Tag Archives: Calgary

CEPA: Report Uncovers Diluted Bitumen Not Corrosive…

A report published on February 25 by a division of the UK-based Penspen engineering firm reveals diluted bitumen is no more corrosive than conventional crude.

Brenda Kenny, President and CEO, of the Canadian Energy Pipeline Association (CEPA), is pleased with the results of the report, which finally dispels the myth that industry critics have been spreading regarding the transportation of diluted bitumen.

“We have always known, based on scientific facts and our pipelines operational histories, that diluted bitumen is no more corrosive than conventional crude,” Kenny said. “Now, this manufactured myth can stop and Canadians can be further assured that our pipelines are safe regardless of the type of product they carry.”

According to CEPA, the report examined 40 studies addressing the behavior of diluted bitumen and conventional crude.  In these studies, which spanned over 40 years, the research concluded that diluted bitumen is no more corrosive when compared to conventional crude oil.

“It is important to have scientific evidence in front of Canadians, so they can make their own informed decisions, and not rely on misinformation”, Kenny said.

The report also showed that tests were carried out using internationally recognized standards, which found that small differences in some components of the product did not increase the chances of corrosion developing in oil transmission pipelines.  In addition, monitoring and preventative maintenance programs used by transmission pipeline operators on conventional crude oil pipelines were equally as effective on pipelines containing diluted bitumen.

The Canadian Energy Pipeline Association represents Canada’s transmission pipeline companies who operate approximately 110,000 kilometres of pipelines in Canada. In 2011, these energy highways moved approximately 1.2 billion barrels of liquid petroleum products and 5.3 trillion cubic feet of natural gas. CEPA members transport 97 per cent of Canada’s daily natural gas and onshore crude oil from producing regions to markets throughout North America.

SOURCE: http://www.cepa.com/new-report-reveals-diluted-bitumen-not-corrosive

Enbridge gets nod for Alberta pipeline

CALGARY, Alberta, Nov. 26 (UPI) — Canadian pipeline company Enbridge announced it reached an agreement with shippers for the expansion of an oil pipeline in Alberta province.

Enbridge said it agreed to terms for a $1.8 billion expansion to its pipeline system between Edmonton and Hardisty, Alberta. The expansion envisions a 2015 capacity target of 800,000 barrels per day.

The company said the new line agreements would fall within its competitive toll agreement and include a 25 cent surcharge on shipments.

“The agreement with shippers on terms for the expansion continues our collaborative relationship, ensuring that we provide the facilities and services they need to maximize the value of their crude oil,” Stephen Wuori, president of liquid pipelines for Enbridge, said in a statement.

Enbridge aims to build the twin Northern Gateway pipeline from oil sands operations in Alberta to ports along Canada’s west coast. Critics of tar sands oil, the type of crude found in Alberta, say there are concerns about the environmental consequences associated with pipeline developments.

Enbridge said the Edmonton to Hardisty line should begin construction by 2014 once it gets full support from the government.

SOURCE: http://www.upi.com/Business_News/Energy-Resources/2012/11/26/Enbridge-gets-nod-for-Alberta-pipeline/UPI-47511353934923/#ixzz2DLctvybr

Alberta to include public in safety review of its energy pipeline network

EDMONTON – Alberta plans to broaden a safety review of its vast energy pipeline network to include input from the public.

The province’s energy regulator hired a company in September to conduct a technical review of pipeline safety, spill response plans and the security of pipelines that cross water.

Energy Minister Ken Hughes says after that report is complete at the end of the year, the government will ask Albertans for their views on pipeline safety.

“We do want to engage everybody who has something constructive to contribute to this so there will be wider consultations in the new year,” Hughes told The Canadian Press in an interview.

The Alberta government asked for the technical safety review last summer following three pipeline-related spills.

In one of those spills, is a pipeline that leaked about 475,000 litres of oil into the Red Deer River, a major drinking water source for central Alberta.

Since July, more than 50 environmental, conservation, land rights, unions First Nations and other groups have been calling on Alberta to include the public in its pipeline safety review.

Greenpeace spokesman Mike Hudema praised the government’s decision to open up the review process to the public, but said its success will depend on its willingness to share information and to really listen to people’s concerns.

“I’m glad that the public is finally getting a chance to have their say,” Hudema said Thursday.

“Of course, it remains to be seen as to how much of a say they will have, how much their feedback will be incorporated in the actual decisions, or whether this is really just a public relations exercise.”

The Energy Resources Conservation Board hired Group 10 Engineering Ltd. of Calgary to conduct the technical review.

The company is to hand in a report to the board by the end of the month. The ERCB is to then submit the report, including its own conclusions, to Hughes by the end of the year.

Group 10 officials say under the terms of the contract, the company is strictly focusing on reviewing pipeline regulations, policies and best technical practices around the world. Consulting with the public is not part of its job.

“For this process to be effective, we have to be very guarded in how we engage people because it could turn out to be a mud-slinging, political, publicized nightmare. So we have to be cautious,” Group 10 director Daryl Foley said from Calgary.

Alberta is criss-crossed by a network of more than 400,000 kilometres of provincially regulated oil and natural gas pipelines, many of them up to 40 or 50 years old.

Hughes said the report will be made public in the new year and its findings will be the subject of the public consultations. He gave no timeline on when more details of the public review will be released or when it will start.

The final goal will be to determine whether or not the pipeline industry is performing to the best world standards and to come up with science-based solutions to fix any problems if it isn’t, Hughes added.

He also said the government will not allow the public consultation to delay the review process, which it hopes will reassure people in the province and around the world.

“Pipeline safety is important, not just to Albertans with respect to how pipelines perform. Pipeline safety and performance is also an important element of our social licence to operate as viewed by other Canadians and people living outside of Canada.”

“We all, as Albertans, have a concern that the pipeline industry is performing at its highest level possible. That expectation is set, not just by people who are technicians, but also by ordinary people like you and me who want to have input into policy process.”

Hughes said the government hasn’t decided how it will consult with the public, or whether the process will include public meetings or hearings.

SOURCE: http://thetyee.ca/CanadianPress/2012/11/01/Alta-Pipeline-Safety-Review-20623047/

Sunshine Oilsands Plans $3.5 Billion in Capital Investment

China-backed Sunshine Oilsands Ltd. has budgeted about US$3.5 billion for capital investment in its Canadian oil-sands projects at a time when investors are on edge about the investment climate in energy-rich Canada.

The Calgary-based energy company’s projects are still in a preliminary stage, but it is aiming for its first production in the fourth quarter of 2013, with output of 5,000 barrels a day by mid-2014, Co-Chairman Shen Songning said in an interview.

Mr. Shen’s optimism about the projects—based in Athabasca Sands, Alberta—comes at a tense time for Chinese and other foreign investors hoping to capitalize on Canada’s huge reserves of oil and natural gas, much of which are expensive to extract as they are trapped in oil-sands deposits or in shale-rock formations.

Last month, the Canadian government turned down a US$5.18 billion bid by Malaysia’s state-run Petroliam Nasional Bhd., or Petronas, to acquire Canada’s Progress Energy Corp. The bid isn’t dead, however, as the two sides have agreed to resume talks on the purchase.

Next week, the government is expected to rule on the US$15.1 billion purchase of Canada’s Nexen Inc. NXY.T +0.78% by China’s Cnooc Ltd. 0883.HK +1.24%

The two deals are a litmus test for Canada’s aspirations to develop its oil and gas reserves and find new export markets at a time when its main buyer, the U.S., is cutting energy imports due to the success of shale projects there.

“Conventional oil supply is in demand and global production is expected to transition toward unconventional sources,” said Mr. Shen. “We see Canada’s oil sands playing a major role in meeting the needs of the world’s growing crude demand.”

Oil sands—a mix of sand and tarlike ultraheavy crude oil called bitumen—are costly to refine, but higher crude prices in recent years have made production from oil sands more feasible. Canada’s oil sands will likely account for 4.4% of global crude-oil output by 2035, up from 1.6% in 2009, the International Energy Agency has said.

Mr. Shen said the US$3.5 billion expenditure will be funded by cash flow from existing projects and potential energy joint ventures, as well as bank loans and proceeds from Sunshine Oilsands’ Hong Kong initial public offering in March. Possible joint-venture investors include China sovereign-wealth fund China Investment Corp. and China oil company China Petrochemical Corp., also known as Sinopec Group.

The company’s oil-sands projects can achieve positive cash flow per barrel when West Texas Intermediate prices are above US$50 a barrel, Mr. Shen said.

“We see oil prices hovering around US$100 a barrel over the next three to five years as demand for oil is rising on the back of strong economic growth in Asia,” he said. He didn’t specify whether he was referring to benchmark West Texas Intermediate or Brent crude.

He also said the company’s operations could benefit from falling natural-gas prices, because fuel costs account for 20% of Sunshine Oilsands’ total production expenses.

Sunshine Oilsands, which raised $579 million from the Hong Kong IPO, is planning a secondary listing in Toronto in the fourth quarter to increase shareholder value. The company’s share price has fallen 46% in Hong Kong since the stock’s debut.

“Our current share prices are extremely undervalued,” Mr. Shen said, adding the company’s net asset value per share is at 21.40 Hong Kong dollars (US$2.76). Shares in Sunshine Oilsands closed at HK$2.62 on Thursday.

In response to the decline in its share price, Sunshine Oilsands recently announced a $50 million share-repurchase program.

SOURCE: http://online.wsj.com/article/SB10001424052970204712904578092052566429508.html

TransCanada to invest $1-billion in Mexican natural gas pipeline

TransCanada Corp. plans to invest about $1-billion (U.S.) in a new natural gas pipeline in Mexico.

The Calgary-based pipeline giant announced Thursday that it has been awarded a contract to build, own and operate the pipeline by Mexico’s federal power company, the Comision Federal de Electricidad or CFE.

The 530-kilometre-long El Encino-to-Topolobampo pipeline will have a contracted capacity of 670 million cubic feet per day and is supported by a 25-year natural gas transportation services contract.

“Mexico’s government is engaged in a comprehensive plan to expand the nation’s electrical grid and generating capacity and much of that generation will be natural gas fired,” TransCanada president and CEO Russ Girling said in making the announcement.

“This award is another example of TransCanada’s commitment to help develop Mexico’s energy infrastructure in a sustainable and cost-efficient manner.”

The Topolobampo pipeline begins in El Encino, in Chihuahua state, and terminates in Topolobampo, in Sinaloa state, interconnecting with other pipelines that are expected to be built as a result of separate bid processes by the CFE.

Mr. Girling said TransCanada is bidding on a number of CFE proposals. The company has already built and is operating the Guadalajara and Tamazunchale pipelines and will soon break ground on a Tamazunchale pipeline extension.

TransCanada operates a network of natural gas pipelines that extends more than 68,500 kilometres and tap into virtually all major gas supply basins in North America. It is also developing one of North America’s largest oil delivery systems.

The company began work this summer on a $2.3-billion crude pipeline connecting an oil storage hub at Cushing Okla., to Texas refineries. It’s expected to start up in mid to late 2013.

The Gulf Coast pipeline was initially part of TransCanada’s $7.6-billion Keystone XL proposal, which would have sent Alberta crude to the Gulf via six U.S. states but has been held up by political and environmental wrangling in the United States.

SOURCE: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/transcanada-to-invest-1-billion-in-mexican-natural-gas-pipeline/article4809829/

TransCanada Plans $3 Billion Oil-Sands Line With PetroChina

TransCanada Corp. (TRP) and a unit of PetroChina Co. Ltd. agreed to develop a C$3 billion ($3 billion) oil pipeline to ship crude from oil-sands projects in northern Alberta.

TransCanada and Phoenix Energy Holdings Ltd. will each own 50 percent of the proposed Grand Rapids Pipeline, which will ship oil 500 kilometers (310 miles) from the Fort McMurray oil- sands production area to Edmonton, according to a statement today. The stake would be the largest taken by a Chinese company in a Canadian pipeline, according to data compiled by Bloomberg.

“This is the first major pipeline project to meet the needs of this fast-growing area,” TransCanada Chief Executive Officer Russ Girling said in the statement.

The plan includes a 900,000 barrel-a-day crude pipeline, and a 330,000 barrel-a-day pipeline for diluent, fluids mixed with tar-like bitumen so it can flow through pipelines. The project is expected to be in service by 2017.

“Transportation in the Athabasca region has become a bottleneck,” Zhiming Li, the chief executive officer of closely held Phoenix, said in the statement. “This transportation solution will be important to Phoenix and other potential producers in the area to monetize their huge resources.”

TransCanada will operate the system and Phoenix has agreed to ship crude on it.

Phoenix is a unit of publicly traded PetroChina, controlled by Chinese state-owned China National Petroleum Corp., according to filings. CNPC owns a controlling interest in PetroChina. Margaret Jia, a spokeswoman for CNPC companies in Canada, didn’t immediately return telephone calls seeking comment.

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Gateway pipeline hearings resume: First Nations get chance to question Enbridge

EDMONTON – Lawyers for an aboriginal group fighting the proposed Northern Gateway pipeline have raised more questions about who could end up with ownership stakes.

Hana Boye, who represents the Haisla band which claims much of the pipeline’s route as its traditional territory, queried Enbridge (TSX:ENB) officials on who put up money for 10 $10-million option agreements that could guarantee their holders space in the pipeline and a share of its ownership.

“If we don’t know who these investors are, we’re not able to determine if they’re financially viable, if they’re market-force driven or if it’s in the interest of Canadians,” she said.

Lawyers for environmental groups had already raised questions at hearings earlier this month about the possibility of Chinese interests buying control of the project.

On Monday, Enbridge vice-president John Fisher said most of the purchasers have been identified. Those who aren’t are covered by a confidentiality agreement, he said.

Under further questioning, Fisher conceded that the Chinese state-owned oil company Sinopec owns one of the $10-million units.

Boye then asked if the purchasers of the other units would be able to sell them and whether Enbridge would have any influence on who would be able to buy them.

“It would be a private transaction between those two parties,” Fisher said. “It could happen.”

Boye pointed out that Chinese energy firms are buying Canadian companies who have purchased option units. The China National Offshore Oil Corp. has purchased a share of MEG Energy, which is an option owner. As well, Chinese interests are also trying to buy Nexen (TSX:NXY), which owns another one of the 10 options.

The testimony came as hearings on Enbridge’s controversial pipeline resumed in Edmonton. It was the first chance for First Nations representatives to cross-examine company officials about the proposed $6-billion line.

Haida and Haisla officials have made statements voicing concerns about the project at earlier hearing sessions.

The pipeline would carry bitumen from Alberta’s oilsands to the B.C. coast where it would be loaded onto tankers headed for Asia.

People living along the route and on the B.C. coast fear the impact of possible spills, but supporters of the pipeline argue it’s needed to expand Canada’s export options.

The latest round of hearings in Edmonton are to last all week.

SOURCE: http://www.firstperspective.ca/news/1859-gateway-pipeline-hearings-resume-first-nations-get-chance-to-question-enbridge

MATCOR to Exhibit at the Global Petroleum Show

 

MATCOR, Inc. the trusted full-service provider of proprietary cathodic protection products, systems, and corrosion engineering solutions proudly announces it will be an exhibitor at the Global Petroleum Show (GPS), Calgary AB, June 12 – 14 2012.

MATCOR’s booth will be located in the Pennsylvania Pavilion within the U.S. Pavilion.  The Pavilion is located in Hall F Booth #8430.  For more information visit: http://globalpetroleumshow.com/exhibitors/matcor-inc/

At the show, MATCOR will have key personnel situated at the PA Pavilion introducing MATCOR’s innovative range of Cathodic Protection Products and Services including “Durammo” MATCOR’s Deep Anode System.  Learn more here.

About the Global Petroleum Show

Global Petroleum Show (GPS), one of the world’s largest energy exhibitions, will be taking place June 12 -14 at Calgary’s Stampede Park. Since 1968, the biennial event has united the world’s most prominent energy leaders. This year, GPS will welcome over 60,000 registered attendees from 95 different countries and will feature more than 2,000 exhibiting companies showcasing the latest in emerging technology.

Expanding to over 700,000 square feet, GPS 2012 will see delegations, presentations and exhibits from Bahrain, China, Colombia, France, Germany, Indonesia, Japan, Korea, Kuwait, Mexico, Nigeria, Norway, Oman, Peru, Poland, Qatar, Russia, Saudi Arabia, UAE, United Kingdom and the USA.

Rainbow Pipeline outage extended to end of June

Plains Midstream continues integrity work on oil line in northern Alberta

Follow-up article from a recent MATCOR Blog Posting: A pipeline which caused the largest oil spill in Alberta since the 1980s likely will remain out of service until the end of June, said operator Plains All American Pipeline.

The parent of operator Plains Midstream Canada said Thursday dig operations to check pipeline integrity along the northern portion of the 187,000 barrel per day line Rainbow pipeline will continue until at least the end of the month.

The line, which runs from Zama to Edmonton, has been shut down since rupturing late April near Little Buffalo in northwestern Alberta. At least 28,000 barrels of crude were spilled into boggy muskeg, flowing to a beaver pond where it was contained.

The rupture was caused by soil settlement after a maintenance program that allowed a section of the pipeline sag, according to initial reports. Plains was ordered by the Alberta Energy Conservation Board to check along the entire portion of Rainbow’s 20-inch line, from Zama to Nipisi in north-central Alberta, as part of the restart plan. The extended program came after the operator found a crack on a weld seam approximately 25 kilometres south of the original break.

“We asked them to do two dig programs and we are waiting for the results of the programs,” said Kim Blanchette, spokeswoman with the ERCB on Thursday.

After the April 29 spill, Plains identified five areas that has similar maintenance to the failure site, Blanchette said. The discovery of a crack downstream of those areas prompted the regulatory to call for a second, random dig program.

Plains said its digs were going slowly due to the remote locations of the sites, as well as the forest fire threat and bad weather.

“We are working to complete the remaining digs by the end of June,” the company said in an e-mail. It said it did not have a firm timeline for the restart of the line.

Plains said it expects repair and remediation costs of the Rainbow pipeline to range from $64 million US to $75 million US, with insurance covering the bulk of the expense.

Also on Thursday, the Houston-based company said it expected to “meet or exceed the high end” of its second quarter guidance for adjusted earnings of $290 million US to $320 million US

Operations on Rainbow’s 24-inch line from Nipisi to Edmonton started soon after the spill was detected, then interrupted for 10 days after forest fires caused power failures in the region.

The outage of the pipeline’s southern leg prevented delivery of about 150,000 barrels a day of heavy crude to the Edmonton, Alberta, refining and pipeline hub.

The northern section of Rainbow, which was built in the 1960s, carries mostly conventional crude from northern Alberta fields. It was moving about 75,000 barrels a day at the time of the rupture.

In May Enbridge Inc. also reported a major leak on its Norman Wells oil pipeline, which feeds directly into the Rainbow line. The spill, in a remote location of the Northwest Territories, could be as large as 1,500 barrels, Enbridge recently disclosed.

The 39,400 barrel per day line flows oil from Imperial Oil’s processing facility in Norman Well, NWT to Zama. Imperial had to reduce production on the Rainbow outage. When the Enbridge line started flowing again at reduced capacity, the company was able to add some barrels to the pipeline.

“That’s helping but it’s not resolving the situation for us,” said Imperial spokesman Jon Harding. “It is status quo.”

Imperial has been storing production at Norman Wells, increasing storage capacity by re-certifying tankage left over from the sites days as a refinery, Harding said. Other volumes are flowing to Zama, where it is being trucked to market.

The outages have had minimal impact on cash crude prices, traders said, but come at a time when several ruptures and leaks in pipelines carrying Canadian oil have raised questions about reliability and safety.

Since the Rainbow spill, TransCanada Corp. suffered two leaks and outages on its 591,000 barrel a day Keystone pipeline to Oklahoma from Alberta due two faulty equipment in pump stations.

SOURCE: http://www.calgaryherald.com/news/Rainbow+Pipeline+outage+extended+June/4920080/story.html#ixzz1OsZyujf1