Tag Archives: ExxonMobil

Genesis Energy to construct new infrastructure for Baton Rouge Refinery

US-based midstream company Genesis Energy has announced its plans to invest $125m to expand its existing infrastructure and construct new assets to connect into Exxon Mobil’s Baton Rouge Refinery in Louisiana.

The refinery with a capacity of 500,000 barrels per day (bpd) is one of the largest refinery complexes in North America.

The company will improve its existing terminal at Port Hudson, Louisiana and build new 29km long 20in diameter crude oil pipeline to connect the port to the Maryland Terminal and to the Anchorage Tank Farm.

The new pipeline is expected to have a capacity of about 350,000bpd and will also have the potential to access other local refineries representing about 140,000bpd.

Genesis Energy chief executive officer Grant Sims said the company is planning to expand its operations in the state of Louisiana.

“This project positions Genesis as an efficient conduit for crude oil supply and logistics in the region,” Sims added.

Genesis Energy also has plans to build a new crude oil unit train facility at the Baton Rouge Maryland Terminal.

The company is also planning to build a storage capacity of 200,000 barrels to complement its 216,000 barrels of existing tank capacity, apart from improving the truck station and barge dock.

Project work is scheduled to begin early in 2013, while upgrade, expansion, and completion work at the Port Hudson and new crude oil pipeline is expected to be completed by the end of 2013.

The Maryland Terminal completion is scheduled for the second quarter of 2014.

SOURCE: http://www.genesisenergy.com/assets/_Investors/Press_Releases/2013-02-04.pdf

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.

Regulators weigh more rules for natural gas pipelines

(Reuters) – U.S. regulators sought public input on Wednesday about the need for increased oversight of the country’s natural gas pipelines, as part of a push to strengthen safety after several deadly accidents.

The U.S. Transportation Department asked for comments about whether certain regulatory exemptions for pipelines built before 1970 should be eliminated and whether rules regarding pipeline integrity should be expanded.

“Incidents with significant consequences continue to occur on gas transmission pipelines, and this action will help us determine whether new requirements are needed to increase safety,” Cynthia Quarterman, head of the department’s pipeline oversight agency, said in a statement.

A 2.5-million-mile (4-million-km) network of pipelines crisscrosses the United States, carrying everything from crude oil to natural gas to refined products such as gasoline and jet fuel.

The department launched an oil and gas pipeline safety initiative in April after a series of high-profile accidents in the country’s aging web of pipelines.

An explosion on a natural gas pipeline operated by UGI Utilities killed five people this past February in Allentown, Pennsylvania, while a blast on a PG&E Corp line in California last year killed eight people.

Many pipelines date to the 1960s or earlier and old lines are rarely retired. The overall length of active U.S. pipelines has grown more than 20-fold since the 1920s.

As part of its safety push, the department is also asking for feedback about the need to reduce operating pressure for some pipelines that are more than 40 years old.

Pipeline safety has actually improved sharply over the past 20 years. But from 2006 through 2009 U.S. oil and gas pipeline accidents killed 56 people, caused $1.2 billion in property damage and spilled 381,000 barrels of oil, government data shows.

Recent oil spills from TransCanada’s Keystone pipeline, as well as Exxon Mobil’s Silvertip line, have also raised concerns about the environmental risks posed by crude oil pipelines.

Earlier this year, the Senate commerce committee approved legislation that would raise fines against reckless operators of petroleum and natural gas lines and require automatic shut-off valves to prevent oil spills and gas explosions.

SOURCE: http://www.reuters.com/article/2011/08/25/us-pipelines-usa-natgas-regulations-idUSTRE77N6MZ20110825

Oil industry, under pressure, vows pipeline safety boost

U.S. and Canadian not-for-profit groups said on Tuesday that they’re conducting a “comprehensive” joint study to improve pipeline safety.

The effort follows several notable accidents over the last two years, and comes as oil companies are pressing the Obama administration to approve a major pipeline linking Canadian oil sands projects to Gulf Coast refineries.

In a statement, six industry not-for-profit groups said the study will “explore safety models and procedures currently utilized by other industry sectors in an effort to deliver natural gas and pipeline-transported liquids more safely and reliably.”

“The collaborative group is committed to promoting positive safety cultures throughout the industry and hopes that by learning from others, the energy pipeline industry can identify and implement a model that will measurably improve pipeline system safety,” the trade groups said jointly.

The groups are:

Pipeline safety is drawing increased scrutiny following the ExxonMobil pipeline break this summer that released an estimated 42,000 gallons of oil into Montana’s Yellowstone River.

An Enbridge pipeline spilled roughly 800,000 gallons into the Kalamazoo River last summer, and a September gas pipeline explosion in San Bruno, Calif., killed eight people.

A TransCanada oil pipeline has suffered leaks in Kansas and North Dakota this year. The company is seeking State Department approval to build a separate, 1,700-mile pipeline — called Keystone XL —  from Alberta, Canada’s oil sands projects to Texas.

Industry groups and many GOP lawmakers are backing the project, but environmentalists are lobbying the Obama administration against it. Secretary of State Hillary Clinton said last week that Keystone XL, if approved, would operate under tougher safety standards than the law requires.

SOURCE: http://thehill.com/blogs/e2-wire/677-e2-wire/176105-oil-industry-under-pressure-vows-pipeline-safety-boost-

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

Montana governor reviewing oil, gas pipeline safety

Earlier this week Montana Governor Brian Schweitzer  said authorities will review safety of all oil and gas pipelines that cross waterways in the state and close those that did not meet standards.

“We’ll make the decision over the next couple of days whether to shut off some pipelines,” Schweitzer told Reuters in a telephone interview. “The last thing I want is for another pipeline to break.”

Schweitzer said he made the move after a spill early Saturday from an Exxon Mobil pipeline released into the rain-swollen Yellowstone River near Billings up to 1,000 barrels of oil, or 42,000 gallons.

Schweitzer said the pipeline inspections — the second round he has called for in as many months — will assess the risk of ruptures and leaks in 88 sections of pipeline that cross rivers and streams in the state.

The review will gauge factors including the pipelines’ age, thickness and corrosion, and the condition and operation of all shut-off valves.

Exxon Mobil Corp (XOM.N) said on Monday that the spill appeared to be concentrated within a 15-mile stretch of the river between Billings and the nearby town of Laurel, although Tim Thennis, Montana Disaster and Emergency Services duty officer, said he had received reports of oil near the community of Hysham, about 75 miles downstream from Billings.

Gary Pruessing, the president of the company’s pipeline unit, said Exxon still did not know the cause of the leak that spilled oil into the river and added that it may change the way it conducts pipeline safety reviews.

“This will give us additional information to think about when we consider doing risk assessments on any line that has a river crossing anywhere in the country,” Pruessing said during a news conference in Laurel, Montana.

By Monday afternoon, Exxon had received 71 calls from nearby residents asking questions or reporting damage from the spill.


The spill came just weeks after the company shut down the pipeline in May after the city of Laurel had safety concerns due to the rising levels of the river from rain and runoff.

“At the time we shut down the line … and went down and did a further risk assessment to make sure the site, based on technical knowledge we had, was something we’d feel comfortable to run,” Pruessing said. “We restarted the line feeling like we had a safe operation.”

The U.S. pipeline safety regulator weighed in on the spill on Monday, saying it had warned the company about problems with the pipeline and had begun its own investigation.

“Inspectors are on site and have initiated an investigation into the cause of failure,” said a spokeswoman with the Transportation Department’s Pipeline and Hazardous Materials Safety Administration.

After inspecting the pipeline in July 2009, PHMSA issued a warning letter to Exxon a year later about oil leaking from some of the valves on the pipeline.

The agency said the valves did not have a means for clearly indicating whether they were open or closed. “There was fresh crude oil on the soil immediately adjacent to the valves,” PHMSA said in its warning letter.

It also faulted Exxon for not following up in a timely manner on atmospheric corrosion issues that were identified during three years of corrosion surveys on the pipeline.


As Exxon fielded a team of 200 workers to mop up oil using absorbent booms and pads, the first reports on Monday came in of a resident downstream on the Yellowstone River sickened by the spill.

Mike Scott, co-owner of a goat ranch inundated by the rupture, said his wife, Alexis Bonogofsky, was briefly hospitalized Monday after suffering from what doctors diagnosed as acute hydrocarbon exposure, a condition linked to exposure to petroleum chemicals.

“She started getting shortness of breath, dizziness; we took her to the hospital and they took an X-ray,” said Scott, who also works for the Sierra Club, an environmental group.

Medical staff declined to discuss the diagnosis, citing patient confidentiality.

The Yellowstone River, the longest undammed river in the United States, is renowned for its trout fishing and bird life.

A team of six experts from International Bird Rescue began arriving in Montana on Sunday to work with state and federal wildlife agencies to coordinate the rescue and rehabilitation of birds tarred by the spill.

“There is definitely concern, there is a wonderful riparian habitat there,” said Amy Cilimburg of the Montana Audubon Society.