May 2023, Vol. 250, No. 5

Global News

Global News May 2023

TC Energy Says Fatigue Crack Caused Keystone Spill 

Calgary-based TC Energy said it is investigating other sites along its Keystone crude oil pipeline after determining that a 14,000-barrel oil spill was primarily due to a progressive fatigue crack that originated during the construction.

The Calgary-based company released the findings after receiving an independent third-party root cause failure analysis (RCFA), as required by regulators. 

Keystone’s spill into a Kansas creek was discovered in late 2022 and prompted a 21-day shutdown of a portion of the 622,000-bpd pipeline, which ships crude from Alberta to U.S. refineries. TC Energy said it has recovered 98% of the spilled product from the pipeline and cleaned up 90% of the Mill Creek shoreline. 

The company said the RCFA report found the fatigue crack came from a girth weld connecting a manufactured elbow fitting to the section of pipe constructed across Mill Creek. The girth weld was completed at a fabrication factory and met applicable standards. 

During construction, the pipe segment came under “bending stresses” that initiated a crack in the girth weld and also led to a deformation in the elbow fitting and a wrinkle in the adjacent piping, TC Energy said. The design of the weld transition made the pipe in that location more susceptible to bending. 

“This resulted in the initiation of a circumferential crack in the weld, which led to failure through operations after over a decade,” the company said, noting that the RCFA findings are consistent with its own investigation released in February. 

TC Energy added that the pipeline segment where the leak occurred had always operated within its temperature and pressure design limits and had never exceeded 72% of its specific minimum yield strength (SMYS). 

The company said it is now investigating other sites along Keystone with similar characteristics, performing extra inspections on 300 miles (482 km) of the pipeline, and reviewing design guidelines, construction and operations. 

“We are unwavering in our commitment to fully remediate the site and are taking action on the recommendations from the RCFA,” Richard Prior, president of liquids pipelines at TC Energy, said in a statement. 

DOE Clamps Down on LNG Export Project Extensions 

The U.S. Department of Energy announced it will change how it approves requests by companies to delay start dates for LNG export projects to get a better picture of true demand for the fuel. 

The DOE will no longer consider new applications for seven-year commencement extensions unless companies demonstrate that they have physically started construction on an LNG export facility or face extenuating circumstances. The new policy will not apply to companies that have applications pending. 

The measure is one in a series of new orders announced by the DOE’s office of fossil energy and carbon management aimed at keeping the U.S. on track to meet its goal of net zero emissions by 2050 while supplying allies with natural gas. 

The U.S. has approved over 49 Bcf/d of LNG for non-Free Trade Agreement (FTA) country exports – of which more than half are held by LNG projects that are not operating or under construction and have asked for extensions for when they will commence exports. 

This new policy “will allow DOE to better assess whether new non-FTA applications are in the public interest; provide more certainty to the U.S. and global LNG export markets; and ensure that DOE is making decisions utilizing the latest market information and analytical tools available,” the DOE said in a statement. 

The agency also announced that it has decided on two pending applications. It will approve a first-time request by Port Arthur LNG and Sempra to extend the start date at the Texas terminal to 2028 and reject a second extension request by Energy Transfer’s Lake Charles export project in Louisiana. 

In a related move, the DOE also issued a request for information from LNG industry participants on strategies and technologies for reducing greenhouse gas emissions and other pollutants throughout the LNG process. 

The DOE has been working on setting standards for certified natural gas, a form of the fuel that producers can market as climate friendly. 

Chad Nationalizes Pipeline, Recalls Ambassador over Dispute 

Chad recalled its ambassador to neighboring Cameroon in April due to “entrenched disagreements” over its disputed sale by Exxon Mobil of the company’s oil assets in both countries to Savannah Energy. 

Exxon closed the sale of its operations in Chad and Cameroon to Africa-focused oil and gas producer Savannah in a $407 million deal in December. But the Chadian government has challenged the agreement, saying the final terms of the deal were different from what had been presented to it. 

Chad has nationalized the assets on its side of the border, including Exxon’s share of the over 621-mile (1,000-km) Chad-Cameroon oil pipeline. 

“Chad finds itself once again in the obligation to defend its interests and its respectability and denounces the repeated actions of Cameroon and its representatives which undermine, relations between the two countries,” a government statement said. “Consequently, Chad has decided recall its ambassador to Cameroon for consultation.”  

Savannah Energy has said it will pursue its legal rights over Chad’s decision to nationalize Exxon’s assets it had acquired. 

Pipeline Companies Pay Penalties over Methane Leaks 

The Biden administration said it had agreed on separate settlements worth about $25 million in total with three natural gas processors to reduce air pollution across 12 states. 

The settlements announced by the Department of Justice and the Environmental Protection Agency require Williams, MPLX and WES DJ Gathering to pay a combined $9.25 million in civil penalties and make about $16 million in improvements at plants and compressor stations. 

While MPLX has agreed to enhancements in its operations at its facilities, company spokesperson Jamal Kheiry noted that many of the measures “exceed existing regulatory requirements.” 

The settlements addressed allegations that the companies violated federal and state clean air laws related to leak detection and repair requirements for natural gas processing plants at facilities that they own and operate. 

The companies will improve training for leak detection and repair and have agreed to use optical gas imaging technology to improve the visual detection of leaks and quickly repair them. 

California City Can’t Enforce Natural Gas Ban, Court Says 

A federal appeals court has decided that Berkeley, California, cannot ban natural gas hookups in new buildings because it is preempted by federal law, siding with a challenge made by the state’s restaurant industry. 

The 9th U.S. Circuit Court of Appeals in San Francisco ruled in April that Berkeley’s 2019 ban on new gas hookups effectively barred appliances that use the fuel, and that the U.S. Energy Policy Conservation Act preempts such a move. The ruling reversed a 2021 decision by U.S. District Judge Yvonne Gonzalez Rogers. 

The federal appeals court is the first to weigh in on bans against new natural gas hookups. New York City, San Francisco, San Jose and Seattle are among dozens of U.S. municipalities that have enacted similar restrictions since Berkeley adopted its rule, citing environmental and health concerns. 

The California Restaurant Association challenged the ban in court in 2019 alongside other industry groups, including natural gas utilities and homebuilders, claiming the ordinance would introduce major costs and burdens. The restaurant described Berkeley’s ordinance as “an overreaching measure beyond the scope of any city.” 

At least 20 states with Republican-led state legislatures have enacted so-called preemptive laws to prohibit local governments from banning natural gas hookups, including Arizona, Ohio and Texas. 

ADNOC Expands ‘Very Large Gas Carrier’ Fleet by Five 

United Arab Emirates’ ADNOC Logistics & Services (ADNOC L&S) has expanded its fleet with the deployment of five new-build Very Large Gas Carriers (VLGC), state news agency WAM reported. 

The carriers of the shipping and maritime logistics arm of state oil giant Abu Dhabi National Oil Company each have a capacity of 86,000 cubic meters. 

The VLGCs will transport liquefied petroleum gas (LPG) cargoes sourced from ADNOC and other global suppliers to Wanhua Chemical Group’s manufacturing bases, WAM reported. It said that they were built at Jiangnan Shipyard in Shanghai and will be owned and operated by AW Shipping, an ADNOC L&S joint venture with Wanhua. 

The carriers have dual-fuel engine technology and LPG as their primary fuel source, making them among the lowest-emission vessels of this type, WAM said. 

“Natural gas is playing an increasingly important role in the global energy landscape and ADNOC L&S is expanding its gas fleet to serve customer demand, while reducing the carbon intensity of our vessels,” WAM quoted Abdulkareem Al Masabi, the CEO of ADNOC L&S and chairman of AW Shipping. 

Malaysia’s Petronas to Restart Gas Pipeline Operations  

Malaysia’s national oil company Petroliam Nasional Berhad aims to restart a gas pipeline currently under force majeure by the first quarter of 2024, a senior company executive said. 

Petronas declared a force majeure on gas supply to Malaysia LNG Dua in October 2022 due to a pipeline leak caused by soil movement at its Sabah-Sarawak Gas Pipeline. The company aims to complete an investigation into the gas supply disruption by mid-2023. 

“Our plan is to complete the work by Q1 2024,” said Shamsairi Ibrahim, vice president of LNG marketing and trading at the company, known as Petronas. The facility’s restart is subject to approval from local authorities, he said. 

The disruption had fueled fears of a supply shortage to customers, including Japanese utilities, but Petronas has said it would continue efforts to provide alternative supplies. 

Poland Limits Access to LNG Terminal Due to Espionage Concerns 

Poland announced in mid-April that it would introduce a temporary 656-foot (200-meter) exclusion zone around its Swinoujscie LNG terminal, the interior minister said, citing concerns about Russian espionage.  

The exclusion zone for members of the public will not affect the terminal’s operations, Poland’s gas pipeline operator said of the plant located on the Baltic coast. 

A staunch ally of Ukraine and a hub for deliveries of weapons to Kyiv’s armed forces, Poland says it has regularly found itself the target of Russian efforts to destabilize the country. In March, Poland said it broke up a Russian espionage network that it said was preparing acts of sabotage and was monitoring rail routes to Ukraine. 

“Actions are being taken to strengthen the protection of critical infrastructure, in which the LNG terminal in Swinoujscie occupies a strategic place,” Mariusz Kaminski said in a statement. “The experiences of past months, including damage to the Nord Stream gas pipeline ... mean important decisions must be taken to ensure the security of the Polish state and Poles.” 

Iwona Dominiak, a spokesperson for pipeline company Gaz-System, told Reuters that the announcement had no impact on the terminal’s operations and tankers were being handled as planned. 

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