November 2010 Vol. 237 No. 11

The Colorado Oil & Gas Association (COGA) announced Nov. 5 the election of Scott Moore as COGA’s 2011 Chairman of the Board.

A near record enrollment exceeding 135 was announced at the Hilton Houston Post Oak Hotel on Aug. 19 at the summer workshop conducted by the National Association of Pipe Coating Applicators (NAPCA). The association, established in 1965, addresses the mutual concerns of the plant-applied line pipe coating industry and those firms that do business with the pipe coaters.

Advertisers from the print edition of Pipeline & Gas Journal, November 2010, Vol. 237 No. 11.

America's Natural Gas Alliance (ANGA) has named Sarah K. Magruder Lyle as vice president of External Affairs. She will work to cultivate partnerships with local, state and national constituencies to promote ANGA's goal of expanding the use of American natural gas.

<strong>Kinder Morgan Energy Partners</strong> has acquired the assets of Gas-Chill, Inc., a company that manufactures and provides small mechanical refrigeration units (MRUs) for natural gas liquids recovery. The $13 million acquisition allows Kinder Morgan Treating, a subsidiary of KMP, to quickly transport and install MRUs that enable customers to remove natural gas liquids from natural gas streams to meet pipeline hydrocarbon dew point specifications.

Shell Global Solutions (US) Inc. and Praxair, Inc. announced Nov. 4 the introduction of a new technology designed to reduce nitrogen oxide (NOx) emissions from fluid catalytic cracking (FCC) units in refineries. The technology is intended to help refiners address increasingly stringent regulatory requirements while providing operational flexibility and lowering capital and operating costs.

PipeLine Machinery International (PLM) announced Nov. 1 that Gordie Tieberg has taken on the new position of Sales Manager – North America. He joins the management team at PLM and will hold responsibility for the sales team and machine business in the US and Canada.

Growing up in Pennsylvania, there was one thing you were sure of: you had to go elsewhere for a job that paid decently. I grew up in a small town in the once-bustling Lehigh Valley – an industrial powerhouse typified by its biggest employer, the now defunct Bethlehem Steel Corp.

In April, the Mears Group, Inc. completed a design-build project in Jacksonville, FL to allow a regional energy producer to expand its natural gas pipeline to serve new facilities. To complete the project, Mears drilled a 7,400-foot pilot hole at a depth of 130 feet beneath the St. John’s River bottom to install a 16-inch steel pipe.

The 1992 version of the NACE RP0169 cathodic protection standard (CP) for pipelines[1]introduced two criteria involving a minimum potential of -850mV with respect to a saturated copper-copper sulfate reference electrode (cse). The introduction came after about seven years of often rancorous debate between the NACE T-10-1 committee on criteria and some pipeline industry representatives.

Volatility in natural gas prices for the past decade has not only impacted consumers, but also has changed corporate thinking. This volatility in the commercial, industrial, transportation and electric power sectors, in concert with global greenhouse gas (GHG) emissions concerns, has created a paradigm shift in corporate attitude.

<em>Pipeline & Gas Journal</em>’s 30th Annual 500 Report is the industry’s most comprehensive statistical review of U.S. energy pipeline systems. As in past years, the report ranks the nation’s top gas distribution, liquids and gas transmission systems. Transmission companies are ranked by mileage while the rank of each liquids pipeline company is based on yearly crude deliveries. The gas distribution rankings are based on number of customers.

Although natural gas has not received the favorable attention given to renewable energy sources in federal energy policy, it continues to prove itself as a clean and reliable domestic energy source. The positive outlook for domestic natural gas production demonstrates this. The U.S. Energy Information Agency (EIA) says domestic natural gas production in 2009 was the highest since 1973, and proved reserves of natural gas have grown significantly in the last several years.

With tens of thousands employed directly in the pipeline industry, and an associated total of more than 9 million jobs supported by the overall oil and gas industry, ongoing recruitment of professionals and management is no small task. In many ways, the challenge has always been intensified by wide-ranging geographical locations, typically remote and even hostile, where skilled pipeline personnel are required on an ongoing basis.

PetroChina Pipeline R&D Center has developed an environmental impact assessment model called the 3F Model for oil and gas pipelines. The name is an abbreviation for Flood-Flow-Forecast (3F). The Flow sub-model, as a part of 3F Model, is used to identify the oil leak paths and evaluate their impact on rivers or seas. The Flow sub-model is based on DEM, and some factors, such as soil absorption and evaporation, are also considered.

Merger and acquisition (M&A) activity in the U.S. oil and gas sector reached its highest level in more than six quarters during the second quarter 2010, according to PricewaterhouseCoopers LLP (PwC). With improved credit markets and buyer-seller expectations finally aligning, coupled with increased CEO confidence and stabilized commodity prices, the U.S. oil and gas sector saw a total of 142 announced deals in the second quarter – the highest volume for deals seen since the third quarter of 2008, when the total numbers of announced deals was 190, according to PwC.

Russia, the world’s top producer and exporter of natural gas, is spearheading Gas Exporting Countries Forum’s (GECF) efforts to inflate its profile and mission amid a global gas glut. Russia and fellow member countries Iran and Qatar form a troika that controls over half of global reserves. The troika is looking to extend trilateral cooperation and wants to ensure gas prices are vulnerably linked to those of oil.

"Be Prepared!” Good motto for Boy Scouts and everyone else! On April 20, the BP Deepwater Horizon offshore rig caught fire. Eleven workers were killed, the rig in a few days was lost and the greatest environmental disaster to date was started. Now, roughly six months later, there are still many questions yet to be answered. What can we say about the calamity?

With the proposed cap and trade bill definitively dead as Republicans retake the U.S. House of Representatives, President Obama spoke Nov. 3 about possible areas for bipartisan cooperation, including energy policy that increases national focus on natural gas.

Congress may vote during the lame duck session after the November elections on the biggest pipeline safety bill since the 2002 amendments established integrity management programs for distribution, transmission and hazardous liquid pipelines. Then again, a major reform bill may be delayed until the next Congress.

ACON Investments and TPG Capital signed agreements with Marathon Oil Corporation’s wholly owned subsidiary Marathon Petroleum Company LP to pay $900 million to acquire the majority of Marathon’s Minnesota downstream assets. TPG Capital and ACON Investments will form a new company, Northern Tier Energy LLC to operate the assets.

NiSource Gas Transmission & Storage (NGT&S) and MarkWest Liberty Midstream & Resources, L.L.C., and The Energy & Minerals Group, have begun operations of jointly developed natural gas gathering, processing, and transmission projects in Majorsville, WV.

Denali - The Alaska Gas Pipeline concluded its open seasons on Nov. 5 for the U.S. and Canadian portions of the Denali Project. Both open seasons were conducted for 90 days. "After two years of work, more than 700,000 man-hours and more than $150 million of private investment, I can report that Denali has received bids for significant capacity from potential shippers," said Bud Fackrell, Denali President.

EagleBurgmann Industries L.P. - a global manufacturer of mechanical seals, systems, packing and expansion joints – announced plans Oct. 7 for a new facility designed to meet increasing demand from their increasing U.S. customer base.

Enterprise Products Partners L.P. has entered into agreements with Anadarko Petroleum Corp. to provide natural gas transportation and processing, and natural gas liquids fractionation and transportation services that will facilitate Anadarko’s growing liquids-rich natural gas production in the prolific Eagle Ford Shale in South Texas.

Dallas-based ETT announced E-Select Systems’ CA Series, a new line of hybrid compression technology that offers the benefits of a natural gas-driven engine coupled with an electric-powered motor. E-Select’s CA Series, in development, will feature the Caterpillar natural gas engine and the Ariel compressor.

GE announced on Oct. 6 the purchase of Dresser, Inc. for $3 billion. The addition of Dresser’s portfolio, which includes technologies for gas engines, control and relief valves, measurement, regulation and control solutions for gas and fuel distribution, will extend GE’s reach into adjacent offerings for its energy and industrial customers worldwide.

Gulf Coast Fractionators, a partnership among ConocoPhillips, Devon Energy and Targa Resources Partners, will expand the capacity of its natural gas liquids fractionation facility in Mont Belvieu, TX. The maximum gross fractionation capacity of the facility will be expanded 42% (43,000 bpd) to 145,000 bpd. Targa Resources Partners owns a 38.8% interest in Gulf Coast Fractionators.

Koch Pipeline Company, L.P. and Arrowhead Pipeline, L.P. will move more Eagle Ford crude via the Arrowhead Pipeline to Corpus Christi following a recent agreement and joint tariff. “This agreement with Arrowhead is one of several projects to expand the joint capabilities of our pipelines in South Texas,” said Kim Penner, president of Koch Pipeline.

Northwest Natural Gas Company earned the highest overall score in the western U.S. among large utilities, according to the 2010 J.D. Power and Associates Gas Utility Residential Customer Study. NW Natural also received the highest score in the nation.

Ryckman Creek Resources, LLC, a wholly owned subsidiary of Peregrine Midstream Partners LLC, held a non-binding open season for prospective customers interested in contracting for up to 15 Bcf of firm, high-deliverability, multi-cycle (HDMC) gas storage capacity in Uinta County, WY near the Opal Hub. The open season began Oct. 6 and concluded Nov. 1.

SemCrude®, L.P., reported the sale of ownership shares of White Cliffs Pipeline®, L.L.C. to Samedan Pipe Line Corp. and Anadarko Wattenberg Company, LLC, a subsidiary of Western Gas Partners, LP. Noble Energy and AWC notified SemCrude of their intention to exercise their option to increase their ownership in White Cliffs Pipeline. The purchase price of $141 million may be adjusted upward.

Engineers at Southwest Research Institute have completed testing of a high-pressure turbo pump and an enhanced compressor design for sequestration of carbon dioxide emissions from pulverized coal, integrated gasification combined cycle (IGCC) and oxy-fuel power plants.

Joint shareholders in the Trans Adriatic Pipeline (TAP) have indicated that the Shah Deniz II natural gas field in Azerbaijan is the initial target of gas intended for the project.

According to a new report from BENTEK Energy, LLC, Canadian producers face serious challenges as the continued growth of unconventional natural gas supplies and newly added pipeline infrastructure in the U.S. push Canadian imports out of the U.S. market. "<a href="http://www.bentekenergy.com/FCSRubyBigSqueeze.aspx">The Big Squeeze: Ruby, Canada and Marcellus</a>" examines the broad displacement of Canadian imports and its impact on the North American natural gas market, which will ultimately lead to curtailments in Canadian production.

Although the contractor that will build a 77-mile crude oil pipeline for Bridger Pipeline LLC in North Dakota has not yet been announced, construction was slated to commence in the first week of October on the project that recently received approval from the state Public Service Commission.

Dominion announced its natural gas transmission and storage subsidiary, Dominion Transmission, has reached a 10-year lease agreement with Tennessee Gas Pipeline Company for firm capacity to move Marcellus shale natural gas supplies.

Ecopetrol is looking for partners to help build its proposed Bicentennial Pipeline – a 1,545- km oil pipeline, which will run from the Casanare to the port of Coveñas, Colombia. Pacific Rubiales Energy Corp. and Petrominerales Ltd. are among those interested in the project.

Enbridge Inc. will spend $185 million to expand its Athabasca Pipeline to handle crude from the Christina Lake oilsands project operated by Cenovus.

ENSTOR has announced expanded storage capacities at two of its U.S. gas storage facilities: Caledonia in Lowndes County, Mississippi, and Grama Ridge in Lea County, New Mexico.

Excelerate Energy L.P. recently announced the signing of a Term Sheet with a consortium formed by Argentina’s ENARSA S.A. and YPF S.A. to develop a second Argentine LNG importation facility in Escobar, 30 miles north of Buenos Aires.

Energy Transfer Partners announced Nov. 8 that two major interstate pipeline projects are expected to be in service ahead of schedule and significantly under budget. The 175-mile ETC Tiger Pipeline and the 185-mile Fayetteville Express Pipeline are both anticipated to be in service on December 1, 2010.

India's Punj Lloyd Group has won a US$121 million contract from the state-owned gas utility GAIL India for laying a natural gas pipeline from Dabhol to Bangalore.

Meritage Midstream Services and Swift Energy Company have agreed to provide natural gas gathering and treating services in the Eagle Ford shale region of South Texas.

Iraq and Syria have reached an initial agreement to build three major pipelines across their borders to carry Iraqi crude oil and gas to Syria's port of Banias on the Mediterranean Sea.

Ryckman Creek Resources, LLC, a gas storage project owned by Peregrine Midstream Partners LLC, has concluded its non-binding open season for firm natural gas storage service at its proposed high-deliverability, multi-cycle (HDMC) natural gas storage facility in Uinta County, Wyoming.

Southcross Energy announced Nov. 3 that the company is constructing an eight-mile, 12-inch-diameter natural gas pipeline in Jones County, Mississippi.

Spectra Energy recently held an open season to confirm customer requirements for additional transportation service on its Transportation North (T-North) natural gas transmission facilities in northern British Columbia (BC).

At the time of P&GJ’s deadline, the Golden Pass LNG terminal in Port Arthur, TX was awaiting the delivery of its first cargo to be used for commissioning. The cargo is scheduled to arrive from the Port of Ras Laffan in Qatar aboard a Q-Flex LNG tanker, one of the largest LNG carriers in the world.

TexStar Midstream Services LP is expanding its 125-mile low pressure gathering system in Frio and LaSalle counties in Texas in order to handle future expected Eagle Ford and Buda gas volumes.

When it comes to gas measurement, the technology is as varied as the multitude of challenges that face this important sector of the utility industry. Winston C. Meyer is a well-known gas measurement guru who plies his trade with CenterPoint Energy in Houston. Because his job involves integrating technology and bringing advancements to gas measurement, Meyer has been active with manufacturers and industry associactions for more than 30 years. He is now focused on electronic instrumentation for gas supply needs, loss and unaccounted-for reporting efforts, technician training, automated meter reading and resource management.

The advantages of utilizing a qualified and knowledgeable field right-of-way agent on pipeline integrity projects can sometimes be overlooked. A right-of-way agent with a firm foundation in pipeline integrity can be a valuable asset to inspectors and constructions crews whose jobs too often expand into dealing with issues that otherwise should be handled by a right-of-way agent.

The U.S. Energy Information Administration released new short-term outlook figures Nov. 9, predicting some changes in prices and conditions in the energy market. The report projects that the price of West Texas Intermediate (WTI) crude oil will average about $83 per barrel this winter (October 1 to March 31), a $5.50-per-barrel increase over last winter and $3 per barrel more than in last month’s outlook. Other highlights of the report include:

On November 15, Energy Solutions, Inc. published its most recent educational analysis, <em>Natural Gas Price Outlook</em>. President Valerie Wood provided a summary of the contents: "Natural gas prices are at eight-year lows, and plentiful supplies have caused some analysts to predict sub-$5 natural gas prices as far out as 2015. If one is looking solely at supply and demand, that forecast may be relevant. But today, the price of natural gas is about so much more than just supply and demand.

Enterprise Products Partners L.P. announced Nov. 19 that it has acquired out of bankruptcy a Houston Ship Channel facility previously owned by Bigler LP that produces high-purity isobutylene (HPIB) and provides terminal services for refined products and petrochemicals. The plant, which was purchased for $38.5 million, has the capability to produce more than 300 million pounds of HPIB annually, a substantial portion of which is under contract.

Cameron says its Scanner 2200 Flow Computer helps make gas, liquid and steam measurement easy to afford, operate, integrate and optimize.

CRC-Evans Automatic Welding is introducing a new generation welding system incorporating laser vision welding and inspection technology.

The Lincoln Electric Company has enhanced its Vantage® 500 engine-driven welder with a new model in a compact case.

Mobis Energy offers a flyer devoted to the Cold Weather Technology (CWT) natural gas line heater. The flyer says the CWT line heaters use energy release of steam created during the change of state to ensure a safe and reliable source of process heat.

NIMTech Inc. offers a flyer spotlighting its SonicGauge™ non-invasive ultrasonic technology to simultaneously measure multiple properties of a substance flowing through a pipeline.

T.D. Williamson, Inc. recently announced the rollout of a 48-inch gas magnetic flux leakage (GMFL) inspection tool, engineered at the TDW facility in Salt Lake City, UT.

Valves and valve operators from Cameron Valves & Management, Flowserve Corp., Dresser, Inc., US Valve Services and Training, Rupture Pin Technology, AnTech Ltd., R.W. Lyall and Polytec Co., Dresser’s Mooney, Flowserve Nordstrom, Leser, LLC, Siemens, Specialty Maintenance Products and CECO.