September 2016, Vol. 243, No. 9

In The News

In the News

Houston Pipeliners Award Scholarships, Pick Officers

The Houston Pipeliners Association handed out over $550,000 to 80-plus soon-to-be college students through its scholarship program as members wrapped up the year’s business at the June meeting. The students selected were each related to a current member of the association who is in good standing. They are eligible to receive full scholarships only if enrolled in 12 credit-hours per semester.

“This is quite a wonderful accomplishment and speaks highly of the efforts of all our committees and members as they work tirelessly to raise money for this great program,” said Barbara Powell, co-chair of the Scholarship Committee.

The Pipeliners also approved officers for the coming year: President Marcus Sexton, of Jacobs; Vice President Danny Seal, of Williams, Treasurer Patrick Lamb, of STS Consulting Services; Secretary Brandy Roberts, of Bisso Marine; and Assistant Secretary Robert Berry, of PetraTech Consultants.

Energy Mix Shows Rising Use of Natural Gas in U.S.

Primary energy consumption fell slightly in 2015 as a decline in coal use exceeded increases in natural gas, petroleum and renewables use. In most cases, changes in the 2014-15 period reflect long-term trends in energy use. In 2015, natural gas consumption rose more than any other energy source, accounting for 29% of total primary energy consumption. As domestic natural gas production continues to reach record levels, gas prices have remained low. Low natural gas prices have led to increased use of gas-fired generators in the electric power sector.

Coal supplied 16% of U.S. primary energy use in 2015, down from 18% in 2014. Coal consumption declined by over 12% in 2015, and it is at its lowest level since 1982. Nearly all coal is used for electricity generation. In 2015 demand for coal in the power sector reached its lowest level since 1987.

Petroleum consumption grew in 2015 as lower gasoline and diesel prices led to more vehicle travel. Exports of petroleum products continue to grow, driven by demand in South and Central America. Crude oil exports grew significantly in 2014 and averaged 458,000 bpd in 2015.

Renewable fuels use grew in 2015, especially in the electric power sector. Wind and solar generation grew by 31% and 5%, respectively. Nuclear electric power remained relatively flat in 2015. Several plants retired in 2013 and 2014, but no nuclear plants either retired or came online.

Enbridge, Marathon to Buy $2 Billion Bakken Pipe Stake

Enbridge and Marathon Petroleum will pay $2 billion for a stake in the Bakken pipeline system from an affiliate of Energy Transfer Partners and Sunoco Logistics Partners. Enbridge Energy Partners is forming a joint venture with Marathon to acquire a 49% interest in the holding company that owns 75% of the pipeline network.

The Enbridge unit is paying $1.5 billion with Marathon paying $500 million. The deal enables Enbridge to move crude from the Bakken to refineries along the U.S. Gulf Coast through connections to its mainline.

The Bakken system includes Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline. Dakota Access will run from western North Dakota to Patoka, IL, and the Energy Transfer line from Patoka to Nederland, TX. The deal follows the January startup of the Southern Access Extension that links Enbridge’s mainline terminals near Chicago to the Patoka storage hub. Upon closing, the Enbridge unit and Marathon will end transportation services and joint venture agreements for the Sandpiper Pipeline Project.

The companies will evaluate the scope and timing of Sandpiper, a proposed 616-mile crude line from North Dakota to Wisconsin, reported Bloomberg.

Gulf Coast May House Huge Petrochemical Complex

ExxonMobil Chemical and Saudi Basic Industries are planning a multibillion-dollar petrochemical complex on the U.S. Gulf Coast. The jointly owned project marks SABIC’s first major effort to take advantage of U.S. shale gas feedstock.

The U.S. facility would include a 1.8 million metric-ton-per-year steam cracker – the world’s largest, the partners say – and downstream ethylene glycol and polyethylene plants. Sites in Louisiana and Texas are being considered.

SABIC and ExxonMobil are partners in two petrochemical ventures in Saudi Arabia that have enabled ExxonMobil to take advantage of low-priced gas feedstock for 35 years. With the recent run-up in Saudi gas prices, the U.S. has become the more attractive investment location. Dow Chemical, ChevronPhillips, Sasol, and ExxonMobil are among the companies already building shale gas-based ethylene plants in the U.S. If the new SABIC/ExxonMobil plant is built, it will likely come online after 2023.

Drillers to Cut $150 Billion from Budgets by 2017, Report Says

Oil producers across the continental United States have chopped more out of their drilling budgets than those in other countries, planning to cut $150 billion by 2017, Wood Mackenzie said. The Eagle Ford Shale and the Bakken Shale comprise over one-third of the cuts.

“That’s because the two plays were in full-scale development, with most operators’ acreage held by production at the time oil prices began to fall,” said Jeanie Oudin, a researcher at Wood Mackenzie. That allowed “for a more responsive slowdown in activity.”

Worldwide, $370 billion in energy spending reductions in the past two years could result in a significant crude production decline by the end of the decade, losing 4.2 MMboe/d drop off by 2020.

Husky Energy Reports Spill in Saskatchewan

Calgary-based Husky Energy notified the Saskatchewan government July 21 that about 200,000 liters of crude oil and other material had leaked into the North Saskatchewan River from its pipeline near Maidstone, forcing the city of North Battleford to shut down its water intake plant. The line runs from Husky’s heavy oil operations to facilities in Lloydminster and carries oil mixed with a diluent added to ease the flow.

Wes Kotyk of Saskatchewan’s environmental protection office said the spill – the equivalent to two rail cars – was bigger than the province is used to. “This is a rare event. We don’t have incidents of this magnitude very often,” he said.

Magellan Midstream Eyes Marine Terminal in Houston Ship Channel

Magellan Midstream Partners plans to build a marine terminal for refined petroleum products along the Houston Ship Channel in Pasadena. The project would include 1 MMbbls of refined products, ethanol storage and a marine dock for barges with up to a 40-foot draft. The storage capacity is expandable to up to 10 MMbbl and the terminal may include up to five docks for vessels with up to a 45-foot draft if there is additional demand.

Magellan said it will build a 36-inch pipeline that would run from its Galena Park terminal to the new Pasadena terminal. The new terminal would also be connected to the partnership’s existing Texas City-to-Pasadena pipeline, and potentially to other third-party refineries, pipelines and terminals in the Gulf Coast.

The project, supported by long-term contracts, would handle products such as various grades of gasoline and diesel fuel and renewable fuels. The estimated cost is about $335 million, including acquisition of 200 acres of land. If approved, the terminal could begin operation in 2019.

Spectra Told More Testing Needed on Pipelines after Incident

The Pipeline & Hazardous Materials Safety Administration (PHMSA) has told Spectra Energy to make further assessments on three lines in western Pennsylvania, including one that has corrosion similar to a fourth line that blew up in April, scorching about 40 acres.

PHMSA said the other lines in Salem Township, Westmoreland County, “potentially have been damaged or adversely affected” by the April 29 blast. The new assessments could lead to pipeline upgrades.

Spectra is cooperating with the investigation and spokesman Creighton Welch said the July 19 order is “well-aligned” with its plans to improve its Penn-Jersey pipeline system with many items recommended already having been completed or begun. Preliminary findings indicate a pipeline weld coated with tape failed, causing the explosion which leveled a nearby home in the rural township and injured its owner.

31 New Tanks Proposed by ExxonMobil in NJ

ExxonMobil Research and Engineering Co. wants to install 31 storage tanks at a rural site near Clinton, NJ. The tanks would store about 300,000 gallons of fuel and is part of an expansion plan at the facility, which includes a 25,000-square-foot addition to the main building.

Virtual LNG Pipeline may Meet Demand for More Efficient Power

Atlantic, Gulf and Pacific Company (AG&P) will introduce a virtual LNG pipeline to bridge the capacity demands for power in Southeast Asia. According to AG&P, the Philippines provides an unusual challenge for the distribution of energy to 100 million people living across 7,000 islands.

Traditional power delivery models are often too bulky to be viable to meet relatively smaller-scale energy requirements. Small-scale LNG solutions, including floating storage, regasification and power, provide power plants tailored to the archipelago, from 5 MW all the way up to traditionally sized plants.

“There is considerable opportunity for LNG to become a major energy source in the region, particularly for ‘stranded’ markets that are either inaccessible or too small to be feasibly served by the current power supply model,” said AG&P President Albert Altura. “Our virtual LNG pipeline comprises a network of smaller-scale economical delivery systems including vessels, regasification terminals and smaller power plants.”

Customized LNG solutions accelerate construction, require less upfront investment and offer faster and broader delivery, he added.

Avangrid Adding Gas Service in Connecticut

As a part of its commitment to convert 200,000 oil-heat customers to natural gas by 2023, Avangrid said it will soon expand service to Bolton and Coventry. The two adjacent Tolland County communities, which are served by Avangrid’s Connecticut Natural Gas, will be the fourth and fifth new service franchises the company has added since Connecticut launched a plan to convert upwards up 300,000 residents and business to natural gas. Other additions include East Hampton, Deep River and Essex.

CNG will spend $1.1 million to install 7 miles of new mains and services in Bolton. Town officials recently signed a contract to bring gas to five municipal buildings and schools, which Avangrid said would save the town $50,000 yearly and provide $30,000 in local taxes from the gas infrastructure.

SwRI Receives $7.8 Million in Funding From DOE

Southwest Research Institute (SwRI) is among three teams awarded funding by the U.S. Department of Energy’s National Energy Technology Laboratory to develop technologies to advance the state-of-the-art in power generation. The three projects total $18.2 million in DOE and private non-DOE funding and are part of DOE’s initiative to advance gas turbine components and supercritical carbon dioxide (sCO2) power cycles. SwRI’s share of the awards is $7.8 million.

“SwRI has been working with the DoE for the past 10 years on several large power plant and energy development programs,” said Klaus Brun, program director in SwRI’s Mechanical Engineering Division. “These new projects address key technology needs to make power plants cleaner and more efficient.”

SwRI will lead the team of Thar Energy LLC, GE Global Research, Georgia Tech and the University of Central Florida for the project, “High Inlet Temperatures Combustor for Direct Fired Supercritical Oxy-Combustion.”

Summit Buying Gas Utility Founded by Industry Pioneer

Natural Gas Intelligence reported privately held Summit Utilities is doubling its customer base and expanding into Arkansas and Oklahoma with the acquisition of family-owned AOG Corp. and its subsidiary Arkansas Oklahoma Gas Corp. (AOG).

AOG serves nearly 60,000 gas customers in Arkansas and Oklahoma. It will be joining existing Summit operations in Colorado, Missouri and Maine. Summit specializes in providing gas utility service to underserved regions. AOG has been owned by the family of Witt Stephens Sr. for 72 years.

Longtime T.D. Williamson Board Chairman Retires

T.D. Williamson announced the retirement of longtime board chairman and past president and CEO Richard (Dick) B. Williamson who has assumed the position of chairman emeritus. He is succeeded by his brother Stephen Williamson, who has served on the board of directors since 1977, most recently as vice chairman.

Dick Williamson received his degree in chemical engineering from the University of Oklahoma and an MBA from Northwestern. He started at TDW 1971 as an engineer and has held positions including executive vice president and COO, and president and CEO. He was chairman of the board from 1994 until his retirement.

Steve Williamson is a graduate of Vanderbilt University with a degree in German and history. He joined TDW in 1971 and was assigned to Williamson International in Brussels to work on international marketing efforts in Europe. He has served in numerous functional and leadership roles during his career in TDW. In January 1989, Steve Williamson purchased a division of TDW in Georgetown, Ontario and ran it until January 2007 when the division was sold back to TDW. He was active in the Canadian Gas Association (CGA), serving on the board for six years.

Correction

An article on page 56 of the August issue of P&GJ incorrectly identified Al Williams, president of Chevron Pipe Line Company. We regret the error.