April 2021, Vol. 248, No. 4
Projects
Projects April 2021
Duke Energy Begins Replacing Aging Gas Pipeline
Construction got underway this week on the 12-mile Central Corridor replacement pipeline designed to run though Hamilton County, Ohio, which is in the southeast corner of the state and contains the capital city of Cincinnati.
Duke said the aging infrastructure needs to be replaced as part of an effort to reduce reliance on gas from stations to the south and allow the company to go forward with retirement of peaking plants used during winter.
The company said it has critical propane peaking facilities that help provide natural gas to its regional customers during the coldest days, but those plants must be retired.
“The Central Corridor Pipeline will enable us to upgrade existing infrastructure without interrupting natural gas service to our customers,” a Duke statement red. “Some of our existing pipelines have been in service for over 50 years.”
Duke said the facilities were placed in service in the early 1960s and “reflect outdated technology.” The facilities include a man-made cavern, located 400 feet underground for propane storage and that the cavern walls cannot be repaired.
“Duke Energy needs the flexibility to bring natural gas into Hamilton County from a diverse supply of pipelines located north of our Ohio service territory. Due to the way our system is configured, we cannot bring additional supplies of natural gas from the south,” Duke said.
Chevron Buying Noble Midstream in All-Stock $1.32 Billion Deal
A month after the company made a slightly smaller offer, Chevron Corp plans to buy the shares of Noble Midstream Partners LP it does not already own in an all-stock deal in a deal valued at $1.32 billion.
Noble Midstream currently provides crude oil, natural gas and water-related midstream services and owns equity interests in oil pipelines in the DJ Basin in Colorado and the Delaware Basin in Texas.
In the DJ Basin the company has sponsored acreage dedications spanning more than 300,000 acres. Additionally, it holds about 20,000 total dedicated acres in Reeves County in the Delaware Basin, mostly related to third-party customers.
Noble Midstream was originally formed by oil producer Noble Energy, but the bulk of it was acquired by Chevron in October 2020 for $5 billion.
In late 2017, Noble Midstream acquired a 54.6% interest and operatorship in the Saddle Butte Rockies Midstream and affiliates and formed the Black Diamond joint venture with Greenfield Midstream.
The Black Diamond assets include a large-scale integrated crude oil gathering system in the DJ Basin, consisting of gathering pipelines and crude oil storage capacity. Black Diamond has more than 200,000 dedicated acres from 11 customers under fixed fee arrangements.
In 2018, Noble Midstream entered into a joint venture with Salt Creek Midstream on a crude oil pipeline and gathering system in the Delaware Basin with acreage dedications totaling more than 100,000 acres across multiple third-party producers.
Chevron, the second-largest U.S. oil producer, in October closed a $4.1 billion all-stock purchase of smaller rival Noble Energy, gaining a nearly 63% stake in Noble Midstream alongside large shale and international natural gas reserves.
Germany’s Friedrich Vorwerk Plans to Expand in Hydrogen Market
German energy infrastructure firm Friedrich Vorwerk plans an initial public offering (IPO) on the Frankfurt stock exchange in the first quarter to accelerate growth in the hydrogen market.
The company, a subsidiary of industrial firm MBB, hopes to raise about $107 million (90 million euros) from newly issued shares as well as shares from existing owners, according to Reuters.
Vorwerk, in which MBB has a 66% stake, specializes in pipeline, cable and plant construction for the gas, electricity and hydrogen markets. It posted earnings before interest, tax, depreciation and amortization of $69.4 million (58.6 million euros) in 2020 on sales of $345.1 (291.2 million euros).
MBB said the hydrogen and electricity businesses were expected to benefit from “substantial investments in light of the clean energy transition.”
New Pipeline Gas Supply Heading to West Australia
Western Gas, the owner and operator of the Equus Gas Project, signed a memorandum of understanding with APA Group assess supplying the gas at competitive prices to western Australia domestic gas customers and East Coast markets through a new pipeline, a news release states. Both companies are based in Australia.
The Equus Gas Project is a development-ready 2 Tcf of gas and 42-million-barrel condensate offshore project about 124 miles (200 km) west of Onslow in Western Australia.
The study will assess the development, commercial, marketing and regulatory aspects of the project to form a basis for an integrated bankable feasibility study, according to the release.
The offshore pipeline would run from the Equus fields to the Ashburton North Strategic Industrial Area, the release states, and gas supply to the east coast would be via an onshore transcontinental pipeline.
“We are delighted to be working with APA Group to advance an Australian resource for supply to Australian markets at an affordable price,” Western Gas Executive Director Andrew Leibovitch said. “This collaboration brings together our independently owned proven gas resource with APA’s long-standing expertise in pipeline construction and operation and its strong relationships with domestic customers and retailers.”
Gas supply could tighten in the east and west coast markets within the next few years with the absence of development of new gas fields, Western Gas said.
“Equus has the opportunity to meet those market needs, as well as create new gas supply opportunities independent of LNG focused developments,” Leibovitch said.
Black Bear Transmission Sells Alabama Gas Gathering Assets
Black Bear Transmission announced it has completed the divestiture of BBT Alabama’s gas gathering assets to an undisclosed buyer.
This divestiture follows Black Bear’s most recent acquisition – the purchase of the NGT Assets from Third Coast Midstream in September.
BBT Alabama owns and operates a fee-based, natural gas gathering system that connects production in Alabama to regional long-haul pipelines. The asset sale consists of more than 240 miles of natural gas pipelines, 26 active metered locations, and 1 active compressor station.
“We are excited to complete this transaction,” said Black Bear CEO Rene Casadaban. “The sale of these assets allows us to continue our main focus on the transmission business, which serves long-term, demand-driven end-user markets, while continuing to provide safe and reliable service.”
The deal allows Black Bear to achieve operational cost savings while directing more internal resources toward its core natural gas transmission infrastructure, the company said.
The terms of the transaction were not disclosed.
Ameren Upgrading Natural Gas Pipeline in Illinois
Ameren Illinois crews will be replacing vintage steel pipeline and natural gas services with modern, corrosion-resistant polyethylene material through the summer.
Starting in March, crews went into action in Champaign, Ill., to replace 11 miles of natural gas pipeline and 900 individual customers’ services. The $6.7 million project should be completed by December, weather pending.
“These proactive steps will ensure the continued safe, reliable delivery of natural gas today while preparing us to meet the future needs of our natural gas customers,” said Colby Sawin, director of East Gas Operations.
Lithuania-to-Poland LNG Pipeline to Come Online Next Year
Lithuanian energy company Ignitis Group will begin shipping LNG to Poland in 2022 when a new 316-mile (508-km) pipeline between the two countries comes online, the company announced.
The GIPL pipeline between Poland and, is due to be completed by December 2021 and will also give Finland, Estonia and Latvia access to pipeline gas from continental Europe.
The region currently imports pipeline gas from Russia and LNG via an import terminal at Lithuania’s Klaipeda port.
Lithuania’s energy minister has previously said that the new pipeline would also be used to supply LNG from Klaipeda to a planned gas-fired power station to be built in northeast Poland.
Canada Looks at All Options to Keep Line 5 Pipeline Operating
Canada served notice it will do whatever it has to do, in order to keep the Line 5 oil pipeline open, according to Resources Minister Seamus O’Regan.
His comments came after an official with the Canadian foreign ministry said the nation might fall back on the Transit Pipeline Treaty of 1977, which stipulates that there be “unimpeded flow” of petroleum products between the U.S. and Canada.
“We are preparing to invoke whatever measures we need to in order to make sure Line 5 remains operational,” O’Regan told a parliamentary committee, according to Reuters. He declined to comment specifically on the government’s legal strategy.
The state of Michigan in November ordered Enbridge to shut down the 540,000 bpd Line 5, due to concerns over possible leaking into the Great Lakes.
Pipeline opponents have been encouraged by U.S. President Joe Biden revoking a permit for the Keystone XL pipeline in January, despite protests from Ottawa.
Unlike KXL, which was under construction when its permit was revoked, Line 5 is currently in service.
Second Russian Pipe-Laying Vessel Joining Nord Stream 2 Construction
A second Russian pipe-laying vessel is undergoing sea trials ahead of joining the project, as it moves forward with construction despite growing political challenges.
The Akademik Cherskiy departed the port of Wismar, German Thursday with the intention of later joining the project in Danish waters, sources told Reuters.
“Upon the sea trials completion, the vessel is planned to start pipelay works in the Danish EEZ,” a Nord Stream 2 spokesman said.
The Danish Maritime Authority (DMA) said it expects the construction work to be finished by the end of September. Another Russian vessel, Fortuna, is currently laying pipes in Danish waters.
The pipeline is mostly complete, but as of early February about 75 miles (120 km) had yet to be laid in Danish waters and almost 18.6 miles (30 km) in German waters.
Nord Stream 2 is expected to double the capacity of the existing undersea Nord Stream gas pipeline from Russia to Germany to 110 Bcm annually.
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