October 2020, Vol. 247, No. 10



Germany Pressed to Rethink Nord Stream 2 Pipeline after Poisoning

Pressure has mounted for German Chancellor Angela Merkel to reconsider the Nord Stream 2 pipeline, which will take gas from Russia to Germany, after she said Kremlin critic Alexei Navalny had been poisoned with a Soviet-style nerve agent. 

Merkel said Navalny, who is being treated in a Berlin hospital, was the victim of a murder attempt using the nerve agent Novichok. Merkel is demanding an explanation from Russia.

Moscow has denied involvement and said the West should not leap to hasty conclusions. 

Western countries have condemned the attack and many German politicians want a tough response.

“We must pursue hard politics; we must respond with the only language (Russian President Vladimir) Putin understands – that is gas sales,” Norbert Roettgen, the conservative head of Germany’s parliamentary foreign affairs committee, said, according to Reuters.

Nord Stream 2 will double the capacity of the existing Nord Stream 1 pipeline from Russia to Germany. Led by Russia’s Gazprom with Western partners, the project is more than 90% completed and scheduled to operate from early 2021, which could make it hard to stop.


Chevron Delays Restart of Gorgon LNG Train for Additional Repairs

Chevron Corp said it would delay until later in October the restart of the Train 2 unit at its liquefied natural gas (LNG) plant in Western Australia, as more time is needed to repair welds on its propane heat exchangers. 

Train 2 at Australia’s second-largest LNG plant has been shut down for maintenance since May, which was extended after cracks were found in the production unit’s propane kettles. The company had hoped to complete the repairs by early September.

“Chevron expects the repairs to the heat exchangers, where weld quality issues were discovered during scheduled maintenance in July 2020, to be complete and to restart production at Train 2 next month,” the company said.

The company said it would continue to meet its contractual obligations to provide gas to the Western Australian domestic market and LNG through the prolonged shutdown.

Cracks up to 3 feet (1 meter) long and 1.2 inches (30 mm) deep were found on between eight and 11 kettles on Train 2, the Australian Manufacturing Workers Union said in July, calling for an immediate shutdown of the whole plant for safety inspections.

Western Australia’s industrial regulator agreed last month to allow Chevron to shut the remaining two Gorgon trains for inspection and repairs in stages – with Train 1 to be shut in October and Train 3 in January.


San Mateo Midstream Nears Completion of Gathering Pipeline

San Mateo Midstream said it is nearing completion of construction on 24 miles (39 km) of large-diameter gas gathering pipelines between the Black River Processing Plant and the New Mexico and Texas state line in southeastern Eddy County.

The company is also completing construction of 19 miles (31 km) of large-diameter natural gas gathering pipelines northward from the Black River Processing Plant, as well as 19 miles of various diameter crude oil pipelines from certain points of origin in Eddy County to the existing San Mateo interconnect with Plains Pipeline, L.P. in Eddy County.

These new pipelines, along with the expansion of the Black River Processing Plant, substantially increase the footprint of San Mateo’s three-pipe midstream services offering throughout Eddy County.

“The expanded Black River Processing Plant and the associated pipeline connections provided by San Mateo provide producers in the area reliable transportation and processing for their natural gas and NGLs out of the basin,” said Matt Spicer, co-chief operating officer of San Mateo.

The Black River LNG expansion adds an inlet capacity of 200 MMcf/d (6 MMcm/d) of natural gas to the previously existing inlet capacity of 260 MMcf/d (7 MMcm/d).

The expanded Black River Processing Plant supports San Mateo’s anchor customer, Matador Resources Company, and offers processing opportunities for other producers’ development efforts in the Delaware Basin.

Consistent with existing arrangements, San Mateo’s customers may access firm transportation via pipeline and fractionation for all NGLs and firm transportation via pipeline for all residue natural gas volumes delivered at the tailgate of the Black River Processing Plant, including those volumes attributable to the newly increased inlet capacity.


US Interior Seeks Expedited Environmental Reviews for Energy Projects

The Department of the Interior asked the Trump Administration to expedite environmental reviews for several energy projects, including liquefied natural gas (LNG) facilities and pipelines, as part of the COVID-19 recovery plan.

More than 60 projects targeted for expedited environmental reviews were detailed in an attachment to a July 15 letter from Assistant Interior Secretary Katherine MacGregor to White House Economic Advisor Larry Kudlow.

According to the Associated Press, the letter, obtained by the Center for Biological Diversity, does not specify how the review process would be hastened. It says the specified energy, environmental and natural resource projects “are within the authority of the Secretary of the Interior to perform or advance.”

Included on the Interior’s list are the Jordan Cove liquefied natural gas terminal in Oregon and the Mountain Valley natural gas pipeline in Virginia.

Other projects listed include highway improvements in South Carolina, Georgia, Florida and other states; storm levees and wetlands restoration initiatives in Louisiana; the Lake Powell water pipeline in Utah; wind farms in New Mexico and off the Massachusetts coast; and mining projects in Nevada, Idaho, Colorado and Alaska.


Police Investigating Bomb Hoax at Texas Pipeline Construction Site

Federal and Texas law enforcement agencies are investigating a device made to look like a bomb placed at a construction site for the Permian Highway natural gas pipeline, an official said.

“It was intentionally placed there,” Chief Deputy Neal Leonard of the Blanco County Sheriff’s Office said. “It looked like an explosive device. There was a cylinder with wires coming out of it connected to a large 9-volt battery.”

The Austin, Texas, Police Department Bomb Squad determined the device to be a fake, Leonard said. Blanco County is located west of Austin, the Associated Press said.

Kinder Morgan, lead partner of the $2.3-billion Permian Highway Pipeline project, resumed construction Sept. 1 at the Blanco County site, a day after work was halted following discovery of the device, Ruiz said.

There have been no claims of responsibility for the package, said Sgt. Deon Cockrell of the Texas Department of Public Safety.

The 428-mile (689-km) pipeline that stretches from the Permian Basin oilfield in West Texas to the U.S. Gulf Coast has faced challenges from local officials, celebrities and environmentalists opposed to its path through sensitive wetlands and areas occupied by endangered species.


Brazil’s Lower House to Vote on Encouraging Pipelines

Brazil’s Lower House is set to vote to pass a bill that can further open up the natural gas market, including pipelines, to private investors by breaking the monopoly held by state-controlled oil company Petrobras.

If approved, the law could reduce natural gas prices in Brazil, according to Congressman Laercio Oliveira, who will present the bill in the House. Its backers say the law could attract $11 billion (60 billion reais) in private investments and generate 4 million jobs.

The bill, which is expected to pass, would then go to the Senate for approval.

Petrobras lost the monopoly in the oil and gas sector by law more than two decades ago, but in practice kept a virtual monopoly in the natural gas industry. The company started to scale back control a couple of years ago by selling assets, including thousands of miles of pipelines.

The bill aims to reduce bureaucracy in handling concessions and building pipelines, with only one authorization needed from Brazilian oil and gas industry regulator ANP (National Agency of Petroleum, Natural Gas and Biofuels).


Energy Transfer Completes Lone Star Express Pipeline Expansion

Energy Transfer finished its Lone Star Express Pipeline expansion project. The pipeline adds over 400,000 bpd of natural gas liquids (NGLs) capacity to Energy Transfer’s existing Lone Star NGL pipeline system in Texas.

The 352-mile, 24-inch (566-km, 610-mm) pipeline originates in Winkler County, Texas, and connects into the existing Lone Star Express 30-inch (762-mm) pipeline at the Morgan Junction in Bosque County, Texas, south of Fort Worth.

It will provide shippers additional connectivity out of the Permian and Delaware basins.

The Lone Star pipeline system ultimately connects into Energy Transfer’s Mont Belvieu facility, an integrated liquids storage and fractionation facility along the U.S. Gulf Coast with connectivity to more than 35 petrochemical plants, refineries, fractionators and third-party pipelines.

Energy Transfer’s seventh fractionator at Mont Belvieu was brought online earlier this year, bringing the partnership’s total fractionation capacity to more than 900,000 bpd.


US Army of Engineers Encourage Settlement in Pipeline Litigation

The U.S. Army Corps of Engineers is recommending that the federal government negotiate a settlement with North Dakota for more than $38 million that the state spent policing protests against the Dakota Access Pipeline.

In a letter obtained by The Associated Press, the Department of the Army is asking the Department of Justice to enter into settlement negotiations with the state “to avoid protracted and costly litigation, particularly in light of the harm that occurred in this case.”

The request comes following U.S. District Court Judge Daniel Traynor’s decision last month to deny the federal government’s motion to dismiss North Dakota’s lawsuit seeking to recover more than $38 million in damages the state claimed from the months-long pipeline protests almost four years ago.

“I request that you consider engaging in settlement discussions with North Dakota to determine whether a reasonable resolution is within reach,” Army Under Secretary James McPherson wrote in his letter to acting Assistant Attorney General Ethan Davis.

North Dakota Republican U.S. Sen. Kevin Cramer called the recommendation “very significant” and the right thing to do for the federal government.

“North Dakota assumed all costs including the cleanup of actions facilitated by the Corps of Engineers,” Cramer said early September. The state “has one thing in mind and that is to make us whole. We don’t go away on these things like everybody else.”


Michels Corporation Selected by TC Energy to Build Facilities on Keystone XL

Michels Corporation has been awarded a contract from TC Energy to construct pipeline facilities on the Keystone XL Pipeline.

In the long run, this project will provide the energy our country needs; during construction, it will allow us to provide a steady paycheck to our hard-working people and their families,” said Pat Michels, president and CEO of Michels Corporation.

Michels is responsible for the construction of eight pump stations in Montana, South Dakota, Oklahoma and Texas. Construction started in late June and is on schedule for completion in the first quarter of 2021.

During peak construction, Michels Corporation will employ more than 350 people on the facilities’ projects.

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