December 2023, Vol. 250, No. 12


Projects December 2023

Putin Optimistic About Progress on Gas Pipeline to China 

Russia’s president, Vladimir Putin, reportedly told his Mongolian counterpart Ukhnaagiin Khurelsukh that the Power of Siberia 2 pipeline, which passes through Mongolia, would be moving forward at a “good pace.” 

Russia has supplied natural gas to China via the initial Power of Siberia pipeline and would like to ship an additional 1.76 Tcf (50 Bcm) through the new conduit. Despite China’s need for additional energy, the talks between the two nations been difficult, according to Reuters, due to issues that include pricing. 

“Everyone agrees with this project, all parties want to participate, want to work. It’s a matter of implementation. I think we will move at a good pace,” Putin told the Mongolian leader during a conference in Beijing on China’s Belt and Road Initiative. 

The Kremlin has said it does not expect any oil or gas deals to be clinched during Putin’s visit and his meetings with Chinese leader Xi Jinping this week. 

The Power of Siberia began shipping gas to China in late 2019. It carried 370.7 Bcf (10.5 Bcm) in 2021 and is due to supply 1.34 Tcf (38 Bcm) annually by 2025, under a 30-year contract worth more than $400 billion. 

Construction of Pipeline-Bound RNG Production Facility Under Way 

South Jersey Industries (SJI), OPAL Fuels and Atlantic County Utilities Authority (ACUA) started construction on a new RNG production facility (Atlantic RNG), located at ACUA’s solid waste landfill in Egg Harbor Township, New Jersey. 

The fuel will be injected into the South Jersey Gas pipeline, making this project the first of its kind in the gas company’s history. 

In conjunction with OPAL Fuels, SJI is developing the Atlantic RNG facility through its rapidly expanding subsidiary, SJI Renewable Energy Ventures (SJI Renewables), which specializes in developing waste to energy projects throughout North America. 

South Jersey Gas, an SJI subsidiary, will enter into an interconnection agreement to accept the RNG produced by Atlantic RNG. 

Atlantic RNG, expected to be online in mid-2025, represents the first collaboration between the companies as part of their previously announced 50/50 joint venture to develop, construct, own and operate RNG facilities. 

RNG, or biomethane, is produced from a variety of sustainable biomass sources. Once processed, it is interchangeable as a carbon-neutral substitute for traditional natural gas and can be fed through the existing South Jersey Gas natural gas infrastructure, without disturbing the distribution network already in place. 

China Supplier Meets Deadline on Uganda ‘Smart’ Oil Pipeline 

Panyu Chu Kong Steel Pipe Co. — the contractor supplying line pipes to the East African Crude Oil Pipeline (EACOP) — said the first batch of 161 miles (100 km) of pipes are in route to the port of Tanga, Tanzania. 

EACOP will have the capacity to pump up to 230,000 bpd down a specially designed 897-mile (1,443-km) smart pipe, from western Uganda to the Indian Ocean coastline of Tanzania. 

Some parts of the pipe will be heated, so that the high-grade Ugandan crude — which is waxy like shoe polish at surface temperatures — will flow evenly. The pipe will be buried and lined with hi-tech insulation, as well sensors and cut-off valves, to minimize the risk of leaks. 

"We are committed to ensuring timely delivery,” said Xie Leshan, president of PCK, at a meeting with a delegation of the Petroleum Authority of Uganda (PAU), led by Executive Director Ernest Rubondo. 

The team visited PCK’s Pipe Mill in Lianyungang, as part of a verification and validation visit to China, ahead of accelerated project timelines for the CNOOC (China National Offshore Oil Corporation) group of companies. CNOOC is one of the key players in the Uganda oil sector and operator of the Kingfisher Development Area (KDA). 

Liu Yongjie — chairman of CNOOC International — and Rubondo discussed the progress of the Kingfisher project and received assurances of CNOOC’s commitment to fulfilling its responsibilities on this project, as well as expanding cooperation to deliver a “shining star” project in Uganda. 

Also discussed were strategies for the commercialization of Uganda's oil and gas resources and ways to maximize the in-country value generated by these projects, which extends to local communities and industries, thereby fostering economic growth and development. 

The two agreed that development of national and local content is the best way to ensure a win-win situation from the Kingfisher project. 

The delegation also toured the Shougang Beijing Group's Qian'an steel mill, which supplies the steel plates used in the manufacturing of pipes for EACOP.  

“This is a crucial component of the project, as the quality and timely delivery of materials are vital for the successful execution of the pipeline project, which ensures the delivery of Kingfisher and Tilenga crude to Tanga for export," Rubondo said. 

PAU said in a statement that the China visit symbolized the collaborative efforts between Uganda and China in the oil and gas sector, with a particular emphasis on the successful execution of key projects like the Kingfisher, Tilenga and the East African Crude Oil Pipeline. 

Duke Energy Building End-to-End Hydrogen System in Florida 

Duke Energy plans to build a project in Florida that will employ an end-to-end system to produce, store and combust 100% green hydrogen. The company expects the system to be installed and “fully functioning” in 2024. 

The new system — a collaboration between Duke, construction management consultant Sargent and Lundy and GE Vernova — would be located at Duke’s facilities in DeBary. 

It will begin with the existing 74.5-megawatt (MW) DeBary solar plant, providing clean energy for two 1-MW electrolyzer units, which will separate water molecules into oxygen and hydrogen atoms. 

The resulting oxygen will be freed into the atmosphere, while the green hydrogen will be delivered to nearby reinforced containers for storage, Duke said. During times when energy demand is highest, the system will deliver the stored green hydrogen to a combustion turbine (CT) that will be upgraded, using GE Vernova technology, to run on a natural gas-hydrogen blend or up to 100% hydrogen. 

This will be the nation’s first CT in operation running on such a high percentage of hydrogen, the company added. 

Ocyan Renovating Petrobras Gas Pipeline for $317.5 Million 

Brazilian oil and gas services provider Ocyan gained a contract with Petrobras to update a network of gas pipelines in the offshore Campos Basin for $317.54 million (1.6 billion reais), an executive told Reuters. 

The contract will last about four and a half years and revamp the pipelines of two decommissioned platforms, Jorge Mitidieri — executive vice-president of Ocyan’s services unit — told Reuters. 

In June, the firm — owned by Grupo Novonor — completed a restructuring process that turned its then-drilling unit into Foresea, with Ocyan retaining a minority stake. 

Ocyan kept the services business, with one of its units focusing on offshore production and subsea construction services and another on new energies. 

“This contract is very important for us... we won it after the company split up, so it shows our strength and a very important position in the subsea construction market,” Mitidieri said. 

Western Midstream Adds 1,500 Miles of Gas Pipelines 

Western Midstream Partners closed its previously announced acquisition of Meritage Midstream Services II. The sale was funded with cash on hand and WES’s recent $600 million investment grade senior notes issuance. 

Meritage, a privately midstream company headquartered in Denver, Colorado, owns and operates a large-scale natural gas gathering and processing business in the Powder River Basin of Wyoming. 

Meritage’s assets — located in Converse, Campbell and Johnson counties, Wyoming — include 1,500 miles of high and low-pressure natural gas gathering pipelines, 380 MMcfd (10.76 MMcm) natural gas processing capacity and the Thunder Creek NGL pipeline — a 120-mile, 38,000 bpd FERC-regulated NGL pipeline that connects to Meritage’s processing facilities. 

The Meritage assets are supported by more than 1.4 million dedicated acres from a diverse set of majority investment grade counterparties, with an average remaining contract life of about eight years. 

“The addition of the Meritage assets meaningfully expands the financial and operational scale of our existing Powder River Basin footprint by adding significant producer inventory and further diversifying our growing G&P customer portfolio,” Michael Ure, president and CEO of WES, said. 

The Meritage acquisition transforms WES’s existing asset footprint in the Powder River Basin, with expanded gathering and processing facilities, a diversified customer base and long-term contracts, supported by minimum volume commitments and acreage dedications. 

CER Asks Approval of NorthRiver Midstream Connection 

The Commission of the Canada Energy Regulator (CER) recommended approval of NorthRiver Midstream’s NEBC Connector Project, which involves the construction of two parallel 134-mile (215-km) NGL pipelines from British Colombia to Alberta. 

As a part of its application, NorthRiver acknowledged the existence of “significant adverse cumulative effects” in the project area and committed to implementing measures to offset the project’s contribution to cumulative effects. 

The Commission concluded that the offset plan should include NorthRiver contributing to the Blueberry River First Nation-B.C. Restoration fund and the Treaty 8 Restoration Fund, as well as establishing an Indigenous-led land securement fund. 

Input from potentially affected Indigenous Peoples played a crucial role in shaping the conditions, including those with specific requirements placed on construction and operation. 

The 49 conditions are related to construction, safety, environmental protection, minimizing greenhouse gas emissions, offsets, employment and monitoring. 

German Gas Grid Operator OGE Joins Hydrogen Pipeline Project 

Germany’s Open Grid Europe (OGE) is working with French, Spanish and Portuguese colleagues to develop a multibillion-euro hydrogen pipeline, connecting the Iberian Peninsula to France and then Central Europe. 

“I’m confident we’ll be able to work faster on this project now,” Franziska Brantner — state secretary at Germany’s economy and climate ministry — said an H2MED-related event held at the Spanish embassy in Berlin, according to Reuters. 

Spain and France are both investing in hydrogen but have disagreed over whether the H2MED pipeline should carry the gas if it is produced using nuclear power. France took the position that nuclear energy should not be discriminated against. 

Brantner acknowledged that the path has been “difficult.” 

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