April 2010 Vol. 237 No. 4
In The News
April Newsreel: Study Questions Benefits of 2005 Energy Policy Act; Shell Gets CGA President's Award; EQT Acquiring Acreage in Marcellus and more
Storage Study Questions Benefits Of 2005 Energy Policy Act
Shell Pipeline Company Receives Common Ground Alliance President’s Award
EQT To Acquire Additional Acreage In Marcellus Shale
Texas Site Added To Superfund List
Tug-Of-War Between Sewer And Natural Gas Lines In Minnesota
New Tools From ROSEN Unveiled In Houston
Alliance Transports First Gas From Bakken Shale Field
Newmans, Cameron Form JV For Downstream Solutions
TMK IPSCO To Open Connections Production Facility In Marcellus Shale
Sempra Acquiring Mexican Pipeline, Gas Infrastructure Assets
GE Unit Partners To Acquire West Texas, Rocky Mountain Oil & Gas Reserves
Alaskan Officials See China As Energy Partner
Peoples Gas Worker Dies In Construction Accident
David Parker Retiring As Head Of AGA
Energy Transfer Acquires Assets In Haynesville Shale Assets
Panama Energy Project Wins Best Refinancing Award
Pace, Geospatial Holdings, Ridge Global Form Strategic Partnership
New Tools From ROSEN Unveiled In Houston
ROSEN USA revealed its latest inline inspection technologies during an exclusive viewing party at the Pipeline Pigging and Integrity Management Conference held in Houston. Among the tools on display was ROSEN’s newest multi-diameter tool: a 30×36-inch corrosion detection tool capable of inspecting pipelines with changes in diameter by as much as six inches. A group of pipeline industry personnel, representing over 25 operating companies, were welcomed by General Manager of Products and Services Bryce Brown, as well as Benedikt Rosen, who was visiting from ROSEN Headquarters in Stans, Switzerland.
Storage Study Questions Benefits Of 2005 Energy Policy Act
A new report by Ziff Energy examines the increase in storage capacity in North America and the location of storage and capacity additions. The price spread between summer injection and winter gas delivery months has provided storage operators with an incentive to build more greenfield storage, expand existing working gas capacity, and add more compression and horsepower to inject and deliver gas more quickly.
The Energy Policy Act 2005 led to FERC Order No. 678 which allows storage operators to capture market-based rates. “The policy objective was to add more storage capacity, which has indeed happened,” said Cameron Gingrich, Manager, Gas Services. “However, the increase in storage capacity has led to high injection season storage carryover volumes, leaving end users with higher carrying costs and increased storage costs from higher summer/winter prices spreads. One has to wonder if this policy is imposing greater costs than added benefits.”
Shell Pipeline Company Receives Common Ground Alliance President’s Award
The Common Ground Alliance (CGA) awarded Shell Pipeline Company LP its “President’s Award” during its annual meeting. The award is presented to an individual, company or association demonstrating leadership and innovation in underground damage prevention.
Gweneyette Broussard, senior legislative and regulatory representative for Shell, received the CGA Ron Olitsky/Member of the Year Award, given in honor of the late Ron Olitsky of Underground Service Alert, who served on the CGA Board from the organization’s establishment and during the development of the Common Ground Study of One Call System and Damage Prevention Best Practices in 1999.
EQT To Acquire Additional Acreage In Marcellus Shale
The EQT Corporation announced plans to acquire 58,000 net acres in the Marcellus Shale from a group of private operators and landowners. The acreage is located primarily in Cameron, Clearfield, Elk and Jefferson counties in Pennsylvania. The purchase includes a 200-mile gathering system, with associated rights of way, and 100 producing vertical wells.
EQT will pay $280 million, 90% with EQT stock and 10% with cash. Following the closing, EQT will hold more than 500,000 net acres in the high-pressure Marcellus shale fairway.
Texas Site Added To Superfund List
The Environmental Protection Agency has added the Van der Horst USA Corporation site in Terrell, TX to the National Priorities List of Superfund sites. The site, located in a commercial warehouse district, is an inactive chromium and iron-plating facility that began operations in the 1950s and operated until December 2006. Finished products associated with these plating operations included natural gas pipeline cylinders for the transportation of natural gas and cylinder bores for large diesel engines such as railroad locomotive engines.
Tug-Of-War Between Sewer And Natural Gas Lines In Minnesota
Xcel Energy has updated the Minnesota Office of Pipeline Safety regarding its ongoing efforts to locate and correct any conflicts between sewer and natural gas lines within its Minnesota natural gas service territory.
The update is in response to a fire that destroyed a Highland Park home when a plumbing contractor tried to clear a clogged sewer line. The plumber inadvertently ruptured a natural gas line that was placed through the home’s sewer line. The gas line was run through the home’s sewer line during an infrastructure project that took place in 1999.
Following the incident, the state ordered Xcel Energy to locate and fix any gas lines that have breached sewer lines statewide. The utility proposed a three-year plan to identify and repair gas mains and sewer lateral conflicts. The plan focuses on the city of St. Paul, where the majority of conflicts have been identified, in addition to hospitals, schools and churches that Xcel Energy serves. Xcel Energy will assess what additional inspections are needed throughout its service territory.
Xcel will start a program to communicate the hazards associated with potential natural gas/sewer line conflicts and the actions necessary to prevent any contact with its lines. It will target professional plumbers and sewer-cleaning contractors who have the greatest potential for identifying these conflicts, as well as equipment rental companies, customers and the company’s employees.
The company will review any new construction processes that include trenchless, underground boring processes. With the growing popularity of modern trenchless methods, the possibility of utilities lines intersecting sewer lines has increased.
Alliance Transports First Gas From Bakken Shale Field
First gas from the Bakken shale oil field, which stretches from Canada into North Dakota, is being transported to the Chicago hub via the Alliance Pipeline system. Alliance has completed construction of an interconnect near Bantry, ND which connects to Pecan Pipeline’s 12-inch, 76-mile Prairie Rose Pipeline. The interconnect brings natural gas and NGLs from the Bakken to market.
While Bakken is primarily an oil play, associated natural gas is being produced. Without the means to transport it, nearly one-third of the gas is burned or flared as a waste by-product.
The Alliance system runs directly through the Williston Basin and is positioned to transport additional gas via such interconnections. It has the capacity to accept additional gas in the U.S. part of its system.
“As the lead time to build new infrastructure can be many years, enhancements to an existing transmission system are the most efficient and economical way to transport natural gas from the Bakken to market. The Alliance system transports rich natural gas, which means the NGLs are extracted at the delivery point, rather than at the production source, reducing processing and transportation costs for producers using the Alliance system by avoiding new plant construction,” said Murray Birch, president/CEO. The interconnection near Bantry, ND is the first field receipt point on the U.S. side of the Alliance Pipeline system.
Newmans, Cameron Form JV For Downstream Solutions
Newmans reports that its ownership has formed a joint venture with Cameron, one of the world’s largest valve manufacturers, to market and manufacture branded products for downstream solutions. Newmans says the affiliation with Cameron will expose Newmans to markets where Cameron has established itself as the industry leader and historically not been part of Newmans’ customer base. Conversely, Newmans reports that it can help expand Cameron’s reach into the downstream markets.
Newmans says it has established itself as a strong industry manufacturer in the downstream valve market and that its product line of gate, globe, and checkvalves, along with newer offerings of ball valves and triple-offset butterfly valves will complement Cameron’s product lines.
TMK IPSCO To Open Connections Production Facility In Marcellus Shale
Steel tubular manufacturer TMK IPSCO has signed a lease on a building in Brookfield, OH where it will install new equipment which will further expand the threading capacity of its ULTRA Premium Connections product line. The facility will be capable of manufacturing premium connections and API connections and will support TMK IPSCO’s growing market share in the Marcellus Shale gas plays.
The facility will have an annual manufacturing capacity of up to 100,000 tons of threaded pipe. Initial employment will be 50 people with long-term levels expected to reach 120. The site is near Youngstown, OH, 40 miles northwest of TMK IPSCO’s existing steel mill in Koppel, PA.
Sempra Acquiring Mexican Pipeline, Gas Infrastructure Assets
Sempra will acquire the Mexican pipeline and gas infrastructure assets of El Paso Corp. for $300 million. The acquisition primarily involves El Paso’s 50% interest in a joint venture with PEMEX. The joint venture operates two natural gas pipelines and a propane system in northern Mexico. The deal also includes El Paso’s wholly owned natural gas pipeline and compression assets in the state of Sonora.
GE Unit Partners To Acquire West Texas, Rocky Mountain Oil & Gas Reserves
GE Energy Financial Services has formed partnerships to acquire West Texas natural gas and North Dakota oil and gas reserves for nearly $200 million.
In the first transaction, GE Energy Financial Services formed a partnership with independent oil and gas company Marlin Energy LLC. Their new alliance, Marlin Permian, LP, acquired natural gas reserves in West Texas from an undisclosed seller for $65 million. GE Energy Financial Services will serve as limited partner. Marlin Energy, based in Lafayette, LA, will serve as general partner of the partnership and operator of the assets.
In the second transaction, GE Energy Financial Services formed a partnership with Sequel Energy, LLC to acquire oil and gas reserves in the Williston Basin of North Dakota from Denver-based St. Mary Land & Exploration Company for $137 million. GE Energy Financial Services will serve as the limited partner, with Sequel – also based in Denver – serving as general partner and operator.
Alaskan Officials See China As Energy Partner
China has a role to play in the Alaskan plans to develop its oil and natural gas ambitions, said Alaskan Lt. Gov. Craig Campbell.
Gov. Sean Parnell plans to invite Chinese investors following a trip there by Campbell in December. Parnell said “gushers” in the Prudhoe Bay and Point Thomson regions of the North Slope require an ambitious effort to exploit.
Alaska needs investors to back its plans to build a natural gas pipeline to market the gas potential in the North Slope. TransCanada and Denali, a joint venture between BP and ConocoPhillips, are competing to develop a natural gas pipeline from the Alaskan North Slope to the Lower 48 states.
Peoples Gas Worker Dies In Construction Accident
In Chicago, a Peoples Gas worker died March 3 in a below-ground construction accident in the West Loop despite heroic efforts to save him. Michael Gryga, 40, was apparently struck by a pipe while pressure-testing it below Jackson Boulevard and Wacker Drive as part of the Wacker Drive reconstruction project. Another Peoples Gas worker was seriously injured, according to news reports.
David Parker Retiring As Head Of AGA
David N. Parker, president/CEO of the American Gas Association (AGA), will retire at the end of 2010. Parker told the AGA board his retirement is part of a transition process that he initiated in 2007 to ensure that AGA continues to have a strong leadership team going forward.
As part of that transition, Parker announced that two AGA senior staff members are taking on new responsibilities: Paula Gant, promoted to senior vice president, Policy and Planning, will develop and manage AGA’s legislative and regulatory agenda. Laura Sheehan has been promoted to senior vice president, Public Affairs, where she will oversee AGA’s advocacy efforts. In addition, Kyle Rogers, AGA’s chief liaison to NARUC, has been promoted to vice president.
In the wake of Parker’s announcement, AGA Chairman Robert Skaggs appointed AGA First Vice Chairman John W. Somerhalder to form a search committee to identify a successor.
“The AGA board is truly saddened to be losing such an outstanding leader,” Skaggs said. “Dave has made AGA a force to be reckoned with in Washington and his ability to bring different groups together to form alliances and partnerships may be his greatest legacy.”
Energy Transfer Acquires Assets In Haynesville Shale Assets
Dallas-based Energy Transfer Partners L.P will buy natural gas gathering and treating assets in the Haynesville Shale from Tristate Midstream, L.P., a portfolio company of Dallas-based Energy Spectrum. Energy Transfer is acquiring Tristate North Louisiana Midstream LLC and TSM Treating LLC, which collectively own a 120-mile gathering system in Red River and Bienville parishes with a capacity of 275 MMcf/d, and natural gas-treating facilities with 480 MMcf/d of treating capacity.
“We are pleased to be expanding our gathering and treating assets in the Haynesville Shale-producing region,” said ETP’s Mac Stallcup, vice president – Louisiana Business Development. “These Tristate assets, which include significant long-term acreage dedications, are not only strategically located, but further complement our emerging presence in the area. Through this acquisition, we have increased acreage dedicated to us under long-term gathering agreements in the Haynesville Shale to more than 100,000 acres.”
The gathering network will tie to several interstate and intrastate pipelines including Energy Transfer’s planned Tiger Pipeline. Tiger Pipeline, expected to be in service in 2011, is under development and consists of a 180-mile, 42-inch natural gas pipeline that will serve the Haynesville Shale-producing region in Louisiana and the Carthage Hub area in East Texas.
Panama Energy Project Wins Best Refinancing Award
An oil storage tank development deal in Panama was awarded Latin American Refinancing Deal of the Year for 2009 by Project Finance magazine. King & Spalding client Petroterminal de Panama S.A. (PTP) was feted for the development of crude oil storage tanks in the Republic of Panama.
King & Spalding’s energy/construction office in Houston advised PTP in October on engineering, procurement and construction agreements with CBI Americas Ltd. and Horton CBI, Limited – a transaction that expanded PTP’s storage tank farm with the addition of tanks on the Pacific and Atlantic coasts of Panama.
PTP operates crude oil-handling facilities, a 131-km oil pipeline that runs through the Panamanian isthmus, energy-generation power plants and a general cargo pier.
Pace, Geospatial Holdings, Ridge Global Form Strategic Partnership
Geospatial Holdings, Inc., Pace Global Energy Services and Ridge Global have created a strategic partnership to offer infrastructure services to the energy, telecom, electrical distribution, industrial, municipal and government sectors.
A news release says the partnership combines Geospatial’s proprietary Smart Probe™ pipeline-mapping technologies and GeoUnderground Web-based secure 3D geographic information system database with Pace’s energy expertise and Ridge Global’s expertise in preparedness, security and resiliency to meet the growing challenges of businesses and governments today.
“The integrated solution provides customers with systems that support effective planning and problem solving, as well as enhancing operating efficiency,” said Mark Smith, CEO of Geospatial. “Customers can make better use of budgets by combining efforts across security, energy and underground infrastructure systems.”
“Geospatial is at the forefront of underground pipeline data capture and data management services which provides enhanced value to our clients,” said Timothy F. Sutherland, Chairman/CEO of Pace.
Tom Ridge, president/CEO of Ridge Global, added: “The capacity to geo-reference underground infrastructure in the most accurate way provides a critical capability to serve vital security and operational needs.”
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