Category Archives: Gas

Pipeline Petroleum Transport Investment May Predict Growing Cathodic Protection Needs

If Warren Buffet’s investment strategy is any indication, pipeline efficiency is going to start playing a bigger role in moving crude oil and natural gas in the United States.

The Berkshire Hathaway luminary is pipeline-efficiency-cathodic-protectionspearheading a swap of about $1.4 billion in shares of Phillips 66 for full ownership of the energy company’s pipeline petroleum transport services business. The business unit’s focus is polymer-based additives that are used to move crude oil and natural gas through pipelines more efficiently by reducing drag.

The shift in Berkshire’s investment strategy comes amid a boom in U.S. crude oil and natural gas production. Since many liquids pipelines in the United States are operating at capacity, producers can use the pipeline petroleum transport additive to quickly increase capacity without immediately growing pipeline infrastructure.

Although future pipeline projects may be in the works to meet the sharp increase in demand, the process of gaining approval for new pipeline projects can be slowed by permitting.

A greater reliance on existing pipelines for transporting liquids means that producers and pipeline owners need to pay even more attention to cathodic protection management, according to Kevin Groll, project management director for MATCOR, a Pennsylvania-based company that specializes in cathodic protection products and services.

“Any time you have pipeline you have to protect it from corrosion,” Groll said. “And that’s especially true when you increase the value of a pipeline by increasing its capacity. If that pipeline were to develop a corrosion problem you’d be facing a situation where your profitability could suffer significantly.”

“With pipeline owners using additives to push greater volumes of liquids it becomes imperative to use cathodic protection products such as impressed current anodes and cathodic protection rectifiers to protect the increased capacity and profitability of the pipeline infrastructure.”

Further Reading

Berkshire Swaps $1.4 Billion in Phillips 66 Stock in Deal,” Bloomberg, December 31, 2013.

Bakken Shale Oil and Gas Companies Pave Way for Growing Cathodic Protection Demand

More than $22 billion will be spent to build over 23,000 miles of pipeline in North America between 2014 and 2020, according to a recently updated pipeline construction report.

The third-quarter 2013 update of the North American Onshore Pipeline Database Service, by Douglas-Westwood, an energy research group based in Faversham, England, also catalogued the planned construction of over 1,000 miles of pipelines transporting Permian crude oil from the Bakken Shale region.

The Bakken pipelines will enable Bakken Shale oil and gas companies to meet the logistical challenges of transporting crude oil from the remote shale region, which encompasses parts of the United States, including North Dakota and Montana, and Canada.

Because of North Dakota’s short construction season, hard terrain, and distance from the Gulf Coast, rail transportation and natural gas flaring by Bakken Shale oil and gas companies has boomed in recent years. However, the report estimates that the planned Bakken pipelines will further lower the current Bakken discount compared to WTI, which has hovered around $5 for most of 2013, and diminish the cost competitiveness of rail.

“While the capital cost of pipeline installation can sometimes be difficult to justify when compared to rail, a pipeline cathodic protection system can help companies control associated maintenance and repair costs,” said Jeff Didas, who works as a pipelines practice lead for MATCOR, a Pennsylvania-based cathodic protection management company.

“When the potentially devastating effects of corrosion are managed to the point that corrosion becomes a minor factor, pipelines transform into a far more cost effective option over the 30-plus year commitments typically required in pipeline shipping contracts,” Didas said. “A cathodic protection strategy for pipelines is vital for Bakken Shale oil and gas companies and others who are investing in takeaway infrastructures from shale plays in North America.”

One such area, the Utica Shale, has lagged in production to date compared to other major shale plays but is expected to spike soon, due in part to pending developments in pipeline construction and capacity.

Further Reading

Shale-Driven Pipeline Expenditure to Hit $22B Before 2020,” Oil & Gas Financial Journal, December 12, 2013.

Marcellus Shale Production Data Hints at Growing Cathodic Protection Needs

Production from the Marcellus Shale natural gas reserves is expected to exceed 13 billion cubic feet per day this December, nearly seven times the 2 billion cubic feet per day it produced during the same period in 2010, according to a recent report.

The report on Marcellus Shale production data, by the U.S. Energy Information Administration, said the figure would equal about 18 percent of total U.S. natural gas production during the month.

One of the Marcellus Shale companies that’s taking advantage of the natural gas boom is Cabot Oil & Gas Co., based in Houston, which claimed 15 of the 20 highest-producing natural-gas wells in the area during the first half of the year.

According to Dan O. Dinges, Cabot’s chief executive officer, 10 wells from a single well pad in Auburn Township produced enough natural gas in 30 days to meet the average monthly demand of the entire city of Philadelphia.

Cabot plans to increase its Marcellus Shale drill rigs from six to seven in 2013, with each rig capable of drilling 20 wells during the course of the year.

The sharp rise in natural gas reserves production hints at the growing need for Marcellus Shale companies to incorporate pipeline corrosion control equipment like cathodic protection rectifiers into their gas delivery infrastructure, according to Chris Sheldon, who works as utilities practice lead for MATCOR, a Pennsylvania-based cathodic protection company.

“Marcellus Shale companies are experiencing a tremendous upswing in natural gas production and are building new drill rigs and digging new wells to take advantage of the vast natural resource at their feet,” Sheldon said. “That means a lot of new pipes are going to be laid. And more pipes means more opportunities for corrosion.”

“At MATCOR, we’re here to help Marcellus Shale companies, as well as other pipeline companies and natural gas producers, with a full line of advanced cathodic protection equipment, systems and services designed to help them meet their corrosion control needs.”

Further Reading

A Marcellus Natural-Gas Bonanza,” The Philadelphia Inquirer, December 10, 2013.

State regulators clear way for Florida Power and Light natural gas pipeline

A proposed $3.5 billion natural gas pipeline took a leap forward last Thursday and by 2017 is expected to be providing fuel to run Florida Power and Light Co.’s plants.

Florida’s two pipelines, the Florida Gas Transmission pipeline, and Gulfstream pipeline deliver gas primarily from such offshore areas as the Gulf of Mexico.

The pipeline’s northern 465 miles is a joint venture of Houston-based Spectra Energy subsidiary Sabal Trail Transmission and a newly formed subsidiary of Florida Power and Light’s parent company, NextEra Energy Inc., called U.S. Southeastern Gas Infrastructure LLC. The southern 126 miles, known as Florida Southeast Connection, is a subsidiary of NextEra.

The pipeline will travel through four Alabama counties, eight Georgia counties and 13 Florida counties. It will end at Florida Power and Light’s Martin County plant near Indiantown. The new pipeline will connect to FPL’s new plants under construction in Riviera Beach and Hollywood.

Commissioner Eduardo Balbis said the pipeline will help mitigate supply interruptions and price fluctuations. It’s also a plus that the cost is $450 million below that of other options.

The project is projected to create more than 6,600 jobs.

Jeff Householder, president of Florida Public Utilities Co., said the additional gas supplies, especially the cheaper shale gas, are needed for the state’s growth and economic development. He expects his company and others will build lateral lines from the pipeline.

Florida Power and Light has signed agreements with the two entities that will own the new pipeline for an initial 400 million cubic feet per day beginning in 2017 with an option for an additional 200 million cubic feet in 2020 and later.

Florida Gas Transmission’s pipeline has a capacity of 3,100 million cubic feet per day, and Gulfstream’s pipeline has a capacity of 1,300 million cubic feet per day

The project approved Thursday differs from a proposal the PSC rejected in 2009 when Florida Power and Light sought to build the 280-mile Florida EnergySecure Line itself.

The pipeline must be approved by the Federal Energy Regulatory Commission and other federal and state agencies. It would give the state 25 percent more natural gas capacity.

SOURCE: http://www.palmbeachpost.com/news/business/state-regulators-clear-way-for-fpl-natural-gas-pip/nbXkw/

Natural Gas Well Drilled at Texas Motor Speedway

As the first natural gas well at Texas Motor Speedway was being drilled Tuesday, Hideki Makihara was more than a casual observer.

Natural Gas is at a premium  explained the Japanese lawmaker since Japan shut down its last nuclear reactor last week, a casualty of the Fukushima disaster in 2011. Since then, he said, electricity prices have doubled and Japan is paying some of the highest prices in the world for the natural gas needed to fuel its remaining power plants.

Natural gas that will eventually flow from Quicksilver Resources wells at the giant racetrack in far north Fort Worth should contribute to the surge in U.S. gas production, which has driven down prices domestically and could eventually provide relief for Japan.

“We want to import shale gas as soon as we can to reduce the price of electricity in Japan,” Makihara told the Star-Telegram. “So far, the cheapest natural gas in the world is U.S. shale gas.”

Makihara, a member of Japan’s House of Representatives, on Tuesday visited Quicksilver’s drill site on the north side of Texas Motor Speedway, where the Fort Worth-based producer started drilling this month. Quicksilver holds the lease on the 1,450-acre property, as well as on much of the neighboring Alliance development.

Quicksilver plans five wells at the current drill site on the edge of the racetrack’s sprawling parking lot, plus two additional drill sites on the west side with similar numbers of wells planned. It will also drill under the speedway from the east side of Interstate 35, something it did when it drilled at Alliance Airport, said Steve Lindsey, Quicksilver’s head of government and community affairs.

But race fans won’t see any rigs at the speedway next month. Drilling will cease and the rig will be moved for the race weekend starting in late October, Lindsey said.

The shutdown of nuclear power plants after the tsunami disaster is costing Japan billions. Japan’s industry ministry has estimated that the nation’s cost to import extra coal, gas and oil to run its non-nuclear plants will hit $93 billion by the end of 2013.

The crisis sent Japanese energy interests looking to the U.S. for solutions.

In March, Tokyo Gas, Japan’s biggest natural gas utility and a diversified global energy company, bought a 25 percent stake in Quicksilver’s Barnett Shale holdings, including the speedway land. Makihara was accompanied by Koji Yoshizaki, general manager of of Tokyo Gas America, based in Houston.

Tokyo Gas has also agreed to buy liquefied natural gas from a planned terminal in Maryland that recently won an export license from the federal government. And the utility continues to seek production in the United States, Yoshizaki said.

Under an agreement reached in 2008, the Fort Worth Sports Authority and the speedway will share royalties from production on the property, with much of the money going toward improvements at the facility.

SOURCE: http://www.star-telegram.com/2013/09/24/5191188/first-gas-well-being-drilled-at.html

Pipeline Cathodic Protection News: New Spectra Natural Gas Pipeline Construction

Pipeline cathodic protection industry received a boost this week: proposed high-volume natural gas pipeline construction across 3 Southeastern states. Spectra, the company behind this jolt of economic opportunity, has dubbed it the “Renaissance Project”. The natural gas pipeline proposes several lines branching off the main pipeline to potential customers along the route.

The pipeline is a complex project and will require a number of business services such as pipeline cathodic protection. MATCOR’s pipeline protection program uses a number ISO 9001:2008-certified solutions to protect such a project. For example, MATCOR’s SPL™-FBR linear Anode and Durammo™ Deep Anode System would help lower total cost of ownership on the pipeline.

The proposed pipeline is almost 300 miles with three different pipeline diameters. The natural gas pipeline will feature two compressor stations to maintain line pressures, according to officials. It was stated the line will have a capacity of 1 billion cubic feet per day, and can be expanded to over 1.5 billion cubic feet per day.

Spectra plans for the pipeline to run from the Chattanooga, Tennessee area, through Alabama and towards the Atlanta, Georgia area. “We are continuing to work with multiple potential customers to design a project to fit their supply demand needs,” Grover said in a statement on the project.

Furthermore, Spectra executed letter of intent with the AGL, the parent company of Chattanooga Gas Co., and Atlanta Gas Light Co.to explore a joint arrangement for local distribution. Sources close to the matter state the “Renaissance Project” could be up and running by mid-2017.

“From a project kickoff standpoint, we continue to reach out to federal, state and local public officials informing them of the project,” she said. “We’ll send letters and start contacting landowners along our proposed study corridor pending further market feedback.” Grover stated Spectra the Renaissance Project study corridor map is in the final stages. Currently, the map highlights 15 counties across Tennessee, Alabama and Georgia.

Economic groups across these states laud the move as one that will stimulate the economy and bring jobs to the region. “It’s going to be a good project and the infrastructure for natural gas is such that, industry-wide, there’s a great demand for it,” one source familiar with the matter said. Experts familiar with the project say it is a crucial move to support industrial expansion and business growth in the region.

 

MATCOR’s Insight That Works

The Renaissance pipeline is indeed poetically named. The Southeastern region has recently seen improvements to its economic state and industrial competitiveness. However, key investments such as the natural gas pipeline and other infrastructure must be put in place to attract jobs, manufacturers and families into these committees. That said, the pipeline is a key cog to the continued rebirth of this region. MATCOR and other service providers will be stewards of this bright future, protecting valuable assets that power communities.

SOURCE: http://www.timesfreepress.com/news/2013/aug/20/proposed-tri-state-natural-gas-pipeline-taking/

MATCOR is a leading provider of ISO 9001:2008-certified cathodic protection for pipelines and cathodic protection management. Our team maintains the highest quality standards of cathodic protection for systems for storage tanks and other products that let you focus on your business operations.

Expansion of Anadarko’s Natural Gas Plant – Eagle Ford Shale

 

MATCOR has learned that Anadarko is close to completing its new $100 million natural gas processing plant in Texas.

The Cathodically Protected Brasada plant will process natural gas produced from the company’s Eagle Ford shale wells.  Components like methane, ethane, propane and butane will be separated before they they are transported through the cathodically protected pipeline for further processing.

Anadarko’s plant is designed to process 200 million cubic feet of gas per day but can expand to process up to 400 MMcf/d.  This could lead to capacity expansion if Anadarko undertakes processing of third party gas at some point.

Although the Eagle Ford Shale region has a lot of potential for company’s such as MATCOR it cannot be optmized until the supporting midstream infrastructure comprising of gathering systems, pipeline and processing plants are developed to move oil and gas to to market.

Anadarko’s Eagle Ford Operations

Anadarko explores for shale oil and gas in a gross area of 400,000 acres in the Dimmit, LaSalle, Maverick and Webb Counties in the Eagle Ford region. Its current resources are estimated at over 600 million barrels of oil equivalent (MMBOE), 65% of which is estimated to be liquids. In 2012, the company achieved a gross processed production record of approximately 152,600 BOE per day. With its higher-margin oil and natural gas/condensate, the Eagle Ford shale region is among the most capital-efficient shale plays in Anadarko’s U.S. onshore portfolio.

Anadarko currently operates approximately 380 miles of oil and natural gas pipelines throughout the southwest Texas region, with additional gathering facilities that support more than 50% of its Eagle Ford shale production. In March 2012, Anadarko and Western Gas Partners began construction of the Brasada gas processing plant. The Brasada plant and the construction of an additional 200 miles of gathering lines will enhance the value of Anadarko’s Eagle Ford assets.

The Brasada Plant

All of Anadarko’s Eagle Ford acreage is located to the west of the Brasada plant, and a pipeline network will bring natural gas into the facility as well as move it off site to market. The pipeline will enable the company to eliminate its dependence on trucks. This will speed up transportation of its gas as there are too many trucks on the road in the region which causes a slowdown in the overall movement.

The Brasada plant also will also reduce flaring of methane in the field because Anadarko will be able to move it directly to market through pipelines. Flaring of methane is a common industry practice in cases where transportation is not viable.

From the plant, natural gas liquids will travel further through a pipeline to a plant in Yoakum and to fractionation facilities in Mont Belvieu, east of Houston. Gas also will go south to Corpus Christi, where it can be used in refining or fed into the existing network of interstate pipelines

Proposed Columbia Gas Pipeline – Philadelphia Area

In recent headlines from the Marcellus Shale natural gas boom, a major interstate pipeline company wants to expand its transmission network in the Philadelphia area to deliver more gas to customers.

Columbia Gas Transmission Group (A MATCOR client) submitted plans Monday with the Federal Energy Regulatory Commission (FERC) outlining a public campaign for its $210 million project.

The East Side Expansion Project, so named because it adds capacity to the eastern part of Columbia’s 16-state system, includes installing a 20-inch-diameter pipeline on a 7.5-mile route in Gloucester County and a 26-inch-diameter pipeline for 8.9 miles in Chester County.

“We are responding to a demand for increasing capacity of natural gas from our customers,” said Brendan C. Neal, community relations and stakeholder outreach manager for the transmission company, a subsidiary of NiSource Inc.

The new and larger pipes with greater capacity, which would be buried alongside existing Columbia pipelines, will require the company to acquire additional right-of-way from adjoining property owners. But the project is less likely to create public apprehension than a pipeline crossing virgin countryside.

“Since they’re running along an existing line, it does limit some of the concerns,” said Lyman Barnes, administrator of Logan Township, Gloucester County.

The work would expand capacity on a part of Columbia’s pipeline that runs from New York state to Virginia through Southeastern Pennsylvania. The existing line connects to the Millenium Pipeline near Port Jervis, N.Y., and transports Marcellus gas southward to Downingtown, where an eastward extension goes under the Delaware River into South Jersey.

The new line would expand supply options for the West Deptford Energy Station, a 738-megawatt gas-fired power plant being built in Gloucester County by LS Power Group. That plant, scheduled to go into service next year, would consume up to 80 million cubic feet of gas a day.

Columbia will increase capacity on its existing pipeline mostly by adding more horsepower to compressor stations in Milford and Easton, Pa., which will push greater volumes of gas though the pipes. Those station expansions are likely to attract the attention of environmental activists, who have objected to air emissions from other such projects.

Pipeline infrastructure designed to deliver natural gas from traditional production areas in the Gulf Coast states is being reconfigured to accommodate new Appalachian shale production.

The project would require FERC approval. The papers filed on Monday with the federal agency were a request to initiate a “prefiling,” which would include public meetings in April before the company formally files its application with the commission in August. Columbia anticipates FERC would authorize construction by June 2014.

SOURCE: http://www.philly.com/philly/business/20130228_Major_interstate_pipeline_firm_wants_to_expand_its_network_in_Phila__area.html

New England needs to expand gas pipelines

New England’s strong and increasing reliance on natural gas is well documented, with almost half of electricity currently generated by natural gas, up from just 15 percent in 2000, according to ISO New England.

That trend line will only increase in coming months and years with more and more homes and businesses converting to natural gas from heating oil. NStar has estimated that conversions here have tripled over the past three years and National Grid said conversions in Massachusetts and New Hampshire increased 34 percent.

All these are positive trends, particularly considering the abundance of cheap, available natural gas – and the possibility of far more due to the shale gas revolution happening throughout the nation.

However, the region will need to do more to increase our capacity to bring this abundant energy source to our businesses, institutions, and homes. That presents a problem which New England ought to see as an opportunity and move quickly to expand the available pipeline for natural gas into the region.

There is a clear need for additional gas pipeline capacity in New England, not only for electric generation on the relatively infrequent peak-gas-demand days and to fill the gaps from the growing use of intermittent renewable resources but, in general, for the rapidly growing end-use demand for gas.

We need new capacity to take advantage of the nation’s rising supplies of natural gas. Currently, the delivery cost of gas in New England is increasing rapidly and will likely keep rising, unabated, until pipeline capacity increases and more gas starts flowing into the area.

In New York, the key financing for an expansion was secured when marketers and transmission companies signed on to firm contracts after a period of significant increase in primary delivery costs. As a result, marketers are now concentrating in that key, new open market. After this new capacity, New York’s primary delivery cost is now approximately $2/therm lower than what Massachusetts end users are paying, as highlighted in a recent report by the US Energy Information Administration. That report also states that New England has the highest average spot prices for natural gas in the nation.

For New England, it doesn’t make sense to wait until the cost of gas increases to the point where it hurts commercial, industrial, and residential customers. For PowerOptions members, who use roughly 13 million dekatherms annually, matching New York’s primary delivery cost would translate into $26 million of savings.

While it is a bad idea to saddle the electricity market with the full cost, smart expansions of pipeline capacity make sense and regulators and the marketplace should consider a range of expansion solutions and include all potential sources of financing support.

The truth is, we can’t continue to provide the incentives we do to end users for the conversion from oil heating and steam to natural gas and then not expand our ability to bring more gas into the region. That math doesn’t add up.

Bottom-line, this is a very complex problem. There are no simple answers and a wide net of potential solutions must be cast. But simple answers like greater efficiency and leak prevention in our pipeline are simply not enough. Smart but bold action is needed – and soon.

SOURCE: http://www.commonwealthmagazine.org/Voices/Perspective/Online-Perspectives-2013/Winter/002-Arcate-New-England-needs-to-expand-gas-pipelines.aspx

The World’s Longest Gas Pipeline – Operational

The world’s longest gas pipeline became operational in China as of December 30.

The China National Petroleum Corporation announced the last section of the west-to-east pipeline that stretches more than 5,400 miles was completed.

It is carrying natural gas from the central part of the country to Shanghai in the east and Guangzhou and Hong Kong in the south, crossing through 15 provincial regions.

China.org reported that the pipeline cost $22.5 billion dollars to build and will help bring power to 500 million people.

The pipeline will help China deliver energy to meet its increasing demands. China Daily reported the country’s electricity consumption continued to rise, growing 7.6 percent in November compared to the same month in 2011. October saw a 6.1 percent year-over-year rise, the article stated.