Report Volume XXIII, Number 3, October 1st, 2011

October 1, 2011

INDUSTRY NEWS (Houston, TX) – Kinder Morgan Energy Partners L.P has partnered with Valero Energy Corporation to build a new 136-mile, 16-inch pipeline to transport gasoline, jet fuel and diesel. known as Parkway Pipeline LLC.

While both companies will own the pipeline system, Kinder Morgan will be the operator. Parkway Pipeline is expected to have an initial capacity of 110,000 barrels per day (bpd) that can be eventually expanded to over 200,000 bpd.

The refined products would be shipped from refineries in Norco, Louisiana to the Collins, Mississippi hub, owned by a subsidiary of Kinder Morgan –– Plantation Pipe Line Company. Kinder Morgan has a 51% stake in the petroleum transportation hub of which it is also the operator. Thereafter, the refined petroleum products will be distributed by the pipeline systems, including Plantation, to important markets in the southeastern United States from this hub.

The pipeline is expected to begin operations by mid 2013 after getting approvals from the concerned environmental and regulatory authorities. It is expected to be accretive for Kinder Morgan unit holders upon completion as the project has a long-term backing of a credit worthy shipper.

To curtail environmental impacts, Parkway Pipeline construction will follow prevailing utility rights-of-way wherever possible. The project is expected to boost fuel supply, and at the same time offer all shippers larger access to Gulf Coast refineries.

INDUSTRY NEWS (Houston, TX) – Tennessee Gas Pipeline can build a new gas line segment and other facilities to add 250,000 Dt/day of transportation capacity from the Marcellus Shale to the Northeast region, the US Federal Energy Regulatory Commission said recently.

The Northeast Supply Diversification Project includes a 6.77-mile, 30-inch-diameter pipeline loop in northeastern Pennsylvania, improvements to a compressor station in Niagara County, New York, improvements to a meter station in Erie County, New York and installation of several other facilities in New York and Pennsylvania.

In its November 12 application, Tennessee said the project would “assist with the commission’s goal of providing more natural gas to markets by providing access to natural gas supplies in the Marcellus Shale supply area, with deliveries to the project’s delivery points at Niagara River, New York and at Mendon, Massachusetts.” Three customers have signed binding agreements for all firm capacity that will be created by the project, the pipeline said. It plans to start operations on November 1, 2012.

The commission also authorized Dominion Transmission to build a related project that will allow it to lease 150,000 Dt/d of firm capacity to Tennessee to help it carry out customer agreements for the Marcellus project.

The Dominion project will move gas from Tennessee’s 300 Line to its 200 Line and includes transmission, compression, gas measurement and pressure-regulating facilities in Wyoming and Livingston Counties, New York and Potter County, Pennsylvania.

INDUSTRY NEWS (Mount Airy, NC) – A recent pipeline job at Dominion Resource’s extraction/fractionation plant in Pine Grove, WV presented some pretty hairy challenges. First the pipeline was to be laid on a 58-degree hillside. Trucks, excavators, and other equipment had to be wenched up the slope and held in place by cables attached to heavy equipment. Secondly, it was the rainy season, so erosion of the freshly turned earth was a major concern.

Chad Corbin’s company, All Seasons Foam and Coatings Services, Sanger, TX, was chosen to create pipeline pillows and trench breakers for the project. “We took one look at it and, when most companies might have thrown up their hands or declined the job, we felt right at home,” says Corbin. “They laid 1,400 feet of pipe on a 58-degree slope. That’s steep. We had to cable the excavator and our spray rig, wench it up the hill, and secure it to two or three dozers while we worked.”

Corbin says his company selected TerraThane geotechnical polyurethane foam system by NCFI to meet the challenge. “TerraThane is a great product. Polyurethane foam is far superior to sand breakers. Water eats through the sand ALL SEASONS FOAM TRENCH BREAKERS WVA 2 breakers and the sand escapes and erodes over time. Polyurethane foam breakers bond with the earth, and water doesn’t have an effect on them. They’re easier to apply and they last.” Corbin says they use NCFI foam because, “unlike others foams we’ve tried and seen used, TerraThane doesn’t char inside, doesn’t smoke when you spray it, or get crusty inside. It’s the highest quality product on the market.” He adds, “Their (NCFI’s) technical support people are dedicated to our success. They are always on call when we’re on a job. We can call them any time and they help us do the best job for our customers. You don’t find that very often and it makes a big difference on our bottom-line.”

Pat Burchett, TerraThane product manager for NCFI, says the WV job is an excellent example of why foam systems are replacing sand breakers. “Less labor is required, there is less chance of injury as compared to handling sand bags, allows for quicker construction and provides time savings. Our system is formulated for low exothermic heat and tested per ASTM test procedures for strength values and dimensional stability. It’s a two component polyurethane foam designed for great lift thicknesses without scorching or splitting during field applications.” The Dominion Transmission plant processes and stores natural gas liquids (NGLs): propane, normal butane, isobutane, and natural gasoline. They extract, fractionate, store, transport and market to various end user markets including propane retailers, refineries, petrochemical facilities, and aerosol companies.

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