April 2011 Vol. 238 No. 4

Advertisers from the print edition of <em>Pipeline & Gas Journal</em>, April 2011, Vol. 238 No. 4.

Contract Land Staff has moved its corporate headquarters from Stafford, TX to nearby Sugarland, TX, becoming the anchor tenant of a new building in the City Walk development.

IMV Projects, a Wood Group company, today announced that a strategic hiring initiative has resulted in the recruitment of more than 100 professionals at the company’s Calgary headquarters since the start of 2011.

Joe Voerding, of Boulder City, NV and a long-time employee of Cashman Equipment, passed away April 7, 2011 at the age of 62.

Vectren Corporation acquired Minnesota Limited, Inc. March 31 in a strategic move to grow Vectren's infrastructure services business segment. Minnesota Limited will join wholly owned subsidiary Miller Pipeline in Vectren's infrastructure services group.

A deal to merge Wood Group’s Production Facilities business with PSN was completed on April 20, 2011. The merger creates the world’s leading brownfield service provider with annual revenues of around US$3 billion and a 23,000 strong workforce operating in more than 35 countries.

I’m going to let you in on a little secret: energy is a dangerous business. Whether laying pipeline in the hinterlands of America or the streets of Philadelphia, drilling in the Gulf of Mexico, coal mining beneath the state of West Virginia or staring at the controls of a Japanese nuclear reactor frantically trying to stem a radioactive breach after Mother Nature’s apocalyptic double-header, the energy business is fraught with unexpected danger. No one can anticipate every possible problem.

The Offshore Technology Conference (OTC) 2011, the world’s largest offshore exhibition and conference, will get under way in Houston’s Reliant Park, May 2-5.

Last year was a historic one for the North American oil and gas industry, marked by the discovery and expansion of a multitude of oil and gas shale plays, the doubling of North American proven gas reserves, a blowout in the Gulf of Mexico that lasted months to become the worst environmental disaster on record, and new (or threatened) rules and legislation that would constrain hydraulic fracturing, offshore permits, and derivatives trading and hedging.

Dave Thompson’s search for the best non-contact flow meter for really challenging liquids began at Freeport LNG’s natural gas storage facility on Oyster Creek on the Texas gulf shore.

To continue to improve service and maintain regulatory compliance, EQT successfully completed an overhaul of its maintenance and work management program involving pipeline assets to gain greater visibility of the work order process.

There is a growing need for availability of accurate data for gas distribution utilities to help devise programs that maintain and operate pipeline assets. For example, distribution integrity management program (DIMP) regulations require gas distribution utilities in the United States to be able to 1) know the risks in their system, 2) identify various threats in the system, and 3) be able to mitigate the same. Having an effective pipeline leak management process along with supporting IT systems will help cater to the regulatory requirements and also maintain a safe and reliable gas distribution system.

I’ve always wondered, why do men and women enter the pipeline business? Some would say it’s a special calling, vital for our lifestyles, and with it comes a special satisfaction in seeing a complicated job through to completion. It certainly can’t be the long hours away from home, the remote locations that pipeline workers are often sent for weeks, months, or even years on end, or the steady thumping of the ‘not in my backyard’ naysayers who reap the benefits — just as long as the projects don’t come close to their properties or otherwise touch their lives.

Wood Mackenzie’s annual review of global upstream M&A suggests that peak levels of deal activity in 2010, particularly at the end of the year, bode well for another big year in 2011. The independent researchers identify four key prevailing themes that underpinned total spend of US$183 billion in 2010 as: Unconventional oil and gas, weak U.S. gas prices, restructuring among the International Oil Companies (IOCs) and aggressive spending by the Asian National Oil Companies (NOCs).

We all know the traditional drivers for gas operations R&D: 1) aging infrastructure, 2) better leak detection and repair, 3) trenchless technology, and 4) better methods of live inspection and repair. In more recent times, pipeline integrity and damage prevention concerns have been the focus of much innovation and materials research – primarily on plastic pipe. This has been and will continue to be a research goal.

The danger of static electricity in natural gas distribution pipe has been well-documented by third-party industry associations and federal oversight agencies. The American Gas Association issued static electricity precautions in the Plastic Pipe Manual in 1985. It recommended external static suppression procedures as well as procedures for static suppression during purging operations.

Washington Gas is in the midst of a major project to rehabilitate about 143,000 gas service lines and 1,900 miles of gas mains. Specifically, the utility is renewing the steel service lines by inserting plastic pipe into them, and it is encapsulating - or renewing the life of - the mechanical fittings that join the mostly 40-foot lengths of wrapped steel distribution main to prevent leaks on the couplings.

Pipeline safety hearings were the rage in early March. The National Transportation Safety Board (NTSB) held hearings March 1-3 on last year's PG&E explosion in San Bruno, CA. Then on March 7 the House subcommittee on railroads, pipelines and hazardous materials held a hearing in King of Prussia, PA focusing on the explosion of a 12-inch diameter main in Allentown, PA owned by UGI Utilities, Inc.

The American Gas Association’s latest study, “The Positive Natural Gas Supply Situation Benefits Consumers – A Look at January 2011,” finds that customers are greatly benefitting from the sustained, stable production of domestic natural gas. According to the report, consumer bills would be 40-70% higher today had natural gas prices in a supply-constrained 2006 persisted.

Bornemann Pumps, maker of advanced multiphase oil and gas pumps, has opened an office along Houston’s energy corridor.

Chesapeake Utilities has signed an agreement with Allen Family Foods, Inc. of Delaware to provide natural gas service to its Harbeson, DE processing plant as well as completion of the required facilities. Upon construction of the facilities, natural gas service was initiated.

Crestwood Midstream Partners LP has signed an agreement to acquire midstream assets in the Fayetteville Shale and the Granite Wash plays from Frontier Gas Services, LLC, headquartered in Tulsa, for $338 million, with an additional $15 million to be paid to Frontier if certain operational objectives are met within six months of the closing date.

Alaska Sen. Lisa Murkowski warned state legislators that declining oil production presents a grave threat to the state’s economy. “Alaska’s oil production has declined 36% since 2003 even as production in many parts of the Lower 48 has increased,” Murkowski said in her annual address to the Legislature.

Picture this: the CEO of a large energy corporation wants to pursue a new development. The economic difficulties haven’t slowed his company, so he decides to build a new plant near a small town in Midwest USA.

Dresser-Rand Group Inc. will acquire Grupo Guascor S.L. “GG”) for an enterprise value of euro 500 million ($690 million) in a cash and stock transaction.

In less than three years of development, the Eagle Ford Shale already accounts for over 6% of the Gross Regional Product for the 24-county South Texas area it encompasses, according to a study by the Center for Community and Business Research at the University of Texas at San Antonio Institute for Economic Development.

Energy Transfer Partners, L.P. announced April 21 that it has entered into long-term fee-based agreements with multiple producers, including Rosetta Resources Operating LP, SM Energy Company, and a subsidiary of Anadarko Petroleum Corporation to provide natural gas gathering, processing, and liquids services from the prolific Eagle Ford Shale.

Greene’s Energy Group has bought the assets of Specialized Oilfield Services, which is based in Minot, ND and services the Bakken region.

MarkWest Liberty Midstream & Resources, L.L.C. has signed a long-term agreement with Statoil Natural Gas LLC, an existing producer customer of MarkWest Liberty and a wholly owned subsidiary of Statoil ASA, to provide additional natural gas midstream services for Statoil’s rich-gas Marcellus acreage in northern West Virginia.

A small survey of global offshore oil and gas personnel has indicated high rates of satisfaction among longtime workers with the industry, their place in it and their pay.

More than 230 attendees participated in Pipeline Research Council International’s fifth annual Pipeline Program Research Exchange Meeting held in February in Atlanta.

The Worldwide Quarterly Smart Meter Tracker from IDC Energy Insights is forecasting worldwide growth of 13% in smart meter unit shipments from 2010-015 and a total of 460.9 million smart meters shipped through the forecast period.

The Pennsylvania Department of Environmental Protection said results of in-stream water quality monitoring for radioactive material in seven rivers showed levels at or below the normal naturally occurring background levels of radioactivity.

Wood Group's Alliance Engineering was awarded a contract for the engineering and design of an additional electric motor-driven compressor and associated equipment at Transco's Station 125 in Monroe, GA.

Arrow Energy announced plans for a major pipeline to connect its operations in the Bowen Basin in central Queensland, to a LNG facility at Curtis Island, off Gladstone, Australia.

BHP Billiton will acquire all of Chesapeake Energy Corp. interests in the Fayetteville Shale, including the midstream pipeline system, for US$4.75 billion.

Chesapeake Utilities Corporation is exploring providing natural gas service to Worcester County, MD as a result of increasing community interest.

Jee recently performed a conceptual design study for National Grid on the feasibility of a new pipeline transporting carbon dioxide (CO-2) from industrial emitters in the east of England to a proposed storage site in the southern North Sea.

Colonial Pipeline announced that recent pipeline system improvements have netted an additional capacity of 24,000 bpd.

The three-year contract will involve Cosalt Offshore carrying out inspection and test activities on the sites at St Fergus and Mossmoran to ensure the ongoing legislative compliance of lifting equipment. St Fergus, 40 miles north of Aberdeen, processes gas arriving by several pipelines from fields in the North Sea, which is then transported by pipeline to Mossmorran in Fife for further processing and then re-delivery to shippers as finished products.

This proposed Kitimat LNG export development is intended to open new market opportunities in the Asia-Pacific region for abundant supplies of Canadian natural gas.

Enterprise Products Partners L.P. bought a 39-mile carbon dioxide pipeline from Trinity Pipeline L.P. with plans to convert it to crude service.

Enterprise Products Partners L.P. and Energy Transfer Partners, L.P. announced April 26 that they have agreed to form a 50/50 joint venture to design and construct a crude oil pipeline from Cushing, Oklahoma to Houston.

Enterprise Products Partners L.P. bought a 39-mile carbon dioxide pipeline from Trinity Pipeline L.P. with plans to convert it to crude service.

Enterprise Products Partners L.P. has entered into a 10-year agreement with two producers in the Eagle Ford Shale play of South Texas to provide firm crude oil transportation and marketing services.

Southern Union Company placed the $2.48 billion Florida Gas Transmission Company (FGT) Phase VIII Expansion project in service on April 1, as scheduled.

Magnum Gas Storage LLC has accepted the FERC certificate of public convenience and necessity authorizing construction and operation of a high-performance natural gas storage facility in central Utah.

Global Industries Ltd. has been awarded a project from LLOG Deepwater Development Company, L.L.C. for the installation of a deepwater subsea development in the Gulf of Mexico.

The Golden Pass LNG Terminal LLC and Golden Pass Pipeline LLC near Sabine Pass, TX has been granted in service authority by FERC and has commenced commercial operations.

Canada’s National Energy Board plans to hold a public hearing to consider an application submitted by Enbridge Bakken Pipeline Company Inc. for the proposed Bakken Pipeline Canada Project.

Centrica Energy has awarded Heerema Hartlepool, one of the three fabrication locations of Heerema Fabrication Group (HFG), the EPCI contract for construction of the 2,750 ton York platform destined for the York Field Development gasfield in the UK Continental Shelf.

Hovertrans Solutions Pte. Ltd., a subsidiary of Singapore Technologies Marine (ST Marine), is constructing a 50-ton payload hoverbarge that is designed for heavy lift operations in difficult terrain.

TMK IPSCO's premium pipe threading facility in Brookfield, OH recently began a two-week commissioning phase for its second thread line, which will allow the facility to thread pipes up to 13 5/8-inch diameter, up from the previous size range of 4-7 5/8-inch.

Wood Group's J P Kenny was awarded a contract to perform detailed design for Amberjack Pipeline Company LLC's Jack/St. Malo deepwater oil export pipeline in the Gulf of Mexico.

Kinder Morgan Energy Partners, L.P. announced April 26 that it has completed construction of its Deer Park Rail Terminal (DPRT) and related ethanol handling assets at its Pasadena Terminal located along the Houston Ship Channel.

McDermott International, Inc.’s subsidiary, McDermott Caspian Contractors, Inc., and the state oil company of the Azerbaijan Republic (SOCAR) formed a strategic alliance to implement a major pipelay and diving services contract in the Caspian region.

Millennium Pipeline announced April 1 a binding open season beginning April 1st and running through April 15th for shippers seeking firm transportation capacity commencing July 1, 2011, to support mainline expansions.

M3 Midstream LLC (Momentum) has signed long-term gas gathering agreements with Chesapeake Energy Marketing, Inc., and Statoil Natural Gas LLC as anchor customers on its Appalachia Gathering System (AGS).

Nord Stream AG says construction of the Nord Stream Pipeline continues on track.

Magellan Midstream Partners, L.P. is proceeding with permitting and final engineering for the potential reversal and conversion of a portion of the partnership’s Houston-to-El Paso pipeline to crude oil service.

Oil and gas environmental waste contractor TWMA will install and operate its offshore waste recycling system on the Stena Spey semi-submersible drilling rig working in the UK North Sea for Chevron.

A new University of Georgia study that is the first to examine comprehensively the magnitude of hydrocarbon gases released during the Deepwater Horizon Gulf of Mexico oil discharge has found that up to 500,000 tons of gaseous hydrocarbons were emitted into the deep ocean.

Technip has been awarded an installation contract by TAQA Bratani Ltd. in the Falcon field in the North Sea.

The Oil Stop Division of the American Pollution Control Corp. has been granted a Phase 2 contract for development and testing of its Oil Stop Bottom Oil Recovery System (OSBORS).

UGI Energy Service’s affiliate, UGI Storage Company, commenced service on April 1 for winning bidders of its initial open season to sell firm storage service from its natural gas storage assets located in north-central Pennsylvania.

STW Resources Holding Corp. has signed an agreement to engage a fleet of mobile units for the treatment and reclamation of hydraulic fracture flow-back and produced waters from oil and gas production.

MWCC has awarded Technip a contract for the creation of the umbilical, riser and flowline components of the company’s expanded well containment response system for the U.S. Gulf of Mexico.

The largest shipbuilder of Latin America and the main logistics and fuel transportation company of Brazil, Petrobras Transporte S.A. – Transpetro – works with transportation and storage activities of oil and byproducts, ethanol, biofuels and natural gas.

In the oil and gas industry, companies that rely on deficient control and management systems are not only risking loss of production and the asset but also putting lives and the environment in danger. A failure to manage these risks can ultimately lead to a sequence of events that may have consequences on a global scale.

A new technology with the promise to provide accurate location data about buried pipe has been licensed to Sensit Technologies.