Tag Archives: Expansion

Pipeline set to link pair of projects – Marcellus Shale

Mike Stice, President of Chesapeake Midstream Development, a subsidiary of Chesapeake Energy, spoke during the Marcellus Midstream Conference & Exhibition in Pittsburgh this week. He said the potential for collecting methane, ethane, butane, propane, pentane and even oil make the Utica and Marcellus shale formations very attractive to companies like his.

“The diversity of the opportunities is where the strength lies,” he said. “We find ourselves on the cusp of a breakthrough for natural gas and oil.”

Chesapeake Energy and its partners will run a 12-inch diameter pipeline to connect the northern and southern portions of its $900 million natural gas processing complex in Harrison and Columbiana counties.

In total, the Oklahoma City-based company plans to lay 200 miles of pipelines across Eastern Ohio in 2012, most of which will be located in Harrison, Jefferson, Columbiana and Carroll counties.

Chesapeake is building the plant with M3 Midstream and EV Energy Partners. Frank Tsuru, president and chief executive officer of M3, also spoke at the conference, highlighting the 12-inch pipeline that will connect the Harrison and Columbiana portions of the major complex.

According to a map on the M3 website, it appears the Harrison County portion of the complex would be built near Scio, while the Columbiana County part would be located near Hanoverton.

The processing facility to be located in Columbiana County will have an initial capacity of 600 million cubic feet per day. Natural gas liquids, via the 12-inch pipeline, will be delivered to a central hub complex in Harrison County that will feature an initial storage capacity of 870,000 barrels. The Harrison County facility also will have fractionation capacity of 90,000 barrels per day, as well as a substantial rail-loading facility, according to Chesapeake.

Chesapeake officials also want to make sure the industry flourishes in Ohio, noting they agree with a comment Gov. John Kasich made during his State of the State speech at Steubenville High School earlier this year.

During the conference, Mark Halbritter, managing director of commercial activities for Dominion Transmission, discussed the company’s $500 million processing complex, which is scheduled to open south of Moundsville by the end of this year. He said a second phase of the plant that would be completed next year could raise the final cost to about $800 million. He said the facility is strategically positioned along the Ohio River so it can process gas derived from the Utica and Marcellus formations.

As for ethane that is derived at the Natrium site, Halbritter said the complex will be able to send ethane to Canada, the Gulf Coast, or to any local ethane cracker, such as the one Royal Dutch Shell plans for Monaca, Pa.

“We expect enough ethane to support both pipelines and up to two crackers,” Halbritter’s presentation states, adding the company anticipates more than 400,000 barrels of ethane will be derived from the Marcellus and Utica shales by 2020.

Jeannie Stell is the editor of Midstream Business magazine, said industry leaders have learned valuable lessons over the past few years of working in the Marcellus and Utica shales.

“It is never too early to start applying for a permit,” she referenced as one of these lessons. A second lesson, Stell added, is that laying pipelines in the sometimes rugged terrain of West Virginia, Ohio and Pennsylvania can be more challenging than doing so in the relative flat country of Oklahoma and Texas.

MATCOR was an active participate and exhibitor at this conference.

SOURCE: http://www.heraldstaronline.com/page/content.detail/id/571616/Pipeline-set-to-link-pair-of-projects.html?nav=5010

TransCanada to Build Texas Segment of Keystone XL Pipeline

TransCanada Corp. will proceed with building a $2.3 billion segment of its Keystone XL oil pipeline from Oklahoma to the Texas coast so that it isn’t delayed by U.S. approval for the rest of the line.

The company, based in Calgary, expects the segment to begin carrying crude from the Cushing, Oklahoma, storage hub to refineries on the U.S. Gulf Coast as soon as mid-year 2013, according to a statement today. TransCanada is separating the Cushing line from its application to President Barack Obama for approval of a Keystone expansion that will bring crude into the U.S. from Canada’s oil sands.

“We remain committed to building this overall project in a timely and efficient manner and to meet demand of shippers,” said TransCanada Chief Executive Officer Russ Girling in an interview today. Shippers are making multi billion dollar commitments spanning decades and “they haven’t wavered from Keystone,” he said.

As originally envisioned, Keystone XL would have carried as much as 830,000 barrels of oil a day from Alberta, Canada, and the Bakken Shale formation in North Dakota and Montana along a 1,661-mile (2,673-kilometer) path to Texas refineries. The full $7.6 billion Keystone pipeline needed a permit from the State Department because it crossed the U.S.-Canada border.

Obama’s Keystone Rejection

Obama rejected Keystone XL in January based on concerns the pipeline might pollute drinking water resources in Nebraska. Obama said a Congressional deadline left him too little time to consider the revised route through Nebraska that the company accepted in November.

As a stand-alone project, the Cushing segment will not need approval from the State Department. The pipeline will help relieve oversupplies that have accumulated in the U.S. Midwest because of a lack of pipeline capacity to carry the oil to refineries on the coast.

Cushing is the delivery point for crude oil traded on the New York Mercantile Exchange. A lack of pipeline capacity between Cushing and the Gulf Coast, where most refineries are located, has caused U.S. oil to trade at a discount to imports.

Obama’s administration supports TransCanada’s plan to build the Oklahoma-to-Texas segment separately.

“Moving oil from the Midwest to the world-class, state-of- the-art refineries on the Gulf Coast will modernize our infrastructure, create jobs, and encourage American energy production,” White House Press Secretary Jay Carney said in a statement today.

‘Near Future’

TransCanada will apply for a permit “in the near future” to build the section from the U.S.-Canada border to Steele City, Nebraska, according to the statement. The company may alter the route in Nebraska, the company said in the statement.

Proceeding with the Cushing section of the line will allow TransCanada to realize income from the pipeline before the full project is built, said Steven Paget, an analyst with FirstEnergy Capital Corp. in Calgary.

“The Gulf Coast Project will transport growing supplies of U.S. crude oil to meet refinery demand in Texas,” Girling said in the statement. “Gulf Coast refineries can then access lower- cost domestic production and avoid paying a premium to foreign oil producers.”

Environmental groups remain opposed to all sections of the pipeline because of concerns about the potential environmental impact of tar-like bitumen known as oil-sands crude.

‘National Interest’

“Whether in pieces or as a whole, the Keystone XL tar sands pipeline is not in the national interest,” Susan Casey- Lefkowitz, director of international programs for the New York- based National Resources Defense Council, wrote in a comment published on the environmental organization’s website. “Raw tar-sands oil going from the Midwest to the Gulf for refining means serious pipeline safety issues for landowners.”

Enbridge Inc. and Enterprise Products Partners LP are preparing to reverse the Seaway pipeline between Cushing and Houston, which will also help alleviate the glut at Cushing. Seaway will be able to carry 150,000 barrels by June 1, and will be expanded to 400,000 barrels by early 2013, the companies have said.

FirstEnergy’s Paget said there’s room for both pipelines, since oil production is growing in the U.S. Also, the full Keystone pipeline will eventually bring much more oil to Cushing, he said.

“The Seaway line’s contracts are independent of Keystone,” said Paget, who rates TransCanada’s shares“market perform” and owns none. “I’m not saying both lines will be full.”

SOURCE: http://www.businessweek.com/news/2012-02-28/transcanada-to-build-texas-segment-of-keystone-xl-pipeline.html