May 2012, Vol. 239 No. 5


Business Meetings & Events

May 2012 Ad Index

Advertisers from the print edition of Pipeline & Gas Journal, May 2012, Vol. 239 No. 5.

Editor's Notebook

Editor's Notebook: The Western Front

We headed west on Interstate 10 to San Antonio for the midyear INGAA Foundation conference last month and couldn’t help being impressed by the constant parade of 18-wheelers carrying line pipe, drill pipe and so many other products to the booming Eagle Ford Shale. Matter of fact, we heard there’s nary a hotel room to be found west of San Antonio.


Alaska Producers Explore LNG Export Possibilities

The three major North Slope producers and a major pipeline company are getting together to look at a proposed multibillion-dollar project that could result in exporting Alaska natural gas to Asia markets, according to a letter sent to Alaska Gov. Sean Parnell.

Baker Institute Paper Suggests Pipeline Alternative To Hormuz Oil Route

Improvements to the pipelines crossing the Arabian Peninsula would allow more of the oil produced in the Persian Gulf to avoid the Strait of Hormuz, according to a new paper from Rice University’s Baker Institute for Public Policy.

Decisions Hastened By Linking Real-time Data And Models

One of the most challenging aspects of the oil and gas pipeline industry for this writer is its collective failure to embrace the technological advance of virtually every other industry – the use of an integrated data environment and real-time analytics to govern day-to-day operations.

Energy Industry Has Potential As Key Economic Engine

Having proved resilient throughout the Great Recession compared to other sectors, the energy industry has the potential to be a key engine of economic growth and recovery, according to a new study by IHS Cambridge Energy Research Associates (IHS CERA) and the World Economic Forum. The findings of the study were presented at CERAWeek 2012 in Houston.

Expansions May Transform Leidy Into Major Natural Gas Supply Hub

BENTEK's Northeast Observer reported that on April 16 Transco proposed three pipeline expansions to transport approximately 700 MMcf/d of natural gas production out of the Leidy Hub in southern Potter County, PA, by 2016.

INGAA Study Examines Economic Benefits Of Midstream Infrastructure Development Through 2035

Midstream investments from 2012–2035 to accommodate natural gas, oil and NGL resource development will require more than $200 billion, according to an Interstate Natural Gas Association of America (INGAA) Foundation report.

Marine Scientists Urge Government To Reassess Oil Spill Response

On the second anniversary of the Deepwater Horizon blowout, a national panel of researchers including University of Georgia marine scientist Samantha Joye has urged the federal government to reassess how it would respond to similar oil spills that might occur in the future.

Midstream Executive Speaks Candidly About Strategy, Growth Prospects And Safety

There are few executives around today better able to discuss the evolution of the natural gas industry on this planet than J. Mike Stice, CEO of Chesapeake Midstream Partners, President of Chesapeake Midstream Development and Senior Vice President of Natural Gas Projects for Chesapeake Energy Corp.

Pipeline Security: New Technology For Todays Demanding Environment

The protection of oil, gas and refined product pipelines against sabotage, illegal tapping and terrorist action, combined with the detection of leaks and in-line equipment failure, is a high priority in all countries, but has been notoriously difficult to achieve.

Shale Boom Continues To Drive New Pipeline Construction

In an interview with Pipeline & Gas Journal, David Sheehan, chairman of Tulsa-based Sheehan Pipe Line Construction Company, the nation’s oldest pipeline construction firm, offered his perspective on the impact of the shale boom on near-term pipeline construction, what is needed to reassure the public that shale development is safe and the possibility of future restrictive environmental regulations.

Shale Gas Should Replace EU Coal-Fired Power: UK Economist

Europe must not reject shale natural gas production and should develop it as a replacement for coal in the power sector, energy economist Dieter Helm told the Flame gas conference in Amsterdam April 17.

Shale-Related Midstream Infrastructure: Where the Action Is!

In the winter of 2012 a mostly snowless and relatively warm Bakken Shale play in northwest North Dakota was trucking about 70% of its oil supplies in the gathering and processing phase as production continued at an all-time record clip averaging 546,000 bpd in January. New midstream infrastructure construction was limited to intrastate shipments within an under-developed gathering and processing system.

Spectra Sees Shale Gas Strength Despite Pipeline Opponents

The U.S. gas shale boom comes with the challenge of bringing that supply to market when new pipelines face safety questions, but Spectra Energy President and CEO Greg Ebel said the industry should be able to make the case for how gas is beneficial.

SpreadBoss: Pipe Tracking Wizard

One of the most nagging offshoots of the San Bruno, CA, natural gas transmission pipeline tragedy was that in the immediate aftermath and the hot glow of federal, state and utility investigations, the operator, San Francisco-based Pacific Gas and Electric Co. (PG&E), had no credible information on the section of pipe that failed. Worse yet, this turned out to be not just an isolated case.

Systematic Turbine Compressor Controls Employ High Performance Modules

On its long journey from extraction to the consumer, natural gas has to be compressed repeatedly to maintain the required discharge pressure in the pipelines. Russia's leading supplier of automation equipment for the gas turbine compressors used for this purpose places its trust in the proven "made in Germany" control technology. This ensures reliable long-term operation as well as maximum supply quality and reliability during natural gas transport.

Texas Lost $7.7 Billion From Declining Natural Gas Use

Texas is the nation’s top producer of natural gas – an industry that provides nearly 1.3 million jobs and $60 billion in labor income to our economy annually. However, Texas’ use of natural gas has been decreasing – slowly but steadily – displaced by out-of-state coal.


Administration Makes Two Regulatory Moves On Oil And Gas Operations

The Obama administration took its first two regulatory steps, one final, one tentative, toward guarding against air and ground water pollution from fracking. The final rule on air emissions from the Environmental Protection Agency (EPA) and proposed rule from the Department of Interior (DOI) covered different regulatory terrain.

PHMSA Proposes Metrics For State Damage Prevention Laws

The Pipeline Hazardous Materials and Safety Administration (PHMSA) took the next step in its, so far, six-year effort to step in when states fail to punish excavators who damage pipelines.

In The News

CenterPoint Seeks Perryville Hub Trading Point

CenterPoint Energy Gas Transmission Company, LLC, an indirect, wholly owned interstate natural gas pipeline subsidiary of CenterPoint Energy, Inc. has filed with the Federal Energy Regulatory Commission (FERC) to amend certain provisions in its tariff to establish a Perryville Hub Trading Point within the existing Perryville Hub that can be accessed for primary or secondary receipt and/or delivery of natural gas using the company’s firm and interruptible transportation and wheeling services.

Conduit Sells Peruvian Assets To Brazilians

Conduit Capital Partners LLC, a private equity investment firm focused on energy infrastructure investment in Latin America and the Caribbean, will sell its remaining interest in the Peruvian pipeline project Gasoducto Andina del Sur (known as “Kuntur”) to Odebrecht, the Brazilian construction conglomerate.

Gas Plant Agreement Advances CPS Toward Cleaner, More Diverse Fleet

In an era of increasing environmental regulations, CPS Energy is one of the first utilities in the nation to make a proactive transition from older coal-fired power to a much cleaner natural gas-fired power.

Gas Storage Could Hit Its Limit By Late Summer

U.S. natural gas prices are at a decade low, at about $2.20 per Mcf. That marks an unprecedented discount to crude oil. With “injection season" now under way through October when warmer weather allows for rebuilding gas inventories, this could make an already bad glut of gas far worse.

Natural Gas Affecting Plans For Nuclear Power Plants

The Wall Street Journal reports a cheaper, less risky alternative is dealing a harsh blow to the U.S. nuclear industry. The nuclear industry seemed to be staging a comeback several years ago with 15 power companies proposing as many as 29 new reactors. Today, only two projects are moving off the drawing board, the Journal noted.

Supply Chain Fleet Operators Eying Natural Gas Power

In increasing numbers, major U.S. contract freight carriers are deploying heavy-duty natural gas-powered trucks to support their customers’ supply chain transport requirements.

U.S. Gas Production Outlook By Major Basin To 2020

Ziff Energy has released its latest report providing a production outlook for the major gas supply basins in U.S. Lower 48 states. Figure 1 illustrates the recent growth of gas production in U.S. Lower 48 since 2000, driven by surging shale gas development, and which basins are growing or shrinking.

Williams To Receive $312 Million For Venezuela Assets

WilPro Energy Services (El Furrial) Limited and WilPro Energy Services (PIGAP II) Limited, the joint ventures owned by subsidiaries of Williams and Exterran Holdings, Inc., have completed the sale of the El Furrial and PIGAP II assets to PDVSA Gas, S.A. in connection with the 2009 nationalization of those assets.


Chevron Phillips Chemical Expanding NGL Unit

Chevron Phillips Chemical Company LP will expand the Natural Gas Liquids (NGL) Fractionator Complex at its Sweeny Plant in Old Ocean, TX. Construction will start shortly and the project is anticipated to be completed by February.

Constitution Pipeline Announces Customer Agreements

Constitution Pipeline Company, LLC, a joint development between Williams Partners L.P. and Cabot Oil & Gas Corp., have executed precedent agreements for a proposed 121-mile pipeline to connect natural gas production in northeastern Pennsylvania with Northeast markets by spring 2015.

Gazprom May Buy LNG From Offshore Israel Field

Gazprom is in talks to buy LNG from a huge new field offshore Israel which could strengthen its hand in the booming Asia LNG market, Reuters reported.

Is Lengthy Review Ahead For Nebraskas Portion Of Keystone XL?

Nebraska environmental officials released a new preferred route submitted by TransCanada for the Nebraska portion of the stalled Keystone XL oil pipeline that avoids the state's groundwater-rich Sandhills region.

Japan Looks To Canada For Gas

Platts reports Japan and Canada agreed March 25 to cooperate on developing energy resources, including natural gas and minerals in Canada.

Kinder Morgan Adding Storage Capacity At Edmonton Terminal

Kinder Morgan Canada Terminals has a long-term contract with a major Canadian producer to support construction of an additional 1.2 MMbbls of merchant storage capacity at Trans Mountain pipeline’s Edmonton terminal in Strathcona County, Alberta.

Kinder Morgan Announces Open Season For Reversal Project

Kinder Morgan Energy Partners, L.P. recently launched a binding open season to solicit market interest for its Cochin Reversal Project which would enable the company to offer a new service to move light condensate from Kankakee County, IL to existing terminal facilities near Fort Saskatchewan, Alberta, Canada.

KKR Natural Resources Acquires Barnett Shale, Arkoma Basin Properties

Kroberg Kravis Roberts & Co. L.P. has entered into a definitive agreement to acquire certain Barnett Shale and Arkoma Basin properties from WPX Energy for $306 million.

Marathon Boosts Production From Bakken

Marathon Oil Corp. is raising its production forecasts for its North Dakota's Bakken Shale operations. It expects production in the Bakken to average 27,500 boe/d this year, up from 24,000 bbls in December.

MarkWest Plans East Texas Processing Expansion

MarkWest Energy Partners, L.P. has executed long-term gathering and processing agreements with Anadarko Petroleum Corp. that will support the 120 MMcf/d expansion of the Partnership’s cryogenic processing capacity in East Texas.

Nabucco Project Still Breathing

The Nabucco pipeline may not be dead yet. A scaled-down version of the long-planned project could end up being folded into a joint Azerbaijani-Turkish effort to transport natural gas from the Caspian Basin to Europe.

Nord Stream Cant Restrict Other Suppliers

The European Commission has ruled that the Gazprom-led consortium Nord Stream must allow other gas suppliers to share capacities of its pipelines on German territory.

NorTex Changes Name, New Midstream Market Focus

Houston-based NorTex Gas Storage Co. has changed its name to NorTex Midstream Partners, LLC, to better reflect its new midstream energy market focus and asset acquisition strategy.

North Dakota Expecting More Investment After Study

U.S. Sen. John Hoeven (R-ND) said a re-evaluation of the amount of recoverable oil in the Williston Basin is slated to be completed late next year by the U.S. Geological Survey. He said the updated assessment will likely be higher than earlier estimates and will spur more investment and infrastructure.

Pelican Energy Partners To Invest In Energy Services Middle Market

Pelican Energy Partners LP, a specialized private equity fund, has completed its initial closing by raising $103.6 million in investment capital.

Petrobras Breaks Records For Gas Delivery

Petrobras set a new record in the delivery of natural gas to the market in 2011, reaching an annual flow of 37 Mcm/d. The company also recorded new monthly and daily records: the flow offered in December 2011 reached 42.4 million m³/d, and 46.1 million m³ on Dec. 23.

PetroChina Surpasses Exxon In Oil Production

ExxonMobil is no longer the world's biggest publicly traded producer of oil. For the first time, that distinction belongs to PetroChina, a company created by Beijing in 1999 to secure more oil for China’s booming economy.

Pipeline And Utility Search Beneath Texas Waterway

Chris Ransome & Associates, Inc. has been contracted to verify existing pipeline and utility crossings beneath the Sabine-Neches Waterway in the Beaumont- Port Arthur area of southeast Texas in preparation for the future Sabine-Neches Waterway Channel Improvement Project.

Shell Pipelines Houma-To-Houston Reversal Open Season Successful

Shell Pipeline successfully concluded a binding Open Season for firm capacity on the Houma-to-Houston pipeline system reversal project (Ho-Ho Reversal). Based on the commitments, Shell is proceeding with next steps to develop and execute the project.

Talisman Will Trim Marcellus Exploration

Canada's Talisman Energy is making even heavier cuts to its rig count in the Marcellus Shale natural gas play and will not reverse that trend until gas prices return to $4 per Mcf, CEO John Manzoni said.

Technip To Install Pipeline In China Sea

Offshore Oil Engineering Co. has awarded Technip a pipeline installation contract for the Liwan 3-1 shallow water project, located in the Pearl River Mouth Basin, China Sea. With a length of 160 miles, the pipeline will link the Liwan gas platform to China National Offshore Oil Corporation's Gaolan gas plant.


12-ton Custom-designed Tool Facilitates Pipeline Maintenance

TDW Offshore Services AS (TDW) designed and built a customized 48-inch SmartPlug® pipeline pressure isolation tool for Nord Stream AG. Weighing 12 tons, the company says it is the largest SmartPlug tool ever produced.