July 2012, Vol. 239 No. 7


Business Meetings & Events

Chesapeake Energy Names New Chairman

Retired oil executive Archie W. Dunham has been hired to lead the board of troubled Chesapeake Energy Corp. in a move that is likely to see a number of major changes in senior leadership at the nation's second-largest natural gas producer.

July 2012 Ad Index

Advertisers from the print edition of Pipeline & Gas Journal, July 2012, Vol. 239, No. 7.

Editor's Notebook

Editor's Notebook: Around The World

Kuala Lumpur, MALAYSIA - It’s going to be a great summer in Houston. I know this because I am in the only place on earth I know of where a Houston summer seems refreshing in comparison. Welcome to Kuala Lumpur, the capital of Malaysia, site of the 2012 World Gas Conference, some 10,000 miles from Houston.


Clamp-on Ultrasonics Solve Storage Well Measuring Challenges

Clamp-on ultrasonic meters provide accurate measurement for natural gas reservoir storage wells and in several other applications. Natural gas is stored during the warm months so it is available when demand increases.

Cone DP Meter Calibration Issues

The cone meter is a simple and robust generic differential pressure (DP) meter. It has been shown to be remarkably resistant to the effects of both asymmetric and swirling flow. The cone meter is often the meter of choice when there is limited straight pipe length available for a flow meter. Therefore, cone DP meters are becoming increasingly popular gas flow meters.

Coriolis Mass Flow Meters For Bulk Measurement

Accurate measurement of liquids is important for all oil and gas industry production or consumption sites. This is especially true for bulk transfer devices where large volumes of products are being moved and must be monitored, including crude oil pipelines, depots, gasoline and jet fuel tank farms, refineries and even cruise line terminals.

Demand Grows For Comprehensive Natural Gas Education Programs

Barton Community College’s Natural Gas programs have grown by leaps and bounds since the first curriculum was introduced in August 2008, but the roots go back to almost three decades ago when MidWest Energy began working with Barton, based in Great Bend, KS, to build a gas field on college grounds to train their workers.

Distributed Acoustic Sensing For Pipeline Monitoring

Optical fiber is increasingly being deployed in many upstream and midstream applications. It is now regularly used to provide high bandwidth telecommunications and infrastructure for SCADA, and is being used more to sense pressure, temperature and strain, along buried onshore pipelines, on subsea pipelines and down hole. In this article results are presented from the latest sensing capability using standard optical fiber to detect acoustic signals along the entire length of a fiber.

Earth Day Awards: Utah Board Of Oil, Gas And Mining Honors Five Companies

Utah Governor Gary Herbert recently presented the 2012 Utah Board of Oil, Gas and Mining Earth Day Awards to Questar Pipeline Company, Anadarko Petroleum Corporation, Canyon Fuel Company’s Skyline Mine, Simplot Phosphates, and Western Clay Company. Each of these companies, through various projects, has exceeded regulatory requirements to protect or restore the environment during their operations.

Intelligent Technology Is Essential For Modern Integrity Management

America is depending on natural gas for its energy future, and pipeline operators are focused on ensuring that their systems provide safe and reliable delivery. Doing so has its challenges, many of which can be managed through the use of technology to solve critical pipeline integrity management issues.

Kinder Morgan, Energy Transfer Become Dominant Players

In recent months the biggest news in the hyperactive midstream energy sector involves the acquisitions of three companies destined to make their buyers kings of the pipeline business for years to come.

Knowing The Ins And Outs Of pH Sensors

This article talks about 1) knowing when to do a pH sensor calibration versus a calibration check, 2) properly cleaning a pH sensor and 3) properly calibrating a pH sensor. It also provides a decision tree for step-by-step guidance.

Managing Mandated Change in Pipeline Control Room Operations

Creating a process for 49 CFR control room regulation compliance requires a great deal of thought, but ensuring that the hard work put into the investigative and implementation phases continue past a few months can require even more thought. To realize these benefits, pipeline operators must rise to meet a number of challenges, not the least of which is managing change.

Mobile Technology And The Pipeline Sector

There are striking similarities between the pre-dot com period and today’s growing use of mobile technology. That is not to suggest now is the time to contemplate a new stock market boom. It is just that today’s mobile technology resembles what was then the Internet - much discussed, used en-masse by consumers and watched but yet to be widely adopted by business. In this article we discuss mobile: demystify it and look at current practices in the pipeline sector and how mobile can potential improve process and efficiency.

Natural Gas Metering Technology - Past, Present, and Future

For the benefit of those who are responsible for natural gas measurement, we’ll review some of the key developments in natural gas measurement technology over the past 20 years or so. We’ll also speculate on the advancements to expect in the years ahead.

Oil and Gas Measurement Still Dominate the Energy Markets

The world’s energy picture is a complex mixture of factors. For years, oil has been the dominant source of energy in many countries. But in the past ten years, it has become clear that the world’s supply of oil is not unlimited, and that over time alternative sources of energy must be found.

Practical Considerations Of Gas Sampling Systems

A representative sample of a hydrocarbon product is necessary to ensure proper accounting for transactions and efficient product processing. The amount of hydrocarbon product that is transported between producer, processor, distributor and end-user is significant.

Shale, Other Unconventional Natural Gas Supports More Than 1 Million Jobs

Natural gas production from shale, coal bed methane and tight sands is expected to generate significant job creation, economic growth, and revenue for federal, state and local treasuries throughout the U.S. in gas producing and non-producing states alike, according to a new IHS Global Insight study.

U.S. Reindustrialization An Offshoot Of Natural Gas Boom

At the March 2012 version of the annual IHS CERAWeek energy conference in Houston, one panel discussion concerned the petrochemicals industry and its growing renaissance in the lower 48 states riding the wave of plentiful and low-priced natural gas supplies. It was generally agreed that the opportunities for gas and related infrastructure in the chemicals industry were “wide and deep,” and likely to grow.

White House Supportive Of U.S. LNG exports, Aide Says

The Obama administration supports in principle U.S. exports of liquefied natural gas, though specific new guidelines on exports await completion of a study by the Department of Energy, President Obama's top energy aide said last month, in a story reported by Platts.

Wireless Sensor Networks Enable Remote Condition Monitoring

With world population growing at a steady pace (the earth will be home to more than 9 billion people by 2050), global demand for energy is rapidly increasing and the untapped oil reserves lying in Africa are more and more attractive. Africa nowadays supplies around 11% of the world’s oil, but it is expected to pass North America soon to become the third-largest producing area after the Middle East and Central and Eastern Europe.

Worldwide Smart Grid Spending To Reach $46.4 Billion In 2015

IDC Energy Insights has published a new report, Worldwide Utility Smart Grid Spending Forecast, 2010-2015, indicating that smart grid spending will increase 17.4% globally (compound annual growth rate (CAGR) for hardware, software and services) from 2010 to 2015 while overall spending will reach nearly $46.4 billion worldwide in 2015. The Asia/Pacific region is forecast to experience the most growth in spending with a five-year CAGR of 33.7%.


Industry Concerned About PHMSA Leak And Valve Studies

The Pipeline and Hazardous Materials Safety Administration (PHMSA) is about to embark on two studies which will be used by Congress to tee up (or not) new safety requirements related to leak detection and automatic and remote controlled shut-off valves (ASV/RCV). But gas transmission, distribution and hazardous liquid pipeline companies and their trade associations are uncomfortable with some of the parameters the PHMSA wants to set. For example, Jeffrey L. Maples, Director, Gas Operations, Paiute Pipeline Company, argues that PHMSA has broadened the two studies to include gas distribution pipelines.

In The News

AGPA Challenges DOEs Direct Final Rule On Furnaces

The American Public Gas Association (APGA) filed a brief with the U.S. Court of Appeals for the D.C. Circuit to appeal a Department of Energy (DOE) direct final rule entitled “Energy Conservation Standards for Residential Furnaces and Residential Central Air Conditioners and Heat Pumps.” The rule established a 90% efficiency standard for residential furnaces in the 30-state northern region.

Enterprise Paying $1 Million For Oil Spills

Enterprise Products paid a fine of more than $1 million concerning three spills in Iowa, Kansas and Nebraska. Enterprise Products spokesman Rick Rainey said all three incidents covered by the settlement announced May 29 were caused by factors outside the company’s control.

For Sale: World War II Oil Pipeline

An underground network of pipelines which kept Britain’s World War II effort well-oiled could be privatized as part of plans to modernize the UK's energy infrastructure. Ownership of the Government Pipeline and Storage System (GPSS) could be transferred to the private sector, according to international legal firm Pinsent Masons.

Inergy Midstream Acquires US Salt

Inergy Midstream, L.P. (NRGM) acquired 100% of the membership interests in US Salt, LLC (US Salt) from Inergy, L.P. for $192.5 million.

McClendon Forced To Give Up Chairmanship

Aubrey McClendon, the embattled chief executive of Chesapeake Energy, will relinquish his title as chairman of the board. That followed an announcement by Chesapeake that McClendon agreed to negotiate an early termination of the controversial Founder Well Participation Program which allowed him to take personal stakes in wells drilled by the company.

New Documents Released From Michigan River Spill

Federal officials have released photographs and 5,000 pages of documents related to the pipeline rupture in southwestern Michigan that polluted the Kalamazoo River and a tributary creek nearly two years ago.

North Dakota Now No. 2 Oil Producer

North Dakota has passed Alaska to become the second-leading oil-producing state in the nation, trailing only Texas. North Dakota oil drillers pumped 17.8 million barrels in March, with a daily average of 575,490 barrels, Assistant State Mineral Resources Director Bruce Hicks told The Associated Press. That compares with 17.5 million barrels in Alaska, though still far behind Texas.

Obama Administration Shifts Support To Natural Gas

After committing early on in his term to renewable energy sources like wind and solar, President Obama has steadily increased his support for increased natural gas exploration and production, according to Bloomberg.

PHMSA Proposes Largest Civil Penalty To Date Against Enbridge for 2010 Michigan Oil Spill

The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) proposed on July 2 a record $3.7 million civil penalty and 24 enforcement actions against Enbridge Energy for the July 25, 2010, crude oil spill near Marshall, MI.

Report Says Canada Must Spend $50 Billion To Compete On LNG

Canada must speed development of liquefied natural gas export projects to compete with emerging international players also vying to supply growing Asian economies, Ernst & Young stated in a report that puts the cost for infrastructure needed over the next decade at $50 billion.

Rex Energy Closes Midstream Asset Sale

Rex Energy Corp. of State College, PA, together with its partners in Keystone Midstream Services, LLC, has closed on the sale of Keystone to a subsidiary of MarkWest Energy Partners L.P. The sale includes two cryogenic gas processing plants, the Sarsen Plant and newly commissioned Bluestone Plant, with a combined 90 MMcf/d of capacity, a gas gathering system and associated field compression in Butler County, PA.

Utilities Burn 34% More Gas In February Than Year Earlier

U.S. utilities are burning a record amount of natural gas for generating electricity without triggering a predicted boost to the fuel's price from near 10-year lows. The power companies used 34% more gas in February than a year earlier, Energy Department data show. Southern Co., among the largest U.S. coal plant operators, is on pace to consume more gas than coal in 2012 for the first time in its 100-year history.


Anadarkos Great Natural Buttes Project Wins Approval

In support of President Obama’s energy strategy and the administration’s goal of continuing to expand responsible oil and gas production, Secretary of the Interior Ken Salazar approved a major natural gas project in Utah’s Uinta Basin.

Copano Plans Cryogenic Processing Expansion

Copano Energy, L.L.C. plans to add 400,000 Mcf/d of cryogenic processing capacity at its Houston Central complex, located in Colorado County, TX, in response to continuing producer demand in the Eagle Ford Shale play. The expansion will bring Copano's cryogenic processing capacity at its Houston Central complex to 1 Bcf/d. Anticipated capital spending for the expansion and associated facilities is estimated at $190 million, with an expected in-service date in mid-2014.

Crosstex Energy Expands Riverside Fractionation Facility

Crosstex Energy, L.P. is increasing its capacity to transload crude oil from rail cars to both barges and pipelines at its Riverside fractionation facility in southern Louisiana from 4,500 bpd to 14,500 bpd.

Foreign Investors Back Burma Pipeline Project

A Rigzone report says Burmese workers are building what is being called “one of the most lucrative foreign-funded development projects in the country's history.”

Gazprom Exports to Europe Decrease

Gazprom's exports to Europe fell 12% in the first four months of 2012, calling the company's annual plans to export 150 Bcm of gas into question. Sales from January to April dropped from 58 Bcm last year to 51 Bcm this year.

Hungary Questioning Nabucco Viability

Hungarian Prime Minister Viktor Orban described Nabucco as a deeply troubled project and predicted that Hungarian MOL would withdraw from the project consortium. While acknowledging that Budapest needed Nabucco to reduce dependence on Russia, Orban expressed hope for Hungary to be included in Gazprom’s South Stream project, if implemented.

Kinder Morgan and BP North America Enter into Long-Term Agreements

Kinder Morgan Energy Partners, L.P. and BP North America announced July 19 the execution of long-term commercial agreements to provide BP condensate processing services and storage at Kinder Morgan’s terminals located on the Houston Ship Channel.

Kinder Morgans Open Season News

Kinder Morgan Pony Express Pipeline LLC, a subsidiary of Kinder Morgan Interstate Gas Transmission LLC, and Belle Fourche Pipeline Co. held an open season to solicit shipper interest for crude oil transportation service on the Pony Express pipeline from a point near Baker, MT to delivery points at Ponca City and Cushing, OK.

Marathon Explores Midwest To Gulf Coast Pipeline Reversal Project

Marathon Petroleum Corp. is exploring reversing a major pipeline to bring oil from the Midwest to the Gulf Coast refining belt, according to a Rigzone report.

National Fuel Puts Pennsylvania Pipeline Project On Hold

National Fuel Gas Supply Corp. has asked FERC staff to drop the pre-filing proceeding for its 78-mile, 24-inch West to East-Overbeck to Leidy Project in Pennsylvania because of scheduling issues with Marcellus Shale producers and other potential anchor shippers.

NDT System & Services Acquired By Weissker Group

NDT System & Services has been acquired by the Weissker Group, an international, mid-sized business holding based in Greiz in Thuringia in east-central Germany.

NiSource Announces Gathering System Expansion

PR Newswire reported that NiSource Gas Transmission & Storage's (NGT&S) Midstream Services has updated details on its western Pennsylvania natural gas pipeline project. Named the Big Pine Gathering System, the project includes the installation, refurbishment and operation of 70 miles of pipeline facilities in the hydrocarbon-rich western Pennsylvania shale production region, including Allegheny, Butler, Armstrong, Indiana and Westmoreland counties.

Oil Price Still Serious Risk To World Recovery: IEA

Oil prices remain a threat to the fragile global economic recovery despite a recent fall, the International Energy Agency's chief economist told Reuters last month, adding the IEA remained ready to release emergency oil stocks if needed.

Regency Expands Gathering, Treating Assets In Eagle Ford Shale

Regency Energy Partners LP will expand its Edwards Lime Gathering Joint Venture in the Eagle Ford Shale located in South Texas. The expansion will increase the system’s capacity by 90 MMcf/d to 160 MMcf/d, and provide for additional crude transportation and stabilization capacity of 17,000 bpd.

Saipem Wins Offshore Services Contract From LUKoil

ENI’s subsidiary, Saipem has signed a deal to lay pipelines that will carry oil and gas from an offshore Caspian Sea field. Saipem and LUKoil, which plans to launch the Vladimir Filanovsky field by the end of 2015, haven't named the price of the contract.

Seaway Crude Line Reversal Completed

Enterprise Products Partners L.P. and Enbridge Inc. announced that modifications to the Seaway crude oil pipeline allowing it to transport crude oil from Cushing, OK to the U.S. Gulf Coast have been completed.

Spectra Energy Receives FERC Certificate For New Jersey-New York Expansion

Spectra Energy Corp. received approval from the Federal Energy Regulatory Commission for its New Jersey-New York Expansion Project, which will transport natural gas supplies to high demand markets in northern New Jersey and New York City.

TransCanada Moves Forward With Keystone Hardisty Terminal

After completing a successful open season for the Keystone Hardisty Terminal project, TransCanada says it has sufficient firm commitments from parties interested in accessing the new terminal at the starting point of TransCanada's Keystone Pipeline System.