April 2012, Vol. 239 No. 4

Advertisers from the print edition of Pipeline & Gas Journal, April 2012, Vol. 239 No. 4.

The Marcellus Shale Coalition (MSC) recently announced the addition of David Brocious to its staff. Brocious, the MSC’s director of Membership and Business Development, will lead the organization’s membership, sponsorship, and business networking activities.

ShawCor Ltd. was among this year’s winners of the OTC 2012 Spotlight on New Technology Award.

“We’re having a revolution. And we’re just scratching the surface.”—G. Steven Farris, CEO of Apache Corporation. That quote comes from an illuminating article entitled “U.S. Inches Toward Goal of Energy Independence,” published March 22, 2012 by The New York Times. Ironically, the article came out at the same time President Obama was pictured at a TransCanada pipe yard near Cushing, OK, pledging to expedite the southern leg of Keystone XL along with other necessary infrastructure.

When you look at the staggering prospects for natural gas as perhaps the essential fuel of the 21st century, can you imagine a more exciting time to be key player in this vital industry, charged with pushing forward the agenda of those energy companies that are on the front-line of providing that precious resource?

In the gas utility business, being prepared for any emergency is as natural as waking up in the morning and going to work. There is always a plan to handle a gas leak, broken pipe, supply shortage, etc. But then there are those rare cases that no amount of planning can solve. They are the events that try our souls and test the depths of our humanity. This is what happened on April 27, 2011 when a swarm of killer tornadoes ravaged the state of Alabama.

Driven by public concerns, regulations and technology improvements, noise control in Alberta’s energy industry has evolved during the past four decades into one of the best in North America. Before the late 1960s, if you had a noise complaint against an energy firm in the Province you had to negotiate.

More than 2 million miles of natural gas pipeline in the United States distribute natural gas to customers every day. Considering the amount of natural gas flowing across the country at any given time, gas providers have an exceedingly good safety record. While serious incidents are uncommon, all it takes is one major event like the San Bruno explosion in September 2010 to focus national attention on the potential risk of natural gas and the need for continued diligence on the part of the gas industry.

GE and Chesapeake Energy Corporation announced March 7 a collaboration to develop infrastructure solutions they said will help accelerate the adoption of natural gas as a transportation fuel.

Saying that it’s an interesting time to be in the natural gas business is like saying that it’s good to be able to heat our homes and offices cheaply and efficiently while providing an essential feedstock for manufacturing and chemical plants. And maybe you can add being able to drive a motor vehicle.

At the end of 2011, the shale boom continued to spawn new-found expectations for U.S. oil and natural gas resources that contain large opportunities for the pipeline and other infrastructure sectors that are quietly riding the production upswing. Resulting low domestic gas prices relative to other global markets have sparked a scramble for export licenses to ship liquefied natural gas (LNG) to Europe and Asia.

Several concurrent forces are at work today at the operational, production and regulatory compliance levels that are creating an urgent need for enhanced tools to help operators meet all of today’s ever-increasing asset management requirements. At the same time, operators are striving to gain improvements in operational efficiency to increase production with fewer staff, and do so in a manner that fully satisfies the regulatory requirements. Fortunately, there are many practical advances in both foundational and emerging technologies that can help operators address all these converging forces.

On Jan. 3, President Obama signed the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (2011 Act) (H.R. 2845, Public Law 112-90, 125 Stat. 1904). The 2011 Act significantly amended existing pipeline safety laws and authorized the appropriation of funds to support the pipeline safety activities of the Pipeline and Hazardous Materials Administration (PHMSA) through 2015.

In many ways the world of natural gas trading bears little resemblance to the halcyon days of the 2000-2001 period when the business began an infamous meltdown because of the questionable practices some companies were applying.

Definition: Scapegoat, someone who is punished for the errors of others. The environment is the scapegoat being used to deny the permitting needed for the final phases of the Keystone XL Pipeline, allowing nearly a million barrels per day (b/d) of additional crude to cross over from Canada into the United States.

The Federal Energy Regulatory Commission rejected a major tariff increase sought by the Enterprise TE Products Pipeline Company for the Enterprise TEPPCO pipeline. The increase was hotly opposed by the National Propane Gas Association (NPGA) and many individual shippers.

The U.S. and Mexico have finalized an agreement to cooperate on oil and gas developments in the Gulf of Mexico.

Cheniere Energy Partners, L.P. has entered into an exclusive arrangement with Blackstone Energy Partners L.P., Blackstone Capital Partners VI L.P., and certain affiliates in which Blackstone would provide financing worth $2 billion to fund the equity portion of the costs of developing, constructing and placing into service its Sabine Pass liquefaction project being developed at the Sabine Pass LNG terminal, the purchase of the Creole Trail pipeline from Cheniere Energy, Inc. and other partnership business purposes.

The Energy Information Administration expects the price of West Texas Intermediate (WTI) crude oil to average about $106 per barrel in 2012, $5 per barrel higher than in the previous Outlook and $11 per barrel higher than the average price last year. Supply disruptions in the Middle East and Africa contributed to a significant increase in world crude oil prices during February.

Political constraints and concerns that production gains at shale fields aren't sustainable will hinder development of LNG export plants in the United States, former ExxonMobil chief Lee Raymond said in an article reported by Bloomberg.

The Anchorage Daily News reported that Calgary-based AltaGas Ltd. will pay $1.1 billion to buy the parent company of Enstar Natural Gas Co., the lone distributor of natural gas to tens of thousands of homes and businesses in south-central Alaska.

Gateway Energy Corporation has closed the acquisition of a natural gas pipeline from Commerce Pipeline, L.P. for an undisclosed purchase price.

Louisiana Gov. Bobby Jindal and NuStar Energy CEO Curt Anastasio announced a $365 million capital investment by NuStar that will expand the company's St. James Terminal, creating 32 new direct jobs at the facility and an estimated 269 new indirect jobs in southeast Louisiana.

Southern Union Company announced that its Panhandle Eastern Pipe Line Company subsidiary has signed a straddle agreement with Next Generation Processing, LLC (NGP).

Price volatility in natural gas and crude oil markets is energy executives’ top concern and compliance with new industry regulations looms, but industry leaders are generally confident in the coming year’s prospects, according to Grant Thornton LLP’s 10th Survey of Upstream U.S. Energy Companies.

Valero Energy Corp Chief Executive Bill Klesse said he expects crude oil from Canada and U.S. shale production will eliminate the need to import light, sweet crude oil at the U.S. Gulf Coast by 2016, in an article published by Reuters.

Petrobras has begun production in the Cascade Field through the Cascade 4 well, which is connected to the FPSO BW Pioneer (a Floating, Production, Storage and Offloading vessel platform), located 160 miles off the coast of Louisiana in 2,500 meters of water in the U.S. Gulf of Mexico.

Crestwood Holdings will acquire certain of Antero’s Marcellus Shale gathering system assets located in Harrison and Doddridge counties, West Virginia for $375 million in cash.

In an interview with Pipeline & Gas Journal, Alex Alvarado, Chief of the Pipeline Section for the Bureau of Safety and Environmental Enforcement’s Gulf of Mexico regional office, talked candidly about the downward trend in pipeline construction in the Gulf and the expected reversal of this trend as a result of recent deepwater discoveries.

A new oil pipeline with potential capacity of up to 400,000 bpd linking Colombia's Llanos basin to the Pacific coast could be operational by the end of 2016, according to Rigzone.

Enterprise Products Partners L.P. plans to construct two more NGL fractionators at its Mont Belvieu, TX complex to provide 150,000 bpd of incremental fractionation capacity.

Spectra Energy cleared an environmental stumbling block in the expansion of its existing Texas Eastern Transmission and Algonquin Gas Transmission pipeline systems to deliver natural gas supplies to the New Jersey and New York area.

Kinder Morgan Energy Partners will pay $855 million to Petrohawk Energy Corp. and assume $65 million in debt for Petrohawk's 50% interest in KinderHawk Field Services.

Magellan Midstream Partners, L.P. plans to expand capacity of its Crane, TX-to-Houston crude oil pipeline to 225,000 bpd. Based on Magellan’s open season, the expanded pipeline capacity is fully committed with long-term agreements.

A subsidiary of McDermott International, Inc. won an engineering, procurement, construction and installation (EPCI) project for Al-Khafji Joint Operations (KJO), in the Hout field, in Saudi Arabia in 31 meters of water.

Det Norske Veritas (DNV) has developed a new deepwater gas pipeline concept that is designed to “significantly reduce the cost of a deep- and ultra-deepwater gas pipeline while still complying with the strictest safety and integrity regime.”

ONEOK Partners L.P. plans to invest $1.5 -1.8 billion through 2015 to build a 1,300-mile crude oil pipeline with the capacity to transport 200,000 bpd.

Plains Pipeline, L.P., a subsidiary of Plains All American Pipeline, L.P., is holding an open season ending May 15 for committed capacity on a proposed crude oil pipeline from Baker to to Billings, MT.

The Utica Shale could be responsible for 65,000 jobs and as much as $5 billion in growth for Ohio by 2014, according to a study released by the Ohio Shale Gas Coalition.

Shell Pipeline announced a binding open season period for firm capacity on the Houma-to-Houston pipeline system reversal project (Ho-Ho Reversal).

Jacobs Engineering Group Inc. was awarded a contract to provide project management consulting services for a new pipe rolling mill near Corpus Christi for Tianjin Pipe (Group) Corporation (TPCO), a global leader in the manufacture of seamless pipe.