Category Archives: Refinery

Motiva Reports Work to Repair Pipe Corrosion at Port Arthur Refinery


Motiva Port Arthur Refinery will perform maintenance to remedy previously announced corrosion issues at some of the piping throughout the plant’s fuel gas system, according to a report filed with the Texas Commission on Environmental Quality.

Compressors at the West Side Gas Plant have already been removed and the filing, made public this week, said the company will temporarily place in service three replacement compressors. The use of these compressors could result in emissions and Motiva submitted the filing out of an abundance of caution, the report said.

Motiva submitted a similar notification for the compressors on April 23 and this follow-up was submitted because the maintenance work identified in the prior notice has not been completed.

The piping maintenance didn’t interfere with the commissioning of Motiva’s newly constructed 325,000-barrel-a-day crude distillation unit at the Port Arthur refinery last week. Crude oil processing rates reached about 80% of capacity, or about 500,000 barrels, before the new crude unit was shut, unplanned, on Monday to repair leaking valves.

The Port Arthur refinery has the capacity to process up to 600,000 barrels of crude oil a day.

A Motiva representative wasn’t immediately available to comment and typically doesn’t address day-to-day refining operations.

Motiva is a joint venture between Royal Dutch Shell PLC (RDSA, RDSA.LN, RDSB.LN) and Saudi Aramco.


Pittsburgh-area site is chosen for major refinery

Shell Oil Co. has chosen a site near Pittsburgh for a major, multi-billion-dollar petrochemical refinery that could create thousands of construction jobs and provide a huge economic boost to the region.

Dan Carlson, Shell’s General Manager of New Business Development, said Thursday that the company signed a land option agreement with Horsehead Corp. to evaluate a site near Monaca, about 35 miles northwest of Pittsburgh.

The so-called ethane cracking, or cracker, plant would convert ethane from bountiful Marcellus Shale natural gas liquids into more profitable chemicals such as ethylene, which are then used to produce everything from plastics to tires to antifreeze.

The plants are called crackers because they use heat and other processes to break the ethane molecules into smaller chemical components. A cracker plant looks very similar to a gasoline refinery, with miles of pipes and large storage tanks. The final complex could cover several hundred acres.

Ohio, West Virginia and Pennsylvania had all sought the plant and offered Shell major tax incentives. Monaca is about 15 miles from both the Ohio and West Virginia borders, so workers in all three states are likely to benefit.

Shell has said that it could spend several billion dollars to build the plant, and that the complex would attract a wide range of industry and suppliers to nearby locations. But actual construction is still years away. The company said the next steps are environmental and design studies and further economic analysis, then permits.

One lifelong resident of the Pennsylvania township almost broke down on hearing the news.

“Oh my God. It makes me want to cry. That’s just the best news,” said Christie Floyd-Gabel, Potter Township’s secretary.

It’s also an unexpected turn for Horsehead’s zinc factory on the banks of the Ohio River, which is currently operating. In September the company announced plans to shut the factory by 2013 and relocate to North Carolina, along with most of its 600 workers.

“That was a major loss,” Floyd-Gabel said of Horsehead’s plans to depart, adding that’s it’s amazing that another major corporation may come in to replace Horsehead.

Ali Alavi, a Horsehead spokesman, said the company would have to vacate the over 300-acre site by April 30, 2014, under the terms of the option agreement with Shell.

Shell said the Horsehead site had the mix of resource and transportation attributes “to accommodate facilities for a world scale petrochemical complex and potential future expansions.”

The American Chemistry Council, in a report last year, estimated the new petrochemical complex could attract up to $16 billion in private investment. Shell estimated the core plant could employ several hundred people and create up to 10,000 construction jobs.

Gov. Tom Corbett said at a press conference that the plant could lead to the “renewal of a significant manufacturing base in southwestern Pennsylvania,” but cautioned that the announcement is “the first pitch in a nine-inning game.”

If the plant is built, Shell would be able to supply it partly with gas from its own wells, giving it more control over supply and costs. The company paid $4.7 billion in 2010 for drilling rights to about 650,000 acres in the region.

That also means that Shell could benefit even from the low wholesale prices that have worried some gas drillers, since a cracker plant’s raw material costs would be lower.

Labor leaders welcomed the announcement.

Frank Snyder, secretary-treasurer for the Pennsylvania AFL/CIO, said it represented “some of the most positive economic news for the working families of western Pennsylvania in over a generation.”

“Indeed, all of Pennsylvania can have hope this spring in the anticipated partnership between a world class workforce and a world class business,” said Snyder.

Shell’s choice may also represent an indication of just how strongly the industry feels about the vast gas reserves in nearby underground shale rock formations, given the multi-billion dollar commitments it has made. Carlson told The Associated Press that any plant must be economically competitive with existing cracker plants in Louisiana and Texas, and even with international plants.

The Marcellus Shale, which lies thousands of feet underground, has attracted a rush of major oil companies, who have drilled almost 5,000 new wells in the last five years. The Marcellus covers large parts of Pennsylvania, New York, Ohio and West Virginia, and drillers have also started to tap the adjacent, deeper Utica Shale formation.

Ohio and West Virginia officials had made all-out efforts to attract the plant. Last year West Virginia Commerce Secretary Keith Burdette said, “We intend to compete with the last breath in our body to attract one or more crackers,” and both West Virginia’s and Ohio’s governor flew to Houston to meet with Shell officials.

West Virginia offered to slash property tax rates for 25 years in exchange for at least $2 billion worth of investment. Pennsylvania offered 15 years of tax breaks and Ohio also reportedly courted Shell with major incentives.

Corbett said he can’t disclose the full details of the tax breaks Shell has been offered because of a confidentiality agreement, and because negotiations are continuing.

George Jugovic, president of the environmental group PennFuture, said it’s still researching the possible impacts of a cracker plant.

Several other companies are also reportedly considering building similar petrochemical plants in the region.


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.”


MATCOR’s SPL Linear Anode Proves Ideal for Retrofit Project

MATCOR's SPL Linear Anode
MATCOR SPL–Anode is placed close to the piping to be protected, and operates at low current levels, reducing potential loss to nearby grounding systems

Arkema is a world class producer of industrial chemicals, but its King of Prussia, PA Research and Development facility looks more like a college campus building than your typical industrial facility.  And yet, like any industrial facility, the site has buried utility piping that is subject to external corrosion.  

When the facility experienced steam piping failures, they called in MATCOR to evaluate their corrosion risk and make suitable recommendations to prevent future leaks.

After a preliminary engineering investigation, MATCOR recommended installing our SPL-FBR linear anode.  The linear anode was ideally suited for this application because of limited site accessibility, the presence of nearby grounding, poor piping isolation, the mix of coated piping with bare steam piping, and the need for uniform current distribution along the high temperature bare steam piping.  The linear anode was installed in stages as Arkema had to excavate the steam piping in multiple locations for inspection and repairs.

MATCOR’s SPL–Anode is an ideal solution for many plant environment retrofit applications.

When placed parallel to plant piping, the SPL Anode can be installed with minimal excavation while assuring even current distribution along the entire piping route.  Unlike many point anode ground bed systems, the linear anode operates at relatively low current densities and is placed in close proximity to the piping to be protected.  This reduces potential losses to nearby grounding systems and eliminates the need for isolation of plant piping. This make the linear anode a great solution for many plant piping applications such as compressor stations, power plants, petrochemical facilities, and even campus facilities such as the Arkema’s King of Prussia R&D facility.

Oil spill brings calls for scrutiny of small lines

HELENA, Mont. (AP) — A northwestern Montana oil spill that went unreported for a month has led to calls for increased scrutiny over the thousands of small flow pipelines within the nation’s oil and gas fields.

Flow lines are completely contained within the fields and pipe unprocessed oil, gas and water from wells to holding tanks and separating facilities and aren’t regulated like larger pipelines, such as the one that broke under the Yellowstone River earlier this month.

But flow lines often face the same issues of corrosion and defects, and should fall under the same federal regulation as larger transmission pipelines, conservation advocates say.

“They’re unregulated lines and they periodically have nasty spills,” said Lois Epstein, engineer and Arctic program director for The Wilderness Society in Alaska. “It’s a problem. Whether there is any motivation to do anything about it, is where we’re at right now.”

The broken line at the Cut Bank oil field on the Blackfeet Indian Reservation 50 miles east of Glacier National Park may have been slowly leaking oil for up to two weeks before FX Energy Inc. discovered it on June 12. FX Energy officials attributed the break to shifting ground during last month’s heavy rain and flooding.

The Salt Lake City-based company fixed the break and shut down the two small oil wells that fed the line, but never reported it to the tribe or the Bureau of Land Management, which oversees the tribe’s mineral leases.

The spill — estimated to be up to 840 gallons — then spread nearly a mile down a steep coulee and into the Cut Bank Creek before a neighboring landowner discovered the stained ground on July 12.

A cleanup crew has been digging oil by hand from the steep, treacherous ravine for more than a week. There have been no signs of wildlife affected by the spill.

The company is paying for the cleanup and has pledged to permanently plug the wells that fed the broken line. Grinnell Day Chief, the tribe’s oil and gas director, said the company has been very cooperative.

FX Energy is one of the largest of the 15 oil and gas companies with production or exploration leases on the Cut Bank field. Combined with its five wells at Bears Den field and a small interest in two wells at Rattlers Butte field, FX Energy leases a total of 10,732 acres in Montana and produces 184 barrels of oil per day.

The broken flow line is one of many that gather oil from FX Energy’s 125 wells on the declining field, which has been producing oil since the 1940s. Many of the 4-inch flow lines are 40 or 50 years old, said Don Judice, the BLM’s Great Falls supervisor.

Because the failed line only carried unprocessed oil from wells to a central tank and never left the oil field, there were no requirements to inspect it, test it for corrosion or perform any preventative maintenance to ensure it doesn’t break.

“Only when a pipeline is used for longer-range transportation does it get more scrutiny,” Judice said. “There’s not a requirement within the regulations for the testing of flow lines.”

But depending on the outcome of an investigation into the recently discovered spill, federal officials may require FX Energy to upgrade all of the aging flow lines that carry oil from the wells to tanks on the Cut Bank field, Judice said.

It was not immediately clear how many flow lines there are, since the lines generally gather oil from more than one well. Judice and Day Chief each said they recalled only one other significant spill from a flow line in the past decade.

Day Chief said another oil company that leases a different part of the sprawling field is already in the process of voluntarily upgrading all of its flow lines. He said the tribe hasn’t discussed recommending a similar remedy for the FX Energy itself, but would support the BLM if it required FX Energy to do so.

“We would back that 100 percent,” Day Chief said.

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