Report Volume XXIII, Number 11, February 1st, 2012
INDUSTRY NEWS (Dallas, TX) – Our industry has lost another pioneer. He will be sorely missed. – WHITE, JAMES THOMAS Born February 7, 1938 in Huntsville, MS to the late James Dibrell White and Mildred Dowd White passed away January 22, 2012 in Plano, TX. Thomas married Barbara Oliver in Winona, MS on September 13, 1959. After graduating from Mississippi State University in Civil Engineering in 1961, he went to work for Texas Eastern Transmission Company, as a pipeline designer engineer, in Shreveport, LA. He later went to work for Williams Pressure Service overseeing hydrostatic pipeline testing. While still living in Shreveport he went to work for Cap-Con International, Inc. as Vice President of Estimating and Construction. Mr. White traveled internationally throughout his life overseeing construction projects throughout the world. In 1977, along with his family, he moved to Bagdad, Iraq, and served as Project Manager for Banister-Price Construction Co., overseeing the construction of the Iraq-Turkey pipeline. He then served as Executive Vice President for Banister Construction, International in London, England and then on to Denver, CO. In 1981 he joined H.C. Price Construction Co., in Irving, TX where he served as President and COO. In 2009, H.C. Price Construction Co. and Gregory-Cook Construction Co. merged to form Price-Gregory International, Inc., where he served as President until his death. Mr. White founded the James T. White Chair of Civil Engineering at Mississippi State University. He was chosen as Mississippi State Engineering Alumnus of the year as well as Mississippi State Alumnus of the year. He served on the Mississippi State University Foundation Board and the Dean’s Advisory Board. He served as President of the Pipeline Contractors Association as well as a Board Member. He was Member of the American Society of Civil Engineers, a Board Member of the Moore Memorial Methodist Church in Winona, MS. Survived by his wife, Barbara Oliver White; sister, Joy Love of Madison, MS; children, Jim White (Laura) of Madison, MS, Pat White (Jill) of Kilmichael, MS, Holly White of Dallas, TX; and grandchildren, Keely White, Hollyn White, Kailan White, Trace White, Connor White, and John Colin White. In lieu of flowers, memorials may be made to French Camp Academy in French Camp, MS or Moore Memorial United Methodist Church in Winona, MS.
INDUSTRY NEWS (Richland, WA) – The Department of Energy is starting work on a plan to build a 30-mile natural gas pipeline to the Hanford Nuclear Reservation’s waste treatment plant. The announcement Monday includes few details but the pipeline would likely go under the Columbia River.
Hanford’s waste treatment plant is going to need a lot of power. After all, its purpose is to mix radioactive sludge with glass material to form molten liquid. That brew, once cooled, would form huge glass logs for long-term storage.
The Department of Energy is paying Cascade Natural Gas up to $5 million to complete the planning and permitting for the proposed gas line project. The pipe would come from the Pasco area, across the Columbia River and then through the Hanford site. If approved, the pipeline would likely burrow under the Columbia’s riverbed.
Energy spokesman Cameron Hardy says natural gas would be more efficient and burn cleaner than powering the waste treatment plant with diesel. He says the pipeline planning should take about two years.
INDUSTRY NEWS (Houston, TX) – Air Products announced recently plans to construct a new 180-mile long pipeline connecting its existing Louisiana and Texas hydrogen pipeline systems, creating the world’s largest hydrogen plant and pipeline supply network. This integrated pipeline system will unite over 20 hydrogen plants and over 600 miles of pipelines to supply the Louisiana and Texas refinery and petrochemical industries with over one billion cubic feet of hydrogen per day. The new Gulf Coast hydrogen pipeline network is expected to be operational in mid-2012.
This project allows Air Products to bring multiple benefits to its hydrogen customers. “Air Products’ investment in this pipeline extension demonstrates our hydrogen market leadership and confidence in our Gulf Coast growth opportunities. Connecting our Gulf Coast hydrogen plants via this pipeline will offer our customers in this market enhanced supply capabilities and unmatched reliability of hydrogen supply which is critical to their operations,” said Steve Jones, senior vice president and general manager – Tonnage Gases, Equipment and Energy at Air Products. Jones added that the company evaluated the implementation of an underground storage cavern for hydrogen and was convinced the Gulf Coast pipeline will bring far greater benefits to customers and shareholders.
The new pipeline extension, which is in the project development phase, will connect Air Products’ Texas facilities to the Louisiana system near Baton Rouge. Once complete, Air Products’ hydrogen pipeline supply network will stretch from the Houston Ship Channel in Texas to New Orleans, LA. Air Products continues to add new hydrogen capacity in the Gulf Coast, with recent start-ups of plants in Garyville and Baton Rouge, LA. in 2010, as well as a new world-scale hydrogen production plant currently under construction in Luling, LA. In addition, Air Products recently acquired and commissioned a new standalone hydrogen plant in Corpus Christi, TX.
INDUSTRY NEWS (Radnor, PA) – Penn Virginia Resource Partners, L.P. announced that it has acquired an option to purchase a pipeline easement in Susquehanna County along a 28.8 mile right-of-way corridor in the Pennsylvania Marcellus Shale. PVR is currently evaluating the construction of a new natural gas gathering pipeline, with an interconnection to the Tennessee system, to serve producers in the region. The optioned easement was acquired from the Rail-Trail Council of Northeastern Pennsylvania (”RTC”), and extends north from the Tennessee pipeline right-of-way in the town of Union Dale through the towns of Thompson and Lanesboro to the New York state line.
William H. Shea, Jr., Chief Executive Officer of PVR’s general partner, said, “We are pleased to have acquired this option as the first step in the development of a new outlet for the region’s natural gas production. The right-of-way was originally developed for railroad use and is ideally situated for pipeline construction. Use of the existing right-of-way will allow PVR to construct the line without creating another utility corridor in the region. The community will also benefit as the payments received by RTC will enable the Council to make significant improvements to the trail. “We expect to continue discussions with potential shippers for construction of a 24-inch mainline trunk system capable of transporting approximately 360 million cubic feet per day of production to major northeastern US consumption markets”, said Mr. Shea.
Report Volume XXIII, Number 10, January 15th, 2012
INDUSTRY NEWS (Houston, TX) – Hoover Energy Partners LP announced recently that it has acquired a 50-mile natural gas gathering system, water transportation system and water disposal well located in Reeves County, Texas from Eagle Oil & Gas. This system is underpinned by a long-term dedication of approximately 68,000 gross acres that Comstock Resources, Inc. recently acquired from Eagle Oil & Gas. Additionally, Hoover announced it has begun construction on Phase I of Pecos Crossing Pipeline, a 24-mile 12″ crude oil system that will serve Ward and Reeves counties, Texas and will have a capacity of up to 120,000 bpd. Both assets are located in the heart of the Bone Spring and Wolfcamp (”Wolfbone”) plays of the Delaware Basin.
“Hoover Energy Partners has shifted into high gear with the Eagle acquisition and construction of Pecos Crossing,” said Randy Hoover, President of Hoover Energy Partners. “We see 2012 as the year that Hoover will emerge as the premier midstream company serving producers targeting the Wolfbone play in Reeves and Pecos counties. Additional growth projects will be announced in the coming months.”
Pecos Crossing Pipeline is scheduled to be operational in April 2012 and will be the first crude oil pipeline operating south of the Pecos River. At its northern terminus, Pecos Crossing will deliver to Plains All American Pipeline’s newly constructed Barstow Station. At the southern terminus, Hoover will serve the Perry Ranch Station, a newly constructed truck loading and tank terminal. Multiple producer and Hoover owned laterals will continue to be constructed and connected as the Wolfbone is developed. Phase II of Pecos Crossing is being contemplated as the Wolfbone play extends south into Pecos County, Texas where Hoover’s legacy 550-mile natural gas gathering system and treating facilities are located.
INDUSTRY NEWS (Radnor, PA) – Penn Virginia Resource Partners, L.P. announced that it has acquired an option to purchase a pipeline easement in Susquehanna County along a 28.8 mile right-of-way corridor in the Pennsylvania Marcellus Shale. PVR is currently evaluating the construction of a new natural gas gathering pipeline, with an interconnection to the Tennessee system, to serve producers in the region. The optioned easement was acquired from the Rail-Trail Council of Northeastern Pennsylvania (”RTC”), and extends north from the Tennessee pipeline right-of-way in the town of Union Dale through the towns of Thompson and Lanesboro to the New York state line.
William H. Shea, Jr., Chief Executive Officer of PVR’s general partner, said, “We are pleased to have acquired this option as the first step in the development of a new outlet for the region’s natural gas production. The right-of-way was originally developed for railroad use and is ideally situated for pipeline construction. Use of the existing right-of-way will allow PVR to construct the line without creating another utility corridor in the region. The community will also benefit as the payments received by RTC will enable the Council to make significant improvements to the trail.
“We expect to continue discussions with potential shippers for construction of a 24-inch mainline trunk system capable of transporting approximately 360 million cubic feet per day of production to major northeastern US consumption markets,” said Mr. Shea.
INDUSTRY NEWS (Houston, TX) – Enterprise Products Partners L.P.announced recently that it has received sufficient transportation commitments to support development of its 1,230-mile Appalachia to Texas pipeline (”ATEX Express”) that will deliver growing ethane production from the Marcellus/ Utica Shale areas of Pennsylvania, West Virginia and Ohio to the U.S. Gulf Coast. Demand for price-advantaged ethane feedstock over crude oil-based derivatives within the Gulf Coast petrochemical market is approximately 955,000 barrels per day (”BPD”) and continues to increase. ATEX Express will have the capacity to transport up to 190,000 BPD from the Appalachian production areas to the partnership’s storage and distribution assets in Texas. The committed shipper transportation rate will range between 14.5 cents per gallon and 15.5 cents per gallon.
“The willingness of shippers to commit to a term of at least 15 years reflects the long-term potential of shale development in the Appalachian region and provides us with the assurance necessary to build the midstream infrastructure that will facilitate further development of this important domestic resource,” said Michael A. Creel, president and chief executive officer of Enterprise’s general partner. “In addition to providing valuable takeaway capacity that gives producers access to the most attractive markets, the ATEX Express pipeline will also serve as an economic driver for the country and the communities in which it will be located. This project is expected to directly create approximately 4,000 jobs during and after construction, which will increase the need for local goods and services and generate incremental state and local tax revenue. This is in addition to the jobs related to increased production in the Marcellus and Utica basins and those resulting from new and expanded ethylene plants in the United States.
Originating in Washington County, Pennsylvania, the first leg of the system would involve construction of approximately 595 miles of new pipeline extending to Cape Girardeau, Missouri, closely paralleling an existing Enterprise pipeline. At Cape Girardeau, Enterprise will reverse a 16-inch diameter pipeline and place it into ethane service. By utilizing an existing pipeline and following an existing right-of-way for the section to be constructed, ATEX Express offers a costeffective and timely solution that also minimizes the project’s environmental impact.
At the southern terminus of the ATEX Express pipeline, Enterprise will be constructing a 55-mile, 16-inch diameter pipeline to provide shippers with access to the partnership’s natural gas liquids storage complex at Mont Belvieu, Texas, giving them direct or indirect access to every ethylene plant in the United States.
Enterprise representatives are working with residents, landowners and community leaders along the proposed pipeline route, providing information about the project, conducting surveys and negotiating right-of-way agreements. ATEX Express is expected to begin commercial operations in the first quarter of 2014.
Report Volume XXIII, Number 9, January 1st, 2012
INDUSTRY NEWS (Houston, TX) – A merger of Pipeline Supply & Service with Wasatch Supply has led to the formation of PSS Companies, which is now the leading supplier of consumable pipeline materials and specialty equipment for the oil and gas industry in the U.S. PSS Companies now has five strategically placed distribution points across the U.S., with plans to continue its geographic expansion.
PSS Companies will serve as the parent holding company to Wasatch Supply, and Pipeline Supply & Service, as well as Porta Lathe, which provides pipeline cold cutting services throughout North America. For now, each PSS Companies division will maintain its own customer base, but will be moving to a unified brand platform that will deliver improved benefits to customers that include more responsive customer service due to the greater availability, accessibility, and delivery of products.
PSS Companies Quote “I wanted to be a part of this exciting new partnership at PSS Companies as I see it as a way to deliver greater value to our customers. Customers can expect to continue to see excellent customer service and responsiveness, and will now be able to get the supplies they need faster and more easily as a benefit from our increased warehouse locations.” – Karma Newberry, Wasatch Supply President, PSS Companies Vice President of Sales and Marketing.
INDUSTRY NEWS (Houston, TX) – Spectra Energy Corp’s Texas Eastern Transmission, LP, American Electric Power and Chesapeake Energy Marketing, Inc., a wholly owned subsidiary of Chesapeake Energy Corporation, announced recently their intention to advance the development of the Ohio Pipeline Energy Network (OPEN) project, a proposed expansion of the Texas Eastern pipeline system that will connect Ohio’s Utica and Marcellus shale gas supplies with the fast-growing markets attached to the Texas Eastern system, in particular natural gas-fired power generation.
The OPEN project brings together the largest producer and leaseholder in the Utica shale play, the largest power generator in the region and the premier pipeline company with over 60 years of safe and reliable operational history in the state of Ohio. The project will involve approximately 70 miles of new pipeline and create an additional 1 billion cubic feet per day (Bcf/d) of transportation capacity to serve local distribution companies, industrial users and gas-fired power generators in the Ohio market, as well as markets along the Texas Eastern system.
The project is anticipated to deliver substantial investment in energy infrastructure in the state through mineral leasing and development and construction of pipeline gathering and transportation infrastructure, as well as create significant jobs and lasting tax revenue for the state. A binding open season for the OPEN project is planned for the first quarter 2012 with the projected inservice slated for November 2014.
INDUSTRY NEWS (Houston, TX and Calgary, AB) – Enterprise Products Partners L.P.and Enbridge Inc. announced recently plans to hold concurrent open seasons from January 4, 2012 through February 10, 2012 to solicit capacity commitments from shippers for an expansion of the Seaway pipeline and an extension of the pipeline into the Port Arthur/Beaumont refining market. Enterprise and Enbridge recently announced plans to reverse the flow direction of the 500-mile, 30-inch diameter Seaway crude oil pipeline, enabling it to transport crude oil from the oversupplied hub in Cushing, Oklahoma to the U.S. Gulf Coast.
The initial 150,000 barrels per day (”BPD”) of capacity on the reversed system could be available by the second quarter 2012. Following pump station additions and modifications, which are expected to be completed by the first quarter 2013, capacity would increase to 400,000 BPD, assuming a mix of light and heavy grades of crude oil. Shippers who participated in the Wrangler open season have indicated strong support for the Seaway reversal and expansion. Given the advantages associated with Seaway, Wrangler has been terminated. Depending on the results of the open season, the Seaway pipeline would be looped or twinned to create additional capacity. This new loop would be built at the size and capacity required to meet shipper needs and in a location that generally follows the route of the existing Seaway pipeline. The new 85-mile pipeline that will be built from Enterprise’s ECHO crude oil terminal southeast of Houston to Port Arthur, Texas will give shippers access to the region’s heavy oil refining capabilities. Service is scheduled to begin in early 2014.
INDUSTRY NEWS (Houston, TX and Tulsa, OK) – Copano Energy, L.L.C. and Magellan Midstream Partners, L.P. announced recently the formation of a joint venture to deliver Eagle Ford Shale condensate to Corpus Christi, Texas.
The 50/50 joint venture, known as Double Eagle Pipeline LLC, will construct and own approximately 140 miles of new pipeline to connect an existing 50-mile pipeline segment owned by Copano to Karnes, Live Oak, McMullen and LaSalle Counties of Texas, enabling delivery of condensate to Magellan’s terminal in Corpus Christi. The initial capacity of the pipeline will be 100,000 barrels per day. Double Eagle also will construct a new truck unloading facility along the pipeline near Three Rivers, Texas for deliveries of condensate destined for Corpus Christi.
The joint venture project is supported by long-term customer commitments from Talisman Energy USA Inc. and Statoil Marketing and Trading (US) Inc., major producers with significant acreage in the rich gas window of the Eagle Ford Shale. The expected cost of the new joint venture facilities is approximately $150 million and will be shared equally by Copano and Magellan. Copano will oversee construction of the new pipeline and serve as operator. The companies expect to provide limited services by the end of 2012, with full service available beginning in the first quarter of 2013.
In connection with the joint venture, Copano will convert its existing 50-mile pipeline from natural gas to condensate service, and Magellan will make enhancements to its Corpus Christi terminal, including the construction of 500,000 barrels of new dedicated condensate storage and a new dedicated dock delivery pipeline.
INDUSTRY NEWS (Houston, TX) – o Crestwood Midstream Partners LP announced recently the signing of a memorandum of understanding with Mountaineer Keystone LLC (”MK”), headquartered in Pittsburgh, Pennsylvania, to construct a 42 mile 16″ natural gas gathering system (the “Tygart Valley Pipeline”) to serve MK’s Marcellus Shale development program in Northeast West Virginia. The Tygart Valley Pipeline (”TVP”) is expected to be completed by the fourth quarter 2012 and will interconnect with Columbia Gas Transmission’s WB Pipeline in Randolph County, West Virginia. The TVP will provide MK and other area producers with access to the growing natural gas markets in the Washington DC and Baltimore areas. Crestwood estimates the TVP project, as currently planned, will cost approximately $70 million.
Report Volume XXIII, Number 8, December 15th, 2011
INDUSTRY NEWS (Tulsa, OK) – The Bargath LLC pipeline company has proposed a 22-mile gas pipeline that would run from the Divide Creek area under the Colorado river to processing facilities near Parachute.
Bargath, also known as Williams Midstream, is being split off from Williams Production RMT in a deal that will take effect in early January, according to Williams spokeswoman Donna Gray.
The U.S. Bureau of Land Management is seeking public comments on the pipeline proposal, according to BLM spokesman Dave Boyd. Comments are due Jan. 20, 2012. The pipeline would cross 7.6 miles of BLM-managed lands, less than a mile of Forest Service land, and nearly 14 miles of private property.
“The pipeline would be bored under the Colorado River to avoid impacts to the riverbed, aquatic wildlife and the adjacent riparian ecosystem,” a BLM release said.
INDUSTRY NEWS (Binghamton, NY) – New York State Electric & Gas Corp. has made the application and documents related to its Seneca West Pipeline Interconnect project available for public review.
The project calls for the construction of a 5-mile natural gas pipeline from the Seneca Lake Gas Storage Facility West Pipeline near Upson Road in Big Flats through the Town of Horseheads to Gardner Road in the Village of Horseheads. NYSEG also plans to build a metering station at the point where the proposed pipeline will connect with the Seneca West Pipeline and a regulator station where the new pipeline will connect with NYSEG’s Elmira-area natural gas distribution system.
Approximately 3.9 miles of the new pipeline will parallel Millennium Pipeline Co.’s existing pipeline. The remaining span of approximately 1.1 miles will be built on a NYSEG electric transmission line right of way.
INDUSTRY NEWS (Houston, TX) – (Spectra Energy) Key permits have been approved for the building of a 16-mile natural gas pipeline across portions of northern New Jersey and into New York City, state environmental officials recently announced.
A spokesman for the New Jersey Department of Environmental Protection said flood hazard, waterfront development and fresh water wetlands permits have been issued for the proposed pipeline, which would run from Staten Island through parts of Linden, Bayonne, Jersey City and offshore in Hoboken into Manhattan’s West Village neighborhood.
It still requires approval from the Federal Energy Regulatory Commission and the U.S. Army Corps of Engineers.
DEP Commissioner Bob Martin said in a statement the permits were issued after Spectra Energy Corp., which is building the pipeline, complied with his agency’s demands for environmental improvements on the original proposal. The revised plan reduces wetlands disturbances, changes the pipeline route to avoid contaminated sites, and places the gas line far below the surface to minimize neighborhood construction disruptions, Martin said.
Spectra, which did not return a call seeking comment Friday, has also agreed to use thicker steel, electronic monitoring of the pipeline to allow shutoffs within 90 seconds, year-round security patrols, high-tech pipe inspections and a reduction in pressure in the pipeline as it runs through the heavily populated neighborhoods of Jersey City.
Supporters of the pipeline, which will have a capacity to carry 800 million cubic feet of natural gas per day, say it will boost the metropolitan area’s use of natural gas and cut down on pollution from other heating sources like fuel oil. New Jersey’s DEP said the project will create jobs, moderate energy costs for consumers, and reduce carbon dioxide emissions by up to 6 million tons annually compared to oil — the equivalent of taking one million cars off the road.
Opponents cite safety and environmental concerns, and the fact that most of the infrastructure will be located in New Jersey while the majority of the energy will be used in New York City. Residents and local officials in cities where the pipeline will be located also wonder about the impact it could have on property values along some of New Jersey’s most valuable real estate — the so-called “Gold Coast” — a ribbon of northern New Jersey waterfront real estate in Jersey City, Hoboken and Bayonne that looks out across the Hudson River toward the Manhattan skyline.
“The benefit flows to our good friends on the other side of the Hudson, while the risks will be borne by us in Jersey City,” said Jersey City Mayor Jerramiah Healy. “It’s the final insult of New York to New Jersey.”
Healy said Jersey City residents would continue to fight the plan, and that he was drafting a letter to President Barack Obama asking him to get involved.
A spokesman for the New Jersey chapter of the Sierra Club said the organization planned to fight the permits in court.
Spectra’s proposal involves an expansion of the Texas Eastern Transmission and Algonquin Gas Transmission pipeline. The gas will go mostly to Consolidated Edison Inc., which serves about 1 million naturalgas customers in the New York metropolitan area.
The project is expected to be completed in the fourth quarter of 2013. Spectra, which has headquarters in Houston, has not disclosed how much the project will cost.
The natural gas will come from the Marcellus Shale, a vast formation of energy-rich rock that runs through several states.
Report Volume XXIII, Number 7, December 1st, 2011
INDUSTRY NEWS (Houston, TX) – Enterprise Products LP and Enbridge Inc. are planning to build what could be the largest pipeline connecting the oil-storage hub of Cushing, Okla., to refiners on the Gulf Coast, the companies said Thursday.
The newly proposed Wrangler pipeline, with an initial capacity of 800,000 barrels a day, would compete with a 500,000-barrela- day pipeline being planned by TransCanada Corp. and Magellan Midstream Partners’ Longhorn pipeline, which would bypass Cushing to deliver up to 225,000 barrels a day of crude oil from revived oil fields in west Texas to the Gulf Coast.
The new pipeline project is the latest entrant in the race to be the first to supply refiners in Texas and Louisiana with low-cost crude oil from Cushing, where a supply glut had occurred amid a boom in inland U.S. and Canadian oil production.
Pipeline companies charge tolls on every barrel of oil shipped along their lines, a huge incentive for them to give Gulf Coast refiners direct access to Cushing’s bounty.
Cushing oil inventories hit a high of nearly 41.9 million barrels on April 18, nearly 30% higher than the year before, according to the U.S. Energy Information Administration. The glut has since subsided-inventories are now about 10% below year-ago levels— but increasing North American oil production is expected to keep Cushing oil prices about $20 a barrel lower than for oil available on the East and West coasts.
If all three pipeline projects are built, a total of 1.5 million barrels a day would be added to the pipeline capacity leading to the Gulf Coast within the next two years. Some analysts questioned whether so much capacity is needed.
But refiners in the region will be happy to have it, said Mark Routt, senior consultant at KBC Advance Technologies Inc. Refineries with a combined capacity of about 4.5 million barrels a day would have access to the three pipelines, he said.
“There’s a hue and cry across the land to get that crude to the coast,” Mr. Routt said. To build Wrangler, Enbridge and Enterprise would essentially combine projects that had been faltering in the face of the competition. Enbridge said the Wrangler project will supersede its proposed Monarch pipeline, a planned 350,000-barrel-a-day pipeline to Houston from Cushing that had just finished the initial engineering phase as of July.
“Wrangler is designed to meet the needs that Monarch was designed for,” Enbridge spokeswoman Jennifer Varey said.
For Enterprise, the Wrangler would replace its failed Double-E project, a partnership it formed with Energy Transfer Partners LP to build a 450,000-barrel-a-day pipeline to connect Houston to Cushing. That project fell apart in August because of insufficient commercial interest.
Enterprise spokesman Rick Rainey said the new line would offer refiners greater capacity than the failed Double-E and reach refiners outside the immediate Houston area.
“It’ll have more capacity, more flexibility to handle heavy or light crudes and serve multiple refinery areas,” he said. Mr. Rainey declined to say how much the Wrangler line would cost.
Enbridge and Enterprise will seek commitments for the pipeline starting next week. If enough shipper interest is expressed, the pipeline could start service in mid-2013, the companies said.
INDUSTRY NEWS (Houston, TX) – Enterprise Products Partners L.P. and Chesapeake Energy Corporation announced in November they have entered into a long-term contract whereby Chesapeake would anchor Enterprise’s proposed longhaul ethane pipeline from the Marcellus and Utica shale regions in Pennsylvania, West Virginia and Ohio to the U.S. Gulf Coast.
The approximately 1,230- mile pipeline would have an initial capacity of 125,000 barrels per day of ethane and could be quickly expanded through a combination of additional pumping horsepower and pipeline looping. The committed shipper transportation rate would range between 14.5 cents per gallon and 15.5 cents per gallon. Through connections at the partnership’s natural gas liquids (”NGL”) storage complex in Mont Belvieu, Texas, ethane production from the Marcellus and Utica shales would ultimately have direct or indirect access to every ethylene plant in the U.S. The pipeline could begin commercial operations in the first quarter of 2014.
“The addition of this new pipeline would provide producers in the quickly expanding Marcellus Shale play, as well as the emerging Utica Shale, with much-needed midstream infrastructure to facilitate production of NGLrich natural gas and provide shippers with access to the highest value markets on the U.S. Gulf Coast for their ethane,” said Michael A. Creel, president and chief executive officer of Enterprise’s general partner. “We have also built facilities to serve the petrochemical industry on the Gulf Coast as it continues to expand its demand for priceadvantaged domestic ethane to displace more expensive imported crude oil derivatives.”
INDUSTRY NEWS (Houston, TX) – Spectra Energy said recently its subsidiary Texas Eastern Transmission LP received approval from the Federal Energy Regulatory Commission to move forward with a natural gas pipeline expansion project in the northeastern U.S.
With FERC’s approval, the Houston-based energy company can begin construction on its Texas Eastern Appalachia to Market expansion project.
During the project, Spectra will install more pipeline to carry natural gas from the Appalachian and Marcellus shale formations in Pennsylvania to markets throughout the Northeast.
When the project is completed in 2012, the expanded pipelines will carry up to 200 million more cubic feet of natural gas per day.
In the future, Spectra said has plans to install more pipeline and pipeline interconnections to transport natural gas from northeast shale formations to customers in nearby regions.
INDUSTRY NEWS (Cleveland, OH) – Lincoln Electric has added Innershield® NR-440Ni2 to its portfolio of premium selfshielded, flux-cored consumables. This product provides lowtemperature impact toughness in a variety of offshore applications.
Key features:
Designed for optimal weldability in narrow TKY joints and poor fit-up conditions
Features excellent toe wash-in and a flat bead face appearance Meets H8 diffusible hydrogen requirements over a range of humidity levels
Hermetically sealed in ProTech® packaging for moisture resistance
Innershield® NR-440Ni2 meets the most demanding requirements for offshore welding. With premium weldability and excellent toe wash-in, the wire is capable of delivering a flat bead face when used in vertical-up or vertical-down welding applications.
The electrode conforms to AWS 5.29/A5.29M:2010 E71T8-Ni2- JH8 and is ABS, DNV, and LR approved.
Innershield® NR- 440Ni2 also maintains low, H8 diffusible hydrogen levels over a range of humidity. Innershield® NR-440Ni2 is available in 5/64 in. (2.0 mm) wire diameter on14 lb. coils. The product is hermetically sealed in Lincoln Electric’s 56 lb. vacuum sealed pails to protect against moisture and ensure to reliable performance.
To request a copy of Lincoln Electric’s Innershield® NR-440Ni2 product literature, call (888) 355-3213 or visit www.lincolnelectric.com to obtain bulletin C3.2000.5.
INDUSTRY NEWS (Newport Beach, CA) – The Federal Energy Regulatory Commission (FERC) recently approved the application of Tricor Ten Section Hub, LLC to construct and operate a new underground natural gas storage project near Bakersfield, CA. The Ten Section Hub facility is designed to hold 32.5 Bcf of gas, of which 22.4 Bcf is working gas, and will offer customers up to four-turns of high-speed deliverability. Ten Section Hub will offer up to 1.0 Bcf per day of withdrawal service and up to 0.8 Bcf per day of injection service, which will significantly improve the overall efficiency and effectiveness of the Western interstate gas transportation network. Furthermore, by virtue of its strategic location to both the Western and Southwestern United States, Tricor is centrally positioned at the backbone of interstate and intrastate pipeline systems with over 4.0 BCF per day of interstate and intrastate pipeline capacity surrounding it. Tricor Energy is an independent energy company that produces, transports,and sells natural gas and oil from its fields in California.
When completed, the Ten Section Hub facility will provide unconstrained access to reliable, predictable natural gas to markets located in the Western US. Tricor will allow gas marketers, gas utilities and power generators to meet their energy demands as well as those of their residential, commercial, and industrial customers, while reducing price volatility. In addition to providing 32.5 Bcf of storage field capacity with a working capacity of 22.4 Bcf, the certificate issued by FERC authorizes Tricor to construct a 21-mile-long, 36-inch diameter bi-directional pipeline at Wheeler Ridge. Subsequent interconnections to the PG&E and SoCal intrastate pipelines will facilitate further storage offerings to intrastate and interstate customers. Southern California Gas Company’s Line 225 also connects directly to the Kern River-Mojave interstate pipeline at Wheeler Ridge. PG&E’s 34-inch 300A and 300B South to North lines have the capacity to deliver large volumes of gas into the San Francisco load center. The 9-mile, 34-inch intrastate Gosford Crossing transmission line, which is jointly owned by SoCal and PG&E, runs directly across the Tricor Ten Section Property, connecting SoCal’s 225 line to PG&E’s 300A & 300B.
Chris Kunzi, Tricor’s Vice-President stated that Tricor is extremely pleased with the certification action taken by the FERC. Mr. Kunzi added that following construction and operation, the storage facility will be able to provide significant new natural gas infrastructure in order to satisfy both existing and future energy demands of residential, commercial, industrial and power generation customers located in the Western US. In addition to providing reliable safe and clean burning natural gas at stabilized prices in the Western region of the US, the construction and operation of the Ten Section Hub storage facility will also serve to fuel the local economy. It is anticipated that the project will cost several hundred million dollars and during construction result in adding over 200 new jobs to the local economy as well as generating several million dollars in additional state tax revenue. Mr. Kunzi noted that the FERC approval of Tricor’s certificate dramatically highlights the need for additional storage capacity in the Western US and Tricor stands ready to bring the new Hub storage deliverability to western natural gas markets in order to serve a diverse customer base, and mitigate the results of shortages of natural gas caused by supply or severe weather conditions.
Report Volume XXIII, Number 6, November 15th, 2011
INDUSTRY NEWS (Kaufman, TX) – Larrett Energy Services, Inc. is expanding its operations to the South Texas Eagle Ford Shale. Larrett will be opening a new 35 acre office, shop and lay down yard at 12048 Hwy 83 in Asherton TX. The facility expansion is to meet the growing customer demand for Larrett to a have a presence in the area. Construction should be complete by December of 2011 with operations in the area beginning immediately.
Larrett Energy which is headquartered in Dallas, Tx has concentrated it’s resources in the Barnett Shale and the installation of the urban pipelines. Larrett Energy also operates a pipeline maintenance division that operates in the states of Texas, Oklahoma and Louisiana. The growth the company has seen it is first year in the Barnett Shale region and its growing customer base is leading the company to expand to the Eagle Ford Shale.
INDUSTRY NEWS (Bismark, ND) – Montana-Dakota Utilities Co. intends to build a 24-mile natural gas pipeline to fuel a proposed 88-megawatt natural gas-fired power plant near the company’s Heskett Generating Station.
MDU announced in July plans to build an $85.6 million natural gas-fired power plant next to its coal-fired plant to meet capacity requirements following the failure of the planned Big Stone II coal plant in South Dakota in 2009. If approved, the new plant could be in use by the beginning of 2015. On Oct. 24, the Bismarck- based company submitted to the North Dakota Public Service Commission a letter of intent to file an application for a certificate of corridor compatibility and route permit for the proposed pipeline to feed the plant. The 10-inch pipeline would cost an estimated $18.4 million and would have a maximum pressure of 1,440 pounds per square inch.
The pipeline would run from a new town border station to be installed on Northern Border Pipeline Co.’s system near St. Anthony, southwest of Mandan, to the Heskett Station north of Mandan.Montana-Dakota Utilities Co. hopes to start construction on the pipeline in mid-2013 and finish it that year.
INDUSTRY NEWS (Houston, TX) – Enterprise Products Partners L.P. recently announced several new construction projects that will extend and expand its natural gas and natural gas liquids (”NGL”) infrastructure in South Texas to accommodate expected production growth from the Eagle Ford Shale play. As a result of additional demand from our Eagle Ford producing customers, along with the execution of new gathering and processing agreements, Enterprise will build an additional 300 million cubic feet per day (”MMcf/d”) train at its Yoakum cryogenic natural gas processing facility in Lavaca County, Texas.
In addition, the partnership is constructing 62 miles of 24-inch diameter and 30-inch diameter pipeline loops and increasing horsepower compression to gather, and transport an additional 300 MMcf/d of rich Eagle Ford Shale gas. This expansion is expected to begin service in the first quarter of 2013. Approximately 195 rigs are presently working in the play as of the end of the third quarter 2011, compared to approximately 105 rigs in the third quarter of 2010.
“Increased drilling activity in the prolific Eagle Ford Shale continues to create opportunities for Enterprise to leverage its integrated network of midstream assets to provide producers with flow assurance and market choice,” said A.J. “Jim” Teague, executive vice president and chief operating officer of Enterprise’s general partner. “Each new addition to our growing infrastructure footprint allows us to provide enhanced service options for customers in a more efficient, timely and cost-effective manner.”
As previously announced, Enterprise is currently constructing its Eagle Ford rich natural gas mainline system and associated laterals consisting of approximately 300 miles of pipeline, representing gathering and transportation capacity of more than 600 MMcf/d. The Yoakum natural gas processing facility currently has 600 MMcf/d of capacity under construction, which is expected to begin service during the second quarter of 2012. With the additional 300 MMcf/d train, the plant will have total capacity of 900 MMcf/d when service begins, which is expected in the first quarter of 2013.
INDUSTRY NEWS (Tulsa, OK) – Magellan Midstream Partners, L.P. announced recently that it is further expanding its crude oil pipeline distribution capabilities in the Houston area to deliver domestic crude oil and condensate transported via thirdparty pipeline systems from the Eagle Ford Shale production area directly to local refineries. The project includes the construction of a 6-mile, 24-inch diameter crude oil pipeline between the pipeline interchanges of Genoa Junction and Speed Junction, which will connect to the 24- inch diameter crude oil pipeline along the Houston Ship Channel that was previously announced as part of the partnership’s Houston-to-El Paso pipeline reversal project, allowing Magellan to further distribute product to the Houston-area refineries.
“Magellan’s crude oil infrastructure is strategically positioned to be the last leg distribution conduit to the Houston and Texas City refinery gate for growing domestic crude oil and condensate production,” said Michael Mears, chief executive officer. “Together with our recentlyannounced capital investment to transport crude oil from West Texas to the Houston market, Magellan will be able to access and distribute crude oil and condensate from both the Eagle Ford Shale and Permian Basin formations, providing Houston and Texas City refineries with direct access to new domestic production.” This project, which is supported by a long-term customer commitment, is expected to be operational by the end of 2012.
Report Volume XXIII, Number 5, November 1st, 2011
INDUSTRY NEWS (Houston, TX) – GulfStar Group is pleased to announce the acquisition of Wasatch Supply, Inc. by Pipeline Supply & Service, LLC a portfolio company of Cadent Energy Partners, LLC (”Cadent”). GulfStar served as exclusive financial advisor to PSS. The transaction closed on September 30, 2011. PSS’ legal advisor was DuBois, Bryant & Campbell, LLP of Austin, Texas.
Wasatch provides consumable supplies and equipment to the oil and gas, pipeline and construction industries in the US and abroad. Since its inception, Wasatch Supply has experienced steady growth under the direction of its president, Karma Newberry, and has forged a great reputation in the industry for its expedited delivery.
PSS, headquartered in Houston, Texas, is one of the largest independent providers of industrial products and services to the domestic oil and gas transmission industry. PSS stocks and distributes one of the industry’s most comprehensive industrial and safety product offerings.
“This partnership strengthens our commitment to help our customers succeed by providing more competitive pricing, more locations for increased availability and accessibility, and service that continues to exceed expectations,” said Chuck Dalio, Chief Executive Officer of PSS.
The GulfStar transaction team included Managing Director Tom Hargrove, Vice President Justin Moers, Associate Jay Stone, and Analyst Kristie Ganss. “The acquisition of Wasatch Supply expands PSS’ geographic presence in the northwest and northeast regions of the United States, providing PSS access to the important Bakken, Niobrara and Marcellus oil and gas pipeline markets,” said Tom Hargrove. “We were pleased to represent PSS on this acquisition and look forward to future initiatives that will continue to allow PSS to achieve its strategic objectives.”
INDUSTRY NEWS (St. Louis, MO) – Insituform Technologies, Inc. recently announced the completion of an internal reorganization whereby a new Delaware parent holding company, Aegion Corporation, has been created to provide corporate and administrative services for its operating subsidiaries (Insituform Technologies, The Bayou Companies, Corrpro Companies, United Pipeline Systems, CRTS, Fibrwrap Construction Services and Fyfe). In the new structure, Aegion replaces Insituform as the public company, and Insituform and its former direct subsidiaries are now direct subsidiaries of Aegion. Aegion’s common stock is traded on the Nasdaq Global Select Market under its new symbol “AEGN.”
Upon completion of the reorganization and without any action on the part of the Insituform stockholders, each share of Insituform common stock (with its attached preferred stock right) was converted into one share of Aegion common stock (with an attached preferred stock right). The management and board of directors of Aegion are identical to that of Insituform prior to the reorganization, as are the certificate of incorporation, bylaws and other corporate governance documents.
J. Joseph Burgess, President and Chief Executive Officer of Insituform, and now Aegion, said: “There are inflection points in every company’s evolution, moments that reflect a major shift in strategy. That moment came for Insituform in 2011 when for the first time our global sewer contracting business will represent less than 50 percent of our revenue, after representing approximately 88 percent of our revenue in 2007. This transition was the direct result of the implementation of our strategic plan to diversify into higher growth and higher return products and services in the energy and mining and high growth commercial and structural rehabilitation markets.”
Burgess continued: “The Insituform name represents where we came from. It identified the flagship technology that is closely aligned to the trenchless sewer rehabilitation business upon which this company depended for so many years. As one of that industry’s most powerful and recognizable brands, we will continue to use the Insituform name for our subsidiaries and products that operate in the water and wastewater business segments.”
“This company has now developed beyond those roots. Aegion (a combination of the Greek roots “Aegis” meaning a protective shield and “Eon” meaning a long period of time) reflects our new mission of extending our leadership capabilities to furnish products and services to provide long-term protection for water and wastewater pipes, oil and gas pipelines, as well as commercial and governmental structures and transportation infrastructure. Our new corporate name and our new corporate structure are recognition of the company’s strategy to continue development in these new directions.”
“We also expect that the new holding company structure will allow us to reorganize our various operating subsidiaries in a more tax efficient manner, facilitate a more cost-effective repatriation of cash to the United States and better manage possible legal liabilities.”
The formation of the holding company will not have any federal or state tax consequences to the stockholders of Insituform. Stockholders will not be required to do anything to convert their Insituform shares and the accompanying preferred stock rights to Aegion shares and preferred stock rights. Share certificates evidencing Insituform shares and rights will, automatically and without any further action, be deemed to evidence an identical number of shares and rights of Aegion. As Insituform share certificates are presented to the transfer agent for transfers in the ordinary course, Aegion stock certificates will be issued to the new stockholders. If any stockholder wishes to exchange the current Insituform stock certificate for an Aegion certificate prior to an ordinary course transfer of the underlying shares, the stockholder may do so by contacting American Stock Transfer Company, the Company’s transfer agent, at American Stock Transfer & Trust Company, LLC, Attn. Shareholder Services Department, 6201 15th Avenue, Brooklyn, New York 11219, telephone no: 1-800-937-5449 for instructions as to how to complete the exchange.
INDUSTRY NEWS (Wyomissing, PA) – UGI Energy Services is planning to invest about $150m to extend its Auburn natural gas gathering system in Pennsylvania, US. The company will expand the gathering system 30 miles from its terminus in Wyoming County to Luzerne County, including a planned connection to Transcontinental Gas Pipeline.
Upon completion, this project will link Marcellus Shale production areas in Susquehanna and Wyoming Counties with multiple Pennsylvania and interstate markets.
The extension of the gas gathering system is expected to be completed in 2013. UGI Corporation chairman and CEO Lon Greenberg said the expanded Auburn gathering system will enhance UGI’s ability to bring competitively priced, locally produced gas to consumers in Pennsylvania and throughout the US Northeast.
INDUSTRY NEWS (Dallas, TX) – Energy Transfer Partners, L.P. announced recently it has entered into a long-term, feebased agreement with XTO Energy, a subsidiary of Exxon- Mobil, to provide natural gas gathering, processing and transportation services from both the Woodford and Barnett Shale regions. ETP will construct a 117-mile natural gas gathering pipeline from the Woodford Shale located in Oklahoma to its existing gathering and processing infrastructure in the Barnett Shale. As part of the project, the Partnership also will construct a new 200 million cubic feet per day cryogenic processing plant at its existing Godley processing facility in Johnson County, Texas.
“We are excited to have the opportunity to expand the footprint of our Godley processing and gathering system into the Woodford Shale in Oklahoma,” said Roy Patton, Senior Vice President of Energy Transfer Partners. “This expansion, which also benefits our customers in the Barnett Shale, increases the long-term utilization of our Godley processing facility by giving us access to some of the most active liquidrich drilling plays in the region. This project complements the Partnership’s other assets by increasing downstream transportation on our intrastate segment as well as providing additional NGL volumes for transportation and fractionation through our Lone Star NGL system.”
“This new pipeline system will provide XTO Energy the necessary infrastructure to operate effectively in the region, access markets beyond the region, and help pave the way for additional job creation and economic growth in Southern Oklahoma,” said Terry Schultz, Senior Vice President of Marketing, XTO Energy.
The 117-mile, 24- and 30-inch Red River Gathering Pipeline will originate in Carter County, Oklahoma and will have an initial capacity of 450 million cubic feet per day, with anticipated capacity expansion exceeding 550 million cubic feet per day. The pipeline is expected to be in service by the fourth quarter of 2012. The new processing plant will increase the Partnership’s processing capacity at Godley from 500 million cubic feet per day to 700 million cubic feet per day and is expected to be in service by the third quarter of 2013. The total cost to build the pipeline and processing plant is estimated to be approximately $360 million.
INDUSTRY NEWS (Denver, CO) – As DCP Midstream continues to move toward a fourth-quarter close on the acquisition of the Seaway Products Pipeline Company, it announces recently a request for binding expressions of interest in the proposed Southern Hills Pipeline.
DCP Midstream announced in June an agreement to acquire the Seaway Products Pipeline Company from ConocoPhillips to create a new natural gas liquids pipeline for transportation capacity from the Midcontinent to the premium Texas Gulf Coast markets, including Mont Belvieu. The pipeline will be renamed Southern Hills Pipeline and converted from refined products service to an interstate natural gas liquids pipeline. DCP Midstream will add extensions into Mont Belvieu, Texas, along with various receipt points in the Midcontinent region and associated gathering infrastructure.
Southern Hills Pipeline will have a target capacity of close to 150,000 barrels per day of Y-grade NGLs and be connected to several DCP Midstream processing plants. Southern Hills Pipeline is expected to be in service as early as mid-2013.
DCP Midstream will operate Southern Hills Pipeline as a common carrier pipeline.
“We are seeing tremendous producer interest in our Southern Hills Pipeline project,” said Bill Waldheim, president of DCP Midstream’s northern business unit. “Similar to our Sand Hills 720-mile, 20-inch, Y-grade NGL pipeline that is currently under construction, which will alleviate NGL bottlenecks in the Permian basin, so, too, will Southern Hills Pipeline provide Midcontinent producers access to the premium priced Gulf Coast NGL markets.”
DCP Midstream announced in June an agreement to acquire the Seaway Products Pipeline Company from ConocoPhillips, rename it Southern Hills Pipeline and convert it from refined products service to an interstate NGL pipeline. DCP Midstream will add extensions to Mont Belvieu, Texas, along with various receipt points in the Midcontinent region and associated gathering infrastructure. The pipeline will run more than 700 miles.
In September, DCP Midstream announced a request for binding expressions of interest in Southern Hills Pipeline from shippers (open season). For information, contact Rick Paul at 713-735-3739 or rmpaul@depmidstream.com.
DCP Midstream will operate Southern Hills as a common carrier pipeline. The regulated pipeline will carry Y-grade NGLs and be connected to several DCP Midstream processing plants and third-party NGL producers. Southern Hills Pipeline is a game changer for Midcontinent NGL values. This critical piece of midstream infrastructure will increase the value producers realize for their growing Rockies and Midcontinent NGL production through enhanced connectivity to the premium priced Gulf Coast NGL markets.
Southern Hills Pipeline will afford DCP Midstream the ability to provide producers with integrated natural gas gathering, processing and NGL transportation services through a timely solution that leverages pipe already in place. The acquisition and the start of the conversion are expected at the end of 2011. The in-service date is expected as early as mid-2013.
INDUSTRY NEWS (Calgary, AB and Houston, TX) – Enbridge Inc. and Enbridge Energy Partners announced recently two projects that will provide increased access to refineries in the U.S. upper midwest and in Ontario, Canada for light crude oil produced in western Canada and the U.S. The project involves the expansion of EEP’s Line 5 light crude line between Superior, Wisconsin and Sarnia, Ontario by 50,000 barrels per day, at a cost of approximately $100 million. Complementing the Line 5 expansion, Enbridge plans on reversing a portion of Line 9 in western Ontario to permit crude oil movements eastbound from Sarnia as far as Westover, Ontario, at a cost of approximately $20 million. Subject to regulatory approvals, both projects are targeting to be in service in late 2012.
The expansion of Line 5 and reversal of Line 9 between Sarnia and Westover can be economically achieved with upgrades or modifications of facilities and does not require installation of new pipeline.
The project will enable growing light crude production from the Bakken shale and from Alberta to meet refinery needs in Michigan, Ohio and Ontario. The project provides another much needed transportation outlet for light crude, mitigating the current discounting of supplies in this basin while also providing more favourable supply costs to refiners currently dependent on crudes priced off of the Atlantic basin.
“We are pleased to be able to provide this high value solution to our shippers,” said Stephen J. Wuori, President, Liquids Pipelines, Enbridge Inc. “With a Brent-to-WTI differential running in excess of $20 per barrel, compared with the historical parity relationship, there is significant value to be captured by increasing the pipeline capacity to move western Canadian and Bakken light crude supply to eastern refiners. This project will utilize the international joint toll (IJT) feature provided for in the new Enbridge Competitive Toll Settlement, which will enable us to provide an attractive toll from western Canada all the way through to refiners in the U.S. upper Midwest and Ontario. “This is an attractive project for EEP,” added Mark Maki, President of the Partnership. “The project can be undertaken generally within our existing rights of way and will utilize a standard FERC cost of service model that will provide additional distributable cash flow to the Partnership once the project is placed into service.”
INDUSTRY NEWS (Houston, TX) – Spectra Energy:
- Spectra Energy entered into agreements with 2 customers to deliver new volumes of natural gas supply along our Texas Eastern Transmission, LP (Texas Eastern) system.
- Grays Ferry Cogeneration, a subsidiary of Veolia En ergy, has contracted for an additional 20 million cubic feet per day
- PBF Energy Company LLC, formerly Valero Energy Corp, has contracted for an additional 7,000 cubic feet per day
- Both customers can expect this additional delivery by November of 2012. We are happy to be continuing our relationship with, and appreciate they recognize that our Texas Eastern system is in place and ready to be efficiently expanded to bring additional firm supply to their power plant.
- Replacement of a 16-inch diameter natural gas pipeline with a new 30-inch diameter natural gas pipeline for approximately 0.4 miles eastward from the Chester Junction valve site in Delaware County, PA. This replacement will generally be within the existing Texas Eastern pipeline easement.
- Construction of new “launcher / receiver” facilities at Chester Junction meter station and the terminal end of the 0.4 miles of 30-inch pipe construction to allow for internal pipeline inspection and preventative maintenance, if necessary.
Report Volume XXIII, Number 4, October 15th, 2011
INDUSTRY NEWS (Houston, TX) – Enterprise Products Partners L.P. through its Texas Express Pipeline LLC (”Texas Express”) subsidiary, recently announced the start of a binding open commitment period for available capacity on a new natural gas liquids (NGL) pipeline being developed by the company. The pipeline would originate from Skellytown, Texas in Carson County and extend approximately 580 miles to NGL fractionation and storage facilities in Mont Belvieu, Texas. The project is part of a recently announced joint venture that includes Enbridge Energy Partners, L.P. and Anadarko Petroleum.
The new Texas Express pipeline, in conjunction with the Mid- America Pipeline, will assist producers in West and Central Texas, the Rocky Mountains, Southern Oklahoma and the Mid-continent in maximizing the value of their natural gas production by providing additional takeaway capacity and enhanced access to the Gulf Coast NGL market. Initial capacity on Texas Express will be approximately 280,000 barrels per day (”BPD”), which can be readily expanded to approximately 400,000 BPD or more depending on shipper interest. The pipeline is expected to begin service in the second quarter of 2013.
“While the pipeline is anchored by long-term commitments, all interested parties will have an opportunity during the open commitment period to sign up for capacity on the system, which offers access to the largest domestic NGL market located along the Gulf Coast,” said A.J. “Jim” Teague, executive vice president and chief operating officer of Enterprise’s general partner. “Interest in the project has been very high. Producers find our project very appealing since it provides a lower-cost fee structure when compared to other announced projects. In addition, it gives them the opportunity to sculpt their volume commitments to match their production ramp-up while offering a one-time, future option to increase their volume commitment.”
INDUSTRY NEWS (Houston, TX) – Enterprise Product Partners is planning a pipeline to transport ethane from the Northeast’s booming Marcellus Shale region to the Gulf Coast’s petrochemical hub and launched an commitment period for potential customers Tuesday.
The 1,230-mile pipeline, a mixture of new construction and existing pipe, is expected to start operation in early 2014 with a capacity of 125,000 barrels per day, according to the Enterprise announcement.
It would move ethane, a natural gas liquid, through from Washington County, Pa. to Mont Belvieu, Texas. It would be the first feed from the Northeast to Enterprise’s Mont Belvieu storage complex, said company spokesman Rick Rainey.
Houston-based Enterprise seeks to capitalize on petrochemical producers’ growing demand for ethane, in massive supply from the Northeastern corridor, Rainey said. The petrochemical industry is increasingly turning to natural gas, from which ethane is derived, as a feedstock because of its lower price compared to crude oil.
During the open commitment period, shippers sign binding agreements to use the pipeline to move their products. The commitment period started Tuesday morning and will run through Nov. 10, Enterprise said.
Rainey said Enterprise has already received verbal interest from shippers and expects to get enough commitment to make the pipeline commercially viable. The company could expand the pipeline’s capacity if shipper interest exceeds current plans, he added.
The company is not releasing the project’s expected cost until the open commitment period closes, Rainey said.
Under current plans, Enterprise will build 580 miles of 16-inch pipe extending southwest from Pennsylvania to Cape Girardeau, Mo. There, it will connect with the existing TE Products Pipeline, extending 650 miles to Beaumont, Texas. That pipeline currently moves gasoline and diesel to the Northeast and it’s flow will be reversed to incorporate the new project, Rainey said.
Another 55 miles of pipe will be constructed to connect Beaumont to the Mont Belvieu natural gas liquids storage complex, according to the Enterprise announcement. The complex will provide direct or indirect access to every ethylene plant in the United States, the company said.
INDUSTRY NEWS (Houston, TX) – Enterprise Products Partners LP and Enbridge Inc. plan to build a 500-mile pipeline to move crude from a bottleneck at Cushing, Oklahoma, to refineries on the U.S. Gulf Coast.
The proposed Wrangler pipeline will be capable of moving as much as 800,000 barrels a day and may be in service by mid-2013, the companies said in a statement today. Bart Moore, a spokesman for Houstonbased Enterprise Products, declined to say how much the project would cost.
The pipeline represents the first step in an effort by Calgary-based Enbridge to bring Canadian crude to the Gulf, Mark Chevalier, a senior consultant with Purvin & Gertz Inc., said in an interview today. The system would compete with TransCanada Corp.’s proposed $7 billion Keystone XL pipeline, which would also take crude from Alberta’s oil sands to Texas refineries. “What they’re trying to do is dominate that route to push all the other pipelines out,” said Paul Euseppi, an analyst with Dallas-based Swank Capital LLC, which manages about $1.5 billion and including stock in Enterprise and an Enbridge subsidiary. The pipeline may cost more than $1 billion, he said. Technology to produce crude from U.S. shale-rock formations and Canadian oil sands has increased production and led to a glut at the Cushing storage hub. A lack of pipeline capacity to move the petroleum to refineries has caused the price of West Texas Intermediate crude, the U.S. benchmark, to trade at almost $27 less per barrel than imported oil.
Earlier Pipeline Plan – Enterprise Products called off a previous plan to build a Cushing-to-Gulf pipeline with Energy Transfer Partners LP on Aug. 19 after the proposal failed to draw sufficient commitments from shippers.
The difference between the two plans is Enbridge’s ability to attract interest from oil producers in Canada for a complete line originating in Alberta, Purvin & Gertz’s Chevalier said.Enbridge announced in August that it is considering building a “Monarch North” pipeline that could move crude from Chicago to Cushing, as well expanding its existing ability to deliver oil from Alberta to Chicago.
Oil Sands Surge – The proposal may affect other pipelines between Cushing and the Gulf Coast. ConocoPhillips, which owns the Seaway pipeline jointly with Enterprise, may be pressured to reverse the line or sell its share, Bradley Olsen, a Houston-based analyst with Tudor Pickering Holt & Co., said in a note to clients.
“The cost of a Seaway reversal would be substantially lower than the new Wrangler pipeline,” said Olsen, who rates Enterprise’s units at “accumulate” and owns none. Production from Alberta’s oil sands is expected to double to more than 3.7 million barrels a day by 2025, according to the Canadian Association of Petroleum Producers. The Keystone XL, which is awaiting U.S. State Department approval because it crosses an international border, was intended to address that increase when it was proposed in 2008. The project is opposed by some environmentalists and landowners.
INDUSTRY NEWS (Houston, TX) – A section of oil pipeline that runs through Cass County could be replaced in 2012.
Enbridge, a Canada-based oil pipeline company, is planning a maintenance and rehabilitation effort along parts of its Line 6B pipeline, which starts in Griffith, Ind., crosses through the Niles area and into southeast Michigan.
Pending obtaining the required environmental permits and regulatory approval, the company would replace about 75 miles of the pipeline, including a five-mile stretch just southeast of the city of Niles, according to Joe Martucci, Enbridge community relations consultant.
Martucci said the company is waiting on approval from the Michigan Public Service Commission. If it gets approval, the company would start construction in 2012.
Report Volume XXIII, Number 3, October 1st, 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.
Report Volume XXIII, Number 2, September 15th, 2011
INDUSTRY NEWS (San Antonio, TX) – NuStar Energy L.P. announced recently that the company has entered into an agreement with Valero Energy Corporation in which NuStar will modify existing sections within its South Texas pipeline system and build new sections to transport Eagle Ford and other crude oils. These projects will help Valero improve transportation of crude and condensate to supply its refineries in Three Rivers, Texas and Corpus Christi, Texas.
NuStar will reverse an eight-inch refined products pipeline that currently runs from Corpus Christi to Three Rivers and will convert it to crude oil service. The pipeline will provide capacity to transport Eagle Ford crude and condensate to Valero’s Corpus Christi refinery, and the line is expected to be in full service by the end of September 2011.
NuStar will also build 55 miles of new 12-inch pipeline that will connect to existing pipeline segments to move crude oil from Corpus Christi to Valero’s Three Rivers refinery. This system is expected to be completed and in service by the second quarter of 2012.
INDUSTRY NEWS (Tulsa, OK) – Magellan Midstream Partners, L.P. announced recently that it is proceeding with the reversal and conversion of a portion of the partnership’s 18-inch Houston-to-El Paso pipeline to crude oil service. The reversed pipeline system is expected to have an initial capacity of 135,000 barrels per day (bpd) to refiners in Houston and Texas City, supported by long-term committed volumes for a portion of this capacity.
“Magellan is pleased to announce that we have obtained the necessary commitment level and are moving forward with the reversal and conversion of a portion of our Houston-to-El Paso pipeline to crude oil service,” said Michael Mears, chief executive officer. “Current and forecasted future market dynamics favor the benefits of our pipeline project and customer interest has been strong as new outlets for West Texas crude oil are sought by producers.
“We believe our project represents the most direct and costefficient route to safely deliver growing West Texas crude oil production to the refineries in the Houston and Texas City area, providing alternative transportation options that will help alleviate the current crude oil oversupply situation in Cushing, Oklahoma.”
The project, which is expected to cost approximately $275 million, includes the following scope:
- Reverse and convert the partnership’s pipeline from Crane, Texas to Houston to transport 135,000 bpd of crude oil from the West Texas Permian Basin to the partnership’s East Houston terminal;
- Construct 1.25 million barrels of crude oil storage at the partnership’s facilities at Crane and East Houston;
- Modify and extend an existing 20-inch pipeline from Magellan’s East Houston terminal to the crude oil pipeline interchange at Speed Junction, Texas, which is located on the south side of the Houston Ship Channel;
- Construct an additional 24-inch crude oil pipeline along the Houston Ship Channel that will be used to add incremental capacity and connections to several Houston Ship Channel refineries; and
- Enhance the operational connectivity of the partnership’s existing pipeline assets to transport up to 65,000 bpd of refined petroleum products to the El Paso market by using an alternate route including the western portion of the 18-inch pipeline from Crane to El Paso.
The Crane-to-Houston crude oil pipeline segment could be expanded to transport 225,000 bpd if warranted by additional commitments at an estimated incremental cost ranging from $80 million to $150 million, depending on whether a new pipeline segment is necessary to access crude oil from Midland, Texas.
Once these modifications are complete, Magellan will be able to provide crude oil delivery from Crane to the refineries along the Houston Ship Channel and the refining complex in Texas City. The partnership also is pursuing opportunities to provide outbound waterborne capabilities and connections to third party pipelines that can transport crude oil to additional markets. Magellan will provide storage to facilitate these movements and will also offer additional crude oil storage for lease at its East Houston terminal.
The partnership had previously started the project’s required permitting work and, subject to receiving the necessary permits and regulatory approvals, expects the reversed pipeline to be operational by mid-2013.
INDUSTRY NEWS (Houston, TX) – Kinder Morgan Energy Partners is pleased to announce the start of a binding open commitment period for available capacity on a proposed crude oil pipeline from Guernsey, Wyoming to Cushing, Oklahoma called the Kinder Morgan Pony Express Pipeline LLC or “Project”. The Project would be a conversion of approximately 500 miles of part of the Kinder Morgan Interstate Gas Pipeline system plus a 210 mile green field extension from central Kansas to Cushing. The 710 mile Project would provide up to 210,000 barrels per day (BPD) of light crude that may be received from various sources near Guernsey, Wyoming, including interconnects with the Platte Pipeline and the Bridger-Butte Pipeline, as well as a potential new receipt point in the DJ Basin/Niobrara area in northeastern Colorado. The Project would offer shippers greater access to Cushing from several different production areas, while providing refiners with a reliable, source of crude oil.