August 2020, Vol. 247, No. 8
Projects
Projects
Rangeland Midstream Canada Brings Marten Hills Pipeline into Service
Rangeland Midstream Canada said its Marten Hills Pipeline System entered service. The system consists of new crude oil and condensate pipelines located in the Marten Hills region of north central Alberta.
The Marten Hills Pipeline System extends 53 miles (85 km), terminating at an interconnect with Plains Midstream Canada’s Rainbow Pipeline System, which serves the Edmonton, Alberta, hub and refining market.
The system is anchored by long-term transportation agreements with three of the region’s largest crude oil producers, who have made a combined minimum volume commitment representing 40% of the system’s capacity. The agreements span a 450,000-acre area of mutual interest dedicated to the Marten Hills system.
“The Marten Hills System will benefit from operators in the region resuming previously shut-in production as they benefit from improved economics and a stronger demand for their products,” said Rangeland Canada Vice President of Business Development Briton Speer.
US Extends Sanctions for Work on Russian Pipelines
The Trump administration bolstered attempts to halt completion of German-Russian and Turkish-Russian natural gas pipelines, telling companies involved in these projects the United States will institute sanctions unless they stop work.
Secretary of State Mike Pompeo told a news conference that European investors in the Nord Stream 2 and a branch of the Turkstream pipelines could be “put at risk” of U.S. sanctions under the Countering America’s Adversaries Through Sanctions Act of 2017. The pipelines will carry gas from Russia to Europe and Turkey.
“It’s a clear warning to companies. Aiding and abetting Russia’s malign influence projects will not be tolerated. Get out now or risk the consequences,” Pompeo said.
The United States, which has a glut of natural gas, is trying to export liquefied natural gas (LNG) to Europe. It has also supported efforts by Europe to diversify its imports of LNG from other sources, including Norway.
Russia’s foreign ministry spokeswoman, Maria Zakharova, said sanctions on the two pipelines equated to political pressure, TASS news agency reported.
“This is the use of political pressure for unfair competition,” Zakharova said. “It is an indicator of the weakness of the American system. Apart from forceful methods, there are no effective tools.”
Nord Stream 2 suspended construction last December after Swiss-Dutch company Allseas, which specializes in subsea construction, pulled out following President Trump’s signing of a defense policy bill that contained other sanctions on the project.
Two Russian-owned pipe-laying vessels may finish the remaining 100 miles (160 km) of the project, led by Russia state-run company Gazprom. Gazprom is financing half of the project worth about 9.5 billion euros ($10.5 billion).
Gazprom did not immediately reply to a request for comment.
Other partners in Nord Stream 2 are Austria’s OMV, German firms Uniper and Wintershall, Anglo-Dutch energy major Royal Dutch Shell Plc and France’s Engie.
Harvest Midstream Completes Ingleside Pipeline
Harvest Midstream Company announced the completion of the new Ingleside Pipeline and provided an update on the Harvest Midway Terminal’s construction schedule.
The Ingleside Pipeline, a 24-mile, 24-inch (39-km, 610-mm) oil pipeline, has a capacity of 600,000 bpd with up to 380,000 bpd supplied by the existing Harvest Eagle Ford pipeline systems.
The pipeline can currently transport volumes to the Flint Hills Resources Ingleside Terminal and will be capable of shipping barrels to the South Texas Gateway Terminal in July 2020 and the Moda Ingleside Energy Center in September 2020.
The pipeline originates at the Harvest Midway Terminal located in Taft, Texas.
The terminal covers 160 acres and has the potential to construct up to 10 million barrels of crude storage.
Phase 1 construction of the Harvest Midway Terminal is expected to be completed by the end of the third quarter and will add new infrastructure capable of pumping the Ingleside Pipeline at 600,000 bpd.
Czech Gas Firm Scales Back Poland, Austria Interconnector Plans
Czech gas pipeline operator Net4Gas postponed plans for new interconnections with Poland and Austria, according to Reuters, based on the firm’s updated investment plans.
Net4Gas ships mainly Russian gas to the Czech Republic, parts of Germany, Slovakia and down to Austria, with gas mostly coming through Germany’s Nord Stream pipeline.
The 2021-2030 development plan shows the company has shelved its Czech-Polish pipeline project Stork II that was to boost cross-border capacity with Poland from 2023.
The project has been replaced by a smaller potential interconnection, raising capacity from Poland, which may come online in 2027-2028.
It has also halted a connector to Austria called BACI that was seen going online in 2024, which may, however, be replaced by a smaller, similar project from 2026.
Net4Gas said the projects were shelved after they did not get on a list of EU-backed projects, and new capacity would be added depending on customer needs.
“The current 10-year plan does not expect the BACI and Stork II projects in their earlier planned form, mainly because they are not, at the moment, included in the European list of projects of common interest,” Net4Gas said in response to Reuters questions.
FERC Gives Delfin Another Year to Build Louisiana Floating LNG Project
U.S. energy regulators granted Delfin LNG a second one-year extension until September 2021, to complete its proposed floating liquefied natural gas (FLNG) export facility off the coast of Louisiana.
The U.S. Federal Energy Regulatory Commission (FERC) in September 2017 authorized Delfin to build its project by September 2019.
The company, in June 2019, asked FERC for a 30-month extension, but the agency only gave it one more year, until September 2020 to finish the project.
Since Delfin still has not started building the facility, it asked FERC in June for a second one-year extension, which the agency approved on Wednesday.
Officials at Delfin were not immediately available for comment.
Delfin’s project seeks to use existing offshore pipelines to supply gas to up to four vessels that could produce up to 13 mtpa of LNG or 1.7 Bcf/d (48 MMcm/d) of natural gas.
Bulgartransgaz Offered $600 Million to Complete TurkStream Expansion
Bulgaria’s state gas firm Bulgartransgaz said it received 10 offers by banks to lend it $613.38 million (542 million euros) in six-year loans and help it finance an extension of Russia’s TurkStream gas pipeline.
The company has to make advance payments to Saudi-led group Arkad, which it has contracted to build the 295-mile (474-km) pipeline Balkan Stream extension and to a Bulgarian-led group that will install compressor stations for the gas link.
Bulgaria is seeking to build the $1.24 billion (1.1 billion euro) transit route to help reduce the country’s reliance on Russian gas.
“This (pipeline) will allow us to diversify gas supplies along the whole route, not only for Bulgaria, but also for Serbia, Hungary and Austria,” Prime Minister Boyko Borissov said.
Sources Say Total Wants Buyers for Stake in North Sea Gas Pipeline
French energy company Total is seeking to sell its 25.7% stake in the Shearwater Elgin Area Line (SEAL) natural gas pipeline in the British North Sea, industry sources told Reuters. The sale could raise about $200 million, an analyst said.
A spokesman for Total declined to comment.
The SEAL pipeline, operated by Royal Dutch Shell, transports natural gas from the Shearwater and Elgin Franklin platforms to the Bacton Gas Terminal on the Norfolk coast.
The recent collapse in oil and gas prices due to the coronavirus pandemic and the uncertain outlook have led to a sharp slowdown in deal-making in the energy sector. But energy pipelines and infrastructure remain attractive assets for investors as they often guarantee steady returns over long periods of time.
Private-equity group HitecVision recently renegotiated its deal to buy North Sea oilfields from Total.
Egypt Pipeline Fire Injures 17, Health Ministry Says
A fire following an oil leak from the Shuqair-Mostorod pipeline near a major highway in suburban Cairo suburb injured 17 people, police said.
The pipeline’s valves were immediately closed in the area of the blaze and the flames were brought under control, the petroleum ministry added in a statement.
A witness told Reuters about two dozen cars caught on fire and were abandoned by drivers. A video posted online showed two residents pulling an injured person away from the highway while thick smoke billowed skyward.
Tallgrass Energy Cheyenne Connector Pipeline Enters Service
Tallgrass Energy said both the Cheyenne Connector pipeline and the Rockies Express Pipeline (REX) Cheyenne Hub Enhancement Project began commercial service.
The 70-mile, 36-inch (113-km, 914-mm) Cheyenne Connector is fully subscribed at 600 MMcf/d (17 MMcm/d), with additional expansion capacity available. Tallgrass owns 50% and operates the Cheyenne Connector; DCP Midstream owns the other 50%.
“This is a win for Colorado producers and for Tallgrass, as Cheyenne Connector provides much-needed incremental takeaway capacity from the D-J Basin. The REX Cheyenne Hub Enhancement Project provides Colorado producers connectivity to bring their natural gas into the REX pipeline at Cheyenne Hub and from there to markets across the country never before available to D-J production,” said Tallgrass Energy’s Segment President of Natural Gas Transportation Crystal Heter.
The pipeline receives natural gas from processing facilities in southern Weld County, Colo., in the D-J Basin and delivers it to the REX Cheyenne Hub just south of the Wyoming border, where numerous other natural gas pipelines interconnect with REX.
The REX Cheyenne Hub was modified to allow it to receive natural gas from interconnecting pipelines and to enable bidirectional capability at several existing interconnects.
It is currently subscribed to 800 MMcf/d (23 MMcm/d), 200 MMcf/d (6 MMcm/d) of which is anticipated to be placed in-service in the fourth quarter of 2020.
The REX Cheyenne Hub Enhancement Project has additional expansion capability beyond the 800 MMcf/d subscribed.
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