Tag Archives: Pipeline

Pipeline Petroleum Transport Investment May Predict Growing Cathodic Protection Needs

If Warren Buffet’s investment strategy is any indication, pipeline efficiency is going to start playing a bigger role in moving crude oil and natural gas in the United States.

The Berkshire Hathaway luminary is pipeline-efficiency-cathodic-protectionspearheading a swap of about $1.4 billion in shares of Phillips 66 for full ownership of the energy company’s pipeline petroleum transport services business. The business unit’s focus is polymer-based additives that are used to move crude oil and natural gas through pipelines more efficiently by reducing drag.

The shift in Berkshire’s investment strategy comes amid a boom in U.S. crude oil and natural gas production. Since many liquids pipelines in the United States are operating at capacity, producers can use the pipeline petroleum transport additive to quickly increase capacity without immediately growing pipeline infrastructure.

Although future pipeline projects may be in the works to meet the sharp increase in demand, the process of gaining approval for new pipeline projects can be slowed by permitting.

A greater reliance on existing pipelines for transporting liquids means that producers and pipeline owners need to pay even more attention to cathodic protection management, according to Kevin Groll, project management director for MATCOR, a Pennsylvania-based company that specializes in cathodic protection products and services.

“Any time you have pipeline you have to protect it from corrosion,” Groll said. “And that’s especially true when you increase the value of a pipeline by increasing its capacity. If that pipeline were to develop a corrosion problem you’d be facing a situation where your profitability could suffer significantly.”

“With pipeline owners using additives to push greater volumes of liquids it becomes imperative to use cathodic protection products such as impressed current anodes and cathodic protection rectifiers to protect the increased capacity and profitability of the pipeline infrastructure.”

Further Reading

Berkshire Swaps $1.4 Billion in Phillips 66 Stock in Deal,” Bloomberg, December 31, 2013.

Marcellus Shale Production Data Hints at Growing Cathodic Protection Needs

Production from the Marcellus Shale natural gas reserves is expected to exceed 13 billion cubic feet per day this December, nearly seven times the 2 billion cubic feet per day it produced during the same period in 2010, according to a recent report.

The report on Marcellus Shale production data, by the U.S. Energy Information Administration, said the figure would equal about 18 percent of total U.S. natural gas production during the month.

One of the Marcellus Shale companies that’s taking advantage of the natural gas boom is Cabot Oil & Gas Co., based in Houston, which claimed 15 of the 20 highest-producing natural-gas wells in the area during the first half of the year.

According to Dan O. Dinges, Cabot’s chief executive officer, 10 wells from a single well pad in Auburn Township produced enough natural gas in 30 days to meet the average monthly demand of the entire city of Philadelphia.

Cabot plans to increase its Marcellus Shale drill rigs from six to seven in 2013, with each rig capable of drilling 20 wells during the course of the year.

The sharp rise in natural gas reserves production hints at the growing need for Marcellus Shale companies to incorporate pipeline corrosion control equipment like cathodic protection rectifiers into their gas delivery infrastructure, according to Chris Sheldon, who works as utilities practice lead for MATCOR, a Pennsylvania-based cathodic protection company.

“Marcellus Shale companies are experiencing a tremendous upswing in natural gas production and are building new drill rigs and digging new wells to take advantage of the vast natural resource at their feet,” Sheldon said. “That means a lot of new pipes are going to be laid. And more pipes means more opportunities for corrosion.”

“At MATCOR, we’re here to help Marcellus Shale companies, as well as other pipeline companies and natural gas producers, with a full line of advanced cathodic protection equipment, systems and services designed to help them meet their corrosion control needs.”

Further Reading

A Marcellus Natural-Gas Bonanza,” The Philadelphia Inquirer, December 10, 2013.

EQT to Sell Unit to its Midstream Partnership for $540 Million

Natural Gas Company EQT said it will sell its Sunrise Pipeline Unit to EQT Midstream Partners LP for $507.5 million in cash, and $32.5 million of common and general partnership units.

EQT Midstream, controlled by EQT Corp, provides transportation and storage services to EQT, as well as to other companies.

Sunrise Pipeline LLC’s assets include a 41.5 mile pipeline between West Virginia and Pennsylvania, a compression station and an interconnect with the Texas Eastern pipeline in Greene County, OH.

As it adds more capacity to the compressor station, EQT Midstream has also signed an agreement with another producer for about a quarter of the capacity on the Sunrise system. That arrangement is scheduled to begin in December 2014 and when it does, EQT Midstream will pay another $110 million to EQT Corp.

Just over a year ago, EQT Corp. spun out EQT Midstream in a $262.5 million initial public offering. The rationale was to get more money for its exploration and production activities by selling off assets

SOURCE: http://www.reuters.com/article/2013/07/15/us-eqtcorp-eqtmidstream-idUSBRE96E0Y920130715

About MATCOR & its Blog: Cathodically Protected

MATCOR is a leading provider of ISO 9001:2008-certified cathodic protection management and mixed metal oxide anodes. Our cathodic protection contractors and services carry an unmatched 10 year guarantee. MATCOR offers the latest insights on the cathodic and anodic protection industry.

 

New 234 Mile Natural Gas Pipeline Coming to New Mexico

The federal government gave the green light to a proposal to build 234 miles of gas pipeline to transport natural gas liquids from one corner of New Mexico to the other and ultimately to markets in South Texas.

News of the pipeline’s approval encouraged oil and gas developers in New Mexico, which is home to portions of both the Permian and San Juan basins.

“These projects aren’t just built for the conditions at the moment. They’re long-term investments,” said Wally Drangmeister, a spokesman for the New Mexico Oil and Gas Association. “I think it’s a good sign that some investment is going in that will support the state.”

The project will transport natural gas liquid products from northwestern New Mexico to a hub in Hobbs in the southeastern corner of the state and ultimately to Texas.

With production increasing in the San Juan Basin and in the Rocky Mountains, Mid-America Pipeline Co.’s existing system is nearing capacity. Currently, the system can transport about 275,000 barrels per day, but more wells are going into production in New Mexico, Wyoming, Utah and Colorado

SOURCE: http://www.elpasotimes.com/ci_23604968/blm-approves-nm-natural-gas-pipeline-project?source=most_emailed

Williams Partners’ Mid-South natural gas pipeline expansion now in service

Williams Partners LP’s expansion of its interstate Transco pipeline into parts of the Southeast U.S. is completed and in service. the Tulsa-based natural gas transporter announced Monday.

The fuel is going to power generators in North Carolina and Alabama as well as a local distribution company in Georgia. The expansion’s added capacity provides enough natural gas for service to approximately one million homes, Williams Partners estimated in its release.

“This expansion represents another milestone in our build-out of Transco, the nation’s largest gas pipeline system and a significant platform for growth,” Rory Miller, Williams’ senior vice president of the Atlantic-Gulf unit, said in a statement. “We’re executing on more than $1.5 billion in additional Transco expansion projects primarily to create efficient access between the prolific natural gas production areas in the Northeast U.S. to growing demand centers in numerous Southeast and Atlantic Seaboard states.”

The Mid-South Expansion includes about 23 miles of new pipeline, a new compressor facility in Dallas County, Ala., and upgrades to existing compressor facilities in Alabama, Georgia, South Carolina and North Carolina.

Transco is one of three interstate pipelines owned and operated by Williams Partners. The 10,200-mile system moves natural gas from the Gulf Coast to the eastern United States. Tulsa-based Williams Cos. Inc. owns a controlling stake in Williams Partners.

MATCOR is a leading provider of ISO 9001:2008-certified cathodic protection products for the pipeline systems worldwide. Learn more about our services and cathodic protection installation that carry a 10 year guarantee. MATCOR offers the latest insights on anodes for cathodic protectioncathodic protection equipment and more.

SOURCE: http://www.tulsaworld.com/article.aspx/Williams_Partners_Mid_South_natural_gas_pipeline_expansion/20130610_49_0_Willia705646?subj=298

Commission to hear proposal on regional pipeline

AUBURN, Ala. — County officials in eastern Alabama are set to discuss a proposed natural gas pipeline that would cross through parts of Alabama, Georgia and Florida.

Lee County commissioners are scheduled to meet Tuesday night to discuss the proposed project by Sabal Trail Transmission, a subsidiary of Spectra Energy Corp.

Logan Gray, a partner at Southern Strategy Group in Montgomery, is scheduled to give a presentation at Tuesday’s meeting, The Opelika-Auburn News reported.

The interstate pipeline system would cover an estimated 465 miles across portions of the three states, the Opelika newspaper reported.

A report on the project states that the plan is a response to a request for proposals from Florida Power & Light Co. to provide natural gas transportation for its power generation needs by May 2017.

The estimated $3 billion project is currently in the early developmental stage and that FPL would likely award the project by July, according to the report. It also noted that Sabal Trail would seek out community response to the project as well as performing surveys to collect information.

MATCOR is a leading provider of ISO 9001:2008-certified cathodic protection products that project many pipelines across the Gulf Coast region. Learn more about our services and cathodic protection installation that carry a 10 year guarantee. MATCOR offers the latest insights on anodes for cathodic protectioncathodic protection equipment and more.

NextEra Requests Bids to Build Third Gas Pipeline Into Florida

NextEra Energy Inc. (NEE)’s utility Florida Power & Light Co. said it’s requesting bids to build a third natural gas pipeline into Florida to meet growing demand from power generators.

The approximately 700-mile (1,125-kilometer) pipeline would deliver gas from western Alabama to a new hub in Central Florida that would connect to FPL’s gas system in Martin County, the Juno Beach, Florida-based company said today in a statement. The line would deliver about 400 million cubic feet of gas a day starting in 2017, and would increase after that, the company said.

Bids for the project, which will consist of two segments, are due by April 3, 2013, Richard Gibbs, a spokesman for FPL, said today in a telephone interview. The “multibillion dollar” pipeline will need federal, state and local approvals, Gibbs said.

Florida uses more natural gas to produce electricity than any U.S. state other than Texas and 60 percent of the state’s power is generated by gas plants, the company said.

SOURCE: http://www.bloomberg.com/news/2012-12-19/nextera-requests-bids-to-build-third-gas-pipeline-into-florida.html

Alberta’s big small-pipe problem

They are the little brothers and sisters of the pipeline world. Some are barely large enough to jam a hand into, but they do the dirtiest work in the energy business, ferrying great volumes of raw oil and gas from wells to processing plants.

And though they are small, they often carry large risk, an issue of mounting concern in Alberta, a province that has seen a series of spills train a global spotlight on pipeline safety.

These smaller pipes can often be overlooked, next to the big ones that garner attention when they rupture into the Kalamazoo River — an accident that cost Enbridge Inc. a historic $3.7-million (US) fine this week, on top of $725 million in cleanup costs — or at an Alberta pumping station where the company recently had another large spill.

But in Alberta, the pipe is almost all small. Some 327,000 kilometres of pipe that is eight inches and smaller in diameter spread across the province like a network of veins. It is roughly 90 percent of all pipe in the province, a vast web of steel that is uniquely vulnerable to problems, and uniquely difficult to both oversee and maintain.

In large measure, that’s because the stuff those pipes carry is often nasty: impure, unprocessed energy laced with hydrogen sulphide and water and sand, each of which can inflict damage on buried steel. Construction methods of smaller pipes mean they often can’t be monitored and inspected using the best tools. Some of the junior and mid-sized oil and gas companies that run them don’t have the large dedicated inspection teams employed by larger pipeline operators.

Alberta’s energy regulator says problems on small pipes often lead to small spills, dampening the need for concern.

Alberta’s oil and gas regulator, the Energy Resources Conservation Board (ERCB), noted in a 2007 report that “most of Alberta’s pipeline infrastructure is used for the production of raw oil and gas, which by nature can be highly corrosive.” It said corrosion has been growing as a problem — from 63 percent of all leaks and ruptures in a 1998 report to 70 per cent less than a decade later.

And though overall accidents have been declining, last year Alberta saw 1.5 failures per 1,000 kilometres of pipe — or nearly 500 on its length of small lines. That’s down from an average in previous years of 3.5. Many of those spills are small — all leaks, regardless of size, get reported. But the ERCB also doesn’t record spills at pipeline facilities, like pumping stations, where many of them happen. That makes its numbers tough to compare with other jurisdictions.

The risks on small pipes are magnified by the low flows on stretches that might carry intermittent volumes of product from, say, oil tanks to a processing plant. When flow is slow or stopped, water and hydrogen sulphide are better able to corrode pipe. Sediments can also deposit, creating a mud where microbes can begin to eat away steel.

The ERCB played down the effect of corrosive products, which tend to create “pitting corrosion” that leads to “small volume spills (small leaks) that are not a significant safety hazard because they do not catastrophically rupture,” spokeswoman Cara Tobin said in an e-mailed statement.

(Although small pipes can lead to big spills: In December, 2011, 12,000 barrels spilled from a small Pengrowth Energy Corp. line, while 5,000 barrels leaked from a small Pace & Oil Gas Ltd. well pipe in May). The regulator requires surveillance of pipeline right-of-ways, corrosion evaluations, yearly inspections of water crossings and “continues to review and update its regulations and requirements to improve all aspects of pipeline performance,” she said.

Plus, industry has ways to combat corrosion. Pipes can be protected with MATCOR’s “cathodic protection,” products which uses electric current to counteract corrosion.  Cathodic Protection is mandatory in Alberta. They can also be chemically shielded from corrosion, and maintained with pigs, devices that travel inside the pipe, either to scrub it or detect areas of weakness.

But small pipe is often the hardest to “pig.” Worldwide, roughly a third of all pipe is not piggable. Alberta’s ERCB has no figure on what percentage of its pipe cannot accept pigs — and pigging is not required — but it’s likely to be large. Alberta’s pipeline system is made up of an enormous number of very short lengths, averaging just 1.6 kilometres long.

SOURCE: http://www.bnn.ca/News/2012/7/4/Albertas-big-small-pipe-problem.aspx

 

Report about cause of 2010 Mich. oil spill delayed

The release of a federal report detailing the cause of a 2010 pipeline rupture that spilled more than 800,000 gallons of oil in southern Michigan has been delayed.

The report is expected to be released this fall, about six months later than expected, the Kalamazoo Gazette reported (http://bit.ly/zkCAau). The National Transportation Safety Board attributed the delay to other investigations into separate pipeline incidents.

“Our investigations look at numerous aspects that could have played a role in the accident, such as maintenance, human factors, pipeline operations, and materials,” said NTSB spokesman Peter Knudson.

“We’ll also look at the emergency response and environmental remediation efforts to assess how they were handled.”

The report about the July 2010 spill from Calgary, Alberta-based Enbridge Inc.’s pipeline also is expected to offer future safety recommendations for the pipeline industry.

Enbridge said it will be able to finish its internal investigation after the report is released. Company spokesman Jason Manshum said the company is working to take what it’s learned from the spill and share that knowledge.

“We’re focused on applying these lessons in our operations in all locations where we operate,” Manshum said.

Cleanup efforts continue this year. The rupture was to a 30-inch pipeline carrying oil from Griffith, Ind., to Sarnia, Ontario. The oil spilled into the Kalamazoo River and Talmadge Creek near Marshall, about 60 east of Grand Rapids.

Preliminary testing of the ruptured pipe found surface cracks and indications of corrosion. The Enbridge pipeline was installed in the 1960s and is part of a system that was eyed by federal officials prior to the leak.

The Pipeline and Hazardous Materials Safety Administration has said that it warned Enbridge about potential problems including possible safety code violations related to monitoring pipeline corrosion.

SOURCE: http://www.cbsnews.com/8301-505245_162-57359683/report-about-cause-of-2010-mich-oil-spill-delayed/

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