April 2013, Vol. 240 No. 4

Advertisers from the print edition of Pipeline & Gas Journal, April 2013, Vol. 240 No. 4.

DCP Midstream LLC announced the following management and board changes effective Feb. 28.

Some important news broke March 20 likely to have major implications for the oil and gas industry going forward. In Pittsburgh, which has become the business hub for the Marcellus Shale, a consortium of environmental organizations, energy companies and philanthropic foundations have formed the Center for Sustainable Shale Development (CSSD). The goal is to provide producers with certification of performance standards for shale development.

With what could be viewed ominously as the perfect storm bringing a much rougher winter than last year’s to New England, concerns about the need for additional natural gas infrastructure in the region have once again been dramatically underscored.

More than 80,000 offshore energy professionals are expected May 6-9 to attend OTC 2013 -- the world’s largest offshore conference at Houston’s Reliant Center. Some 2,400 of the world’s leading offshore service and manufacturing companies from 110+ countries will participate in the exhibition in Reliant Center, Reliant Arena and the OTC Parkway.

MAATS Tech Ltd. is a specialist ship design organization with expertise in the provision of turnkey carousel systems and associated equipment installed in special purpose vessels used for laying flexible pipe, umbilicals and power cables.

Since it was formed in 1961, the American Public Gas Association (AGPA) has played an instrumental role in the operations of more than 700 member companies in 36 states. The non-profit trade group has a number of vital functions that serve the interests of the industry and ultimately the consumers who are buying that natural gas in increasing amounts and will continue to do so far into the future.

Global demand for energy continues to grow, especially in developing countries such as China and India, as the oil and gas industry continues to search for new sources of energy. Increasingly, oil and gas are found in challenging areas, such as deep water, arctic regions and politically challenged regions of the world.

Ecosse Subsea System has unveiled what it considers game-changing pipelay technology. The subsea firm says it has developed and patented a rigid pipelay system which can be deployed from smaller, more readily available vessels and which will slash schedules and installation costs for pipe-laying projects.

The rapid growth of production from tight oil plays in the U.S. mid?continent, as well as the development of oil sands in Canada, have dramatically changed the balance of flows at Cushing, OK, which was historically the distribution hub of imported and West Texas produced crude oil for Gulf Coast refineries.

As the distance of large-scale offshore tie-backs continue to extend, this presents fresh challenges in terms of pipeline design. As pipelines and flowlines are custom-designed, this provides opportunities for re-thinking during the concept, front-end and pre-feed stages of a project. This early investment in overall system design will help avoid nominal design ratings and “standard” designs – which can result in over design - a problem which is all too common.

ExxonMobil Corp. will develop the Hebron oil field offshore the Canadian province of Newfoundland and Labrador using a Gravity-Based Structure (GBS) that will recover more than 700 MMbbls of of oil, an increase versus earlier estimates.

With federal Gulf of Mexico production projected to increase in 2014, averaging 1.45 MMbpd, operators are readying four deepwater facilities for installation in the area to develop reserves in challenging areas.

With the intense controversy surrounding the proposed Keystone XL Pipeline construction, unprecedented attention is being placed on the transportation of unconventional crude oil products, in this case diluted bitumen originating in the vast tar sands of Western Canada.

A McDermott International, Inc. subsidiary has received a letter of award for a turnkey contract valued at US$A230 million for the PB-Litoral-A production platform for PEMEX Exploracion y Produccion in the Litoral Tabasco Tsimin-Xux fields.

The shale plays in North America with their enormous reserves of natural gas-related resources offer extensive opportunity for multiple national and industry payoffs. In addition to providing the potential gift of energy independence for years to come to our nation, the development of this vast resource has the chance to positively impact our nation’s general economy and its job creation capability.

With recent FERC approval for its comprehensive pipeline infrastructure replacement program in hand, NiSource has undertaken the initial five-year investment plan for the Columbia Gas Transmission pipeline and its related facilities.

A rapid influx of natural gas supply coupled with an annual predicted growth rate of .9% in regional demand has revolutionized natural gas as a key player in strengthening North America’s economy, according to Northwest Gas Association’s recent “Gas Outlook” report.

Oil and gas companies need to change their perspective on cybersecurity initiatives from one of incident-based response to a holistic approach more analogous to counterintelligence to prevent espionage, said experts attending IHS CERAWeek 2013, March 4-8. A two-part strategy to decrease exposure and mitigate possible consequences was recommended for a realm where the consensus was that some degree of infiltration is nearly inevitable.

In less than three years, the San Francisco-based combination utility Pacific Gas and Electric Co. (PG&E) has had to reconstitute its vast natural gas transmission and distribution system on a scale that is unprecedented for the U.S. pipeline sector.

This article presents a primary justification for an Emergency Operations Center (EOC), the Human Element. Human Factors is a critical component in all safety programs, particularly PHMSA CFR 49 Parts 190-194, Pipeline Safety. It is a relatively new, but mature science and an increasingly mature engineering discipline in the process industries. It is also an area that is often overlooked and not well understood.

We live in an era when natural gas and pipelines are part of everyone’s vocabulary. Never have pipeline operators and the companies that service them had to work more closely to ensure that natural gas is delivered reliably and most important safely throughout our vast underground transportation network.

Statoil and its partners have chosen a concept for the Skrugard development in the Barents Sea that includes a floating production unit with a pipeline to shore and a terminal for oil from the Skrugard field at Veidnes outside Honningsvåg in Finnmark. Statoil’s Øystein Michelsen, executive vice president for Development and Production Norway (DPN), said the field is scheduled to come on stream in 2018.

The worldwide financial crisis and subsequent recession, shale gas implications on U.S. natural gas prices and the aftermath of the Macondo incident have led to significant changes in the outlook for the U.S. Gulf of Mexico. Despite those obstacles, Quest Offshore's latest market report, Quest Deepwater Review: Gulf of Mexico, predicts a bright future for the GOM with a pronounced recovery expected in all major market segments from drilling to subsea, floating production and marine construction.

The UK oil and gas sector could create more than 34,000 new jobs within the next two years according to research from Lloyds Banking Group. However, the bank added that a skills shortage in the sector remains its biggest challenge.

Increasing gas demand, coupled with the requirement for short- to medium-term import solutions, has seen the floating regasification sector experience rapid growth in recent years. The industry has grown from the Gulf Gateway unit (2005-2012) to ten operational vessels in 2012. Similarly, the floating liquefaction market is gaining traction with the first base load FLNG liquefaction terminal due onstream in 2016.

The Obama administration's positive draft environmental impact statement on the final, four-state legs of the Keystone XL pipeline appears to set approval by the State Department on an exorable path. The draft EIS cleared away the major roadblock: concerns that greenhouse gas emissions from extraction of tar sands in Alberta would be unacceptable. It also found no problem with a new route TransCanada developed to avoid passing through a vulnerable aquifer in the Sand Hills of Nebraska.

Chesapeake Energy Corp. and Sinopec International Petroleum Exploration and Production Corp. have an agreement providing for Sinopec to pay $1.02 billion for a 50% undivided interest in 850,000 of Chesapeake’s net oil and natural gas leasehold acres in the Mississippi Lime play in northern Oklahoma.

The Crosstex Energy companies, Crosstex Energy L.P. and Crosstex Energy Inc., joined with the former management of Enerven Compression Services to form a new company (E2) that will provide services for producers in the liquids-rich window of the Utica Shale.

EQT Midstream Partners L.P. and its subsidiary Equitrans L.P. commenced a non-binding open season to gauge customer interest in securing firm transmission and storage capacity on what will be known as the Allegheny Valley Connector.

MarkWest Utica EMG LLC, a joint venture between MarkWest Energy Partners LP and The Energy and Minerals Group (EMG), announced definitive agreements with Rex Energy Corp. to provide gathering, processing, fractionation, and marketing services in the Utica Shale.

Regency Energy Partners L.P. will acquire Southern Union Gathering Co. LLC, the owner of Southern Union Gas Services Ltd. (SUGS), from Southern Union Co., a jointly owned affiliate of Energy Transfer Equity L.P. and Energy Transfer Partners L.P. The $1.5 billion acquisition will significantly expand Regency’s presence the Permian Basin.

Shell Pipeline announced the start of a limited supplemental binding open season for additional firm capacity commitments on the Houma-to-Houston pipeline system reversal project. The limited supplemental open season will offer contract transportation rates for the route from Houston to St. James/Clovelly, LA.

UGI Corp. has entered into agreements with Tenaska Resources LLC to jointly develop gas resources in the Marcellus Shale region in north-central Pennsylvania.

Western Gas Partners LP will acquire a 33.75% interest in the Liberty and Rome gas gathering systems from Anadarko Corp. for $490 million.

Blueknight Energy Partners, L.P. launched an open season on March 4 to solicit shipper commitments to transport crude from southern New Mexico to Crane, TX.

Bulgaria's Parliament denounced again the trilateral agreement for construction of the Burgas-Alexandoupolis oil pipeline.

CenterPoint Energy Bakken Crude Services, LLC, an indirect, wholly owned subsidiary of CenterPoint Energy Inc., held an open season that ran until March 29 to solicit binding long-term volume commitments from customers for a crude oil gathering and transportation pipeline system.

China-owned CNOOC Limited has completed its acquisition of Nexen Inc. for US$15.1 billion.

To provide supply access to growing markets in the Northeast and Mid-Atlantic, Columbia Pipeline Group (CPG) plans to construct additional capacity on the Columbia Gas Transmission system.

Pakistan is moving ahead with a pipeline to bring natural gas from Iran despite American opposition with Iranian President Mahmoud Ahmadinejad insisting the West has no right to block the project.

Enserco Midstream, LLC, a subsidiary of Twin Eagle Resource Management, LLC, plans to build and operate a crude oil trans-loading terminal to serve producers in the Niobrara and Bakken Shale formations and Canada.

Gazprom will build 17 CNG filling stations in 10 Russian regions this year, is a sign of the growing global interest in using natural gas as a transport fuel.

Gazprom’s Management Committee has approved the investment rationale for a new LNG plant near Vladivostok in the far east of Russia.

Holly Energy Partners is proceeding with expansion of its crude oil transportation system in southeastern New Mexico in response to increased crude oil production.

Sarmatia International Pipeline Company (ICC) of Warsaw, Poland has filed for an environmental permit for the construction of the Brody-Plock (Adamova Zastava) pipeline with a possible extension to Gdansk or the West.

Japan reported last month it had extracted gas from offshore deposits of methane hydrate, a breakthrough experts say might lead to developing a promising energy source.

Enbridge Inc. and Energy Transfer plan a joint development to provide crude oil pipeline access to the eastern Gulf Coast refinery market from the Patoka, IL hub.

Kenya relies on imported fuel as there is no local production. It relies on an existing 14-inch pipeline that runs from Mombasa to Eldoret and has been in use since 1978.

Magellan Midstream Partners, L.P. has agreed to acquire 800 miles of refined petroleum products pipeline from Plains All American Pipeline, L.P. for $190 million.

A gas pipeline planned for Mexico's west coast could offer multiple advantages for Vancouver-based Chesapeake Gold's Metates gold-silver project.

A new pipeline is planned to help meet Mexico's growing demand for natural gas. NET Midstream announced that NET Mexico Pipeline, LP, a wholly owned subsidiary of NET, will build a 124-mile, 42-inch natural gas pipeline system to the Texas/Mexico border with associated compression.

Extensive plans to shift Oman’s oil export capacity from the crowded Gulf waterways moving ahead, led by the newly formed Oman Tank Terminal Company will build, own and operate a huge storage facility on the eastern coast.

Qatari officials reported a gas discovery in Block-4N has been made after four years of intensive exploration activities, including the drilling of two exploration wells.

Oman Oil Refineries and Petroleum Industries Company (Orpic) plan to construct a 173-mile pipeline to connect the Sohar and Muscat refineries. If built, it will eliminate the need to ship refined products from Sohar to Muscat and then truck them through the city, as is done today.

Gazprom and the China National Petroleum Company (CNPC) have agreed to conclude talks on the long-stalled Russo-Chinese natural gas deal by year’s end.

Southcross Energy Partners, L.P. has completed its 57-mile, 20-inch Bee Line pipeline that will transport liquids rich gas from the central Eagle Ford Shale to Southcross’ Woodsboro and Bonnie View processing and fractionation complex in Refurio County. The pipeline has capacity of 320 MMcf/d.

Statoil has awarded three contracts for the long-distance Polarled gas pipeline in the Norwegian Sea. Total value is about $720 million.

Sabah Shell Petroleum Company Ltd. awarded Technip a subsea pipeline contract for the Malikai deepwater project, located off Sabah, in 650 meters of water.

Williams and Boardwalk Pipeline Partners have formed a joint venture to develop a pipeline to transport NGLs from the infrastructure-constrained Marcellus and Utica Shale plays to the rapidly expanding petrochemical and export complex on the U.S. Gulf Coast as well as the developing petrochemical market in the Northeast.

Shanghai-based Wison Offshore & Marine Ltd., a subsidiary of the Wison Group, has finalized an agreement with EDF Trading and Exmar NV to pursue LNG export opportunities in North America using offshore, barge-mounted natural gas liquefaction facilities developed by Exmar, Wison and Black & Veatch.

In this article, we profile Mike Poston, chief executive and president and of WeamcoMetric, a Tulsa-based company that has focused on providing measurement-related products and services to the oil and gas industry for 40 years. During the interview, it becomes readily apparent that Poston is a very spiritual individual, strongly devoted to his family, his business and his industry.

As a fitting testament to Stephen Ewing’s contributions to the energy industry, he was honored by the American Gas Association as its 2012 Distinguished Service Award recipient. At that Boston conference then-AGA Chairman Lawrence Borgard called him “a leader and champion of the natural gas industry.”

ShawCor’s Mobile Robotic Cutback System is one of the 15 technologies that is to receive a 2013 Spotlight on New Technology Award from the Offshore Technology Conference (OTC), the world's foremost event for the development of offshore resources in the fields of drilling, exploration, production and environmental protection. The award recognizes innovative new products that provide significant impact for offshore exploration and production.

No-Dig Anode Installation, or NDAI, is a patented process that allows utility companies to install one or more 17-pound anodes on steel services and mains through existing valve box test stations or curb valve boxes.

Operators and service contractors in oil and gas, chemicals, and pipelines are constantly searching for new solutions to help them improve their operations, safety and environmental compliance, and of course the financial “Bottom Line.” So, why do many companies struggle with leveraging mobile technology for improving their operations?