December 2022, Vol. 249, No. 12
Projects
TC Energy Hires Allseas to Lay 445 Miles of Offshore Gas Pipeline
Open Season Launched for NG Storage Services at Freeport Hub
Houston-based Gulf Coast Midstream Partners LLC (GCMP) scheduled an open season for firm gas storage services at its Freeport Energy Storage & Sequestration Hub (FRESSH) under development near Freeport, Texas.
“Given ongoing natural gas price volatility and the acute shortages experienced in natural gas and electric power markets during Winter Storm Uri in 2021, we believe the time has come to develop new, strategically located HDMC gas storage capacity to serve the Texas Gulf Coast market. Our FRESSH project will do just that,” GCMP’s CEO John M. Hopper said.
GCMP’s FRESSH project is strategically located for providing high deliverability, multiple inventory cycle (HDMC) gas storage services to the Texas Gulf Coast intrastate market, with potential connectivity to as many as 11 intrastate pipeline segments. Additional connectivity may be available for up to three interstate pipelines under Section 311 of the Natural Gas Policy Act.
Phase I of the FRESSH project will consist of 12 Bcf (340 MMcm/d) of working gas storage capacity with an aggregate injection capability of 400,000 scf/d and an aggregate withdrawal capacity of more than 800,000 scf/d. GCMP’s HDMC gas storage service offerings include 30-day (peaking), 45-day (8-turn), 60-day (6-turn) and 90-day (4-turn) services.
Pipeline Operator Plains All American Raises 2022 Profit Forecast
Bolstered by higher volumes on its Permian Basin pipelines and better prices, operator Plains All American raised its profit forecast for the third time this year.
Recently, fellow operators Magellan Midstream Partners and Energy Transfer also raised their earnings outlooks.
Crude oil pipeline tariff volumes rose 23% to 7.5 MMbpd, Plains said, with volumes in the Permian Basin of Texas and New Mexico climbing about 30%.
Plains and Canadian pipeline company Enbridge Inc. purchased Western Midstream Partners’ 15% interest in Cactus II Pipeline LLC for an aggregate amount of $265 million, the companies said in a separate statement.
Company Agrees to Pay $11 Million on Line 3 Pipeline Penalties
Enbridge reached an agreement to pay $11 million in penalties over its Line 3 oil pipeline replacement project. The money will be handed over to the Fond du Lac Band of Lake Superior Chippewa and Minnesota regulating entities.
The Canadian company said $7.5 million of the total will be used to provide financial assurances and fund multiple environmental and resource enhancement projects, according to Reuters.
As part of the deal, the Minnesota attorney general filed misdemeanor criminal charge for taking water without a permit at the Clearbrook aquifer, which will be dismissed if Enbridge complies with state water rules for one year, the company said.
Enbridge Approves Expansion of Southern B.C. Pipeline System
Enbridge sanctioned an expansion of the southern segment of its British Columbia (B.C.) pipeline system, a project that would cost up to US$2.65 billion (C$3.6 billion), after strong demand from crude oil producers.
In a separate move, the company launched an open season on the northern segment of the B.C. line. Interest in the open season would determine whether Enbridge launches a $1.4 billion (C$1.9 billion) expansion of that line.
Enbridge said the T-South expansion of its B.C. pipeline system, which runs from near Chetwynd and extends south to the Canada-U.S. border at Huntingdon-Sumas, will add 300 MMcf/d (8.5 MMcm/d) of capacity.
The expansion of the T-North segment would boost capacity by about 500 MMcf/d (14 MMcm/d). T-North connects the Fort Nelson area to the T-South segment and to interconnecting pipelines at the B.C.-Alberta border on the east.
Enbridge expects the T-South expansion will be in service in 2028, while open season for T-North is expected to end Jan. 10, 2023.
TC Energy Hires Allseas to Lay 445 Miles of Offshore Gas Pipeline
TC Energy hired Swiss-based contractor Allseas to install the (444-mile) (715-km) offshore segment of the Southeast Gateway Pipeline in the Gulf of Mexico.
The $4.5 billion Southeast Gateway Pipeline, which received approval in August, is the first significant gas infrastructure project to result from a strategic partnership between TC Energy and Mexico’s state-owned utility Comisión Federal de Electricidad (CFE).
“Together, TC Energy and the CFE will develop critical energy infrastructure to serve the growing central and southeast regions of Mexico,” François Poirier, president and CEO of TC Energy, said. “The Southeast Gateway Pipeline will be TC Energy’s second marine natural gas pipeline in Mexico, connecting to the coastal regions of Veracruz and Tabasco, and is another prime example of our ability to originate world-class projects that offer incremental growth to our long-term outlook.”
The 36-inch natural gas pipeline will follow the coast southward, running from Tuxpan through the Gulf of Mexico, essentially connecting the ports of Coatzacoalcos and Dos Bocas. An estimated 1.3 Bcf/d (37 MMcm/d) of natural gas will be transported by the pipeline.
TC Energy said sanctioning of the pipeline would expand its secured capital program to $33 billion and could add to its 2021–2026-adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth outlook.
Germany-based Europipe, which received the order from TC Energy in August, will supply the pipe for the project, Offshore Energy reported. The scope of work includes providing 227 miles (365 km) of pipe with an anti-corrosion coating.
The pipeline was built in the 1960s and ships oil from Edmonton, Alberta, to refineries in the U.S. Midwest. During the final stage in Minnesota, Native American groups and environmentalists opposed the replacement project, which has been in the works since 2014.
Russia Says It Prevented Sabotage of ‘South Stream’ Pipeline
The Federal Security Service (FSB) of Russia said it foiled a Ukrainian attempt to sabotage the “South Stream” gas pipeline.
‘‘As a result of a set of investigative measures, [the FSB] prevented an attempt by Ukrainian special services to commit an act of sabotage and terrorism on the South Stream gas pipeline supplying energy resources to Turkey and Europe,’’ the FSB said.
It was not clear which pipeline the statement referred to as the South Stream, which was intended to move Russian gas beneath the Black Sea to the Bulgarian coast. That project was abandoned in 2014.
The South Stream pipeline was scrapped in favor of TurkStream, which reaches land in and has the capability of supplying gas to Hungary and Bulgaria.
px Group to Operate 294-Mile North Sea Gas Pipeline
TotalEnergies E&P UK has awarded px Group a long-term, multiyear contract to operate the SEAL pipeline, a critical component of the U.K. energy supply and energy security.
The pipeline is 474 km (294 miles) long with a diameter of 34 inches and has been operational for more than 20 years. The SEAL pipeline transports sales quality gas from the Elgin Franklin platform in the Central Graben Area of the North Sea to the dedicated SEAL module at the Bacton gas terminal on the Norfolk coast.
With the addition of this contract, px is now responsible for managing commercial operations of approximately 40% of the UK gas supply.
Using the latest IT cloud technology, px Group will operate and manage the SEAL pipeline via a number of cloud applications. The project also included the recruitment and training of a full complement of shift personnel along with the project management of building, testing and operating the new control infrastructure.
Enterprise Transports Record Volumes During Quarter
Enterprise Products Partners’ pipelines shipped a record volume of natural gas and liquids during the third quarter of 2022, the company said during an earnings statement.
According to the company, it transported 11.3 MMboe/d, and natural gas pipelines transported a record 17.5 TBtu/d, while posting an 11% increase in total gross operating margin to $2.3 billion for the third quarter vs. the same period in 2021.
Results were attributed to the company’s Midland Basin gathering and processing business, and higher margins from its natural gas processing, octane enhancement and natural gas pipeline businesses.
Overall, the company’s natural gas processing and related natural gas liquids (NGL) business reported a gross operating margin of $485 million for the third quarter, an 84% increase over last year.
For crude oil pipelines and services, the company’s gross operating margin was $415 million, compared with $423 million for the third quarter of 2021, according to Reuters.
MPLX Shows More Throughput in Third-Quarter Comparisons
MPLX LP’s total pipeline throughputs for third-quarter 2022 were 5% higher than the same time last year, while it raised its quarterly cash distribution by 10%, the company said in an earnings statement.
The throughputs of 5.8 MMbpd and net income of almost $1.43 billion, compared with $802 million, for the periods reflected in MPLX’s continued focus on the Permian and Marcellus Basins.
The company’s average pipeline tariff rate decreased 2% vs. the same time last year to $0.88 per barrel, due to changes in the mix of throughputs on various pipeline systems, the company said.
Terminal throughput was 3 MMbpd for the quarter, a decrease of 1% against last year’s total for the period.
For its gathering and processing business, income from operations increased by $565 million compared with a year ago. Although gathered and processed volumes rose overall, both decreased in the Marcellus region.
For the segment, MPLX remains focused on the Permian and Marcellus Basins because of producer demand, the company said.
Gas and natural gas liquids prices continue to be supportive in the U.S. northeast, as well as elsewhere, company executives said on the third-quarter earnings call.
In the Permian, the 200-MMcf/d (5.66 MMcm/d) Tornado ll processing plant is expected to be fully online by year-end. Preakness ll, the company’s sixth 200-MMcf/d processing plant in the basin, is expected online in the first half of 2024.
In the Marcellus, MPLX placed the 68,000-bpd Smithburg de-ethanizer into operation in the third quarter. The Harmon Creek ll, a 200-MMcf/d processing plant, is expected online in the first half of 2024.
Judge Questions New Water Permit for Mountain Valley Pipeline
A federal circuit court judge said West Virginia regulators haven’t adequately explained how approvals for construction on the Mountain Valley Pipeline have been changed to avoid future water pollution, setting up another potential setback for the beleaguered natural gas pipeline.
A permit for the 303-mile (488-km) proposed pipeline was opposed by environmentalist groups after the West Virginia Department of Environmental Protection (WVDEP) found 100 water-quality and sediment violations.
During arguments at the 4th U.S. Circuit Court of Appeals, one judge from the panel asked WVDEP to explain how further construction guidelines address the pollution concerns.
“There’s no question you have new conditions, what you don’t have is an explanation as to why those conditions are specifically tailored to address past problems,” Judge James Wynn said.
In previous challenges, the 4th Circuit Court had vacated key approvals from federal agencies needed for the pipeline to cross a national forest.
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