December 2015 Vol. 242, No. 12

Advertisers from the print edition of Pipeline & Gas Journal, December 2015, Vol. 242, No. 12.

I have some final thoughts about the Keystone XL debacle, because that’s what it was. That project never should have been the line in the sand in the debate over climate change, because as we all know, any environmental effect would have been negligible at worst.

The briefing is now complete in a closely watched appeal of a landmark judgment issued last year in Energy Transfer Partners, L.P. v. Enterprise Products Partners L.P., in which a Texas jury concluded that, notwithstanding express contractual language disclaiming the formation of a partnership in connection with preliminary exploration of an oil pipeline project, the conduct of the parties could – and did in fact – establish a legally binding partnership.

Leading a natural gas distribution company is always a challenge because there are few businesses that deal so directly with their customer base, be it residential, commercial or industrial, as well as safety regulators, equipment and service providers, not to mention the city council or utility board that approves rates.

Association News

Ralph A. LaRossa was elected chairman of the board of directors of the American Gas Association for 2016. LaRossa is president and COO of Public Service Electric and Gas Company (PSE&G) in New Jersey.

Personnel Changes

Kevin Smith was named president of HammerHead® Trenchless Equipment, a Charles Machine Works company. Smith had been serving as president of MTI® Equipment, a Charles Machine Works company – as is Ditch Witch®, where he was director of product definition and research, product planning manager, business manager and salesman.

Company News, Mergers & Acquisitions

The ROSEN Group of Switzerland was recipient of the 2015 Global Pipeline Award for an innovative device that uses a sensor to determine material specifications in petroleum pipelines. The Pipeline Systems Division of The American Society of Mechanical Engineers (ASME) presented the award at the Rio Pipeline Conference held in September in Brazil. ROSEN won for RoMat PGS-ILI solution for Pipe Grade Determination. The ILI tool uses especially adapted electro-magnetic sensor technology to determine yield strength and ultimate tensile strength in pipe joints.

Obituary

Harold Lloyd Chapman, 83, passed away on October 31, 2015 at home with his family by his side.

Cured-in-place liners (CIPL) have been installed on cast-iron and steel pipelines in natural gas distribution systems in Europe, Japan and North America over the last few decades. CIPL have been used because of their rehabilitative and renewal qualities in contrast to the higher costs, construction risks and public inconvenience associated with conventional pipeline replacement methods, particularly in congested and difficult to access areas such as river and road crossings or urban areas.

The last year has been tough on the oil and gas industry. In times like these, as a number of companies are forced to downsize, the last thing your business needs is to face a lawsuit for wrongful termination.

The federal Environmental Protection Agency recently proposed new regulations for methane and volatile organic compound (VOC) emissions from the oil and gas sector that place time-consuming and expensive new requirements on midstream businesses. These regulations would not apply to pipelines, but would require ongoing emissions monitoring and equipment replacements at compressor stations and natural gas processing plants built, “modified,” or “reconstructed” after Sept. 18, 2015.

Natural gas prices have fallen to their lowest levels in three years, plummeting by more than 10% on Oct. 26. The balance of natural gas supply and demand typically goes through seasonal fluctuations, with inventories building during the summer months in North America as surplus production is diverted into storage. Then, in winter months, consumers draw down on natural gas inventories as heating demand spikes.

Across many industries, companies showing a reluctance to embrace new technology are in danger of losing any competitive edge. In the oil and gas industry, where even the smallest error can have a major long-term effect, embracing innovation in the form of data analytics has become a necessity for companies striving to reach the highest levels.

Several years ago after the collapse of a bridge in the Minneapolis-St. Paul area, a cartoon was published showing two people standing on a sidewalk acknowledging the news and bemoaning what else could go wrong. Shown only as can best be done in cartoons, was a mish-mash of pipes underneath their very feet totally out of sight, in various contortions and in varying levels of disrepair and decay.

Justin Harvey knows he has an industrial-sized pair of shoes to fill as he takes the helm at A+ Corporation, a family-owned and operated gas sample conditioning system service company in Gonzales, LA. The 30-year-old Harvey was just a toddler when his legendary grandfather Donald Mayeaux founded the company in 1989. Mayeaux earned his reputation for developing product concepts that changed the manner in which natural gas was sampled.

Strong natural gas production and storage inventories approaching a new record have positioned the nation’s gas industry well to meet winter demand, the Natural Gas Supply Association (NGSA) said in its 15th annual Winter Outlook assessment of the natural gas market.

Nine- and even 12-figure numbers don’t phase Paul Copello, a petroleum engineer and president of IIR Energy, a capital projects tracking company that globally compiles and analyzes information for over 95,000 energy projects worldwide, collectively representing potential capital investment of $13.7 trillion. Among those projects, the natural gas pipeline sector is one of the surest bets for consistent increased capital spending, Copello told an energy meeting in Chicago last September.

With oil prices hovering near $50 a barrel for the first time since the crash of 2008, oil and gas producers are watching to see if this is a temporary blip from the $80-100 range or closer to a “new normal” in which prices stay below $60. For some, this price uncertainty has meant scaling back production, exploration and drilling with the looming possibility of halting some activities all together.

Editor’s note: The EPA’s proposed rule changes could considerably expand the jurisdiction of the federal government. Here are some proactive steps that pipeline owners and operators should consider to prepare for unprecedented expansion of the Clean Water Act. The proposed Rule 33 CFR, Part 328, developed by the federal Environmental Protection Agency (EPA) and U.S. Army Corp of Engineers (USACE) and in review with the White House, will redefine and clarify the reach of EPA’s jurisdiction under the Clean Water Act (CWA).

Natural gas consumers led by the Industrial Energy Consumers of America (IECA) have begun a campaign to encourage the Federal Energy Regulatory Commission (FERC) to get tough on pipeline rates. It is a two-pronged attack. One path seeks to persuade FERC to resume mandatory three-year reviews of interstate natural gas pipeline rates. The other aims to persuade Congress to amend Section 5 of the Natural Gas Act to provide FERC with refund authority.

Duke Energy Corp. announced Oct. 26 it will acquire Piedmont Natural Gas Co. Inc. for $4.9 billion in cash. Duke will also assume $1.8 billion in Piedmont existing net debt. Piedmont began operations in 1951 in Charlotte, NC and is primarily engaged in distributing natural gas to over 1 million residential, commercial, industrial and power generation customers in portions of North Carolina, South Carolina and Tennessee. Duke and Piedmont are key partners in the $5 billion Atlantic Coast Pipeline that will be the first major natural gas pipeline serving eastern North Carolina.

Algonquin Gas Transmission, LLC has filed a request with the Federal Energy Regulatory Commission (FERC) for a pre-file review process for the proposed Access Northeast Project. Upon completion of the review, Algonquin will file an application with FERC to start construction.

Asset Risk Management’s wholly owned subsidiary. ARM Midstream, is partnering with Highbridge Principal Strategies, LLC to build a cryogenic processing plant, natural gas gathering system, and crude oil gathering system in Oklahoma's STACK play. Plans for the Kingfisher Midstream system include over 100 miles of low- and high-pressure gas gathering pipelines, over 15,000 hp of compression, and a new cryogenic processing facility with initial processing capacity of 60 MMcf/d.

TransCanada has final permits from the BC Oil and Gas Commission (BCOGC), giving regulatory approval for construction and operation of the Prince Rupert Gas Transmission pipeline project (PRGT). “Receiving the full complement of 11 pipeline and facility permits is a major milestone for the project, and concludes an exhaustive regulatory process that we embarked on more than two years ago,” said Tony Palmer, PRGT president.

Tennessee Gas Pipeline, a Kinder Morgan company, filed with FERC to increase capacity of the proposed Northeast Energy Direct (NED) project to 1.2 Bcf/d, an increase from 1 Bcf/d as submitted in earlier documents. TGP plans several route modifications on both the mainline and delivery laterals. The anticipated in-service date for the NED project remains Nov. 1, 2018.

At the Gastech Conference and Exhibition 2015 held Oct. 27-30 in Singapore, Dresser-Rand displayed how its combined solutions with Siemens offers clients what it says are the oil and gas industry’s most extensive portfolio of rotating equipment, including the launch of the new RB211-GT30 gas turbine.

ULC Robotics, a leading robotics, energy services and research/development company focused on the energy and utility industries, deployed its Cast Iron Joint Sealing Robot (CISBOT) for the first time in Scotland on busy George Street in Edinburgh this past summer. Similar to Fifth Avenue in New York City, the visitors and high-end shop owners along George Street had minimal disturbance to their normal routines because CISBOT because is virtually invisible.

High-powered engines require high-powered cleaning to maintain operating efficiency and productivity. One natural gas facility is realizing significant time savings, seeing greater equipment efficiency and extending the life of its 100-year-old equipment, saving millions of dollars in the process.

International energy consultancy Xodus Group and the Dutch company TNO have completed the first phase of a pioneering joint industry project (JIP) into the dynamic forces that affect the integrity of piping systems, in particular through multiphase flow. The second phase of the project, which is expected to be run across three stages, is now open for new participants to join.

Kinder Morgan and Brookfield Infrastructure Partners agreed to jointly acquire, from Myria Holdings, the 53% equity interest in Natural Gas Pipeline Company of America (NGPL) not already owned by them for $242 million. KMI will pay $136 million and increase its ownership interest from 20% to 50%, while Brookfield will pay $106 million, increasing its ownership from 27% to 50%. The transaction values NGPL at a total enterprise value of $3.4 billion, including existing debt.

Inline Services

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Chevron Corporation’s subsidiary, Chevron Overseas (Congo) Limited, has begun oil and gas production from the Lianzi Field, located in a unitized offshore zone between the Republic of Congo and the Republic of Angola. Located 65 miles offshore in 3,000 feet of water, Lianzi is Chevron’s first operated asset in the Congo and the first cross-border oil development project offshore Central Africa. The project is expected to produce an average of 40,000 bopd.