Tag Archives: Crude

Keystone XL pipeline concerns are being addressed

A state agency has issued its preliminary review of the Keystone XL pipeline that appears to indicate most concerns are being addressed.

The draft evaluation report, released Tuesday afternoon by the Nebraska Department of Environmental Quality, concluded that the new route of the controversial crude-oil pipeline successfully avoids the Sand Hills region of Nebraska, a step agreed to during a special session of the Legislature last year.

The report also stated that pipeline developer TransCanada Inc. had, by making some minor changes to the pipeline route in August, addressed concerns raised by the agency about crossing areas of sandy soils or areas near municipal drinking-water supplies of two small communities, Clarks and Western.

The agency also said TransCanada has agreed to compile an emergency response plan for leaks that might occur in the 36-inch, high-pressure pipeline, and buy $200 million in third-party liability insurance policy to cover any clean-up costs.

The company has provided the state with a chemical makeup of several forms of crude oil that will be shipped through the pipeline, which will carry 30 million gallons of oil a day. The exact composition of the oil, the agency said, will be made immediately available in the event of a leak.

Environmental groups, including Bold Nebraska and the Sierra Club, have raised concerns about the lack of information about the chemical makeup of diluted bitumen that will be carried by the pipeline.

While Tuesday’s draft report doesn’t raise “concerns” like those this summer about sandy soils and drinking-water wells in the path of the pipeline, he said it does “point out the impacts on different kinds of terrain” that will be crossed by the pipeline.

A public hearing on the draft report will be held at 6 p.m. on Dec. 4 at the Boone County Fairgrounds in Albion, Neb. Linder encouraged the public to comment on the report, either at the meeting or by mail or email.

A final report will be issued after the hearing. Gov. Dave Heineman will have the final say on whether the state approves the pipeline’s route across Nebraska.

That decision will be forwarded to the U.S. Department of State, which will make the final judgment on whether the entire Keystone XL project will be allowed. The project will transport oil from Canada’s tar sands region to the U.S. Gulf Coast, and pick up some oil from North Dakota and Montana along the way.

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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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In hours, caustic vapors wreaked quiet ruin on biggest US refinery

In the end, all it took was a small chemical spill — perhaps less than a barrelful — to bring down the newest, mightiest oil refinery in the United States.

Three weeks ago, while workers repaired a minor leak at the Port Arthur, Texas plant owned by Motiva Enterprises, a few gallons a day of so-called “caustic” was inadvertently seeping into the newly built crude distillation unit (CDU), the 30-story-high network of interconnected cylinders and latticed pipelines at the heart of the refining process.

While harmless when mixed with crude, the undiluted caustic vaporized into an invisible but devastating agent of corrosion as the chamber heated up to 700 degrees Fahrenheit ( 370 Celsius); the chemical gas raced through key units, fouled huge heaters and corroded thousands of feet of stainless steel pipe.

Now, just weeks after they commissioned the biggest U.S. refinery project in a decade, two of the world’s biggest oil titans — Royal Dutch Shell and Saudi Aramco , which own Motiva — are rushing to repair the potentially billion-dollar glitch that has added an embarrassing and costly coda to a landmark $10 billion expansion.

After a five-year effort to double the plant’s capacity, making it the largest in the country, they must now reassemble many of the same people and parts for a blitzkrieg fix that may exceed the original $300 million cost of the unit: corrosion experts are flying in from across the world; hundreds of workers are being hired; bespoke 30-inch (75-cm) stainless steel pipelines and 30-story cranes may need to be obtained quickly, according to sources involved in the repairs.

Sources familiar with the effort provided Reuters with the most detailed account yet of what officials believe went wrong at the 325,000-barrels-per-day (bpd) unit known as vacuum pipestill-5 (VPS-5), showing how a series of seemingly minor glitches crippled the vast plant.


Motiva has said little about the incident. Late on Wednesday, 11 days after it occurred, the company confirmed for the first time that the unit might remain shut for “several months”. Sources say officials are telling workers that the unit could be idle for as long as a year.

On Friday, in response to Reuters questions, Motiva spokeswoman Kayla Macke confirmed the contamination: “The preliminary inspection indicates that parts of the new unit have been contaminated with elevated levels of caustic.”

The extent of the damage is still not known as portions of the crude unit are too hot to enter, according to the sources. Some areas may not be accessible for weeks.

Motiva has not reached a final conclusion as to the cause of the damage, but has developed a working theory on what experts said appeared to be a rare instance of “accelerated chemical corrosion”. The unit’s intense heat was critical: the rate of corrosion can double with every 10 degrees Celsius.

Even as it pitted the inside of the atmospheric section, a giant still that performs the initial and most basic stage of converting crude oil into fuel, the damage went undetected. Only when two fires broke out and a heater ruptured — once crude resumed flowing — did operators suspect something was amiss.

“They had the first fire and then they had the second one 20 feet away. They knew they had a problem,” one of the sources said.

Why caustic continued flowing into the unit while it was idled to repair an unrelated leak is unclear, and is a key part of the investigation to establish cause. It is thought a valve failed to shut completely, but why that happened is unknown.


While Motiva’s VPS-5 was idling, authorities believe a few gallons each day of caustic leaked into the unit. The caustics are a base meant to negate the acid in cheaper heavy, sour crude that the new CDU was made to consume. They prevent residue from blocking pipes and reducing crude intake.

Normally, the amount leaked in the CDU would have been harmless, diluted by the crude. But only a small amount of hydrocarbon was circulating through the still while it was out of production, the normal method to maintain so-called “warm circulation” during a brief shutdown.

By the following weekend, unaware of the caustic incursion, Motiva began reheating the unit to resume operations; as the temperature reached 300 to 400 Fahrenheit, the caustic vaporized.

Ground zero was the atmospheric section, one of the simplest but most important machines in a modern plant. Although vast in scale, today’s units are in many ways similar to the simple stills used to convert crude into kerosene for lamps at the start of the U.S. oil industry in the 1850s.

The core of any refinery, the main still boils crude at intense temperatures to split the hydrocarbon molecules into the initial components of fuels such as gasoline and diesel; the bulk of the output is an intermediate feedstock that requires further refining in a host of specialized secondary units.

Unlike a refinery blast, the misfortune unfolding at Motiva was relatively slow to materialize. The fires that erupted from small pipeline cracks that Saturday were small enough to be quickly extinguished by the workers on hand at the crude unit.

The extent of the damage was understood within two days.

“We have the worst-case scenario,” one of the sources said. “Extensive damage throughout the crude unit. All of it.”

Three engineering experts agreed that what one called “accelerated chemical corrosion” was rare, but not unheard of.

“The temperature issue could be a factor as well,” said Kevin Garrity, president of NACE International, a global organization for engineers studying corrosion, and a 38-year veteran of the industry. He compared the effect to pouring sugar into hot tea, which dissolves the crystals much more quickly than in a cup of cold tea.

Normally, corrosion problems can be prevented.

“From a general sense you would not expect this kind of deterioration and problems in such a short period of time. You might not even expect it in 30 years if you have the right combination of technology and inspection practices,” he said.


Motiva has yet to examine the fractionation towers — tall, thin, metal columns — as well as the main part of the atmospheric section, because they are still cooling from their operating temperatures, said sources recruited for the repair work.

The vacuum section of the VPS-5 — which takes the heaviest “residue” created in the atmospheric section and refines it in a vacuum, increasing the yield of feedstocks for other units — was not damaged, they said.

Operators have continued to run many of the unharmed secondary units, although without the crude tanks they must buy intermediate feedstock from other refiners or shut peripheral units, as Motiva did last week.

But stainless steel piping, some sections as large as 30 inches in diameter, was damaged. Such equipment, part of more than 700 miles of pipe used on the expansion project, is often built to order, and may be difficult and costly to replace.

“If someone has 30-inch stainless steel pipe for sale, I would guess they’re going to charge a premium price,” one of the sources said.

Instrumentation on the unit is also known to be damaged, according to the sources.

Up to 50 heat exchangers will need to be cleaned throughout portions of the new plant, according to IIR Energy, an industrial intelligence firm that gathers data on operations and project activity on thousands of assets globally.

Work on exchangers 300 feet (90 meters) above the ground will require large cranes, though likely not the giants needed for the original construction. The heat exchangers, which look like 30-foot-long cylinders collected in a metal frame, house lengths of tubing where feedstocks are warmed and refined products are cooled as they go to and from a refining unit.

IIR also told Reuters that all trays in the distillation column and components within the furnace would need to be replaced. It said no restart timeframe had been determined.

Soon the question of who is to blame will arise. The cost to complete repairs may be as much as replacing the whole unit, which was originally estimated to cost some $300 million when the project was launched in April 2005, according to IIR.

Without knowing exactly why the caustic leaked, it’s not possible to say who, if anyone, is at fault. The two main contractors for the project — Bechtel and Jacobs Engineering — declined to comment.

Meanwhile, the investigation continues, and oil traders await any word on when the plant will resume operations. Motiva will likely be “extra-cautious” in restarting, Auers of Turner, Mason and Co said.

“They’re really focused on the repairs,” one of the sources close to refinery operations said. “They don’t need to know the cause now. They’ve got 12 months to figure that out and fix it.”

SOURCE: http://in.reuters.com/article/2012/06/25/usa-refinery-motiva-idINL2E8HO4GH20120625

Northern Gateway regulatory decision expected months later than Enbridge target

CALGARY – The regulatory panel weighing the controversial Northern Gateway oil pipeline said Tuesday it will likely make its decision in about two years, several months later than estimated by the builder, Calgary-based Enbridge Inc.

The proposed 1,200-kilometre pipeline would ship oilsands crude from Alberta to Kitimat, B.C., where it would be loaded onto tankers that could transport it to Asia — providing exporters with alternatives to the United States, the biggest importer of Canadian crude.

However, as with the Keystone XL pipeline that TransCanada Ltd. (TSX:TRP) hopes to build from Alberta to refineries along the Gulf Coast in the southern United States, Enbridge’s Northern Gateway proposal faces opposition on environmental and other grounds.

Thousands of people are set to speak at hearings across northern British Columbia and Alberta between January of next year and April 2013.

The joint review panel said Tuesday, in announcing several dates for the hearings, that it expects to release an environmental assessment report in the fall of 2013, and announce its final decision around the end of that year.

Enbridge CEO Pat Daniel said in May he was anticipating an early 2013 decision, but it’s clear from the hearing schedule that won’t be the case.

The company issued a statement late Tuesday saying it “welcomes clarity around the hearing process.”

“We understand that there is significant public interest in the Northern Gateway project. The JRP seems to be ensuring that there is a thorough inclusive process, and we are supportive of that. We see value in a well-defined process and remain committed to the regulatory review,” Enbridge spokesman Paul Stanway said in an emailed statement.

Enbridge also faces a longer review process than it expected for a proposal to reverse part of an oil pipeline in Ontario.

The National Energy Board said Monday it will begin oral hearings this fall into Enbridge’s Line 9 proposal.

Enbridge originally aimed to begin work on the $20-million Line 9 reversal project in early 2012, with start-up anticipated in the fall of next year.

“While the schedule extends further into 2012 than we had anticipated, we respect the board’s desire to enable stakeholders and communities affected by the project to have the opportunity to participate in the regulatory review process,” Enbridge spokeswoman Jennifer Varey said in an earlier email Tuesday.

Opposition to major pipeline projects has grown since the disastrous offshore spill in the Gulf of Mexico after BP’s leased Deepwater Horizon rig experienced a fatal explosion in April 2010.

The pipeline industry’s reputation as a relatively reliable and environmentally safe way to transport oil was tarnished by a much smaller spill in July 2010, involving an Enbridge pipeline in southern Michigan.

There have also been periodic small-scale leaks at the original Keystone pipeline and a major spill at the Rainbow pipeline in northern Alberta operated by Plains Midstream Canada.

SOURCE: http://www.winnipegfreepress.com/business/breakingnews/neb-to-hold-hearings-into-enbridge-line-9-oil-pipeline-reversal-in-ontario-135101398.html

Montana spill pipeline may have carried oil sands crude

An Exxon Mobil pipeline that ruptured, leaking oil into Yellowstone River, may have sometimes carried a heavier and more toxic form of crude than initially thought, federal regulators said on Thursday.

The U.S. Transportation Department’s Pipeline and Hazardous Materials Safety Administration spokeswoman Patricia Klinger said her office had learned that the pipeline may have been used to carry heavier crude.

“I just found out that apparently, and the regional folks just found out, there is an interconnect on the pipeline that possibly does carry some oil out of Canada,” she said in response to a question about tar sands crude in the pipeline.

That a pipeline thought to transport only “sweet,” low sulfur crude could have carried so-called tar sands crude from Canada raised concerns by health and environmental officials, even as Exxon officials said the heavier oil was not flowing through the Silvertip pipeline when it broke on July 1.

“The actual crude in the line at the point of the incident was a blend of crudes from Wyoming,” Exxon spokesman George Pietrogallo told Reuters in an email on Thursday.

Exxon was responding to a question about whether tar sands crude had ever flowed in the pipeline. Almost all the oil produced in Canada’s Alberta fields is from tar sands.

The chemistry of tar sands oil, derived from tar sands or bitumen and sweet crude is significantly different, said Ronald Kendall, head of the environmental toxicology department at Texas Tech University.

“Tar sands oil is in itself heavier oil and it contains more compounds that are toxic and may contain heavy metals like lead,” Kendall said.

In a July 6 email to Reuters, Exxon spokesman Kevin Allexon said the crude carried by the pipeline “does not originate from Alberta” but from fields on the Montana-Wyoming border. On Thursday, Exxon revised that.

“The pipeline carries a variety of different production fields in the U.S. and Canada,” Pietrogallo said in the email.


Tar sands crude may cause more wear and tear on pipes because of its chemical makeup, including corrosive and abrasive agents, said Tom Finch, the pipeline administration’s technical services director for the western regional office.

Federal inspectors were trying to determine if transport of tar sands crude could have triggered internal corrosion that may have played a role in the rupture, he said.

Montana Governor Brian Schweitzer faulted Exxon for failing to tell the state exactly what kinds of crude ran in the pipeline or spell out what hazardous chemicals were in the mix now contaminating riverside properties.

“Since they dumped that oil into the river that the state owns and manages, since they have spread oil in a film across 150 separate properties, since the film is over fishing access sites and state parks, we thought it would be appropriate to know what it is,” Schweitzer said.

Richard Opper, head of the Montana Department of Environmental Quality, said he was surprised to learn the pipeline buried in the streambed of the Yellowstone may sometimes have moved tar sands crude from Canada.

“If the question is, did we know it was carrying tar sands oil? Hell, no,” he said in an interview on Thursday. “If companies are changing the kinds of materials in pipelines to mixes that make them more likely they will leak or rupture, that raises huge concerns.”

Exxon has apologized for the spill, which it estimates at 42,000 gallons, and pledged to restore a river prized for its near pristine waters, scenic beauty and abundance of wildlife.

EPA officials are analyzing the chemical fingerprint of the oil which, depending on its source, could contain anything from benzene, a known carcinogen, to hexane, a toxin that can damage the human nervous system.

Preliminary testing by the EPA has shown no detectable levels of some hazardous compounds harmful to humans. But at least five residents were treated in hospital emergency rooms for symptoms like dizziness, nausea and respiratory distress, according to state environmental officials.

Environmentalists said on Thursday that questions about the grades of crude in the Silvertip should prompt a call by regulators for new pipeline standards and guidelines.

“The industry likes to say, ‘oil is oil’; it’s pithy but untrue,” said Anthony Swift, energy analyst for the National Resources Defense Council. “Some grades of tar sands oil are fundamentally more corrosive and dangerous.”

SOURCE: http://www.reuters.com/article/2011/07/15/us-oil-spill-montana-idUSTRE76E0OJ20110715