July 2008 Update

In the news...

• House Speaker Votes to Have TransCanada License Vote by July 16 (7/13/2008) Alaskan legislators returned to Juneau, Alaska on July 9 to complete work on a natural gas pipeline license proposal for TransCanada. House Speaker John Harris said he hopes a vote on the license will be taken by July 16. However three key issues must be addressed - first, how much gas is available for the pipeline company, second, if the license could trigger financial penalties against the state thus impeding the rival Denali pipeline being pursued by BP and ConocoPhillips and third, whether penalties would be enacted if the Legislature wants to help an industrial operator in southern Alaska needing more than 500 million cubic per day of gas (cfd) moved through a spur pipeline. The 500 million cfd through a spur pipeline is the threshold at which TransCandada can seek treble-damages under a provision in the TransCanada agreement. The proposed 48-inch pipeline by TransCanada is expected to move 4 to 4.5 billion cfd. [More here]

• Enbridge Delays Plans for Major Pipeline to Ship Crude to the U.S. Gulf Coast (7/9/2008) Because of a worse outlook for oilsands production in northern Alberta, Enbridge is delaying for about two years its plans for completing construction of a major oil pipeline. The project is now expected to be complete in 2013 or 2014. Instead the company plans to ship Canadian crude to the U.S. Gulf coast. "The best market possible for Canadian heavy crude at the moment is the U.S. Gulf Coast (where much of that country´s refineries are located). What this project really does is provide a nifty interim solution to get volumes to the Gulf without waiting for a large diameter pipeline proposal that would take much more volume than is currently envisioned to be generated in the near term," said Enbridge vice-president Al Monaco in an interview. Enbridge's $350 million "Tailbreaker" project will use oil tankers to move 200,000 barrels of oil per day (bpd) to the U.S. Gulf. "When the volumes of Canadian heavy crude seeking access to the U.S. Gulf Coast exceed the capacity of Trailbreaker, we´ll be ready to meet that requirement with our Texas Access joint venture at a lower toll," Monaco said. The $2.6 billion Texas Access pipeline will connect Enbridge's mainline in Patoka, Illinois with hubs in the Houston, Texas area and transport up to 400,000 bpd. [More here]

• TransCanada Pipeline Expansion May Cost C$7 Billion (7/9/2008) Construction of the next phase of TransCanada's Keystone oil pipeline from Hardisty, Alberta to refineries in Port Arthur and Houston, Texas is expected to cost C$7 billion. The 3,200 km expansion will transport 700,000 barrels of oil per day and has a target in-service date of late 2011. It adds to the C$5.2 billion Keystone project which will transport 590,000 bpd from Alberta to Cushing, Oklahoma starting late next year. The Keystone project is a 50-50 partnership with ConocoPhillips. [More here]

• Alaska Governor Announces In-State Pipeline Plan (7/7/2008) Gov. Sarah Palin announced the Alaska Natural Gas Development Authority (ANGDA) and Enstar have proposed to build an in-state natural gas pipeline. The 450-mile pipeline will run from the Cook Inlet basin in southern Alaska going north to Fairbank, Anchorage and other Alaskan markets. The governor told a news conference the project would seek to "deliver our natural gas to our homes and to our businesses as quickly as possible to finally unlock the energy potential throughout Alaska." Gene Dubay senior vice president at Continental Energy, Enstar's parent company, said a partnership with Alaska and ANGDA would make the gas pipeline cheaper and easier to build. The Cook Inlet is thought to have a 50-year supply of gas. The pipeline construction, which is expected to be completed by 2013 will deliver 460 million cubic feet a day of natural gas. [More here]

• Pipelines Continue to Be Safe However National Energy Board Concerned With Increase in Worker Injuries (7/3/2008) In a new report by Canada's National Energy Board (NEB) Canadian oil and gas pipelines are operating safely but there has been a spike in workplace injuries. According to the NEB's annual report "Focus on Safety and Environment: A Comparative Analysis of Pipeline Performance 2000-2006" between 1991 and 2002 an average of 2.5 pipelines regulated by the NEB ruptured each year. However, between 2002 and 2006 there were no ruptures. On the other hand the injury rate for pipeline workers more than doubled in 2006 versus the previous year, going from 0.7 injuries to 1.5 injuries for every 100 full time equivalent workers. It is the highest injury rate since 2001. In 2006 the 45,000 kilometers of NEB-regulated pipeline had 37 incidents related to safety, pipeline integrity and the environment. [More here]

• Exxon-Alaska Relationship Tenses Up Over Pipeline (6/27/2008) After the U.S. Supreme Court's decision to reduce the amount of punitive damages Exxon Mobil is required to pay for the 1989 Exxon Valdez oil spill, many Alaskans are bitter about the ruling. But the relationship between the state of Alaska and the oil-producing giant may get worse. Gov. Sarah Palin has made building a natural gas pipeline from the Alaska's North Slope to the lower 48 states a priority for her administration. But first she needs Exxon Mobil to commit its portion of the gas in Prudhoe Bay to the project. So far the company has refused to commit to shipping gas through the proposed pipeline and, under a 1977 agreement among Prudhoe Bay producers, Exxon can stop its partners from committing their gas production to any pipeline. "In terms of the parties that have to be out on the field, so to speak, and playing for this to go forward, we have four out of the five: the state, BP, TransCanada and Conoco," said Joe Balash, special assistant to Ms. Palin. However, Balash said the relationship between the governor and Exxon wasn't close adding, "We don't think this is impossible to overcome, but it is going to require a certain amount of accommodation by Exxon, which is not their first choice in dealing with governments or commercial parties." Margaret Ross, an Exxon spokeswoman said, "We look forward to working with the state, the legislature and the people of Alaska to develop the state's resources in the future. We want to work with the state. Everyone believes it's important for a pipleline project to move forward." [More here]

• Rocky Mountain Pipeline System LLC Announces Reversal of Wamsutter Pipeline (6/27/2008) After getting a long-term customer commitment Rocky Mountain Pipeline System LLC (RMPS), an indirect subsidiary of Plains All American Pipeline, L.P. plans to reverse its Wamsutter pipeline in the first quarter of 2009. Currently the pipeline transports Southwest Wyoming Sweet (crude oil) from RMPS's facilities in Wamsutter, Wyoming to Ft. Laramie, Wyoming. [More here]

• ShawCor Completes Acquisition of Flexpipe Systems (6/27/2008) ShawCor Ltd. has completed its acquisition of all outstanding shares of Flexpipe Systems, Inc. for a total consideration of around $130 million. Flexpipe Systems manufactures spoolable, composite pipe used by oil and gas producers. ShawCor Ltd. is an energy service company that specializes in products and services for the pipeline and pipe services utilized by the oil and gas industries. [More here]

• FERC OKs Review for BP-Conoco Alaska Natural Gas Pipeline (6/26/2008) The Federal Energy Regulatory Commission (FERC) has agreed to an early review of ConocoPhillips and BP's plan for a $30 billion natural gas pipeline from Alaska's North Slope to the lower 48 states. Due to the complexity of the project, an early review was advised by FERC. The "Denali Pipeline" plan proposes constructing a 48-inch or 52-inch diameter pipeline from Prudhoe Bay through western Canada. By "pre-filing," BP and Conoco can work with FERC in drafting economic, engineering and environmental studies before their final application is submitted for approval. A similar project was rejected by Gov. Sarah Palin in January when Conoco insisted on having tax deal talks before the prelimary work was started. The governor has express preference for a plan proposed by TransCanada over one owned by the North Slope oil producers, arguing an independent pipeline would allow greater access to new participants in the oil and gas fields. [More here]

• Canadian Oil Pipeline Capacity Remains Tight (6/26/2008) Although there is some spare capacity in certain Canadian oil pipeline systems, additional capacity will soon be needed according to the Canadian Pipeline Transportation System Assessment from the National Energy Board. "Capacity constraints on oil pipelines in Canada were evident in 2007," said NEB Vice Chair, Sheila Leggett. "While there was some spare capacity, periods of apportionment meant that some pipelines were at times not able to fully meet shipper demand." Growth in oil-sands production and strong demand in the U.S. has resulted in high capacity utilization of Canadian oil pipelines. However, even during the peak winter season, there is adequate capacity on existing natural gas pipelines and, in some cases, excess capacity. The annual report examines more than 45,000 km of oil, gas and petroleum product pipelines to determine their adequacy and economic efficiency. [More here]

• Magellan Midstream Assets Remain Fully Operational Despite Midwest Flooding (6/23/2008) Despite flooding in parts of the Midwest, Magellan Midstream Partners, L.P. has confirmed that its pipeline assets and petroleum products terminal remain fully operational. [More here]

• Alberta Ceding Control of Gas Distribution Web to Federal Agency (6/20/2008) Ten years ago, TransCanada acquired Nova and its natural gas pipeline network based in Alberta. The Nova grid transports more than 10 billion cubic feet of gas per day. Last year it moved more than four trillion cubic feet of gas - more than two-thirds of western Canadian production or around 16 percent of the total North American gas output. Jurisdiction of the grid, currently under the control of the Alberta government, will be transferred to the Canadian National Energy Board. Alberta Energy spokesman Jason Chance said the reason for an independent transportation web is gone and its future lies in extensions beyond Alberta's boundaries, developing into a "hub" for continent-wide traffic in gas and byproducts. "Integrated" provincial, national and international service under federal supervision will make Nova the route to markets for new gas production from B.C., the Northwest Territories and Alaska, TransCanada predicted. [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]

April 2008 Update

In the news...

• Pipeline Setback Gives Oil A Lift (4/14/2008) ... . . Disruption in a major U.S. oil pipeline was a factor in causing the May-date West Texas Intermediate crude contract price to briefly trade above $111. Royal Dutch Shell's Capline pipeline shut down on April 11 after a leak was discovered by a Tennessee worker. The pipeline transports 1.1 million barrels of oil per day from Louisiana to Illinois, feeding BP's Whiting, Indiana refinery and Marathon Oil's refinery in Catlettsburg, Kentucky. A Shell representative was not sure when the pipeline will be back online. [More here]

• Denali Pipeline To Surpass Alaskan Pipe In Cost, Regs (4/11/2008) In addition to higher steel costs, the proposed Denali natural gas pipeline faces strict environmental laws and a mountain of regulatory challenges seldom seen in the 150-year history of the global oil industry. The pipeline project, which takes its name from North America’s tallest peak – Denali, also known as Mt. McKinley – is currently awaiting a critical $600 million open season process and will have to obtain approximately 1,000 permit approvals from the U.S., Alaska and Canada. The pipeline will follow the existing Trans Alaska pipeline thus avoiding the environmentally sensitive Arctic National Wildlife Refuge. Cost for metal to construct the pipeline could reach $6 billion alone and it could take 10 years to complete vs. the nine years needed for the Trans Alaska pipeline. The total cost is expected to be $30 billion, which, ironically is the same as the inflation-adjusted cost of the Trans-Alaska pipeline. When completed, the Denali pipeline could transport 8% of the current U.S. natural gas supply. [More here]

• Gas Plant in L.I. Sound Is Rejected (4/11/2008) . ........ . . New York Gov. David A. Patterson blocked a proposal to build the nation's first floating liquefied natural gas plant in the Long Island Sound. “One of my goals as governor is to protect Long Island Sound,” Mr. Paterson said at Sunken Meadow State Park, on Long Island. “Shame on us if we can’t develop a responsible energy policy without sacrificing one of our greatest natural and economic resources.” Gov. Patterson added the region can find other more responsible ways to obtain energy. The Broadwater Energy plan called for construction of a $700 million natural gas terminal as well as a 22-mile underwater pipeline that connects to the existing Iroquois pipeline that serves New York and Connecticut. John Hritcko, senior vice president and regional project director for Broadwater, an energy consortium consisting of Shell Oil and TransCanada Pipelines, said the rejection represents a “missed opportunity” to lower energy prices for consumers and businesses. Broadwater opponents argued the terminal would be vulnerable to a terrorist attack and jeopardize traditional industries like fishing and oyster harvesting. [More here]

• Exxon Mobil May Join BP, ConocoPhillips Pipeline (4/8/2008) Spokeswoman Margaret Ross confirmed Exxon Mobil was invited to participate in the new ConocoPhillips and BP PLC Denali natural gas pipeline project in Alaska. "ExxonMobil was only made aware of the ConocoPhillips-BP plan a few days prior to the announcement," she said. "We need to better understand their approach to ensure that it will lead to a commercially viable development on a cost and schedule basis that will deliver maximum benefits to the State of Alaska, the producers and consumers in the United States and Canada." [More here]

• JayHawk Energy Inc. Announces The Acquisition Of A 16-Mile Pipeline (4/1/2008) JayHawk Energy Inc. has purchased assets from Galaxy Energy Inc., a private company in Crawford and Bourbon counties of Kansas. The assets include a sixteen (16) mile gas pipeline and gas production within 6,500 acres of land bordering the pipeline for $2 million. [More here]

• Company Seeks Gas Pipeline (3/29/2008) . ....................... ConocoPhillips plans to develop a pipeline to transport natural gas from Alaska's North Slope to the lower 48 states and Canada. The company estimates the entire project will cost between $25 billion and $42 billion and move about 4 billion cubic feet of natural gas per day. The company also said it is "prepared to make significant investments, without state matching funds, to advance this project." In a prepared statement ConocoPhillips Chairman and CEO Jim Mulva said the company hopes to work directly with the state of Alaska to expedite the project, as well as partner with other companies including Exxon Mobil Corp., BP PLC and possibly a pipeline company. BP spokesman Steve Rinehart could not speculate on the offer and Exxon Mobil had no comment. ConocoPhillips is in the process of gathering data to support its pipeline permit application. A proposed deal between North Slope producers BP, Exxon Mobil and ConocoPhillips and former Alaskan Gov. Frank Murkowski fell through last year. [More here]

• More Than A Pipe Dream (3/28/2008) ............................ .... It seems like America is getting high on natural gas. With around 25 pipeline projects and 11 storage projects, natural gas pipeline builders are in the midst of a building boom. One of the longest pipelines ever built - the 1,678-mile Rockies Express - is near completion and the industry has not been this busy since the 1950s, according to consulting group Bentek Energy. However, many uncertainties lie ahead. Supply depends on drillers' ability to ramp up production and some pipeline builders face a labor shortage. Competition is fierce since pipeline builders need to get right-of-way before anybody else does while keeping costs under control for their customers. Although the need to construct pipelines is driven largely by the demand from energy consumers, it is also driven by the discovery of new supplies. Shallow natural gas fields in the Gulf of Mexico are almost exhausted but new drilling technology now enables access to the deepest fields. As a result, new construction is now based on speculation about future production instead of on current production. Government regulation of everything from utilities to right-of-way and greenhouses gases affects pipeline builders. The ongoing construction boom may lead to overcapacity, depending on the outcome of many of these factors. It will take years before that unknown will be resolved. [More here]

• Pipeline Would Take Rockies Gas To Markets In U.S. And Canada (3/26/2008) Two pipeline companies - Alliance Pipeline Inc. and Questar Overthrust Pipeline Company - plan to build a 42-inch, 800-mile Rockies Alliance Pipeline from Wyoming to Canada, U.S Midwest and Northeast. The estimated $3.5 billion project will transport natural gas from Wamsutter, Wyoming, traversing Wyoming, Montana and North Dakota, on its way to the Emerson trading hub located on the Minnesota-Canada border. Brian Jeffries, executive director of the Wyoming Pipeline Authority, said the Rockies Alliance project can provide new markets for the state's natural gas and is one of five pending pipeline proposals. A sixth, the Rockies Express, is already under construction. Questar and Alliance will start taking bids from customers interested in using the pipeline on May 1st. Subject to financing and regulatory approval, the companies plan to have the whole pipeline operating by fall of 2011. [More here]

• Alaska Senator Stresses Gas Line (3/19/2008) ................ U.S. Alaskan Senator Lisa Murkowski told members of the Alaskan Legislature that time is running short for Alaska to get a natural gas pipeline project started on its North Slope. During her annual speech she said, "We are slipping and cannot afford to slip any further. Our competitors are moving ahead. Our oil production is dropping. Steel and construction prices just climb higher every year." Although Sen. Murkowski didn't criticize Gov. Sarah Palin's Alaska Gasline Inducement Act (AGIA) she placed the onus to get things moving equally on pipeline companies, the federal government and North Slope lease holders - ConocoPhillips, Exxon Mobil Corp. and BP PLC. TransCanada was the only applicant to comply with regulations established in AGIA. However, ConocoPhillips is promoting a competing plan outside the state's bid requirements but it is seeking what it calls fiscal certainty - long-term tax and royalty terms for the North Slope lease holders before a pipeline license is awarded. Sen. Murkowski commented "I recognize the value of the AGIA process. But, clearly Conoco is on its own track. Is it wrong to have a duel track? In my opinion, anything that will get us a gas line sooner is worthwhile." [More here]

• New Pipelines Will Even Out Gas Prices (3/15/2008) . ....... . Last fall in the Rocky Mountain region of the U.S., due to excess production and limited pipeline capacity, spot prices for natural gas producers dropped to a low of only 5 cents per 1,000 cubic feet. For consumers in the region the surplus has been a boon. However, after years of low prices, things are about to change. A new pipeline - 1,678-mile Rockies Express from Meeker, Colorado to Clarington, Ohio - is almost finished and is now partly operational. The pipeline, with a capacity of 1.6 billion cubic feet per day, will allow gas suppliers to sell to other markets including California, Phoenix, Arizona and Midwest area. In addition to gas suppliers making more money, analysts predict the new pipeline will even out national supplies reducing price spikes elsewhere, especially in the East. This change could be at the expense of those consumers located the Rocky Mountain states. Producers counter as long as production continues to ramp up, local prices should stay under control. Although Texas is currently the country's biggest producer of gas, the Rockies region most likely contains more than 200 trillion cubic feet of natural gas reserves - enough to supply the U.S. for 10 years. [More here]

• TransCanada Ready To Start Building U.S. Oil Line (3/14/2008) TransCanada Corp. plans to start construction on its 2,148-mile, $5.2 billion Keystone oil pipeline the second quarter of this year. A key factor in the decision to start building was a presidential permit issued by the U.S. State Department for the construction of a 590,000 barrel per day pipeline at the Canada-United States border. "The U.S. Department of State has determined that this is in the national interest, so after a culmination of years of hard work we're certainly pleased to have the permit," said TransCanada spokeswoman Shela Shapiro. The pipeline, co-owned by ConocoPhillips, will extend from Alberta to Oklahoma and southern Illinois. Part of the Canadian side of the pipeline will use an existing natural gas pipeline converted for transporting oil. The pipeline is targeted to be in service in late 2009. [More here]

• Canadian Pleads Guilty In Oil Pipeline Bomb Plot (3/13/2008) Canadian Alfred Reumayr of British Columbia pleaded guilty to charges of plotting to blow up the Trans-Alaskan oil pipeline on January 1st, 2000, at the U.S. District Court in Santa Fe, New Mexico. After being arrested in August 1999 by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosive and the Royal Canadian Mounted Police, Mr. Reumayr was accused of soliciting the help of a U.S. citizen to bomb the Trans-Alaska Pipeline System. Prosecutors said Mr. Reumayr acquired explosives, which he planned to locate at three points along the pipeline in order to disrupt energy supplies. They said Mr. Reumayr also hoped to profit from the attacks by purchasing energy securities at low prices and then selling them after the attack during the market turmoil resulting from the attacks. [More here]

The Natural Gas Industry Lags When it Comes to Integrating Data

Even with all the technological advances over the last ten years, the natural gas industry still struggles when it comes to integrating operational and commercial data. The industry is state-of-the-art in tracking SCADA and real time operational data. Much can also be said about the commercial side of the business with its scheduling, nomination, and allocation processes. However, when it comes to merging real-time operational data with commercial accounting data in order to get a real-time financial look at a pipeline, the industry lags.

Departments within an organization are often very distinct and operate with different priorities. Operations focuses on running the pipeline and would like to have commercial/accounting data to make better decisions. Commercial and accounting focus on revenue and need to see how they are doing right now (before official measurement close). While they both need each other’s data, they are often hesitant to share it based on the fear that it may be misinterpreted. It’s not uncommon to have two different numbers being reported because the data was viewed differently. That just causes frustrating reconciliations – and often finger pointing – all trying to get to the “real” number.

Recent software advances make this integrated data more readily available – without the grinding behind-the-scenes effort historically needed to consolidate the information. However, companies need to commit to a process, tear down the silos within the organization, and do some up-front work without grousing about “how this didn’t work in the past.”

The result will be a world class organization that can have its data available to all concerned parties – without worrying about whether the number is right, or whose data is better. It will all be consistent.

Robert W. Young
Product Manager – Commercial Applications

March 2008 Update

In the news...

• Williams and TransCanada Propose New Natural Gas Pipeline for Western U.S. (3/13/2008) Williams and TransCanada may develop a new natural gas transmission pipeline - Sunstone Pipeline - to transport gas from the Rockies to markets in the western US. The proposed 618-mile, 42-inch pipeline will have a capacity of up to 1.2 billion cubic feet per day. If built, the Sunstone Pipeline will parallel the existing Williams Northwest Pipeline system. That pipeline runs from its Opal hub in Wyoming to Stanfield, Oregon and interconnects with TransCanada's Gas Transmission Northwest (GTN). The Sunstone project has the option to serve both Northwest and GTN markets. Additional benefits of the Sunstone Pipeline include: construction of fewer miles of pipeline along an existing utility corridor, favorable rates due to efficiencies from existing operations and infrastructure, and increased access to markets in Nevada, California and Pacific Northwest. The project, if approved, is scheduled to begin service in 2011. [More here]

• Gas Explosion Injures Six, One Missing (3/12/2008) . ....... A March 12 natural gas explosion 15 miles off the coast of Marsh Island, Louisiana injured six crew members of a pipeline maintenance vessel and left another missing. The maintenance vessel Jillian Morrison was clearing gas from a closed section of pipeline when the explosion occurred. The pipeline owner, ANR Pipeline Co. (a subsidiary of TransCanada), said its pipeline system and natural gas supplies to customers were not affected by the blast. However, El Paso Corp's Tennessee gas pipeline was affected leading the company to declare force majeure because it was unable to meet contractual supply obligations. Three crew members have been released from the hospital while three more were listed in serious condition at the hospital in Lafayette, Louisiana. The Coast Guard is continuing its search for the missing crew member. A cause for the explosion has not been determined. [More here]

• Exxon Flexes, Critiques Gas Line (3/10/2008). ............ Exxon Mobil Corp. submitted a 14-page document criticizing a TransCanada bid to build a North Slope natural gas pipeline. TransCanada is the only bidder approved by Alaska Gov. Sarah Palin for the project. Exxon said the 1,715-mile, $26 billion pipeline proposal is seeking too much profit and seeks to send the Alaskan gas only into TransCanada's Alberta pipeline network. The higher shipping rates TransCanada expects to charge could discourage drillers from locating and developing new gas supplies. However, the proposal also offers to share ownership of the pipeline and Exxon expects to be a co-owner with a stake equal to its share of gas flowing through the pipeline. [More here]

• Alaska Mulls Pipeline Options If Big Oil Balks (3/6/2008) Alaska and the U.S. Federal government are considering other options in the event Exxon Mobil, ConocoPhillips and BP Plc refuse to back Gov. Sarah Palin's approval of the TransCanada Corp. pipeline proposal. The natural gas and oil producers are wary of working with Canada's largest pipeline firm. Gov. Palin has threatened to revoke leases for oil fields including Prudhoe Bay if the companies do not participate in her process. Alaska is considering the potential for an alternative liquefied natural gas project along with the TransCanada proposal. The U.S. Department of Energy is evaluating other pipeline construction proposals as well. Congress is also eager to tap into the 35 trillion cubic feet of North Slope gas reserves to meet U.S. demand, according to Drue Pearce, federal co-ordinator for Alaska Natural Gas Transportation Projects. "(Lawmakers have) said: 'Alaska, you need to move because, if we have to, eventually, Congress will step in and make sure this pipeline gets built'," Pearce said. [More here]

• Widening Investigation May Present A Hurdle For Gas Pipeline Project (3/6/2008) Federal prosecutors expanded their Alaska corruption investigation into the executive branch of government after Jim Clark, chief of staff for former Gov. Frank Murkowski, pleaded guilty to a felony conspiracy charge in connection with illegal campaign contributions. Around 10 percent of the 2006 Alaskan Legislature have been implicated in corrupt activity. "This bleed over into another branch of government ... is very, very unfortunate in terms of Alaska's reputation," Gov. Sarah Palin said. She also said past negotiations with oil companies to get a natural gas pipeline built took place behind closed doors. It now appears VECO Corp. was making illegal campaign contributions to the state's lead negotiator to the governor. None of the North Slope oil producers applied for the pipeline license, nor did a respected pipeline company, Mid-American Energy, citing the fallout from the corruption investigation. The governor said her administration is working to set a new standard for ethical and open government. [More here]

• Fatal US-Canada Pipeline Fire Causes Over $3 Spike In Oil Prices (3/3/2008) Fire broke out at an Enbridge Energy pipeline in Northern Minnesota. Two workers repairing the pipeline were killed by the fire. The pipeline carries crude oil from Canada to the U.S. Midwest. In total, five pipelines will have to be shutdown until repairs can be made. Enbridge spokeswoman - Denise Hamsher - said the company stored oil in stations along the line and at refineries thus avoiding disruptions in supply to the Midwest for several day. However, oil prices rose more than $3 on uncertainty of how the pipelines closure would affect supplies. [More here]

• Enbridge Inc. Gets Approval For Southern Lights Diluents Pipeline (2/27/2008) On February 20 Enbridge Inc. announced it received approval from the National Energy Board (NEB) for its Southern Lights pipeline that will transport diluents, gasoline-like liquids, from U.S. refineries to Edmonton, Alberta. The Calgary-based company plans to build a new section of 20-inch pipeline from Chicago, Illinois to Clearbrook, Minnesota and reverse the flow of its Line 13, that currently transports light synthetic crude oil from Edmonton to Clearbrook. In total, the project involves laying 1,085 kilometers of 16-inch pipe and will run through Illinois, Wisconsin, Minnesota, North Dakota, Manitoba, Saskatchewan and Alberta. It will have a capacity of 180,000 barrels-per-day and is expected to cost $2.2 billion. [More here]

• Enbridge Receives NEB Approval On Alberta Clipper Expansion Project (2/22/2008) The National Energy Board (NEB) approved Enbridge's application for the Alberta Clipper Expansion Project. The project involves the construction of a new 1,000-mile, 36-inch crude oil pipeline from Hardisty, Alberta to Superior, Wisconsin. Once completed the pipeline's initial capacity will be 450,000 barrels-per-day (bpd) which can be increased up to 800,000 bpd. It is scheduled to be in service by mid-2010 pending U.S. regulatory approvals.... [More here]

• TransCanada Plots Next Big Oil Line To Gulf Coast (2/21/2008) TransCanada is plotting an even bigger pipeline than its Keystone project to transport Canadian crude to the U.S. Gulf coast. The company is considering a direct route to the huge refining hub in the Gulf. The other option is to send Canadian oil sands crude to more distant refineries via its under-used natural gas pipelines for part of the route similar to its Keystone project. "But if the demand for transportation materializes more quickly, we would look at building a direct line," TransCanada CEO Hal Kvisle told investors at a conference in Whistler, British Columbia. "Either way, the discussions are well advanced and this is one of the future projects that we will be bringing forward here in the months ahead," he said in his Webcast speech. The 2,148-mile, $5.2 billion Keystone pipeline starts construction in the next few months. It is scheduled to start service in 2009 or 2010 and can transport 590,000 barrels of oil per day. The Gulf coast currently demands seven million barrels of crude a day. Canadian crude production could increase by one to two million barrels per day in the next decade, according to Kvisle. [More here]