December 2011, Vol. 238 No. 12

Advertisers from the print edition of Pipeline & Gas Journal, December 2011, Vol. 238 No. 12.

ConocoPhillips has created a new independent downstream company named Phillips 66 that will be headquartered in Houston. Phillips 66 will have leading businesses in refining, marketing, midstream and chemicals.

The Alaska Oil and Gas Association (AOGA) board of directors named Kara Moriarty, AOGA Deputy Director, the new executive director. She succeeds Marilyn Crockett who is retiring from AOGA after more than 41 years of service.

The other day I was reading one of the many beautifully written obituaries about Smokin’ Joe Frazier, the heavyweight champion from Philadelphia who died Nov. 14 of liver cancer at the all-too-young age of 67.

With the recent spate of material failures in the oil and gas industry around the world, the role of a material and corrosion engineer in selecting suitable material has become more complex, controversial and difficult. Further, the task had become more diverse, since now modern engineering materials offer a wide spectrum of attractive properties and viable benefits.

Talk about being the right person at the right place at the right time. For Dave McCurdy and the American Gas Association, it could hardly be a better match. Now well into his first year as head of AGA, McCurdy, 61, has stepped into a situation filled with opportunity for the natural gas industry, including the nation’s steadily growing distribution sector.

At its recent Integrity Educational Seminar, Mears Group Inc., personnel focused on the topic of establishing the maximum allowable operating pressure (MAOP) of a gas pipeline and the general concept of operating margin of safety.

The nation’s natural gas distribution industry delivers gas to the homes or places of business of more than 70 million customers every day. These customers consumed approximately 24.1 Tcf of gas in 2010. Some 2.4 million miles of pipeline of varying sizes and pressures are used to transport natural gas annually from the wellhead to customers throughout the U.S.

This article explores the feasibility of exporting shale gas - in the form of LNG - from the U.S. to Japan and Korea considering the break-even gas prices and the liquefaction and transportation costs versus prevailing spot and long-term contract prices of LNG in Japan. Potential risks also are discussed.

Using pipe made from PE100 material to install a 29-km gas main provided Manitoba Hydro a C$200,000 advantage over the second-best alternative. In fact, the avoided cost was sufficient to render the expansion project economically feasible.

Cathodic potential (CP) criteria are used as a recommended minimum requirement for controlling external corrosion of buried or submerged steel piping systems. Different and sometimes conflicting CP criteria are given in different global CP standards. This can lead to confusion regarding what criterion is best used for a given condition.

Despite the higher gas pipeline pressures (up to 1,000 psi) and varying inlet pressures on peak days in recent years, Wisconsin Public Service Corporation believes the most effective pressure-reduction practice is to take a first cut from the supply pipeline in one big step while sizing for minimum contract pressure.

Pipeline leakage, breakage and other critical issues can create multiple environmental problems, cost utilities millions in lost revenue and delay important services to customers. There is no doubt that reliability is key – and that includes starting with the right pipeline distribution system manufactured with the right ingredients.

Today, many utilities are using online tools and social media to connect and share information with their customers. But what about the one, consistent touch point they have every single month - the utility bill? Can utilities use the monthly invoice more effectively to reduce costs or does there need to be a larger communication strategy in effect?

In today’s ever-changing and increasingly competitive energy industry, utilities continue to search for new ways to achieve operational excellence. As part of its ongoing efforts, Union Gas successfully developed a new measure in 2008 called Overall Employee Effectiveness (OEE).

Midstream goes mainstream in the natural gas business as midstream activities continue to take the spotlight. New gathering systems and intrastate pipelines along with additional gas treating, processing, and fractionating plants are announced frequently.

To no one's surprise, the Environmental Protection Agency announced in October that it will think about regulating shale gas wastewater. The Department of Energy's shale gas subcommittee - formed at the request of President Obama - provided the impetus to the EPA by noting the "fracking" chemicals contained in the water injected into shale rock formations and the contaminants that "flowback" to the surface both should be looked at more closely in case they are contaminating drinking water sources.

Sen. Mark Begich (D-AK) has urged the state to consider a loan guarantee that would help with financing for a major Alaska natural gas pipeline.

Encana Oil & Gas (USA) Inc. plans to sell its North Texas natural gas producing properties to certain partnerships managed by EnerVest, Ltd. of Houston for $975 million.

Enterprise Products Partners L.P. and Chesapeake Energy Corp. have entered into a long-term contract in which Chesapeake will anchor Enterprise’s proposed long-haul ethane pipeline from the Marcellus and Utica shale regions in Pennsylvania, West Virginia and Ohio to the Gulf Coast.

A report released by the EPA Dec. 8 and labeled "DRAFT" in large type finds that "[e]levated levels of dissolved methane in domestic wells generally increase in those wells in proximity to gas production wells." The report is the product of an investigation taking place between March 2009 and April 2011 in the area of Pavillion, WY, and sampling from domestic and EPA-drilled wells at several points during that period.

ExxonMobil said last month it expects its response to the July oil spill into the Yellowstone River in Montana will cost about $135 million. ExxonMobil said it has reached compensation agreements with more than 95% of property owners affected by the spill, which released about 1,000 barrels of crude oil into the river.

Estimates used by the Environmental Protection Agency and others for greenhouse gas emissions from upstream shale gas production are likely significantly overstated, according to a new report by IHS Cambridge Energy Research Associates. The estimates are based on assumptions that do not reflect industry practice and should be re-evaluated, it says.

GE Energy Financial Services said its co-owned Gulf LNG regasification and LNG storage facility on the Gulf of Mexico has begun operations. GE made the announcement at a ceremony at the facility in Pascagoula, MS, joined by Gov. Haley Barbour and executives of El Paso Corp.

Love’s Travel Stops & Country Stores, an Oklahoma City-based and family-owned operator of 280 travel stops and convenience stores, plans to add 10 publicly accessible compressed natural gas (CNG) fueling stations at existing locations across Oklahoma.

The U.S. Chemical Safety Board (CSB) has released a study of explosions at oil and gas production sites across the U.S., identifying 26 incidents since 1983 that killed 44 members of the public and injured 25 others under age 25, and is calling for new public protection measures at the sites.

While producers are aggressively pursuing projects to sell large quantities of LNG to Asia, that prospect is raising alarm among consumer groups who fear that rising exports could drive up domestic prices.

Ziff Energy released a report last summer analyzing the pipeline infrastructure costs on 120 new gas pipeline projects in the Marcellus, Eagle Ford, Haynesville, Barnett, Woodford, Fayetteville and Horn River shale gas regions over the past decade.

U.S. shale gas could be exported for the first time after an $8 billion deal was reached between the BG Group and Cheniere Energy. The gas is likely to be sent to countries in Asia and Europe, including the UK, after it is liquefied. The price of gas in the U.S. is one-fourth of the price in Asia and about half the price in the UK.

Royal Dutch Shell is "very interested" in onshore U.S. shale oil, but the company is focusing on less developed plays to bypass the pricey competitive rush for more established acreage, the head of Shell's Americas operations recently told Reuters.

Atlas Pipeline Partners, L.P. has entered into a long-term, fee-based agreement with XTO Energy Inc., a subsidiary of ExxonMobil.

The Bureau of Safety and Environmental Enforcement (BSEE) has approved a drilling permit, originally submitted by BP in January 2011, for a new well in the deepwater Gulf of Mexico.

Qatargas recently delivered its first Q-Max LNG cargo to China from the Q-Max vessel, Bu Samra.

Enbridge Energy Partners continues an aggressive investment program, announcing a further US$145 million investment to enhance the capability of its North Dakota crude oil system.

Enterprise Products Partners recently held a binding open commitment period that ended Nov. 10 for capacity on a proposed pipeline designed to transport ethane from the Marcellus and Utica shale regions in Pennsylvania, West Virginia and Ohio to the Gulf Coast.

Excelerate Energy® L.P. completed its 200th commercial Ship-to-Ship (STS) transfer of LNG on Nov. 27 in Escobar, Argentina at the GNL Escobar LNG import facility.

Spectra Energy’s subsidiary, Texas Eastern Transmission, received FERC approval for the Texas Eastern Appalachia to Market (TEAM) 2012 expansion project.

Latin America will account for half of the projected floating production Capex over the next five years according to a Douglas-Westwood report.

Port Arthur, TX parks will soon get upgrades as part of a settlement the General Land Office has reached over the Eagle Otomes spill, which put nearly 397,000 gallons of crude into the Port Arthur Ship Channel.

ROSEN and Mexico state-owned PEMEX have been working together on the multiyear large-scale Marinos y Playeros project for the development and implementation of a comprehensive integrity and management program since 2010. The project involves 14 marine terminals with all onshore and offshore pipelines and associated piping.

Petrobras announced a new oil discovery in the extreme southwestern part of the Walker Ridge concession area, located in the U.S. Gulf ultra-deep waters.

Plains All American Pipeline, L.P. announced plans to convert an existing Oklahoma LPG pipeline into crude oil service.

RASGAS (a joint venture between Qatar Petroleum and ExxonMobil) plans to develop the multibillion-dollar Barzan natural gas project in the North Field reservoir offshore Qatar in the Arabian Gulf.

T.D. Williamson Inc. recently completed the first-ever subsea STOPPLE® Train isolation.

TexStar Midstream Services, LP is holding a binding open season to obtain firm commitments from interested parties for the TexStar Crude Oil Pipeline, LP to transport crude oil and condensate from various points located in Frio, LaSalle, McMullen and Live Oak counties in Texas to NuStar’s North Beach Terminal in Corpus Christi, TX.

The UK-headquartered oil and gas environmental waste management company TWMA won a contract from Maersk Oil to handle and dispose of subsea structures and equipment damage when storms in the UK North Sea caused the Gryphon FPSO to move off station in February.