February 2014, Vol. 241 No. 2

Advertisers from the print edition of Pipeline & Gas Journal, February 2014, Vol. 241, No. 2.

New York Gov. Andrew Cuomo wants it both ways: sorely needed economic development minus the leading factor that could entice companies, cheap and abundant natural gas. TV commercials tout big tax incentives for companies willing to relocate or expand in New York State. Unlike Pennsylvania, Cuomo prefers to do it without drilling for gas in portions of the Marcellus Shale that stretch into southern New York and the Finger Lakes regions.

New security capabilities at the remote terminal unit (RTU) level are substantially easing implementation of cybersecurity measures in SCADA systems.

Cybersecurity concerns with our critical infrastructures are well-known. In recent years, the Department of Homeland Security (DHS) and other authorities have encouraged critical infrastructure owners and operators to take steps to ensure cybersecurity for both their business and critical control system assets.

Cybersecurity-related events have become an increasing problem for the oil and gas industry over the past decade. On one hand, there has been a push to reduce costs and increase efficiency through companywide network integration. The advances in industrial control systems (ICS) have made pipeline systems accessible through Internet-based technologies and tools. This has allowed systems to be operated and maintained effectively with fewer staff distributed widely around the world.

Production from natural gas and liquids rich shale plays in the United States is booming. In the past five years alone, shale gas reserves have increased tenfold to 25 Bcf/d. Similarly, tight oil production has risen to 1.8 MMbcf/d, more than 600% over that same period [1]. This prolific growth trend has created a dramatic need for infrastructure improvements, including transport via pipeline from the wellhead to processing facilities and beyond.

During my annual hunting pilgrimage back home to northwestern North Dakota last fall, I was struck by the differing opinions about how the recent oil development activity has affected families and communities.

Soon, nearly every shipment of pipe and fittings delivered to natural gas operators in the United States will include barcodes that store a wealth of information about each item. These 16-digit alphanumeric codes will serve as the basis of a ASTM standard (F2897-11a) and will help utility operators address new distribution integrity management (DIMP) regulatory requirements.

The U.S. Energy Information Administration's Annual Energy Outlook 2014 Reference case shows that recent growth in domestic crude oil and natural gas production is expected to continue for many years.

Oklahoma State University Institute of Technology (OSUIT) has introduced a degree program in pipeline integrity, developed in cooperation with a committee of industry advisors that includes transmission pipeline companies, utilities, manufacturers and service providers. OSUIT will grant an associate of applied science degree to graduates, with hopes to add a bachelor’s degree program in the near future.

Standard practices today simply use human machine interfaces (HMI) as windows into a system by allowing some information to be passed back and forth through those windows. This method anticipates the user having the knowledge to use that information both in and out of the system, such as coming up with solutions to problems or passing the information along to the correct individuals.

SCADA migration projects are complex and filled with many challenges. When pipeline companies undertake these projects they are often focused on technical aspects such as selecting the right SCADA system, scoping and planning the conversion, establishing interface connectivity, and configuring the system properly.

In the past, it was thought that lightning strikes were random or due to an object being tall or located at a higher elevations. New discoveries are showing these are seldom the controlling factors and that geology plays a greater role. Fault lines tend to be struck by lightning more often, and it’s known that active fault zones are good for oil and natural gas exploration, but can be bad for pipelines.

Promigas is a natural gas transportation company on the Atlantic coast of Colombia that, on average, transports 0.3 Bcf/d and may reach 0.6 Bcf/d at peak times. Its system consists of pipes ranging from 1-inch to 32-inch diameter with four entry points and 330 exit points, serving about 6.2 million homes.

Recently filed class-action lawsuits by North Dakota landowners have brought renewed attention to the controversial practice of gas flaring in that state. In their suits, the landowners claim that major producers in the region, including Continental Resources, XTO and Marathon are costing those owners their share of royalties on as much as $100 million per month of value in natural gas that has gone up in flames in order to keep oil production flowing.

Our increasingly digital world – with all of the texting, emailing, tweeting, posting, downloading and streaming that’s become commonplace – is creating huge amounts of data, more than than ever before. Pipeline operators are faced with a similar phenomenon when it comes to information overload. Intelligent devices for safety, fire and gas, instrumentation, intelligent motor control and condition-based monitoring offer many individual types of information, each with related alarms.

In 2008, about 60% of the crude oil produced in the United States came from one of three places: the Gulf of Mexico, Texas and Alaska. Domestic production was on the decline, having decreased about 2% annually on average since 1970. Imports from foreign nations filled the gap, bringing with them significant political and economic implications for the country.

The line of functionality between supervisory control and data acquisition (SCADA) and distributed control system (DCS) is blurring.

As Houston-based SEC Energy Products & Services puts the finishing touches on a flurry of expansion activities that will double both its natural gas compression manufacturing and workforce in 2014, new President Tommy Stone sees the effort in fairly simple terms.

The Shah Deniz consortium announced the final investment decision for the Stage 2 development of the Shah Deniz gas field in the Caspian Sea, offshore Azerbaijan. This decision triggers plans to expand the South Caucasus Pipeline through Azerbaijan and Georgia, to construct the Trans Anatolian Gas Pipeline (TANAP) across Turkey and to construct the Trans Adriatic Pipeline (TAP) across Greece, Albania and into Italy. Together these projects, as well as gas transmission infrastructure to Bulgaria, will create a new Southern Gas Corridor to Europe.

Tonight I’d like to cover several topics important to all of us. Projections for increased production of natural gas and crude oil, transportation of said commodities to the marketplace, climate change and politics.

On Oct. 1, a crew working for Tourmaline Oil Corp. was clearing the right-of-way for a new pipeline near Spirit River, Alberta, Canada when they cracked open a rock that revealed the massive fossil of a dinosaur tailbone.

Supervisory control and data acquisition (SCADA) is a pivotal tool in achieving impressive productivity and reliability of pipelines. However, SCADA systems face cyber threats that could render them inoperable, causing substantial adverse effects on profitability. Worse yet, the threats could deactivate some safety systems, and jeopardize safety of the pipeline, workers and neighbors.

Two separate challenges have been made to FERC's Order 787 issued in November. It allowed interstate pipelines and electric utilities to share non-public operational information to promote reliable service or operational planning on either the public utility’s or pipeline’s system.

President Obama placed far less emphasis on energy policy Tuesday night than he had in any of his four previous State of the Union speeches, offering neither any surprises nor any comment on the Keystone XL Pipeline.

The cold weather that blanketed much of the country in late November and December and made a "sizeable dent" in natural gas inventories and lifted prices, and if forecasters are correct that below-normal temperatures will persist through mid-January, there's more upside for gas prices ahead, Barclays Capital analysts said in an article published June 7 by Natural Gas Intelligence.

Volvo Construction Equipment (CE) has made significant investments in North America and it has not gone unnoticed by key decision makers in America. This was clearly evident when U.S. Rep. Bill Shuster (R-PA), chairman of the House Transportation and Infrastructure Committee, visited the company’s Shippensburg, PA, facility on Jan. 6.

Duke Energy Progress’ new 625-megawatt (MW) L.V. Sutton combined-cycle natural gas plant has begun serving North Carolina and South Carolina customers. The $600-million plant replaces the existing three-unit, 575 MW coal-fired plant that the company recently retired after 59 years of service.

Production from the Eagle Ford Shale – an unconventional resource play – will continue to grow in 2014, fueling a reduction in net crude imports and driving exports of refined products in the U.S. to pre-1990 levels, says a report from research and consulting firm GlobalData.

A leading energy economist expects the shale boom to retreat somewhat amid weak returns on capital investments that are already causing investors to turn their attention offshore where “risks are more understood.”

From 2011 to 2012, Pennsylvania's marketed natural gas (which includes natural gas liquids) production grew by 72%, moving it from the seventh-largest to the third-largest marketed gas-producing state in the U.S., according to the Natural Gas Annual, 2012.

WASHINGTON (AP) — The long-delayed Keystone XL oil pipeline from Canada moved a significant step toward completion Friday as the U.S. State Department raised no major environmental objections to its construction. The finding is likely to be welcomed by Republicans and some oil- and gas-producing states but is sure to further rankle environmentalists already at odds with President Barack Obama over his energy policy.

Kinder Morgan Energy Partners (KMP) LP and Targa Resources Partners LP have signed a letter of intent to form a joint venture to construct natural gas liquids (NGL) fractionation facilities at Mont Belvieu, TX, to provide services for producers in the Utica and Marcellus shale resource plays in Ohio, West Virginia and Pennsylvania.

MarkWest Energy Partners and The Energy & Minerals Group (EMG) announced the execution of definitive agreements with Gulfport Energy to provide stabilization services and potential gathering services for condensate produced within an area that includes Belmont, Harrison, Guernsey, Noble, and Monroe counties, OH.

A bill for what is arguably the most liberal energy reform in Mexico to date presents an opportunity to end lethargy that has surrounded the region’s oil and gas industry for longer than necessary.

According to Reuters, a natural gas pipeline with an unknown capacity, operated by ONEOK Partners, exploded near Milfay, OK. No one was reported injured.

Regency Energy Partners LP plans to purchase Eagle Rock Energy Partners LP’s midstream business. The acquisition will complement Regency’s core gathering and processing business, and when combined with the proposed acquisition of PVR Resources, will further diversify Regency’s basin exposure in the Texas Panhandle, East Texas and South Texas.

Tennessee Gas Pipeline Co., a unit of Kinder Morgan Energy Partners, L.P., has signed a binding, 15-year firm transportation precedent agreement with Seneca Resources Corp., the wholly owned exploration and production subsidiary of National Fuel Gas Co., to ship 158,000 Dth/d of natural gas to eastern Canadian markets on the Niagara Expansion project. Subject to regulatory approvals, the $29 million Niagara Expansion is expected to begin service Nov. 1, 2015.

Canyon Midstream Partners is developing a natural gas gathering, processing and treating system in the Permian Basin.

CH2M HILL was selected by TransCanada for front-end engineering and design (FEED) for the St. John Extension of the Energy East Project. The overall project will convert an 1,864-mile natural gas pipeline to transport oil from Alberta to eastern Canadian refineries and will require 932 miles of pipeline construction.

Installation of the first gas compressor unit (GCU) was carried out late last year at the Russkaya compressor station (CS) in the Krasnodar Territory in Russia’s southernmost region. The station will ensure gas transmission via the South Stream gas pipeline. The station will ultimately be equipped with 14 similar compressor units having an aggregate capacity of 448 MW.

One of BP’s attempts to curb pay outs for what it says are “fictitious” and “absurd” claims related to the 2010 Deepwater Horizon oil spill has failed after an appeal was rejected by a U.S. court, according to Reuters.

The Cygnus project, located 150-km off the coast of Lincolnshire, England, which will develop the largest gas discovery in the Southern North Sea in the last 25 years, is about to reach its next milestone.

OptaSense says it is developing a Subsea-DAS system in a joint program with Shell.

Kinder Morgan Crude and Condensate LLC and Double Eagle Pipeline LLC, a 50/50 joint venture between Magellan Midstream Partners, L.P. and Kinder Morgan Energy Partners, L.P. have entered into a long-term agreement with Anadarko Petroleum Corp. to transport Eagle Ford shale production from Gardendale, TX in LaSalle County to the Houston Ship Channel via the KMCC Pipeline.

Pennant Midstream’s Hickory Bend cryogenic gas processing plant recently began operation.

The global oil and gas industry needs better ways to plan for oil spill surveillance, and it’s looking to the airborne remote sensing and commercial satellite industries for help.

Marathon Petroleum Corp. plans to spend $140 million to build the Cornerstone Pipeline that will connect its refinery in Canton, OH to an oil and natural gas processing facility in the Utica Shale.

The Hungarian MOL Group has acquired assets in the UK North Sea from Wintershall. The Group will acquire 14 licenses in the North Sea, including non-operated equity stakes in the Broom field (29%) as well as the Catcher (20%), Cladhan (33.5%) and Scolty/Crathes (50%) developments.

Houston-based Noble Energy's first deal to export natural gas from Israel shows that nearby Middle Eastern countries may be the most lucrative market to sell massive reserves of the Leviathan offshore field.

Pembina Pipeline Corp. has reached binding commercial agreements to proceed with $2 billion in pipeline expansions, the largest expansion in its history.

Plains All American Pipeline, L.P.announced four projects that are part of its plan to increase its Permian Basin pipeline infrastructure to keep pace with rising production volumes. The four projects, as well as several others under review, will result in investments of $400-500 million.

Late last year, Shell completed Phase 2 of its project to reverse the flow direction of the Houma-to-Houston (Ho-Ho) pipeline. The system provides Gulf Coast refineries pipeline access to additional sources of the growing crude production from the inland oil plays in the Eagle Ford, Bakken and other shale regions.

According to news reports, South Korea’s STX Heavy Industries Co. has won a $471.5 million contract to build a 550-km pipeline for the Akkas gas field in northwestern Iraq.

Petrobras has awarded Technip two ultra-deep water contracts to supply flexible pipes for the Sapinhoá Norte field and Lula field (former Tupi field), located in the Santos Basin pre-salt area off Brazil in depths up to 2,500 meters.

Trans Mountain Pipeline ULC, operated by Kinder Morgan Canada and owned by Kinder Morgan Energy Partners, L.P., has filed an application with Canada’s National Energy Board for authorization to build and operate the necessary facilities for the company’s proposed Trans Mountain expansion project.

According to news sources, Transneft recently began construction of the 435-mile Kuyumba-Taishet Pipeline that will run from Siberia’s northern fields and transport oil to China. The pipeline will have an initial transportation capacity of 15 million tons of oil per year. Transneft said it is also constructing the 311-mile Zapolyarye-Purpe Pipeline that will also run to Asia. Completion of both oil links is expected by the end of 2016. It is anticipated Gazprom will sign a contract with China to determine transportation volumes, in-service dates and other terms of agreement.

There are signs that restrictions in Turkmenistan on foreign ownership of oil and gas fields could be at least partially lifted in order to pave the way for international oil companies to join the TAPI (Turkmenistan-Afghanistan-Pakistan-India) gas pipeline project.

The Internet has affected many aspects of gas pipeline operations, from tracking operator qualification credentials to keeping up to date with pipeline regulations. Now one company is using the Internet to distribute and manage its operations and maintenance (O&M) manual as required by 49 CFR Part 192.605. Gone are the days of large, three-ring binders and all the associated printing and distribution headaches.

Complex technology realities come to life as Houston-based FuelFX takes energy industry training tools into a new era built on the technology of augmented reality.

WASHINGTON (AP) — Government investigators have found crude oil being transported from North Dakota's Bakken region was misclassified in samples taken from 11 out of 18 truck shipments en route to rail loading stations, federal transportation officials said Tuesday.

KNIFLEY, Ky. (AP) — An underground transmission pipeline carrying natural gas exploded early Thursday in southern Kentucky, sending two people to the hospital, destroying two homes and alarming residents who saw flames from miles away.

Your article "Help Wanted? OSU Campus Develops Pipeline Integrity Degree, Industry Partnerships" was very interesting and timely. There is a great need for a college degree program focused on pipeline integrity, as you know. When I read the part "Even for an interested and informed newcomer, the path toward a stable career is unclear," it struck a chord with me and hence, this email to you.

LOS ANGELES (AP) — Californians were urged to voluntarily cut their electricity use Thursday in a rare mid-winter conservation alert, after frigid weather across the U.S. and Canada caused a shortage of natural gas at Southern California power plants.

WASHINGTON (AP) — President Barack Obama told U.S. state governors at a White House meeting Monday that he expects to decide on the proposed Keystone XL oil pipeline from Canada in the next couple of months, two Republican governors said.

WASHINGTON (AP) — Former Interior Secretary Ken Salazar says he believes the Keystone XL oil pipeline from Canada should be built.

BILLINGS, Mont. (AP) — At least 10 times since 2008, freight trains hauling oil across North America have derailed and spilled significant quantities of crude, with most of the accidents touching off fires or catastrophic explosions.

WASHINGTON (AP) — The White House on Wednesday offered to help U.S. businesses protect their computer systems from cyberattacks that President Barack Obama called "one the gravest national security dangers that the United States faces." Administration officials warned during an event at the White House that an attack on critical sectors of the U.S. economy could put the entire country at risk.

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