March 2020, Vol. 247, No. 3



Enbridge-Annova LNG Deal to Expand Valley Crossing Pipeline 

Enbridge’s Valley Crossing natural gas pipeline from Agua Dulce to Brownsville, Texas, will be expanded along with the construction of a 9-mile (14.5-km) lateral to Annova liquefied natural gas’s (LNG) Brownsville export facility. 

The precedent agreement provides for Valley Crossing Pipeline to transport 100% of the natural gas requirements at Annova’s 6.5-mtpa LNG facility, now under development. 

“Annova LNG’s firm transportation arrangements will ensure security of supply and access to the most diversified, low-cost feed gas of any of the U.S. LNG facilities,” said Omar Khayum, CEO of Annova LNG. 

The agreement provides for the execution of a 20-year firm transportation service agreement that will access multiple receipt points with major pipelines in the Agua Dulce area, providing gas supply diversity for Annova’s feed gas requirements, the company said.

In October 2018, Annova LNG announced that Black & Veatch and Kiewit invested in the facility and were awarded the engineering, procurement and construction (EPC) contract on a joint basis. It is scheduled to commence commissioning in 2024 and commercial operations in early 2025, Annova said. 

The Brownsville facility will use electric-driven compressor engines and source its electricity from carbon-free, renewable energy resources, making it “the most sustainable and reliable provider of LNG from the United States,” according to Khayum. 

Canada’s Enbridge placed the 168-mile (270-km) Valley Crossing Pipeline into service in November 2018 to transport up to 2.6 Bcf/d (74 MMcm/d) of natural gas to the Comisión Federal de Electricidad (CFE), Mexico’s state-owned utility, which serves about 37 million customers. 


Reversed Capline Pipeline Set to Begin Light Crude Service in 2021 

MPLX LP said the reversal of the Capline pipeline was on schedule, with the line expected to begin light crude service in mid-2021 and heavy crude service in 2022. Once the reversal is complete, the Capline will increase the flow of Canadian and Mid-Continent crude to the St. James, Louisiana, market.

During the fourth quarter, MPLX completed the purge of the mainline, a process during which contaminants are removed from the piping. 

The Wink-to-Webster Permian crude oil project is 15%-owned by the company. The 1.5-MMbpd pipeline system is expected to be in service in early 2021, with all the contractable capacity covered by minimum volume commitments, MPLX said. 

Overall, the pace of new projects has slowed as production growth is expected to ease due to an expected reduction in new drilling for a second year in a row in 2020. 


What’s Next for Keystone XL in South Dakota? 

Plans for construction of the Keystone XL oil sands pipeline inched forward with several approvals at both the federal and state levels, but opponents in South Dakota say they haven’t given up on preventing, or at least slowing, the pipeline’s construction. 

Plans for the $8 billion project have been over a decade in the works. TC Energy, the Canadian company building the pipeline, plans to begin construction in South Dakota in August, according to a court filing in Montana that also spells out planned work in that state and Nebraska.  

The company plans to move equipment to construction sites starting in February and prep worker accommodation sites in March. 

After the South Dakota Water Management Board approved five water permits for the pipeline’s construction last week, Sara Rabern, a spokeswoman for TC Energy, said the company does not need any more permits from South Dakota agencies, but is working to “finalize” permits from other authorities.  

The Army Corps of Engineers must approve TC Energy’s plans to drill beneath three major rivers along the route, which include the Cheyenne River in South Dakota and the Missouri and Yellowstone Rivers in Montana. 

The pipeline would stretch 1,200 miles (1,930 km) from western Canada to Nebraska, where it would connect with other lines that go to Gulf Coast refineries. It would be capable of pumping 830,000 bpd of crude oil. 


Virginia Files Supreme Court Brief Opposing Atlantic Coast Pipeline 

Virginia Attorney General Mark Herring filed a brief in the Atlantic Coast natural gas pipeline case at the U.S. Supreme Court opposing construction of Dominion Energy’s $7.3 billion project.  

In the Supreme Court case, Dominion and its partners, Duke Energy Corp. and Southern Co., say the U.S. Forest Service was correct in issuing Atlantic Coast a permit to cross the Appalachian Trail in Virginia. 

In his brief, Herring asked the court to affirm the 4th Circuit Court of Appeals ruling that invalidated the Forest Service permit. 

Dominion spokesman Aaron Ruby said the company disagreed with the attorney general, noting the Forest Service has full authority to authorize the Appalachian Trail crossing. 

Dominion has said it expects to complete Atlantic Coast in early 2022. 


Kinder Morgan Gains OK for Lockridge Pipeline Construction 

The U.S. Federal Energy Regulatory Commission (FERC) approved Kinder Morgan’s request to start construction of its proposed Lockridge natural gas pipeline in the Permian basin in West Texas.  

The Lockridge project is one of several under development or construction designed to remove gas from the Permian basin in West Texas and eastern New Mexico where pipeline capacity has not kept up with the amount of gas associated with record oil production in the region. 

Kinder Morgan’s Natural Gas Pipeline Co. of America LLC unit will build and operate the 17-mile (27-km) Lockridge pipe, which is designed to deliver 500 MMcf/d (14.2 MMcm/d) of gas.  

Other pipes expected to enter service in the Permian include Kinder Morgan’s 2.1-Bcf/d (60-MMcm/d) Permian Highway in 2020 and MPLX LP’s 2-Bcf/d (57-MMcm/d) Whistler in 2021. 


Saipem Wins Equatorial Guinea Pipeline Contract 

Italy’s Saipem was awarded a contract in Equatorial Guinea worth $90-$100 million to build a 43-mile (70-km) subsea pipeline linking the Alen platform with the Punta Europa petrochemical hub, the oil ministry said. 

Gas deliveries from the project, operated by Noble Energy, are expected to begin in early 2021, Oil Minister Gabriel Obiang Lima said in a statement. 

The pipeline will serve offshore gas fields and have a capacity for 950 MMcf/d (27 MMcm/d) of gas as Equatorial Guinea looks to extend the life of its liquefied natural gas production assets. 

“We anticipate that this contract, which is being approved exceptionally under the given circumstances, will contribute immensely to improving the performance of local businesses and the creation of employment,” Obiang Lima said. 

Equatorial Guinea, a small West African member of the Organization of the Petroleum Exporting Countries, derives more than 90% of its foreign revenue from oil and gas. 


Moda Midstream to Evaluate New Pipeline as Part of Expansion 

U.S. oil export terminal operator Moda Midstream said it has begun to enhance its Moda Ingleside Energy Center (MIEC) in Ingleside, Texas, to allow the docking of larger-sized vessels and is considering a new pipeline as well. 

Moda has begun structural enhancements and dredging to Berth 5 and improvements to Berth 4, which will allow for the docking of Suezmax class vessels and very large crude carriers (VLCCs), respectively, the company said. 

The company said it was evaluating construction of an additional pipeline called the Moda Ingleside Express Pipeline, which would be bidirectional and run between MIEC and Moda Taft Terminal, located in Taft, Texas. 

MIEC receives crude from the Cactus Pipeline, the Cactus II and the EPIC Crude Oil Pipeline, while the Taft Terminal is connected to the EPIC Crude Oil Pipeline and Moda’s 20-inch pipeline between the Inner Harbor and MIEC. 


Niger Look s to Step Up Oil Production with Pipeline to Coast 

Niger began construction on a $7 billion oil pipeline that will reach the coast through West African neighbor Benin. The 1,232-mile (1,982-km) pipeline is Niger’s most important project since gaining independence. 

Construction is already underway at a site in Koulélé, located about 55 miles (90 km) from Agadem in the Diffa region. 

China National Petroleum Corp., which has operated in Niger since 2011, will build the pipeline, along with the West African Oil Pipeline Company. Nearly two-thirds, just under 808 miles (1,300 km), will run within Niger, with the remainder in Benin. 

The first phase of construction requires an investment of $4 billion between 2019 and 2021, according to the Associated Press. The total through completion is expected to be $7 billion, the government said. 

Oil accounts for 4% of GDP in Niger. By 2022, it’s expected to represent 24%, according to the government. 


PennEast Looking to Start Construction in Pennsylvania 

PennEast Pipeline asked federal energy regulators for permission to build the Pennsylvania part of its proposed natural gas pipeline first due to difficulty in gaining approvals in New Jersey.  

The company said in a filing with the U.S. Federal Energy Regulatory Commission (FERC) that it expects to be able to complete the Pennsylvania section of the pipeline by November 2021. As for New Jersey, the company said it is targeting completion of the second phase of the project from Pennsylvania into New Jersey in 2023. 

FERC approved PennEast’s request to build the pipeline in January 2018, and the company promptly sued in federal court under the U.S. Natural Gas Act to use the federal government’s eminent domain power to gain access to properties along the route. 


Militants Bomb Underwater Pipelines in Syria 

Militants sent divers to plant explosives on underwater crude oil pipelines in an attack on Syria’s Banias refinery near the Mediterranean coast, the country’s oil ministry said, according to the Associated Press.  

No one claimed responsibility for the attack, the third to target Syria’s oil and gas industry in less than a year. 

Oil Minister Ali Ghanem told state TV that divers planted the bombs in the facility used to pump oil to the coast. He said the facility is 2 miles (3 km) off the coast and the targeted pipes are 75 feet (23 m) underwater. 

“The aim of the attack is to cease (oil) imports into Syria,” Ghanem said, adding the ministry’s experts are evaluating and fixing the damage. He said the attack will not stop imports as the ministry had prepared plans in case of such attacks. 

The extent of the damage was not immediately clear, though state media reported that technicians were evaluating the damage and making repairs. Ghanem said there would be no disruption to the refinery’s operation. Banias has capacity to process more than 130,000 bpd of crude oil. 


Iran Building Oil Pipeline to Terminal Outside Gulf 

Iran is building a $1.8 billion oil pipeline to its port of Jask outside the mouth of the Gulf, the country’s oil minister said, as part of plans to protect its exports against potential problems in the region and to boost shipments of Caspian oil. 

Iran has been planning since at least 2012 to set up the terminal on the Gulf of Oman, just outside the Strait of Hormuz. 

Tehran has threatened to block the vital Gulf oil shipping route during its standoff with the United States, after Washington withdrew last year from Iran’s 2015 nuclear deal with world powers and re-imposed sanctions, including on Tehran’s vital oil exports. 

“The project would transform the region as various oil storage facilities, export jetties, wave breakers and single buoy mooring systems would be built in Jask,” Oil Minister Bijan Zangeneh said through social media. 

Zangeneh added that two refineries as well as petrochemical facilities were also planned in the region.

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