January 2018, Vol. 245, No. 1



Tellurian Awards $15.2 Billion in Driftwood LNG Contracts

Tellurian Inc. awarded Bechtel four engineering, procurement and construction agreements valued at $15.2 billion for its Driftwood LNG facility to be located near Lake Charles, LA. When completed, Driftwood will be able to produce 27.6 million tons of LNG a year. The facility is expected to begin production of LNG in 2022, with full production from all four phases of construction planned for 2025.

Tellurian completed a merger with Magellan Petroleum Corp. in February, a move that brought it into public markets. “Today, production on Bechtel-built facilities accounts for 30% of global LNG capacity,” Tellurian CEO Meg Gentle said. “We are proud to work together on the next generation of U.S. LNG exports.”

Millennium Pipeline’s Eastern System Upgrade Project Approved

The Federal Regulatory Commission (FERC) approved Millennium Pipeline’s Eastern System Upgrade Project, which includes the construction of a 7.8-mile, 30-and 36-inch pipeline loop in Orange County, NY.

The project includes a new compressor station in Sullivan County with a 22,400 hp Solar Titan 130E gas-fired turbine compressor unit and modifications to the existing Ramapo Meter and Regulator Station in Rockland County. When completed the Eastern Upgrade Project will add 223 MMcf/d of capacity along Millennium’s system in New York. An alternate interconnect to the 16-inch Valley Lateral 5 at milepost 7.6 of the Huguenot Loop will also be built.

Open Season Launched for Pipeline Construction in Wyoming

Genesis Energy launched a binding open season to secure long-term commitments to support a new gathering system to connect crude oil production to its existing Powder River Basin Pipeline. The pipeline consists of 140 miles of transmission pipeline and provides Wyoming producers access to additional downstream markets at Guernsey, Wyoming, regional refineries and East, West and Gulf coast markets via the Pronghorn Rail loading terminal.

“The basin continues to see increasing drilling activity and our existing Powder River Basin Pipeline is well-positioned to provide reliable deliveries to multiple attractive downstream markets,” said Grant Sims, CEO of Genesis Energy.

Pennsylvania Regulators Cite Sunoco for Pipeline Work Leaks

State regulators cited Sunoco for three recent leaks during its construction of the Mariner East 2 pipeline project. The Department of Environmental Protection issued violation notices for two leaks of drilling fluid on Nov. 11 in Chester and Berks counties.

One caused a 6-foot diameter sinkhole in a back yard. The other involved using an unauthorized method to go underneath a waterway. The third citation is for a Nov. 10 leak in a Dauphin County wetland. Construction is underway on the 350-mile pipeline that ends in Marcus Hook and is expected to be completed in 2018.

Construction Underway on EPIC NGL Pipeline Project

Construction began on the 650-mile, 375,000 bpd EPIC NGL Pipeline running from southeast New Mexico to Corpus Christi, Texas which is expected to be completed in early 2019. It will have multiple points of origin in the Midland and Delaware basins.

An EPIC-affiliate plans to build a fractionator near Corpus Christi to accommodate the pipeline’s volume and EPIC will construct purity pipeline systems, including an ethane system, to span the upper Gulf Coast into the Markham, Texas area.

“Our pipeline will be an NGL superhighway providing customers volumes from the Permian Basin to Corpus Christi and will better serve the growing needs of the petrochemical and refining sectors along the U.S. Gulf Coast,” said Justin Gordon, EPIC’s senior vice president of Engineering and Operations. EPIC plans a first-phase in-service date in early 2018. BP has committed to be the anchor shipper.

Bibby Offshore Finishes Subsea Decommissioning

Bibby Offshore’s Houston-based division, Bibby Subsea, completed the decommissioning of an 8-inch oil export pipeline in the Gulf of Mexico at a depth of 353 feet. The pipeline, operated by Shell, required the Bibby Sapphire, equipped with an SMD Quasar work class ROV, to disconnect the pipeline from a hot tap tee installed on the Amberjack Pipeline. The work took 16 days to complete.

Appeals Court Orders Halt on Natural Gas Pipeline in Ohio

In a 2-1 decision, the 6th U.S. Circuit Court of Appeals ruled that the city of Green, OH is likely to prevail in a federal petition it filed claiming the state Environmental Protection Agency (EPA) failed to follow its own rules when it granted Nexus Gas Transmission a clean water certificate for the project.

In granting a temporary emergency stay halting construction, the court sided with Green, which argued that an 8-mile pipeline section could damage environmentally sensitive areas, including a bog that contains protected plant and animal species. The EPA has said in court documents that it followed its rules.

Nexus, a partnership between Enbridge and Detroit’s DTE Energy, has intervened in the petition to defend the EPA. The company recently began construction of a 255-mile-long pipeline capable of transporting 1.5 Bcf/d from Appalachian shale fields across northern Ohio and into Michigan and Canada.

The 6th Circuit, in granting Green’s motion for an emergency stay, said not only are the city’s chances of prevailing in the petition good, but also that judging by early arguments, the city would face “irreparable harm” if the pipeline is built there. There are no precedents for a project like Nexus being scuttled this far along in the process. One possible outcome is that the 6th Circuit could order the EPA to redo its field work after the growing season begins this spring.

Agreement Signed for Pipeline to Trans Alta Generating Units 

TransAlta and Tidewater Midstream, and Infrastructure Ltd signed a  letter of intent for Tidewater to construct a 75-mile (120-km) natural gas pipeline from its Brazeau River Complex to TransAlta’s generating units at Sundance and Keephills.

The pipeline will provide initial capacity of 130 MMcf/d by 2020, and have expansion capability to 340 MMcf/d, which represents about 50% of TransAlta’s gas requirements at full capacity.  TransAlta has the option to invest up to 50% in the pipeline.

The project is expected to cost $150 million and is supported by a 15-year take- or-pay agreement. The Tidewater Pipeline is in line with TransAlta’s strategy to convert its coal units at Sundance and Keephills to natural gas.

“In addition, having greater access to natural gas allows TransAlta to blend natural gas with the coal, prior to fully converting the units, allowing us to take advantage of low natural gas prices and reduce our carbon costs,” said Dawn Farrell, president and CEO of TransAlta.

Fluor completed the Sunrise, Tower and Saturn sweet gas plants for the Cutbank Ridge Partnership (CRP) program in Dawson Creek, B.C. weeks ahead of schedule after two years of work. Mark Fields, president of Fluor’s Energy & Chemicals business in the Americas, said the accelerated schedules were achieved through “a culture of innovation, collaboration and transparency.”

FERC Approves Pipeline to Serve 5th Train at Cheniere LNG

FERC cleared the way Nov. 20 for a pipeline expansion to deliver feed gas to a fifth liquefaction train at the Cheniere Energy Sabine Pass LNG export terminal in Louisiana. The $151 million expansion will add about 600 MMcf/d to north-to-south firm delivery service. A lateral will connect to the export terminal in Cameron Parish and add 15,900 hp of compression. Kinder Morgan Louisiana Pipeline and Cheniere’s Sabine Pass Liquefaction signed 20-year contracts for full capacity from the project.

Transco Seeks FERC Application for Gateway Expansion

Transcontinental Gas Pipe Line Co. has applied with FERC for authorization for its Gateway Expansion Project, designed to create 6.5 MMcf/d of firm transportation capacity for northeastern markets in time for the 2020 winter heating season.

Transco executed precedent agreements with PSEG Power and UGI Energy Services for firm transportation service under the project. Once complete, the project will help meet the growing demand for natural gas by consumers in New Jersey and New York. The certificate application reflects an expected capital cost of $84.6 million and a target in-service date of Nov. 1, 2020.

The Gateway Expansion Project will add electric horsepower at an existing Transco compressor station in New Jersey, in addition to making modifications to two existing Transco meter stations. Most of the project activities are proposed within Transco’s existing rights of way or property boundaries.

Alaska Gasline Development Signs MOU with PetroVietnam Gas

Alaska Gasline Development Corp. (AGDC) and state-owned PetroVietnam Gas (PVGAS) signed a memorandum of understanding concerning the LNG supply from AGDC to serve LNG import projects in Vietnam and to evaluate a possible upstream resource investment in Alaska.

PVGAS is developing LNG receiving and regasification terminals in Vietnam, Thi Vai LNG Terminal and Son My LNG Terminal, in order to supply natural gas to newly built and proposed power plants and existing gas users.

“The agreement with Vietnam fits very well with AGDC’s broader marketing program and recently announced deal with Sinopec, which leaves a portion of the Alaska LNG production capacity with AGDC for sale to regional Asian markets such as Vietnam,” said Keith Meyer, president, AGDC.

Alaska LNG is an integrated gas pipeline and LNG infrastructure project designed to provide a direct and reliable link between the proven, conventional, natural gas resources on Alaska’s North Slope with growing LNG markets in the Asia-Pacific region.

On Dec. 5 in Tokyo  the AGDC and Tokyo Gas Co., Ltd. signed a letter of intent (LOI) regarding the sale and purchase of LNG from AGDC to Tokyo Gas Co., Ltd. as well as a commitment to explore other opportunities to materialize Alaska LNG. Tokyo Gas  is one of the largest energy utilities in Japan and is the principal service provider to over 11 million customers.

“Alaska is a trusted source of LNG,” said Michiaki Hirose, president, Tokyo Gas Co., Ltd. “For more than 40-years Tokyo Gas Co., Ltd. received shipments of LNG from Alaska. As the closest source of North American LNG to Japan, with a shipping time of as little as seven days point to point, Alaska LNG is naturally an economic and reliable source of LNG for Tokyo Gas Co., Ltd.”

“Tokyo Gas and Alaska have a special relationship in LNG and I was very pleased to host President Hirose for meetings and a project update in Juneau this past August to help continue that kinship,” said Alaska Gov. Bill Walker.

“I am pleased to help the longstanding LNG trade between Japan and Alaska continue for the next 40 years,” said Meyer. “The LOI signifies the continuation of this decades-long relationship between Alaska and Tokyo Gas Co., Ltd. and helps round out the sales volumes from the Alaska LNG project.”


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