September 2017, Vol. 244, No. 9

Projects

Projects

Application for PennEast Pipeline Closed over Deficiencies

New Jersey regulators closed an application for the $1+ billion Penn East natural gas pipeline starting in Pennsylvania and ending in New Jersey, according to the Associated Press. The New Jersey Department of Environmental Protection said in a letter to PennEast that its request for a 60-day extension on a freshwater permit application was denied and the application was “administratively closed.”

The letter said PennEast showed a “lack of demonstrated progress” on part of its application, specifically obtaining landowners’ signatures for surveys. The project is not dead, however. PennEast spokeswoman Pat Kornick said the decision wasn’t a surprise and the company anticipates pending federal approval late this summer.

The 120-mile pipeline, which would extend from Dallas, PA to near Pennington, NJ, is also awaiting a determination from federal regulators on whether there is a need for the project. The Federal Energy Regulatory Commission’s (FERC) final environmental impact study outlined several areas of concern, including trace amounts of arsenic in some rocks the pipeline would cross, and potential threats to endangered and threatened species, including the bog turtle and Indiana bat.

Pembina Completes Phase III Expansion

Pembina Pipeline placed about $2.8 billion of integrated capital projects into service, including its Phase III Pipeline Expansion and two connected major delivery points: the company’s third fractionator at Redwater (RFS III) and its Canadian Diluent Hub (CDH), the company said.

The Phase III Expansion program, which began in 2013, included installing over 560 miles of new pipeline primarily along the company’s existing Peace and Northern system rights-of-way, along with upgrading and adding new mainline pump stations.

Initial work for the Phase III Expansion included debottlenecking segments of existing pipeline systems from Taylor, B.C. to Gordondale, AB and adding a new pipeline from Wapiti to Fox Creek, AB to allow increased volumes upstream of Pembina’s Fox Creek tie-in point. In support of handling the increased product, 420 MMbpd of incremental capacity was added in the Fox Creek-to-Namao corridor of through the construction of two pipelines: a 16-inch and a 24-inch pipeline, each spanning 180 miles.

With the Phase III Expansion complete, Pembina has four pipelines between Fox Creek and Namao, allowing the company to transport four distinct hydrocarbons – ethane-plus, propane-plus, condensate and crude oil – each in its own segregated pipeline, plus upstream capacity to handle higher volumes driven by the development of the Montney, Duvernay and Deep Basin resource plays.

Permico Energia to Build Texas NGL Pipeline 

Permico Energia plans to construct a Texas natural gas liquids (NGL) system comprised of 510 miles of 24-inch pipeline to ship West Texas Permian Basin NGL production to its planned 300 MMbpd fractionator near Corpus Christi. The project scope also includes construction of a 350-mile system of downstream product pipelines which will provide access to an 8 MMbbl NGL storage facility and to Texas Gulf Coast industrial markets, including the Mont Belvieu area.

Construction is expected to begin in the second quarter of 2018. The system’s initial capacity of 300 MMbpd will be operational in the fourth quarter of 2020.

Project funding has been secured through long-term commitments from Korean pension fund institutions, with Sumitomo Mitsui Bank Corp. serving as lead syndicator for the senior debt financing. All project equity has been committed and senior debt financing is expected to close in the first quarter of 2018.

Shell to Replace 12 Miles of California Pipeline

Shell Oil is replacing over 12 miles of a pipeline that carries crude petroleum from California’s Central Valley oil fields to refineries in the Bay Area in the wake of two spills that occurred on the 177-mile-long San Pablo Bay Pipeline in 2015 and 2016.

Investigators from the state  Fire Marshal’s Pipeline Safety Division found both ruptures were caused by “fatigue cracks” that grew as pressure on the underground line fluctuated to deal with different grades of oil, according to documents examined by KQED public news.

The ruptures accounted for totals spills of about 60,000 gallons on grassland, resulting over $6 million in damage, emergency response and cleanup costs. Shell had inspected the failed sections of pipeline months before they broke, while the state last inspection occurred in 2012, according to KQED.

New Open Season Launched for Keystone XL

TransCanada Corp. has launched another open season to solicit additional binding commitments from interested parties for transportation of crude oil on the Keystone Pipeline and the Keystone XL Pipeline Project from Hardisty, AB to markets in Cushing, OK and the U.S. Gulf Coast. The open season ends at noon MT on Sept. 28.

The 2,687-mile Keystone Pipeline System connects Alberta crude oil supplies to U.S. refining markets in Illinois, Oklahoma and Texas, as well as  U.S. crude oil supplies from the Cushing hub to refining markets in the U.S. Gulf Coast. If completed, the proposed Keystone XL pipeline will run from run from Hardisty to Steel City, NB and deliver crude oil to U.S. markets.

Canadian LNG Project Canceled

Pacific NorthWest LNG has decided against proceeding with an LNG project in Port Edward, B.C. The decision was made by Petronas and its partners after a review of the project amid changes in market conditions.

TransCanada’s Prince Rupert Gas Transmission Project was to deliver natural gas for the project. According to Karl Johannson, the company’s executive vice president and president, Canada and Mexico Natural Gas Pipelines and Energy, TransCanada remains committed to completing the Prince Rupert Gas Transmission Project.

“This important project is backed by independent 20-year commercial service agreements with 11 shippers (including Progress Energy), and, pending regulatory approvals, we remain ready to move forward,” Johannson said.

Dalton Expansion Now in Service in Georgia

Williams Partners and Southern Company Gas placed the Dalton Expansion Project, an expansion of the Transco pipeline system, into service to provide natural gas to utility companies, a power company and a municipal entity in northwest Georgia.

The project added 115 miles of pipe extending from Coweta County, GA to new delivery points in Paulding and Murray counties. The pipeline was designed to transport 448 MMcf/d, enough to meet the daily needs of 2 million homes. It will deliver to an electric-generating facility in northern Georgia operated by Oglethorpe Power, local distribution company Atlanta Gas Light, as well as the city of Cartersville.

With the expansion, Transco pipeline’s system design capacity is increased to 14.2 Bcf/d. Work on the Dalton Expansion Project began in August 2016.

PSE&G Proposes 5-Year Infrastructure Upgrades Program 

Public Service Electric and Gas Company (PSE&G), New Jersey’s largest utility, unveiled a proposal for the second phase of its natural gas infrastructure modernization program.

If approved by the state Board of Public Utilities (BPU), the program will enable PSE&G to continue accelerating replacement of its aging cast-iron and unprotected steel gas pipes – installing 1,250 miles of new gas mains over a five-year period. The proposed cost is $540 million a year, or $2.7 billion in total.

PSE&G has just under 4,000 miles of cast-iron gas pipes, which is the most of any utility in the nation. At the pace proposed, the utility can replace its cast-iron and unprotected steel pipes with new plastic pipe within 20 years.

The proposal is a continuation of work the utility is performing under its Gas System Modernization Program that is replacing 510 miles of gas mains over three years. Since January 2016, PSE&G has replaced 286 miles of pipes.

Cosmodyne Commissions 3rd LNG Peak Shaver this Year

Cosmodyne and UGI Energy Services installed and commissioned a LINEX natural gas liquefaction (LNG) plant in Mehoopany, PA. The facility will produce LNG for UGI’s merchant and utility businesses.

The refrigeration compressor, the major energy consumer in the liquefier, is driven directly by a natural gas-fired turbine. This reduces operating costs and decouples the facility from any electrical power limitations.

Cosmodyne’s liquefier uses nitrogen refrigeration technology to produce LNG and is inherently safe and easy to operate. The equipment was designed and fabricated in Cosmodyne’s U.S. facilities. This is the third peak-shaving liquefier that Cosmodyne has commissioned in the last 12 months.

Tallgrass Sets Second Open Season on Pony Express

Tallgrass Pony Express Pipeline announced another open season to offer potential shippers a proposed extension and expansion of Pony Express’s system.

The open season offers new capacity and transportation service on a proposed extension of the system beginning at a new origin near Platteville, CO (and potentially another origin near Lucerne, CO) and ending at the Buckingham point, as well as possible expanded capacity on Pony Express’ existing pipeline system. The project will provide transportation for products meeting the condensate common stream criteria to be established by Pony Express.

This second open season results from a binding bid received by Pony Express during a separate open season between June 1 and July 17 that resulted in 30,000 bpd of binding commitments.

Atlantic Sunrise Receives Favorable Ruling

A federal judge in Pennsylvania said authorities can condemn and seize property in order to make way for the Atlantic Sunrise pipeline, clearing the way for Transcontinental Gas Pipe Line Company to obtain temporary and permanent rights-of-way for the pipeline in Conestoga Township.

This is the first eminent domain order against 30 Lancaster County homeowners who have refused to sell their land for the pipeline. Of the remaining 30 cases, 16 have been settled and 12 are still in court.

Mountain Valley Review Finds Limited Environmental Impacts

An environmental assessment of the proposed Mountain Valley natural gas pipeline finds the project would have “significant” impacts on forests in Virginia and West Virginia, but “limited” adverse effects in other areas. The analysis by the FERC marked a milestone in the approval process for the 300-mile pipeline. FERC commissioners will consider the analysis in making a final decision.

The Mountain Valley Pipeline and the similar Atlantic Coast Pipeline have drawn opposition from environmental groups and many landowners along the routes. But many political and business leaders insist that the projects are necessary for economic development.

ETP Strikes Deal to Restart Construction

Energy Transfer Partners (ETP) won permission Aug. 9 to restart construction on two gas pipelines that state regulators have blocked in Pennsylvania and West Virginia. Company officials said they are optimistic the projects will be finished on time.

Environmental groups in Pennsylvania reached a settlement allowing Energy Transfer’s Sunoco subsidiary to restart work on the Mariner East 2 pipeline system in exchange for concessions to reduce the risk of water pollution and other problems.

Separately, the West Virginia Department of Environmental Protection lifted a cease-and-desist order it issued last month that stopped work on Energy Transfer’s Rover pipeline. The Federal Energy Regulatory Commission is still blocking work on Rover while it investigates a string of spills at construction sites. The $4.2 billion, 713-mile Rover project is designed to carry gas from the Marcellus and Utica Shale fields to markets in Michigan.

Mariner East 2 is a two-pipeline, $2.5 billion expansion of an existing line that carries natural gas liquids across Pennsylvania from the Marcellus field to Philadelphia. Both projects have been dogged by complaints of sloppy construction, particularly around creeks and rivers.