January 2011 Vol. 238 No. 1

America's Natural Gas Alliance (ANGA) has named Tom Hassenboehler as vice president of policy development and legislative affairs. Hassenboehler comes to ANGA with a strong background in energy and environmental policy and political affairs.

Chesapeake Utilities Corporation announced Jan. 24 that William B. Zipf has joined as vice president of Eastern Shore Natural Gas Company (Eastern Shore).

IMV Projects, a Wood Group company, has been awarded a multimillion-dollar contract by AltaGas to provide full engineering, procurement and construction management (EPCM) services for the C$235MM Gordondale sour gas processing facility and associated gas gathering system.

The Interstate Natural Gas Association of America and The INGAA Foundation Inc. announced Jan. 10 the appointment of Cathy Landry as the interstate natural gas pipeline trade association’s new director of communications, effective immediately.

John Hoopingarner has been named the director for the Petroleum Extension Service (PETEX), a component of Continuing and Innovative Education (CIE) at The University of Texas at Austin.

STW Resources Holding Corp., a water reclamation services company, has formed a joint venture, Water Reclamation Partners, LLC (WRP), with privately held Aqua Verde LLC, to provide water solutions for oil and gas producers, municipalities, and environmental remediation projects.

Lincoln Electric is offering a free pipeline welding seminar intended for contractors and professionals in the pipeline industry. The three-day, in-depth session will take place on March 29-31, 2011, at Lincoln Electric’s corporate headquarters in Cleveland, Ohio.

As North America experiences a renaissance in oil drilling, exploration & production (E&P) spending is expected to rise in 2011. According to a recently released Barclays Capital research note a decline in dry gas drilling is predicted, offset by an increase in oil and liquids-rich activity. In the wake of this activity the Tight Oil From Shale Plays World Congress 2011 will take place in Denver in January to discuss maximizing oil recovery.

Roger D. Nelson, PLS, CFedS, has been named Vice President of Surveying for Merrick & Company. Nelson will be responsible for statutory and technical matters, professional registrations, and educational requirements related to the firm’s surveying and mapping practice. Nelson has been with Merrick for 16 years. During that time, he has managed and supported numerous surveying and mapping projects throughout North America. He is licensed as a Professional Land Surveyor in ten states and holds a Certified Federal Surveyor certificate.

NW Natural announced January 7 that Rick Daniel, president of its wholly owned subsidiary NW Natural Gas Storage LLC (NWNGS), will be leaving at the end of January, returning to his home in Canmore, Canada.

It’s great to see you tonight and I hope you all had a hearty holiday season. We have a two-part program tonight. I’m going to talk about some of the dynamic changes under way in the natural gas business and then a few minutes on some key issues the industry is facing this year. I’ll be throwing a bunch of numbers at you – the point being that no matter which way you look, the natural gas business is the one to be in right now.

SCANA Corporation announced Jan. 7, that William B. Timmerman, SCANA’s chairman, president and CEO will retire from the company effective November 30, 2011.

Bugsy Siegel, Donny & Marie, Holly Madison, Willie Nelson….all names that kept cropping into my overworked brain during our trip to Las Vegas. It was my first time there so I knew I was missing something. Exactly what that was I couldn’t be sure until we spent a few days at the posh Bellagio resort on the Strip next to Caesar’s Palace. The Bellagio was built in 1998, has 4,000 rooms, a staff of 10,000 and the world’s largest chocolate ice cream fountain. The Bellagio was recently held up in the wee hours by a helmeted bandit who ran off with $1.5 million (face value) in betting chips from the casino.

Despite a global economic downturn, new oil and gas pipelines are being planned and built. <em>P&GJ</em>’s worldwide survey figures indicate 119,938 miles of pipelines are planned and under construction. Of these, 83,634 represent projects in the planning and design phase while 36,304 miles reflect pipelines in various stages of construction.

The energy pipeline industry works 24/7 to avoid “wake-up calls,” but when one comes, there is an obligation recognized by all segments to answer or find answers. That situation was no different in the wake of September’s natural gas transmission pipeline rupture in the San Francisco suburb of San Bruno.

This article focuses on steps in developing a successful pipe replacement program at a local distribution company (LDC). It will review the elements of a distribution integrity management program (DIMP) plan relative to pipe replacement and will discuss: 1) the common criteria used to develop a program, 2) how to rank and prioritize pipe segments, 3) tips for creating a program timetable, 4) importance and usefulness of partnering with state and local officials, 5) efficiencies gained by creating simplified and practical standards, 6) identifying program resources, and 7) developing a program communications plan.

Time constraints in pipeline project execution can involve either the construction phase or the overall project cycle duration, which mainly depends on the root cause of the time constraint from several perspectives such as high risk due to construction in an unsecured area, government instructions or whether the project is part of a strategic program.

We stated in Part 1 of this two-part series that one of the most critical decisions in pipeline design is the quality of steel. We also discussed the importance of steel quality in terms of the quality of pipe. Pipe, after all, is a dimensional aspect of material and, for this discussion, the material is steel. The discussion on steel making especially focused on low-temperature ductility and steel’s ability to resist initiation and arrest of ductile cracks.

There is an office in Washington DC whose work will not be apparent to many in the United States for several years; yet without the effort of the Office of Federal Coordinator for Alaska Natural Gas Transportation Projects it is highly doubtful this mother of all pipeline projects will ever come to fruition.

A pig trap must be designed to match the pipeline section design specifications. The mechanical design characteristics of the pig trap should meet or exceed the design pressure, have the same design factor, have compatible material type, be designed using the same design code and be suitable for the same temperature range as the pipeline section that it serves.

Interest in shale gas is being driven by concern about peak oil, pressure to develop secure domestic energy supplies and a need to reduce greenhouse gas emissions. Shale gas is also called tight gas or shallow gas. And, members of the conventional gas industry are experiencing some new challenges in the exploration, production and pipelining of this shale gas energy source.

Every project starts off with good intentions: 1) all stakeholders will be pleased with the results, 2) It will be on time, 3) within budget, 4) meet all the requirements of the job, and 5) function trouble-free.

PSE&G, with about 1.7 million gas customers in New Jersey, has a first responder program to ensure that technicians respond to a leak emergency call within 60 minutes or less1. To meet this goal, procedures are reviewed yearly, new service personnel receive extensive classroom and hands-on training, and apprentices are matched up with experienced technicians in a Field Experience Program for four months [1].

Changes announced on Dec. 1 of the administration’s new ruling banning offshore drilling along the East Coast and eastern sector of the Gulf of Mexico for five to seven years only further amplify industry’s questions of what the administration really wants with domestic oil and gas exploration and production companies. The continued changes to the offshore “drill – no drill” and potential changes in onshore production only further the uncertainty of U.S. oil and gas production and the desire to get closer to energy independence.

The Federal Energy Regulatory Commission (FERC) is investigating the possibility that two interstate pipelines are charging unreasonable rates. The FERC opened mid-November investigations of Kinder Morgan Interstate Gas Transmission LLC and Ozark Gas Transmission LLC, a unit of Spectra Energy Partners LP., based on reviews of Form 2 cost of service and revenue information submitted by the companies for 2008 and 2009.

Nearly every week on average since 1995, the North Slope oil fields have had a spill from a pipeline, a well, a tank or other equipment, according to a study by the Alaska Department of Environmental Conservation published last month in the Anchorage Daily News. That could be mitigated by close leak detection and pipeline regulation that might reduce the size and frequency of the spills, the study said.

“ENSTOR continues to invest in facility expansion through the addition of interconnects or by increasing capacity in locations where market conditions are favorable,” said Pat DeVille, president of ENSTOR. The high-deliverability, multi-cycle Caledonia facility has increased its maximum certificated working gas capacity from 16.9 Bcf to 22 Bcf. That pushes maximum daily withdrawal rates to 550,000 Mcf/d and the maximum injection rate to 558,000 Mcf/d.

Pennsylvania's public utility regulators were advised to reject an effort by a Houston natural gas pipeline firm that could help it secure the power of eminent domain on private property. An administrative law judge recommended denial of an application by Laser Northeast Gathering Co.

Chris Kobilan, pipeline integrity engineer with American Innovations, has returned from active military duty in Afghanistan after a tour beginning in March 2009.

Kinder Morgan Energy Partners LP said it will spend $1.4 billion in expansions and acquisitions in 2011. The amount is lower than the $1.5 billion it pledged to spend in 2010.

A study by BDO USA, LLP found that 54% of chief financial officers at oil and gas E&P companies feel “legislative changes” will be the leading factor inhibiting growth of the U.S. oil and gas industry in 2011. In addition, 40% cite “legislative changes” as the greatest financial challenge in the year ahead.

U.S. natural gas proved reserves, estimated as "wet" gas which includes natural gas plant liquids, increased by 11% in 2009 to 284 Tcf, the highest level since 1971, according to the U.S. Energy Information Administration's (EIA) Summary: U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 2009.

The United States will keep a pledge to cut greenhouse gas emissions made in 2009 with help from a domestic boom in natural gas, Washington's lead negotiator said at the U.N. climate talks.

A new report from the Worldwatch Institute concludes that electricity produced from natural gas uses less water than electricity from coal on a life-cycle basis – even when natural gas comes from deep shale formations.

The complex dispute over ownership of 11 Bcm of gas in storage — a byproduct of the January 2009 Russia-Ukraine "gas war" — moved one step closer to a final resolution when Gazprom, Naftogaz Ukrainy, and former intermediary RosUkrEnergo (RUE) announced a package of agreements designed to end uncertainty and avert a potential new interruption in Russian gas supplies to Europe.

Baker Hughes opened a new facility in Welshpool to meet growing demand and increased oilfield activity in Australia. Three of the company’s service lines – pumping services, tubular services, and process and pipeline services – are now housed in the 340,000-square-foot site.

Bulgaria rejected two environmental impact reports on a planned oil pipeline that bypasses Turkey’s crowded Bosporus Strait.

Chesapeake Energy Corporation and CNOOC Limited’s wholly owned subsidiary, CNOOC International Ltd., have finalized a project cooperation agreement allowing the purchase of a 33.3% undivided interest in Chesapeake’s 600,000 net oil and natural gas leasehold acres in the Eagle Ford Shale project in South Texas.

Construction began on the 530-mile ethanol pipeline Petrobras is building to link Brazil’s main ethanol-producing regions in Minas Gerais and São Paulo to the large consuming centers of São Paulo and Rio de Janeiro.

DCP Midstream LLC announced Jan. 19 it has signed long-term gas gathering and processing agreements with the Pioneer JV to provide a full scope of midstream energy services in the Eagle Ford shale play.

DCP Midstream recently held a non-binding expression of interest for the proposed DCP Sandhills Pipeline.

Romanian, Azerbaijani Georgian and Hungarian leaders signed the Baku Declaration on the implementation of the Azerbaijan-Georgia-Romania Interconnector (AGRI) energy project.

PT Pertamina and ExxonMobil agreed to jointly develop the Natuna D-Alpha natural gas block in Indonesia. Pertamina is in final talks with other potential partners and expects to sign similar deals shortly.

Citing weaker-than-expected gas demand in the domestic and international markets, Gazprom cut its 2010 production forecast for a second time.

Harvest Pipeline Company is beginning the next expansion phase of the Arrowhead Pipeline to ship more crude oil from the Eagle Ford area.

Koch Pipeline Company, L.P. is seeking corporate approval to further expand its South Texas Crude oil system.

National Fuel Gas Supply Corp. and Empire Pipeline, Inc., are holding two open seasons aimed at making firm transportation capacity available from the Marcellus Shale.

Petrofac has acquired a 20% interest in Gateway Storage Company Limited to develop the Gateway Gas Storage project in the East Irish Sea.

Rangeland Energy LLC plans to build, own and operate a crude oil loading terminal and pipeline in Williams County, ND.

Jeffrey P. Beale, president of CH-IV International (CH-IV), indicated his company will continue its owner’s engineering support for Freeport LNG Expansion L.P.’s recently announced project with the Macquarie Group.

The Samsun-Ceyhan pipeline would transport Russian and Caspian oil from the Black Sea to the Mediterranean by circumventing the Turkish Straits. It is considered the top competitor to the Burgas-Alexandroupolis line.

Stroygazmontazh has been awarded a contract by Gazprom to construct five sections of the 275-mile-long Pochinki – Yaroslavl Pipeline.

Williams Partners L.P.’s Transco pipeline has filed an application with the Federal Energy Regulatory Commission to provide an additional 142,000 Dth/d of incremental firm natural gas transportation capacity to serve growing markets in the Mid-Atlantic region by November 2012.

The presidents of Turkmenistan and Iran recently launched the Hangeran-Sangbast natural gas pipeline.

A custom-built welding tractor -- the latest pipeline offering from Caterpillar -- was unveiled late last year at the company’s Grenoble Echirolles plant in France.

Pemex has signed a contract with Telvent to provide a centralized control solution for automated product handling at all Pemex oil storage terminals. In making the announcement, Telvent said its solution will optimize the accuracy of product data and support “agile business management” for the Mexican state-owned energy company. Pemex is among the world’s largest oil producers.

Underground Construction's Traci Read interviews LaValley Industries president Jason LaValley, Jan.

OTC Brasil is a new event sponsored by the Offshore Technology Conference (OTC) and is its first event outside of Houston. This biennial event will be October 4-6, 2011 at Riocentro in Rio de Janeiro, Brazil.

On Jan. 13, PipeLine Machinery International (PLM), the first Caterpillar dealership without geographic borders, held a grand opening of the company’s new equipment yard and a working demonstration of the DECKHAND Pipe Handling System, exclusively distributed by PLM.

Watch the PipeLine Machinery-distributed DECKHAND pipe handling system lift, tilt and twirl line pipe. Video from Jan. 13, 2011.

Trachte’s modular, pre-engineered, pre-assembled enclosures are flexible in size/design, built around an expandable galvanized steel framework, and available in transportable sizes from 4-30 feet wide.

New welding products from Lincoln Electric, CRC-Evans Automatic Welding, Pipeline Machinery-Cat, Vacuworx International, GE Sensing & Inspection Technologies, Geneq Inc., Semaphore, McElroy, Meta Vision Systems, Invensys Operations Management, Polyguard Products, PCC Energy Group and Kobelco.