October 2017, Vol. 244, No. 10

Projects

Projects

FERC Approves Nexus Pipeline Construction

The Federal Energy Regulatory Commission (FERC) approved construction of a high-pressure pipeline that will carry natural gas from the shale fields of Appalachia across northern Ohio and into Michigan and Canada, a decision likely to be a death blow for project opponents concerned about safety and property rights.

The planned $2 billion Nexus Gas Transmission project is a partnership between Calgary, Alberta-based Enbridge and Detroit-based DTE Energy. The 255-mile-long pipeline will be capable of carrying 1.5 Bcf/d, enough to meet the needs of about 15,000 homes for a year.

The commission Aug. 25 issued a certificate of public necessity and convenience, the project’s last major regulatory hurdle. Despite the opposition, there was little chance the project wouldn’t be approved as long as the Nexus partnership was willing to pay for it. The Natural Gas Act of 1938 gives private companies wide latitude to build pipelines in the U.S., and FERC has no known history of disapproving projects like NEXUS.

“Receiving this stamp of approval is a testament to our strong history of consultation and successful project execution,” said Nexus Gas Transmission President Jim Grech in a statement. A federal lawsuit filed by opponents against FERC over the approval process was crippled last month when a magistrate wrote that U.S. District Court was the wrong venue for their complaint.

Pacific Connector Pipeline Launches Open Season

Pacific Connector Gas Pipeline LP (PCGP) is conducting a binding open season on new pipeline facilities that it proposes to construct in Oregon. PCGP is soliciting commitments for firm natural gas pipeline transportation on the Pacific Connector Gas Pipeline.

The PCGP will provide natural gas to the Pacific Northwest and international markets. The 229-mile, 36-inch pipeline is designed to transport up to 1.2 MMDth/d from interconnects near Malin, OR to the Jordan Cove LNG terminal at Coos Bay, OR where the gas will be liquefied for transport to serve overseas markets, particularly those in the Pacific Rim. The anticipated service commencement date is the fourth quarter of 2022.

Summit Midstream Plans Permian Pipeline System

Summit Midstream Partners executed an agreement with XTO Energy Inc. to develop, own and operate a new associated natural gas gathering and processing system servicing acreage located in the northern Delaware Basin in Eddy and Lea counties, NM.

Summit will initially construct a gathering and processing system with high- and low-pressure gathering and discharge pipelines, two compressor stations and a cryogenic processing plant with 60 MMcf/d of processing capacity. Summit’s processing complex will have the ability to be expanded to over 600 MMcf/d to meet future customer needs. The company expects to process production from XTO and other nearby producers. The initial phase of the project is expected to be operational by June 1, 2018.

TransCanada May Abandon Energy East Facing Tougher Review

TransCanada Corp. is seeking to suspend the application for its $15.7 billion Energy East pipeline and may abandon the project, the company said on Sept. 8, weeks after Canada’s National Energy Board (NEB) announced a tougher review process. TransCanada will do a “careful review” of the new assessment process to gauge its effect on the costs, schedules and viability of the pipeline to the Atlantic coast, the company said in a statement reported by Reuter. The pipeline was up for its second NEB review, after the first stalled last year amid protests by environmentalists and after revelations that regulatory panel members met privately

The NEB in August expanded the scope of Energy East’s review, saying it will consider the project’s indirect greenhouse gas contributions and will provide “more visibility” to the evaluation of risks associated with accidents such as oil spills. The regulator said on it will consider TransCanada’s request to pause its Energy East application and will make a decision “in a timely fashion.”

Energy East, which would take crude from Alberta, would earn higher prices for Canadian producers, whose landlocked product trades at a discount to the West Texas Intermediate benchmark. Assessing indirect emissions had been opposed by TransCanada, which had called it “completely redundant and unnecessary.”

In a filing to the regulator, TransCanada requested an extension to the deadline for filing Energy East updates to Oct. 27. Should TransCanada abandon the project, “the carrying value of its investment … as well as its ability to recover development costs incurred to date would be negatively impacted,” the company said. TransCanada said it will continue to advance its other projects despite pausing Energy East.

Dirk Lever, an energy infrastructure analyst at AltaCorp Capital in Calgary, said, “What they want to do is halt the clock on it, and I can’t say I am surprised. Assessing indirect emissions “is a really tough ask.”

Energy East’s importance has somewhat diminished for TransCanada since the United States this year approved the company’s Keystone XL pipeline, which would run from Alberta to U.S. refineries. The ultimate fate of that proposed pipeline is also uncertain.

Midland-to-ECHO Pipeline Secures Transportation Contracts

Enterprise Products Partners executed additional long-term contracts to provide transportation services on the Midland to ECHO crude oil pipeline system. The agreements bring total committed volumes on the Midland-to-Sealy segment to 335,000 bpd, representing 83% of the segment’s ultimate committed capacity of 405 MMbpd. Total capacity for the pipeline segment will be 450,000 bpd, including 45,000 bpd of “walk-up” capacity.

The Midland to Sealy Pipeline is expected to begin limited commercial activities later this year. The pipeline is scheduled to be in full service, including the capability to batch four grades of crude oil, with 450,000 bpd of capacity, by mid-2018. Committed volumes ramp up through 2021 with 90% of the total committed volumes scheduled to ramp up by the end of 2019.

TransCanada to Boost Canadian Mainline System Capacity

TransCanada Corp. announced that it will apply to the NEB to increase the capacity of the Canadian Mainline System through its Maple compressor station near Vaughan, ON. The $160 million project is underpinned by 15-year contracts and will expand capacity to the southern Ontario market plus delivery to Atlantic Canada via the Trans Quebec & Maritimes Pipeline and Portland Natural Gas Transmission System.

The proposed project will add incremental compression and associated facilities on the Mainline to move an additional 80 MMcf/d of natural gas. Once TransCanada has completed its tariff process for capacity additions, an application to approve the associated facilities is expected to be filed with the NEB in early 2018, with the project expected to be in-service Nov. 1, 2019.

Transco Pipeline Files for Rivervale South Authorization

Transco, a Williams Partners company, filed an application with FERC for authorization of its Rivervale South-to-Market project, which would create 190,000 MMbtu/d of firm transportation capacity to northeastern markets in time for the 2019-20 winter heating season.

Transco has executed precedent agreements with Direct Energy Business Marketing and UGI Energy Services, for service under the project. Once complete, the project will help meet the growing heating and power generation demand for northeastern consumers, primarily in New Jersey and New York. The Rivervale South-to-Market project will consist of uprating 10.4 miles of existing Transco pipeline, adding a 0.6-mile pipeline loop, as well as upgrades and modifications to existing pipeline facilities, all in New Jersey.

FERC Approves Use of Ohio Natural Gas Pipeline

The federal agency has told Dallas-based Energy Transfer Partners that it can use its completed 42-inch, 191-mile-long pipeline from Carroll County in eastern Ohio to Defiance in northwest Ohio. A twin 42-inch line remains under construction for the $4.2 billion Rover project which is designed to carry 3.25 Bcf/d of natural gas from Appalachian shale fields to Canada and states in the Midwest, Great Lakes and Gulf Coast.

FERC also gave Energy Transfer permission to use 3.5 miles of 30-inch pipeline in Harrison County and 19 miles of 42-inch pipeline connecting Harrison County to Carroll County.

Trans Adriatic Pipeline Reaches Halfway Point   

The Trans Adriatic Pipeline (TAP) is now more than 50% completed, nearly 16 months after construction began. This includes all engineering, procurement and construction scope. As of early September, contractors had cleared 70% of the project route in Greece and Albania and buried 45% of welded steel pipe. Additionally, 95% of the total 55,000 pipes have been received in Greece, Albania and Italy.

“We are pleased that TAP continues to progress on time and on budget,” said TAP Managing Director Luca Schieppati. “We remain on track to deliver the first Shah Deniz II gas in 2020, bringing a much-needed new source of energy into the European energy network.”

The 546-mile TAP will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, crossing Greece and Albania and the Adriatic Sea before coming ashore in Southern Italy.

Over 5,500 people have been working for the project across TAP’s host countries, 85% of whom are local staff. Crews have clocked 16 million man-hours with no major accident, officials said. TAP has implemented a wide range of social and environmental investment programs in communities along its route, with substantial projects to be rolled out in coming months. TAP will invest over $66 million in SEI in Greece, Albania and Italy.

With first gas sales to Georgia and Turkey targeted for late 2018, first deliveries to Europe will follow in 2020.

Undersea Pipeline Proposed to Move Iranian Gas to India

An 800-mile undersea pipeline from Iran, avoiding Pakistani waters, could bring natural gas from the Persian Gulf to India at rates less than the price of LNG in the spot market. Releasing a study on the Iran-India gas pipeline, India’s former oil secretary T.N.R. Rao said gas imported through the $4 billion line would cost $5-5.50 per MBtu at the Indian coast, cheaper than some domestic gas supplies.

Rao, who is the chairman of the advisory board of South Asia Gas Enterprise – the firm wanting to lay the undersea line – said the pipeline can first travel to Oman, and then onward to Porbandar in Gujarat, India’s westernmost state and closest to Iran. “The cost of landed gas through an undersea pipeline will be at least $2 cheaper than importing LNG, saving about $1 billion annually,” the study said.

The company wants the Indian government to support the pipeline and help buyers enter into contracts. The pipeline is planned to carry 1.1 Bcf/d. The company said it could be built in two years from the date of necessary approvals and signed gas sale-and-purchase agreements. Under the proposal, the company would lay the pipeline to bypass the exclusive economic zone of Pakistan.

Santa Fe Midstream Building Permian Assets

Santa Fe Midstream is building a natural gas gathering, treatment and processing system in the Permian basin, reports Argus. Construction began in August and the initial natural gas facilities are expected to be operational by the second quarter of 2018, the Texas-based company said.

Santa Fe said it was also developing a crude oil gathering system in the area. The San Andres formation is located within a geological region known as the Central basin platform in West Texas. This area separates the Delaware and Midland basins, and all are contained within the larger Permian basin.

The company’s natural gas and crude midstream facilities will be located in the Yoakum, Gaines and Cochran counties in Texas, as well as Lea County in New Mexico. Residue from the natural gas processing plant and treating facilities near Denver City in Texas will be delivered to El Paso Natural Gas’ interstate pipeline, with access to the Waha hub as well as the western US natural gas markets, the company said. Natural gas liquids will be delivered to Enterprise Products’ Chaparral pipeline for transportation to Mont Belvieu in Texas.