.221 per million Btu on the NY Mercantile Exchange since the shutdown. After Enterprise announced resumption of service, natural gas futures fell by as much as 1.6 percent to $12.06. Enterprise has more than 35,000 miles of pipelines. [More here]

• TransCanada Says It May Seek to Build Peruvian Gas Pipeline (6/3/2008) As part of its strategy to satisfy increasing North American demand, TransCanada confirmed it may pursue building a natural gas pipeline in Peru. "It's purely an exploratory activity at this point,'' said company spokeswoman Shela Shapiro. "The idea has some inherent possibilities.'' The company may team up with Brazil's state controlled oil company, Petroleo Brasileiro SA, to become the third group to bid on the approximately $1.2 billion pipeline. TransCanada owns Canada's largest natural gas pipeline system with more than 36,669 miles of pipeline in the U.S., Canada and Mexico. "It's a logical fit for Peruvian gas to get into the North American market," said Shapiro, adding the Peruvian project suits the company's strategy of linking producing regions with North American consuming markets. Peru is South America's fifth largest natural gas producer and is expected to double gas output over the next four years. [More here]

• Alaska Governor Proposes $500 Million in Subsidies for a Gas Pipeline (5/23/2008) Alaska Gov. Sarah Palin is suggesting $500 million in matching funds to subsidize the construction of a natural gas pipeline proposed by Canadian company TransCanada. The 1,715-mile pipeline would cost between $30 billion and $60 billion and transport gas from Alaska's North Slope to markets in the lower U.S. and Alaska. It could eventually supply up to 7 percent of the United State's current natural gas use. “A domestic supply of clean energy, you can’t go wrong with this,” Ms. Palin said. “We’re ready to tap it.” However, Bert Stedman, State Senator and vice chairman of a special Senate committee reviewing the proposal, said Gov. Palin's plan appears to take a great risk by granting so many incentives to TransCanada when the company has no commitment to use the pipeline from producers that own gas rights on the North Slope. A rival pipeline plan from two of the three major North Slope producers - BP and ConocoPhillips - was announced in April and the companies say they have committed to spending $600 million on early development of the pipeline. Gov. Palin countered her plan is superior because it included "enforceable commitments" from TransCanada and gas producers wanting to use the pipeline with an option to allow new companies to use it at reasonable rates. [More here]

• Canada's Oil and Gas Front Man Calls It Quits (5/22/2008) Canada's top oil and gas sector advocate, Pierre Alvarez, president of the Canadian Association of Petroleum Producers (CAPP), resigned Wednesday May 21st but said he will stay with the powerful lobby group until a successor is found. The announcement precedes another announcement, made on May 22nd, that David MacInnis, president of the Canadian Energy Pipeline Association (CEPA) is to become VP of policy, government and public affairs at Chevron Canada Ltd. CEPA, which lobbies on behalf of Canada's pipeline industry, has promoted current VP, Brenda Kenny, to the position vacated by MacInnis. [More here]

• Planned Pipeline to Carry North Dakota, Montana Natural Gas (5/20/2008) Williston Basin Interstate Pipeline Co., a unit of MDU Resources Group Inc. is planning on building a 100-mile 16-inch natural gas pipeline from Bakken shale formation in Montana and North Dakota to an existing pipeline that transports gas to Chicago, Illinois. The pipeline, estimated cost to be between $50 million and $75 million, will initially carry 100 million cubic feet of gas per day and ultimately up 200 million daily, according to company spokesman Tim Rasmussen. The company hopes to have the pipeline completed by mid-2010. [More here]

• REX-West Fully Operational (5/20/2008) Rockies Express Pipeline LLC, a joint venture of Kinder Morgan Energy Partners, LP, Sempra Pipelines and Storage and ConocoPhillips, announced the final 210 miles of the Rockies Express West pipeline (REX-West) are now in service. Approximately 500 miles of the 713-mile 42-inch diameter pipeline that travels from the Cheyenne Hub in Weld County, Colorado to Audrain County, Missouri started service January 12. REX-West pipeline now has a natural gas capacity of 1.5 billion cubic feet per day (Bcf/d). Pending regulatory approval, the company will begin construction of REX-East, a 638-mile pipeline extending east from Missouri to Clarington, Ohio. The entire REX project is expected to operating by June 2009. [More here]

• Canadian Superior Plans Gas Line for U.S. Northeast (5/20/2008) Canadian Superior Energy Inc. and Global LNG Inc. will collaborate through their joint venture - New Jersey-based Excalibur Energy Inc. - on a $550 million liquefied natural gas project. The Liberty Natural Gas Transmission Project includes a deepwater pipeline system 15 miles off the coast of Asbury Park, New Jersey and an import buoy used to process as much 2.4 billion cubic feet of gas from drilling sites off Trinidad and Tobago. Last year, the Caribbean country was the leading supplier of natural gas to the U.S., accounting for 3.4 percent of the U.S. gas supply, according to Energy Department data. Previous U.S. Northeastern projects have been delayed or stopped by citizens and state governments concerned about security and the environment. Excalibur CEO Roger Whelan said the liquefied natural gas will be delivered "without compromising safety or the clean waters off the Jersey shore.'' The company hopes to have the pipeline operational by late 2011. [More here]

• FOCUS: Florida Readies for First US Ethanol Pipeline (5/19/2008) Kinder Morgan, the largest U.S. independent energy pipeline operator, is converting its 104-mile 16-inch gasoline pipeline running from Tampa to Orlando to transport both gasoline and ethanol later this year. "We're doing lab tests with different metals for the pipeline now and will have our first experimental ethanol run through the line in September," said Jim Lelio, Kinder's business development director. "If early runs are successful, commercial operations will start later this year. Gasoline will move through the line, followed by ethanol, and a small amount of intermingling will occur where the two meet, in what's called a transmix." Ethanol attracts water and when mixed with oxygen can cause pipes to crack; both problems must be solved by Kinder engineers before the pipeline can operate. Ethanol is derived domestically from Midwest corn and abroad from sugar cane in Brazil, the Caribbean and Central America. It enters Tampa by boat and train and will be stored in well sealed tanks before being piped to Orlando and sold by central Florida gas stations in a 10% ethanol blend E-10. [More here]

May 2008 Update

In the news...

• Grain Gives Way to Fuel (5/14/2008) ......... ....................... All across the U.S. ethanol plants are consuming more and more of the nation's corn crop. This year, around a quarter of all corn farmed in the U.S. will go to feeding ethanol plants instead of livestock. "The price of grain is now directly tied to the price of oil," says Lester Brown, president of Earth Policy Institute, a Washington research group. "We used to have a grain economy and a fuel economy. But now they're beginning to fuse." Iowa, one of the two largest corn-exporting states in the U.S., now has 28 ethanol plants with dozens more under construction. Two pipeline companies, Magellan Midstream Partners and Buckeye Partners, are exploring if it is feasible to build a $3 billion pipeline to transport up to 3.65 billion gallons of ethanol from the Midwest to distribution points in Ohio and mid-Atlantic states. As a result of this new domestic demand stockpiles are dwindling and Iowa's exports of corn are expected to be less than half of current levels in a few years. [More here]

• TransCanada, Enterprise Products and Quicksilver Gas Services Sign Agreement for Equity and Pipeline Capacity in Pathfinder Pipeline Project (5/12/2008) Affiliates of Enterprise Products Partners L.P. and Quicksilver Gas Services LP have signed a Memorandum of Understanding to acquire up to a total of 50 percent ownership of TransCanada's proposed Pathfinder Pipeline project. Enterprise would own up to 40 percent and Quicksilver the remaining 10 percent. Both companies committed to ship a total of 500 million cubic feet of gas per day for a 10-year period. TransCanada will own the remaining portion and be responsible for developing, constructing and operating the pipeline project. Phase one of the Pathfinder Project plans to install a 915-mile natural gas pipeline from Meeker, Colorado through Wamsutter, Wyoming to the Northern Border Pipeline Company system by 2010. Initial capacity is expected to be 1.2 billion cubic feet per day. A second phase will extend the pipeline to Emerson where gas can be shipped to Eastern markets or stored using the Great Lakes Gas Transmission system and TransCanada's Canadian Mainline system. Phase two could be in service as early as the fourth quarter of 2011. [More here]

• Premier Counters Dirty Oil Threat (5/09/2008) ....... Alberta's premier, Ed Stelmach fended off an attempt by an environmental coalition's campaign to get the U.S. Congress to prohibit the use of "dirty oil" - from Alberta's oilsands - by American government agencies. The premier said if the U.S. does not want to utilize Alberta's oilsands - the second largest oil reserves in the world - the province will look to other countries. "We will not only depend on the American market. We will expand markets. If that means building a pipeline to the coast and selling oil to another country, we will," Stelmach told reporters Thursday. "We have options and we'll continue to pursue options." He added later it will be up to companies to decide if they should build a pipeline to the coast. "If there's further resource development and other parts of the world are crying for energy, the companies in the pipeline business, I'm sure, will determine that and make that decision," he said. The veiled threats came a day after the Natural Resources Defense Council and 26 other U.S. and Canadian environmental groups sent a letter to U.S. Congress men and women urging them to reconsider the use of oilsands-derived energy. Less than a week earlier, 500 ducks died in a toxic tailings pond near Fort McMurry - a loss condemned by both the prime minister and environmental groups - tarnishing Alberta's environmental image around the world. [More here]

• With Billions of Dollars at Stake, TransCanada Pitches Pipeline (5/8/2008) Calgary, Alberta-based pipeline operator TransCanada Inc. is waiting to see if Gov. Sarah Palin's administration will forward its pipeline proposal to the Alaskan Legislature for approval during the week of May 19. If approved, the company - the only one to meet the state's Alaska Gasline Inducement Act (AGIA) requirements - potentially qualifies for $500 million in state subsidies. In the meantime, competing oil companies ConocoPhillips and BP have put forth their own proposal called the "Denali Alaska Gas Pipeline." The companies argue they are better suited to build the pipeline because they hold rights to much of the North Slope's gas. Tony Palmer, vice president of Alaska Development for TransCanada, said that outside of Alaska, "It's not the norm for producers elsewhere to own pipelines." ConocoPhillips and BP have suggested, along with ExxonMobil Corp., they wouldn't make their gas available to competing pipelines. Palmer said TransCanada spent years developing rights of way for the gas pipeline through Canada - the same route proposed by BP-ConocoPhillips - and the company will defend those rights. [More here]

• Enbridge Has $15 Billion in New Projects Under Consideration CEO Says (5/8/2008) Enbridge Inc.'s CEO Patrick Daniel told shareholders at their annual meeting that the company has $15 billion of new projects under consideration to expand their network of pipelines. One proposed project is the $2.6 billion Texas Access pipeline it plans to build with ExxonMobil Corp. to bring Alberta oil down to the refining hub of Port Arthur, Texas. The pipeline would connect to Enbridge's mainline in Patoka, Illinois and have a capacity of 400,000 barrels by 2012. Enbridge also plans to file an application for construction of its Gateway pipeline to Kitimat, B.C. by 2009. The oil pipeline would open up new markets to California and East Asia. The company is currently in discussions with several undisclosed Canadian oil producers about the pipeline. [More here]

• Federal Government Grants Rehearing of Pipeline Tariffs (5/7/2008) The Federal Energy Regulatory Commission (FERC) agreed to give more time to reconsider tariffs it granted to Western Refining Pipeline Co. to ship crude oil in the company's 414-mile pipeline. The Navajo Nation and Resolute Natural Resource Co. objected to the tariff's - which range from $6 to $7.50 a barrel and went into effect on March 10 - on grounds that they were discriminatory and harm producers in the Four Corners region. "In order to afford additional time for reconsideration of the matters raised or to be raised, rehearing of the commission's order is hereby granted for the limited purpose of further consideration," Nathaniel Davis Sr., deputy secretary of the commission, wrote in the order. Although the Navajo Nation currently does not ship on Western's pipeline, it plans to do so in the future. The tribe claims the price Western offers for crude oil produced by Navajo Nation Oil and Gas Co. will reduce revenues by $4.2 million and lose about $6 million in royalty and tax revenues each year. Western Refining spokesman, Gary Hanson declined comment on the claim, only saying, "I'll let the previous ruling stand for itself". [More here]

• Crude Costs Pump Oil Pipeline Capacity (5/7/2008) Canada's National Energy Board (NEB) said in its annual report that surging crude oil prices are responsible for a big shift to oil pipelines. Last year, NEB considered applications for almost one million barrels per day (bpd) of new oil pipeline capacity versus just a total of 40,000 bpd in 2006. "Without a doubt, the National Energy Board shifted into high gear throughout 2007," said NEB chairman and CEO Gaetan Caron. Applications included TransCanada Corp.'s Keystone pipeline that will transport 590,000 bpd when completed in 2009 and grow to 1.3 million bpd by 2013-14. NEB also reviewed Enbridge Inc.'s Alberta Clipper that will initially move 450,000 bpd before expanding to 800,000 bpd. Only one major gas project - the proposed MacKenzie Valley natural gas pipeline - was brought before the board last year. The project is still awaiting NEB's approval, but a final decision is expected in June. [More here]

• Pipeline Giant Eyes Expanded Project (4/26/2008) .... Although TransCanada is about to start construction of its $5.2 billion Keystone oil pipeline, it is already planning a massive expansion. Once the first phase is completed in 2009, the new expansion will add a second 36-inch pipeline that takes a different route by going from Alberta's pipeline hub at Empress to Port Arthur on the Gulf Coast of Texas. The second pipeline would add another 750,000 barrels per day (bpd) for a total combined capacity of approximately 1.3 billion bpd. ConocoPhillips, which has committed to be a shipper on Keystone's first phase, has a 50 percent stake in the new project. Texan refineries can better handle the heavier oil blends from Alberta because of their experience with similar heavy oil traditionally used from Venezuela. TransCanada's CEO Hal Kvisle said, "Both projects (Keystone one and two) are in the broad public interest of Alberta and Canada," because higher volumes of Alberta oil will spur demand in North America's largest refining market. The resulting demand will narrow the price differential between Alberta wellhead prices and Texas refineries. [More here]

• Oil Giants Push for Pipeline in Congress (4/21/2008) ...... Two of Alaska's North Slope biggest oil producers - BP and ConocoPhillips - were in Washington, D.C. pushing their plan to build a $30 billion pipeline to carry natural gas to the continental U.S. BP Alaska president Doug Suttles and Jim Bowles, chief executive of ConocoPhillips' Alaska operations, met with the Federal Energy Regulatory Commission and members of Alaska's congressional delegation. Sen. Lisa Murkowski, R-Alaska, said she left her meeting with Suttles and Bowles “feeling good about the future of the state.” Sen. Ted Stevens, R-Alaska, said “We’re looking now at certainty that we’re going into a period of real development, I think that changes the dynamic of the Alaska economy.” The project, named Denali Pipeline by the ConocoPhillips-BP partners, would deliver 4 billion cubic feet of gas per day or around 8 percent of the nation's current demand. The companies say they have the experience and capital required for the pipeline. Their plan calls for a 48-inch diameter pipeline from Prudhoe Bay that would follow the existing trans-Alaska oil pipeline corridor to Fairbanks where it would split off alongside the Alaska Highway before ending in Alberta. Existing pipelines will be used to ship the gas onto the Lower 48 states. Bowles and Suttles said each of their companies approved $300 million to spend over the next two summers to get the project to open season. State officials who are considering TransCanada's proposal - the only one approved by Gov. Sarah Palin's administration - welcomed the announcement, but said more information is needed to properly evaluate it. Gas could flow down the pipeline beginning 2018 if project stays on schedule, according to Bowles. [More here]

• TransCanada, Enbridge Ready to Work with Oil Majors (4/20/2008) After North Slope producers BP and ConocoPhillips announced plans to build a $30 billion gas pipeline and preparations for a 2010 open season, TransCanada Corp. and Enbridge said they are ready to work with them. Tony Palmer, TransCanada's vice president for Alaska development, said, “We believe we are the best independent pipeline to pursue the project because our proposal to the state meets every one of its goals,” and allows for equity participation by producers. However, Enbridge Vice President Ron Brintnell said his company has years of experience building pipelines in northern climes adding, “We have $12 billion in current projects under way, which gives us current knowledge with construction and steel costs. No one can touch Enbridge's experience with current construction.” State legislators were encouraged by the announcement, but Alaskan House Speaker John Harris expressed concerns about how to maintain a sense of competition if only one producer pipeline is moving forward. [More here]