September 2013, Vol. 240 No. 9

Fieldwood Energy LLC acquired Apache Corp.’s Gulf of Mexico Shelf business for $3.75 billion. The properties comprise the largest operated asset base on the GoM Shelf and include more than 500 blocks and 1.9 million net acres. As part of the transaction, Fieldwood hopes to retain substantially all of Apache’s GoM Shelf employees.

Itron Inc. has completed installation of its automated gas-metering solution for ATCO Gas, a natural gas service provider to more than a million customers in Alberta, making this the largest such project in Canada. Itron’s gas-metering solution include 1.1 million gas communication modules, mobile and handheld collectors and associated software.

The board of directors of ONEOK Inc. unanimously authorized management to separate the company's natural gas distribution business into a standalone, publicly traded company. The new entity will be called ONE Gas Inc. and consist of Oklahoma Natural Gas Co., Kansas Gas Service and Texas Gas Service.

Advertisers from the print edition of Pipeline & Gas Journal, September 2013, Vol. 240 No. 9.

Toshiba International Corp. (TIC) completed an expansion of its control plant in Houston, which provides an additional 107,000 square feet of manufacturing and office space. The new space is scheduled to go into production shortly.

In 1992 I first met George Phydias Mitchell on the 60th floor of Houston’s tallest skyscraper. If you looked far enough to the north you could see The Woodlands, the master-planned development community he created about 30 miles from where we sat. If you looked 50 miles to the south, you might see the city of Galveston where Mr. Mitchell was born, where he spent much of his fortune on revitalization efforts, and where his wonderful life would end on July 26 at age 94.

Aside from the scale, engineering, design, construction and safety challenges, any of which could define a pipeliner’s career, what really motivates Enbridge’s Flanagan South Pipeline executives Jerrid Anderson and Mark Sitek, is the idea they are part of a larger socio-economic movement across North America. They’re helping to allow domestic energy to fuel more of the load, backing out imported oil.

Many countries rely on their natural gas grid almost as much as they do their electrical grid, which makes it socially as well as economically imperative for network operators to strive for the utmost in system reliability.

When you first meet Doug Evans, you may not realize that his knowledge of the oil and gas pipeline industry is second to none. He is a physically large man whose presence is easily recognizable; beneath that imposing 6-foot-2 frame is a friendly individual who is thoughtful and good-humored with a mind that never stops absorbing information.

Rice University’s James A. Baker III Institute for Public Policy recently hosted a conference, “Energy Market Globalization: Investment and Commodity Price Cycles and the Role of Geopolitics.” Much discussion focused on the relationships of oil prices to other economic indicators, and whether these relationships indicated that oil prices may tumble in the near future.

Oil and gas exploration is much about its transportation, and compressors play a central role in the pertinent processes. This overview of the diverse technology driving the industry cites the example of German MAN Diesel & Turbo’s broad turbomachinery product range.

The combination of advancing technology and deregulation of the gas industry have resulted in an increasingly complex situation for utilities. Companies are more aggressive about delivering gas service in the most efficient way in order to stretch margins as much as possible. Utilities are pushing the boundaries with intricate daily supply plans to maximize the use of cost-efficient fuel sources.

The Marcellus Shale Coalition (MSC) released “Recommended Practices for Pipeline Boring,” the seventh in a series of content-rich guidance documents developed by the coalition’s various subject-specific committees.

With U.S. crude oil production at the highest level in two decades, outstripping pipeline capacity, the U.S. is relying more on railroads to move its new crude oil to refineries and storage centers. The amount of crude oil and refined petroleum products transported by rail totaled close to 356,000 carloads during the first half of 2013, up 48% from the same period in 2012, according to the Association of American Railroads (AAR).

When a train carrying 72 tanker cars of Bakken crude oil derailed in the Quebec town of Lac-Mégantic, killing 47 people and destroying 40 buildings, it powerfully rekindled the debate over the merits of rail vs. pipeline delivery throughout the industry.

Russia faces a looming oil crisis that places the country at a crossroads. Production could well be in decline by 2020, even as the state's dependence on oil as its primary source of income continues to grow. Yet oil also offers Russia’s best hope for continued progress if the state's precarious relationship with the industry can be reformed, said IHS Senior Research Director Thane Gustafson, author of “Wheel of Fortune: The Battle for Oil and Power in Russia.”

Spectra Energy Corp. announced that Sabal Trail Transmission, LLC, a joint venture of Spectra Energy and NextEra Energy, Inc., has been awarded a 465-mile interstate natural gas pipeline project by Florida Power & Light Company (FPL) to begin service in May 2017.

A key goal for operators with centrifugal compressors is to prevent the compressor from going into surge. This is accomplished by proper design of the piping system, associated equipment and control valves that can balance the opposing requirements associated with start-up, emergency shutdown and normal operation.

In late July, the natural gas industry mourned the passing of George P. Mitchell, who pioneered key technologies applied to natural gas extraction, which today are changing global energy markets. Mitchell – his vision, ingenuity and commitment - is a prime example of the ability for research and subsequent deployment of lessons learned to transform an industry, create economic value and ultimately shape the course of history.

Today’s utilities have a highly productive and efficient business environment that is very competitive and needs to comply with many stringent regulatory requirements to prevent situations that would cause a facility to be down for even a short time.

Faster means better, most of the time. Faster gathering, faster processing, faster transmission. We all see the obvious benefits of getting and going faster. But faster isn’t always better.

Rapid dominance of your response requires far more than just getting there quickly or having a lot of really cool stuff with you when you arrive. Current or former military readers (thank you) already know this term. The military doctrine of “rapid dominance” requires four things:

“Green energy sources” are becoming more popular but still make only a small dent in the country’s or even the global energy supply. Green energy today includes conventional hydropower, wind, solar, wood and waste biomass, and geothermal. Some observers include nuclear because the waste products are easily collected and handled. Almost any source of energy that is free of fossil fuels is considered green energy. Many times the green fuels are a renewable source of energy.

The Senate may consider some form of pipeline permitting reform but the bill may not look like the one the House was expected to pass. Sen. Ron Wyden (D-OR), chairman of the Energy and Natural Resources Committee, released a broad statement on natural gas issues July 25.

The Pipeliners Association of Houston closed out its year by electing new officers and announcing it had raising about $300,000 to go toward scholarships.

The Department of Energy conditionally approved Lake Charles LLC’s application to export LNG to countries that do not have free trade agreements (FTA) with the U.S. Lake Charles Exports is a jointly owned subsidiary of BG Group plc, and Southern Union Co. (SUG), a joint venture owned by Energy Transfer Equity LP and Energy Transfer Partners LP.

Ohio Oil Gathering, a subsidiary of Crosstex Energy LP, reactivated its Black Run rail terminal with a ribbon-cutting ceremony July 17 at the company’s regional office in Frazeysburg, OH.

The Energy Information Administration reports that from the start of 2007 through the end of 2012, total U.S. private sector employment increased by more than 1 million jobs, about 1%. Over the same period, the oil and natural gas industry increased by more than 162,000 jobs, a 40% increase.

The Pennsylvania PUC modified a $500,000 settlement reached as part of an investigation of a 2011 Philadelphia Gas Works (PGW) explosion that killed an employee to include increased leak-detection measures.

Gibson Energy announced plans for a crude rail terminal near Hardisty, Alberta, to handle increasing Canadian production. The terminal will be developed in partnership with rail logistics company U.S. Development Group LLC and served by Canadian Pacific Railway’s North Main Line.

Alliance Pipeline is offering capacity on its system for natural gas transportation services effective Dec. 1, 2015.

Bond Construction's Civil & Utility was awarded two projects on the East Coast. The company’s Newark, NJ office will build a meter and regulation station for Columbia Gas at a major gas transmission interconnect facility in Ramapo, NY.

The Trans Adriatic Pipeline AG (TAP) said BP, SOCAR and Total – members of the international consortium developing the giant Shah Deniz field in Azerbaijan - will join the project.

Walter Oil and Gas Corp. experienced a loss of control of Well A-3 July 23 on an unmanned platform at South Timbalier Block 220 while doing completion work on the sidetrack well to prepare the well for production. The operator reported the safe evacuation of 44 personnel from the Hercules 265 jack-up rig.

China National Petroleum Corp. (CNPC) made significant investments in place of Venezuela’s state-owned oil company Petroleos de Venezuela (PdV), which has retreated from its international commitments following the death of President Hugo Chavez, said an analyst with research and consulting firm GlobalData.

Enterprise Products Partners L.P. announced a binding open season to seek shipper support for a proposed expansion of the portion of its Panola Pipeline Co., LLC NGL system between Carthage and Lufkin, TX.

Energy Solutions International (ESI) was selected by the UK’s Oil and Pipelines Agency (OPA) and its operations and maintenance contractor, Costain Group Plc, to implement the Synthesis solution across the 1,243-mile fuel pipeline and terminal network known as the Government Pipeline and Storage System (GPSS).

It wasn’t long ago that Gazprom was worth $350 billion, making it the third-most valuable company in the world.

Through a collaboration between NASA and Astro Technology Inc., a first-of-its-kind fiber-optic monitoring system was recently installed on two oil platforms off the coast of West Africa. The installation marks a milestone in the organizations’ efforts to adapt aerospace technology for use in the oil and gas industry.

Inter Pipeline Fund has entered into a binding agreement with Canexus Corp. to transport bitumen blend to Canexus unit train rail loading operations near Bruderheim, Alberta. Under the terms of the 10-year agreement, Inter Pipeline will provide Canexus with 100,000 bpd of firm capacity on a new pipeline lateral from the Cold Lake Pipeline system.

Marathon Oil Corp. reports that it will likely start producing oil from Iraq’s Kurdish region over the next two years.

On July 29, the Myanmar-China natural gas pipeline was inaugurated in northern Myanmar's Mandalay and began deliveries to China.

Testifying before the Senate Energy and Natural Resources Committee hearing on offshore energy revenue sharing, National Ocean Industries Association (NOIA) President Randall Luthi urged Congress to move forward in enhancing America’s energy security, energy reliability and American jobs by increasing access to the Outer Continental Shelf (OCS) for exploration and development.

Norway will be Europe’s key offshore oil and gas destination in the near future with a series of fresh development projects over the next two years driving up the drilling expenditure, reports business intelligence provider GBI Research.

NuStar Energy L.P. announced the launch of a binding open season by its affiliate, NuStar Crude Oil Pipeline L.P., to assess interest in committed space to transport Eagle Ford Shale crude from several terminal locations on its South Texas Crude Oil Pipeline System in Frio, McMullen, and La Salle counties to its Corpus Christi North Beach facility.

The owners and operator of the Rockies Express Pipeline LLC (REX) have executed a binding precedent agreement with a large Utica Shale producer to transport up to 200,000 Dth/d of processed production to Midcontinent markets.

The demise of the Nabucco-West gas pipeline project leaves Romania and Hungary dependent on Russian gas imports, and scrambling for diversification solutions that variously look sub-optimal or doubtful.

SemGroup Corp. completed its acquisition of the gas gathering and processing assets owned by Chesapeake Energy Corp. in the Mississippi Lime play for $300 million in cash.

Spectra Energy Partners LP and Spectra Energy Corp. will drop down Spectra Energy’s remaining U.S. transmission, storage and liquids assets to Spectra Energy Partners. The transaction is expected to close by year-end.

Sunoco Pipeline L.P. began an open season July 17 for its Granite Wash Extension. The pipeline will provide crude oil takeaway capacity from the Granite Wash Shale in the northeastern Texas Panhandle and portions of western Oklahoma.

TransCanada Corporation recently completed a binding open season to obtain firm commitments from interested parties for a pipeline to transport crude oil from Western Canada to Eastern Canadian markets.

Williams Partners’ Transco natural gas pipeline has filed an application with the Federal Energy Regulatory Commission to expand a compressor station and provide additional firm natural gas transportation capacity to growing markets in the Southeast by spring 2015.

Union Gas and Gaz Métro Limited Partnership held a binding open season to solicit market support for firm transportation capacity originating from a new interconnect at Enbridge Gas Distribution's system at Albion, Ontario to a new interconnect with TransCanada at or near Maple, Ontario.

Yokogawa Electric Corp. announced that its subsidiary, Yokogawa United Kingdom Ltd., won a multimillion-pound contract by SSE Hornsea Ltd. to upgrade one of the UK's largest onshore underground gas storage facilities in Atwick, East Yorkshire.

The hallmark of the pipeline business has always been symbolized by the handshake. Never has there been a better example of this tradition than with Charlie Joyce and his family, owners of Otis Eastern Service, Inc., in Wellsville, NY.

As a fitting tribute to Pat Riley’s three decades-plus of contributions to the natural gas industry, he was recently named recipient of the Tennessee Gas Association’s coveted Silver Flame Award. Riley, the long-time general manager for Gibson County Utility District – covering about 500 square miles and serving 12,000 natural gas customers – sits on the executive and full board at the TGA as well as the energy subcommittee of the state Chamber of Commerce.

Emerson Process Management has added the Micro Motion ELITE CMFS sensor platform to its line of Coriolis flowmeters to deliver precise measurement to smaller pipeline sizes of less than 2 inches or DN50.

Quantitech has launched an in-pipe gas flow monitoring technology that can also measure gas composition or purity. Unlike other methods, this measurement is not affected by the gas composition, temperature, density, viscosity or pressure, and there is no obstruction at the measurement point.

New products and services from Newpark, i-cubed, Sawyer Mfg. Co., Kinyon Construction, Synodon, Rockwell Automation, Save The World Air (STWA), Master Bond, Crystal Engineering, John Deere, Pyramid Transportation and more.