Tag Archives: Chevron

Community Minister Bennett predicts a natural gas boom as way cleared for LNG plant

British Columbia is on the verge of a natural gas development boom that will rival anything Alberta has experienced, according to B.C.’s Community Minister.

Bill Bennett made that comparison Tuesday while speaking at a press conference to announce the final regulatory pieces have fallen in place for a new liquefied natural gas plant to be built on a native reserve near Kitimat.

The massive LNG plant, a joint venture by Apache Canada Ltd. and Chevron Canada Ltd., in co-operation with the Haisla First Nation, will process nearly 700 million cubic feet of gas per day, becoming a key link in the transportation chain between B.C.’ s northeast gas fields and off-shore markets.

Mr. Bennett said the plant, the first of six that have been proposed for the West Coast, will open up B.C.’s massive gas fields and allow the resource industry to thrive like it never has before in the province.

“The story here is a story about British Columbia exploiting an opportunity … on the scale of what faced Alberta 40 to 50 years ago,” Mr. Bennett said.

“The opportunity for B.C. really is on the same scale as for example, Norway, when they discovered they had off-shore oil [and gas discoveries] and Alberta when they discovered they had oil and could ship it to the U.S.,” Mr. Bennett said.

He said both Alberta and Norway have thrived economically because of the way their governments regulated and encouraged the development of rich oil and gas resources.

“It’s built [Alberta’s] economy and made them, you know, the most [economically] comfortable province in Confederation.

“It’s that scale of an opportunity [for B.C.],” he said.

Last month Apache Canada and Chevron Canada announced they were teaming up to develop gas fields in the Horn River and Liard basins, in northeast B.C.

Apache Corp. chairman Steven Farris has described those fields as “two of the most prolific shale gas plays in North America, with more than 50 trillion feet of resource potential.”

At a press conference in Vancouver, Mr. Bennett and John Duncan, federal Minister of Aboriginal Affairs and Northern Development, jointly announced regulatory changes that they said have now cleared the way for construction of the Kitimat LNG plant.

Haisla Chief Councillor Ellis Ross praised both levels of government and industry for working with the band to bring the project forward.

“Our people have been looking at natural gas projects since the 1980s … this is a small example of what can be done if all … four parties are focused,” he said.

Mr. Bennett said the regulatory changes allow the province to enforce provincial environmental standards on reserve lands, which are technically under the jurisdiction of the federal government.

Tim Wall, president of Apache Canada, said the change provides “regulatory certainty” for the Kitimat LNG plant, allowing construction to proceed.

“It’s unusual to be here celebrating regulations,” said Mr. Bennett, who has a reputation for battling red tape.

Mr. Bennett, whose government is trailing in the polls as it seeks re-election in May, said developing B.C.’s gas fields is of “profound” economic importance to the province.

“It’s huge and it has the potential to change the frame for British Columbia in terms of the jobs [created],” he said.

Mr. Bennett said the chronic unemployment problems that burden many small northern communities, particularly native communities, could be relieved by the development of B.C.’s gas fields.

SOURCE: http://www.theglobeandmail.com/news/british-columbia/bennett-predicts-a-natural-gas-boom-as-way-cleared-for-lng-plant/article7649911/?utm_source=Shared+Article+Sent+to+User&utm_medium=E-mail:+Newsletters+/+E-Blasts+/+etc.&utm_campaign=Shared+Web+Article+Links

Probe of Chevron fire focuses on corroded pipe

Federal investigators looking into last Monday’s fire at the Chevron oil refinery in Richmond want to know why the 8-inch carbon steel pipe that failed wasn’t replaced in November during a round of maintenance, officials said Sunday.

At that time, the refinery’s crude unit was taken offline, and a 12-inch pipe connected to the same distillation tower was replaced due to corrosion, said Daniel Horowitz, the managing director of the U.S. Chemical Safety Board.

Investigators do not yet know if corrosion in the 8-inch pipe caused a leak of hydrocarbon liquid that ignited. Horowitz said he believed the pipe was inspected last year, along with the 12-inch pipe, but that his agency had not yet reviewed the records.

Investigators are also looking into why the crude unit was kept running while workers tried to fix the leak. They said the workers narrowly escaped the vapor cloud that ignited.

The initial leak “had the effect of drawing people in,” Horowitz said. “We want to understand the decision-making around when you attempt to make a repair and when you shut the unit down.”

Chevron spokesman Justin Higgs said the company was cooperating with the probe and was “committed to better understanding the root cause of this incident.”

SOURCE: http://www.sfgate.com/bayarea/article/Probe-of-Chevron-fire-focuses-on-pipe-3781644.php#ixzz23QrL1v1q

Alyeska, federal regulators reach settlement on January oil leak

The operator of the trans-Alaska pipeline has reached a settlement with federal regulators, who raised major safety concerns following a January oil leak at Pump Station 1.

Alyeska Pipeline Service Co. signed the settlement, or “consent agreement,” with the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration.

The deal resolves the “notice of proposed safety order” PHMSA issued to Alyeska on Feb. 1, allowing the parties to “avoid further administrative proceedings or litigation,” the consent agreement says.

The consent agreement notes, however, that Alyeska continues to dispute some of the findings in the agency notice.

The seven-page document makes no mention of a fine for Alyeska, but does say the company is subject to daily civil penalties of up to $100,000 per violation if it fails to comply with the agreement, which includes extensive Alyeska work commitments.

The settlement took effect quietly on Aug. 17.

Multiple risk conditions cited
Alyeska is the Anchorage-based consortium that runs the 800-mile oil pipeline on behalf of owners BP, ConocoPhillips, ExxonMobil, Chevron and Koch Industries.

Alyeska’s president, Thomas Barrett, formerly was PHMSA administrator.

PHMSA issued its Feb. 1 notice following an oil leak at Pump Station 1 on Alaska’s North Slope. The leak, discovered Jan. 8 in the basement of a booster pump building, forced two shutdowns of the pipeline, the longest one lasting about 84 hours.

The spill, which resulted in no oil escaping the building, was attributed to internal corrosion in some station piping. The mainline, 48-inch pipe was not involved.

PHMSA said it conducted an investigation of the Pump Station 1 leak and, more broadly, of the “safe operation” of the pipeline system.

“As a result of the investigation, it appears that multiple conditions exist on your pipeline facility that pose a pipeline integrity risk to public safety, property or the environment,” the notice to Alyeska said.

The notice focused on the pipeline’s declining throughput — from a peak of more than 2 million barrels per day in 1988 to an average of about 609,000 barrels in September — and the implications low flow has for pipeline safety, particularly during a winter shutdown.

The agency raised concerns about crude oil cooling down and water freezing inside the pipeline, about potential corrosion in inaccessible piping, and about Alyeska’s “cold restart” procedures and equipment.

PHMSA proposed a laundry list of “corrective measures,” many of which are incorporated in the consent agreement.

Alyeska’s work commitments
Alyeska spokeswoman Katie Pesznecker provided Petroleum News this statement on the consent agreement:

“We are pleased we reached an agreement with PHMSA. We are committed to working with our regulatory agencies to continue to safely operate and maintain the Trans Alaska Pipeline System. Many of the projects in the Consent Agreement are projects that have been underway for some time, including efforts to mitigate the compounding technical challenges related to declining throughput and crude oil temperatures, ongoing modifications to our cold restart plan, and work to identify and isolate or replace certain piping on TAPS. These issues are complicated, and we are engaged in ongoing discussions with our regulators so we can determine the best path to continue to safely maintain and operate TAPS. We believe the simplest solution to mitigate issues related to steadily declining throughput is to get more oil in the pipeline.”

Under the agreement, signed by Mike Joynor, Alyeska’s senior vice president of operations, the company makes numerous work commitments. Among these:

• Alyeska will replace or remove oil piping that can’t be inspected with in-line tools, known as pigs, or some other PHMSA-approved method.

This was a concern in the Pump Station 1 incident, which involved “low-flow, dead-leg” piping installed in the 1970s and encased in concrete.

Alyeska has submitted an evaluation to PHMSA of which piping is to be replaced.

Alyeska will install an additional pig launcher and receiver on the pipeline between pump stations 5 and 10.

PHMSA had questioned Alyeska’s ability to remove inspection or cleaning pigs that might be inside the line at the time of a shutdown. A pig could “cause a plug in the pipeline” in a cold restart scenario, the agency said.

• Alyeska will study the need for increased tank capacity at pump stations as a way to “mitigate the consequences of a cold weather shutdown,” the consent agreement says.

PHMSA had raised concern about the lack of oil storage capacity particularly upstream of Pump Station 1.

Under the consent agreement, Alyeska must develop a plan for oil storage projects, if any, by Dec. 31. Possibilities include bringing existing tanks back into service, the agreement says.

• Alyeska agreed to submit a revised cold restart plan to PHMSA and pre-position certain equipment during winter. The consent agreement says an agency inspector would make a field visit to see that the necessary workers and equipment are ready.

PHMSA said Alyeska, during the January shutdown, had trouble implementing its cold restart procedures — an assertion Alyeska’s Barrett disputed.

Restarting the pipeline after an outage is always a high-stress event, even in the best of conditions.

Maintaining oil temperature

The consent agreement pays considerable attention to the problem of oil temperature.

“Alyeska has proposed several projects which are aimed at maintaining crude oil temperatures on the pipeline at a level that will allow safe cold-weather operations,” the agreement says. “Based on current operational conditions, including crude oil characteristics, Alyeska will develop a plan and timeline for implementation and completion of proposed projects designed to create sufficient time to allow for safe restart or implementation of the Revised Cold Restart Plan, and safe ongoing cold weather operations. The projects will be designed to maintain the crude oil temperatures at or above the minimum allowable temperature … in the event of a prolonged shutdown during cold weather conditions.”

Alyeska was to submit its initial plan and timeline to PHMSA by Oct. 1, the agreement says, adding that approved projects “may not be cancelled solely for financial reasons.”

In an Aug. 1 letter to PHMSA, Alyeska provided its evaluation of the minimum oil temperature needed for safe operation of the pipeline.

As part of a recent low flow study, Alyeska said it conducted modeling, simulation and “actual flow loop testing” to determine the effects of temperature on pipeline system crude.

The study determined that if the oil temperature goes below about 31 degrees Fahrenheit, water entrained in the oil can start to freeze.

“Therefore, Alyeska has accepted the temperature of 31°F as the minimum temperature under flowing conditions for safe operation of the pipeline,” the letter said.

However, the letter added: “Taking into consideration throughput and ambient condition variables, the low flow study recommends the minimum crude oil temperature be maintained at or above 36°F. Alyeska has initiated projects with the primary purpose of maintaining the crude oil temperature at or above 36°F.”

PHMSA, in its Feb. 1 notice, said the minimum pipeline oil temperature recorded at a pump station during the January shutdown, as reported by Alyeska, was 25.7 degrees.