August 2010 Vol. 237 No. 8

In The News

August Newsreel: Pipeliner of the Year Mark Laney, Hal Kvisle Retires, Rod West Promoted and More

Pipeliners Association Names Mark Laney “Pipeliner of the Year”
Hal Kvisle Retires As CEO Of TransCanada
Rod West Named Chief Administrative Officer For Entergy
Texas Railroad Commission Eying Plastic Pipe To Replace Steel

Canusa-CPS, NRI Sign Sales And Marketing Agreement
Chesapeake More Active In Oil Projects, Chief Says
KKR Investing $400 Million To Develop Texas Shale Gas
EOG Canada To Acquire Galveston LNG Inc.
Tulsa Pipeline Expo Seeks To Attract Contractors
Questar Finalizes Spin-off Of QEP Resources
Do Abandoned Wells In Gulf Pose Threat?

Pipeliners Association Names Mark Laney “Pipeliner of the Year”
J. Marcus (Mark) Laney, co-owner of Laney Inc., Humble, TX, was honored by the Pipeliners Association of Houston with its “Pipeliner of the Year” award during the group’s dinner meeting June 7. Laney was recognized for his exemplary work in both road boring and directional drilling.

Laney got an early start in the road boring business working for Docs Road Boring when he was just 16 years old. Building on the knowledge he gained, Laney and his brothers Dickey and Steve, formed Laney Inc., in 1970. He soon recognized that horizontal directional drilling (HDD) would play a major role in the underground industry. A short time later he, along with Robert Hamil, designed and built their first HDD rig. Over the years the company has grown and is known as a premier road-boring contractor with 12 HDD rigs and four boring crews working in the U.S. and worldwide.

Also at the event, the following officers were elected for the 2010-2011 term: David Dacus, Troy Construction, LLC, president; Marcus Sexton, Trow Engineering Consultants, vice president; Allan Taylor, Mustang Engineering, treasurer; John Worrell, Prime Flexible Products, Inc., secretary; and Mark Reilly, Spectra Energy, assistant secretary.  For information, visit www.houstonpipeliners.org.

Hal Kvisle Retires As CEO Of TransCanada
TransCanada Corp. CEO Hal Kvisle retired June 30 and was replaced by
Russ Girling, chief operating officer. Kvisle will assist with the transition until Aug. 31 and serve as an adviser for Girling afterwards.

“Russ Girling is the right leader to deliver strong financial returns from our existing businesses and position the company for continued growth and success in the years ahead,” Kvisle said in a news release. Kvisle was the keynote speaker at the 2010 Pipeline Opportunities Conference sponsored by Pipeline & Gas Journal.

Kvisle joined TransCanada in 1999 and was appointed chief executive in 2001. Earlier, he founded Fletcher Challenge Energy and worked at Dome Petroleum as an engineer. Girling came to TransCanada in 1994 after working in marketing and management at Suncor Inc., Northridge Petroleum Marketing and Dome Petroleum. He was previously TransCanada’s chief financial officer from 1999-2006.

Alex Pourbaix, President, Energy and Executive Vice President Corporate Development, was named President, Energy and Oil Pipelines. He will continue to have overall responsibility for non-regulated businesses, including power and non-regulated natural gas storage and he assumes responsibility for TransCanada’s emerging oil pipeline business.

Greg Lohnes, Executive Vice President and Chief Financial Officer, was named President, Natural Gas Pipelines. He has overall responsibility for natural gas pipeline and regulated natural gas storage businesses in Canada, the United States and Mexico.

Don Marchand, Vice President, Finance and Treasurer, was named Executive Vice President and Chief Financial Officer. He has overall responsibility for accounting, taxation, finance, treasury, risk management, investor relations, corporate communications, and corporate strategy.

Dennis McConaghy, Executive Vice President, Pipeline Strategy and Development was named Executive Vice President, Corporate Development. He is responsible for development of major new infrastructure initiatives across TransCanada’s businesses and will have accountability for execution of major transactions.

Rod West Named Chief Administrative Officer For Entergy
Entergy New Orleans President/CEO Rod West has been promoted to corporate Chief Administrative Officer by Entergy Corp. where he will head legal, human resources and administration and external affairs departments.

At ENOI West was credited with managing the rebuild of critical aspects of the New Orleans infrastructure after Hurricane Katrina, and for leading Entergy New Orleans out of bankruptcy after the storm. In addition, he oversaw the industry’s largest natural gas rebuild effort in history – the replacement of 860 miles of underground pipe damaged after Hurricane Katrina. That project was named by the Platts Global Energy Awards as the 2009 Global Infrastructure Project of the Year.

Texas Railroad Commission Eying Plastic Pipe To Replace Steel
Utilities in Texas could be required to replace decades-old steel natural gas pipelines with plastic versions to help prevent explosions. The Dallas Morning News reported that Texas Railroad Commission member Michael Williams will propose that utilities replace the steel lines, which can shift and corrode.

Williams said Texas has at least 525,000 steel lines in a replacement project that could reach $500 million. He said the proposed upgrade would be the largest replacement program ever done by the regulatory commission. Utilities have been allowed to charge ratepayers for the cost of new infrastructure plus a 10% percent profit, according to the report.

Canusa-CPS, NRI Sign Sales And Marketing Agreement
Canusa-CPS and Neptune Research Inc. (NRI) have signed a preliminary reciprocal sales and marketing agreement covering specific products manufactured by both companies. Canusa’s focus with the NRI products will be superior mechanical protection for pipeline coatings, such as its recently developed visco-elastic brand, Wrapid Bond™, and for enhanced horizontal directional drilling systems.

The agreement allows NRI to access Canusa’s domestic and international distributor network specific to corrosion protection and coatings and corrosion coating allowance products for steel pipe. The agreement also provides Canusa with another route to market the Wrapid Bond™ products.

Chesapeake More Active In Oil Projects, Chief Says
Aubrey McClendon, CEO of Chesapeake Energy, predicted his company’s gradual movement to oil and natural gas liquids will enlarge its image beyond that of a natural gas leader. At a shareholders meeting last month he said Chesapeake is active in 12 oil prospects in several states.

“I think it’s going to be an important feature of the company going forward, that we’re not so tied to natural gas prices,” he said.

KKR Investing $400 Million To Develop Texas Shale Gas
Private-equity firm KKR is investing $400 million in a joint venture with Houston-based Hilcorp Energy Co. to develop the Eagle Ford Shale in South Texas. Hilcorp is one of the country’s largest privately held oil-and-gas companies and will control 60% of the JV and run its operations, as well as contribute 100,000 acres to the partnership. Eagle Ford Shale is located in south central Texas.

Earlier, KKR was part of a large natural-gas deal expected to yield major profits for the firm. Royal Dutch Shell PLC agreed to buy East Resources Inc., a closely held U.S. natural-gas explorer in the Marcellus Shale, for $4.7 billion. KKR paid $325 million for a roughly one-third stake in East Resources only one year ago, the Wall Street Journal reported.

EOG Canada To Acquire Galveston LNG Inc.
EOG Resources, Inc. said its Canadian subsidiary, EOG Resources Canada Inc., will acquire the shares of Galveston LNG Inc. The Calgary-based corporation, through its wholly owned subsidiary, Kitimat LNG Inc., owns 49% of the planned LNG export terminal to be located at Bish Cove, near the Port of Kitimat, 405 miles north of Vancouver, British Columbia. On Jan. 13, Apache Corp. announced an agreement with Kitimat LNG Inc. to acquire 51% of the planned Kitimat LNG project of which Apache will be the operator.

Planned capacity of the proposed Kitimat LNG terminal is about 700 MMcf/d or 5 million metric tons of LNG per year. Preliminary construction costs, estimated at $3 billion (Canadian), will be revised at the conclusion of front-end engineering and design. Under the terms of the agreement, EOG’s offer to purchase the shares of Galveston LNG Inc. is conditioned upon the achievement of certain commercial and regulatory milestones.
 
Tulsa Pipeline Expo Seeks To Attract Contractors
The second annual Tulsa Pipeline Expo will be held Sept. 1–3 at the historic QT Center, formerly known as the International Petroleum Expo building at the Tulsa, OK fairgrounds. The event is designed to showcase the thriving industries of energy and infrastructure in the Tulsa area, said TPE President Shawn Lowman.

“Our goal is to promote Tulsa business for the industry and associated businesses,” Lowman said. “We want to help reaffirm that there are still a great many manufacturing, products and service companies to the pipeline market in Tulsa.”

The event kicks off Sept. 1 with registration from 1–4 p.m. at the host Renaissance Tulsa Hotel and Convention Center. Buses will then depart for ONEOK Field for a baseball game. Lowman said 25-30 exhibitors have signed up with 60–70 expected. There will be also a several companies doing actual equipment demos.

A room block is reserved at the Renaissance Tulsa Hotel and Convention Center with a special rate of $119. Reservations must be made with the hotel at http://cwp.marriott.com/tulbr/tulsapipelineexpo. For advanced TPE registration, visit www.tulsapipelineexpo.com or register online. For information, call (877) 300-4852 or e-mail info@tulsapipelineexpo.com.

Questar Finalizes Spin-off Of QEP Resources
Questar Corp. has completed the spin-off of QEP Resources, Inc. Keith Rattie, who has served as Questar’s Chairman, President and CEO, will remain as chairman of both Questar and QEP Resources. Charles Stanley will serve as President and CEO of QEP. Ronald Jibson will serve as President and CEO of Questar.

Questar Corp. is a natural gas-focused energy company. Its subsidiaries include:
* Wexpro Company, which develops and produces natural gas on behalf of Questar Gas Company’s utility customers;
* Questar Pipeline Company, which operates interstate natural gas pipelines and storage facilities in the western United States;
* Questar Gas Company, a regulated natural gas distribution utility serving more than 900,000 homes and businesses in Utah, Wyoming, and Idaho.

QEP Resources is a domestic U.S. exploration and production company. QEP Resources subsidiaries include:
* QEP Energy Company (formerly Questar Exploration & Production), a diversified natural gas and oil-exploration, development and production company;
* QEP Field Services Company (formerly Questar Gas Management), a midstream field services company that gathers and processes natural gas in the Rocky Mountain region and northwest Louisiana;
* QEP Marketing Company (formerly Questar Energy Trading), which markets natural gas and oil on behalf of QEP Energy Company and others and operates a natural gas storage facility in western Wyoming.

Do Abandoned Wells In Gulf Pose Threat?
More than 27,000 abandoned oil and gas wells lurk in the hard rock beneath the Gulf of Mexico, an environmental minefield that has been ignored for decades. No one — not industry, not government — is checking to see if they are leaking, an Associated Press investigation shows.

The oldest of these wells were abandoned in the late 1940s, raising the prospect that many deteriorating sealing jobs are already failing. The AP investigation uncovered particular concern with 3,500 of the neglected wells — those characterized in federal government records as “temporarily abandoned.”

Regulations for temporarily abandoned wells require oil companies to present plans to reuse or permanently plug such wells within a year, but the AP found that the rule is routinely circumvented, and that more than 1,000 wells have lingered in that unfinished condition for more than a decade. About three-quarters of temporarily abandoned wells have been left in that status for more than a year, and many since the 1950s and 1960s — even though sealing procedures for temporary abandonment are not as stringent as those for permanent closures.

Experts say such wells can repressurize, much like a dormant volcano can awaken. And years of exposure to sea water and underground pressure can cause cementing and piping to corrode and weaken.

Oil company representatives insist the seal on a correctly plugged offshore well will last virtually forever. Spokeswoman Margaret Cooper of Chevron U.S.A., which has at least 2,700 abandoned wells in the Gulf, said, “It is our experience that the well abandonment process, when performed in accordance with regulation, has been accomplished safely and successfully.”

The General Accountability Office, which investigates for Congress, warned as early as 1994 that leaks from offshore abandoned wells could cause an “environmental disaster,” killing fish, shellfish, mammals and plants. In a lengthy report, GAO pressed for inspections of abandonment jobs, but nothing came of the recommendation.