January 2023, Vol. 250, No. 1

Projects

Germany Plans 1,118-Mile Hydrogen Pipeline Network by 2027

Williams, Sempra to Develop LNG, Pipeline Projects on Gulf Coast 

Williams entered into an agreement with Sempra Infrastructure to establish an integrated platform to further connect the Haynesville Basin to growing LNG export demand along the Gulf Coast.

Cameron LNG facility (Photo: Cameron LNG)

As part of the proposed transaction, Williams and Sempra Infrastructure plan to form a strategic joint venture to own, expand and operate the Cameron Interstate Pipeline that is expected to deliver natural gas to the proposed Cameron LNG Phase 2 in Hackberry, Louisiana.  

Additional pipelines are also expected to be owned by the joint venture, including the Louisiana Connector Pipeline expected to deliver natural gas to Sempra Infrastructure’s proposed Port Arthur LNG facility, located in Port Arthur, Texas. 

“We are excited to continue advancing our U.S. Gulf Coast LNG and associated pipeline projects as we work to help satisfy a growing global demand for cleaner, more reliable energy sources,” said Justin Bird, CEO of Sempra Infrastructure.  

The agreement anticipates long-term gas sales of 0.5 Bcf/d delivered near Gillis, Louisiana, and two LNG offtake agreements for 3 mtpa in the aggregate from Sempra Infrastructure’s proposed Cameron LNG Phase 2 and Port Arthur LNG projects. These proposed transactions complement Williams’ recently sanctioned low-carbon Louisiana Energy Gateway (LEG) gathering project and are expected to include connections to pipelines serving Sempra Infrastructure’s LNG export facilities. 

Ørsted Plans Large-Scale Green Hydrogen Project in Denmark 

Renewable energy firm Orsted plans invest in a large-scale green hydrogen production facility in Denmark as part of a transition to cleaner energy. The first stage of the investment is expected to run between $141 and $705 million (1 billion to 5 billion Danish crowns), the company said.  

Orsted’s Power-to-X technology converts surplus electricity, usually from renewable sources such as wind or solar, to storable substances or fuels, producing hydrogen or methane. 

The project is being developed with Skovgaard Energy and is expected to have  electrolysis capacity of 150 megawatts (MW) in its first phase. 

The capacity might increase to more than 3 gigawatts (GW) “if the necessary offshore wind capacity and hydrogen infrastructure in and out of Denmark are established,” Orsted said. 

About 100 GW of electrolysis capacity is required to deliver the 10 million tonnes the European Commission seeks to have in place by 2030 as part of its plans to eliminate Russian fossil fuels, according to Danish engineering group Topsoe. 

Enbridge Reduces Supply on Vital Canadian Pipeline System 

The Enbridge is reducing supply on its vital Canada line, creating yet another barrier for oil producers, Bloomberg reported. The Calgary-based said it will allocate space on a section of its Mainline system by the most since November 2021.  

The allocation has resulted in significant discounts for Canadian crude oil, and the discount for Canadian heavy crude is about $30 in Alberta, near the greatest level since 2018. 

The move seems to indicate that export lines may be beginning to fill up once more as a result of the province’s record oil production and the increased demand for Canadian petroleum on the U.S. Gulf Coast. 

Russia Says It Prevented Sabotage of ‘South Stream’ Pipeline 

The Federal Security Service (FSB) of Russia said that it foiled a Ukrainian special services 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 in scrapped in favor of TurkStream, which reaches land in and has the capability of supplying gas to Hungary and Bulgaria. 

Pembina to Sell $500 Million Stake in Gas Pipeline System 

Canadian pipeline operator Pembina’s joint venture with KKR & Co. agreed to sell its 50% stake in the Key Access Pipeline System (KAPS) to private equity firm Stonepeak Partners for $484.89 million (C$662.5 million), the companies said. 

KAPS is a 348-mile (560-km) system that ships NGLs from the Montney and Duvernay fields in Western Canada to processing facilities in Fort Saskatchewan owned by Keyera. 

Keyera Corp. will continue holding the remaining 50% stake in KAPS and will operate the asset, Stonepeak said. 

Germany Plans 1,118-Mile Hydrogen Pipeline Network by 2027 

Germany hopes to build an 1,118 miles (1,800 km) hydrogen energy pipeline network by 2027, according to an Economy Ministry draft strategy paper. 

The paper, according to Reuters, also envisions Germany bolstering the use of blue hydrogen, in part through importation, as part of a transition toward green hydrogen. 

The government also foresees Germany doubling its electrolysis capacity to 10 gigawatts by 2030, the paper said. 

Chancellor Olaf Scholz in September said Germany wants to create a boom in the use of hydrogen as a way of diversifying its energy sources and to meet its climate goals. 

 

Blue hydrogen is extracted from natural gas and captures the CO2 emissions in underground or subsea storage. It is seen as a transitional approach while green hydrogen, which uses renewable energy for extraction, cannot fully meet demand.  

Delfin Gets More Time to Build US Gulf of Mexico LNG Export Plant 

U.S. regulators gave LNG developer Delfin LNG until September 2023 to place the onshore portion of its proposed Gulf of Mexico floating export project into service off the coast of Louisiana. 

Delfin is one of many North American LNG export developers that delayed construction in recent years partly due to the pandemic and the resulting hesitancy of customers to sign long-term deals. 

The U.S. Federal Energy Regulatory Commission (FERC), in 2017, authorized Delfin to put its project into service by September 2019 has granted several one-year extensions since then.  

In its request, Delfin told FERC the LNG market “is strong with the current geopolitical importance of the Ukraine invasion and the initiative of the European Union to increase deliveries of U.S LNG to Europe.’’ 

Delfin has agreed to sell LNG to a unit of Swiss/Dutch commodity trading company Vitol. 

The project would use existing offshore pipelines to supply as many as four vessels that could each produce about 3.5 mtpa of LNG. 

Putin Discussed Talks with Erdogan About  Turkish Gas Hub 

Russian President Vladimir Putin talked about creating a Turkish gas hub with Turkish President Tayyip Erdogan during a recent phone call, according to a Kremlin news release. 

Putin first proposed creating a gas base in Turkey in October as a means to redirect supplies from the damaged Nord Stream pipelines and export them on to the European market, an idea that Erdogan has supported. 

The Kremlin said the two sides also discussed the agreed extension of the Black Sea grain deal, an agreement that Turkey helped broker to ensure the safe passage of grain exports from blockaded Ukrainian ports. 

“Vladimir Putin and Recep Tayyip Erdogan emphasized the importance of a comprehensive and complete implementation of this package agreement,’’ the Kremlin said. 

Poland Gains Control of Gazprom’s Local Gas Pipeline Assets 

Poland will take over Gazprom’s Polish assets, Development Minister Waldemar Buda said, while expressing concern about the Russian company’s 48% stake in Europolgaz, which owns the Polish section of the Yamal gas pipeline. 

The compulsory administration will ensure security of the critical infrastructure used for gas transit. 

In September, Poland imposed sanctions on Gazprom and said its assets would be frozen after in April. Gazprom was among 50 Russian companies and oligarchs included in restrictions, following Russia’s invasion of Ukraine. 

Russia then discontinued gas exports to Poland after the nation refused to pay in rubles. 

“We are doing all we can to counteract Russia’s aggression and eliminate Russian capital and influence, expropriation is not possible under (the) Polish constitution hence we decided to put in place compulsory management,’’ Buda said in an email. 

Outrigger Sells Almost 200 Miles of Pipeline to Summit Midstream 

Outrigger Energy II completed the sale of its midstream system in Weld County, Colorado, to Summit Midstream Partners, the two companies said. 

Outrigger’s Denver-Julesburg (DJ) Basin system includes a 60 MMcf/d cryogenic natural gas processing plant with product deliveries to the Cheyenne Plains gas pipeline and DCP’s natural gas liquids system, 70 miles of low-pressure natural gas gathering pipelines, 90 miles of high-pressure natural gas gathering pipelines, 12,800 hp of field and plant compression and 30 miles of crude oil gathering pipelines with delivery to the Pony Express Pipeline. 

The company’s DJ system is anchored by long-term, fee-based contracts and about 310,000 dedicated acres from leading basin operators. 

“The system’s extensive high-pressure gas gathering footprint provides an excellent platform for interconnectivity with multiple midstream systems in the DJ Basin, including Summit’s system,” Dave Keanini, Outrigger’s president and CEO, said. 

With the sale of its DJ Basin system, Outrigger will be exclusively focused on the continued development of its Williston Basin system located in Williams and Mountrail counties of North Dakota.  

In early 2022, Outrigger extended its 24- and 20-inch, high-pressure, rich-gas pipeline from Williams County farther east into Mountrail County. The pipeline now extends more than 100 miles and has a capacity of 450 MMcf/d. 

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