January 2016, Vol. 243, No. 1


Business Meetings & Events

Company & Association News

The Board of Directors of the Texas Alliance of Energy Producers elected Robert W. Osborne vice chairman at its recent meeting in Fort Worth. Osborne, who has been in the oil and gas business since 1971, is vice president and 50% owner of Cobra Oil & Gas Corp. in Wichita Falls. Personnel Changes  ..

Editor's Notebook

Editor's Notebook: A Few Things I Just Don’t Understand

A former classmate of mine posts on Facebook a photo of 1970, yearning again for gasoline at 40 cents a gallon. Do you want to go back to earning $2 an hour? Do you realize that the $1.75 you’re probably paying today is less in adjusted dollars than what you paid in 1970? But then I have to remind m..


27 Billion Barrels Worth Of Oil Projects Now Canceled

An estimated $380 billion worth of oil and gas projects have been canceled since 2014, according to a new estimate from Wood Mackenzie. The downturn in oil prices have hit projects all around the world, and Wood Mackenzie says that 68 major projects were scrapped in 2015, which account for around 2..

49th IPLOCA Convention Convenes in Singapore

SINGAPORE – The parallels between the pipeline industry and the island country of Singapore may not be obvious but after a few days in the city-state, one observes the efficiency, the diversity and the innovation of this unique city – all traits reflected by both the pipeline industry and the Intern..

Appeals Court: Clean Power Plan Can Proceed Pending Review

WASHINGTON (AP) — In what environmentalists hailed as a victory for efforts to curb climate change, an appeals panel Thursday in Washington rebuffed efforts to delay enforcement of President Barack Obama’s plan to reduce greenhouse gas emissions until legal challenges are resolved. The U.S. Court..

As Oil Plunges, Energy Companies Cut Jobs, Postpone Projects

LONDON (AP) — The world’s biggest oil companies are slashing jobs and backing off major investments as the price of crude falls to new lows – and there may be more pain to come. Companies like BP, which said Tuesday it is cutting 4,000 jobs, are slimming down to cope with the slump in oil, whose ..

Average Gasoline Price in US Falls Below $2  for First Time Since '09

Based on EIA’s weekly survey of gasoline prices, the U.S. average retail price for regular gasoline fell to $1.996 per gallon  Jan. 11, falling below $2 for the first time since March 23, 2009. The U.S. average retail regular gasoline price had last approached, but not gone below, the $2-mark in ear..

Canada to Step Up Climate Scrutiny on Oil Pipelines

The Canadian government is set to impose stricter criteria for evaluating major energy infrastructure projects like oil and gas pipelines or liquefied natural gas export terminals. The federal government is reportedly planning on adding a “climate test” for proposed projects, an extra hurdle for la..

Changing Contract Expiration Dates to Alter Crude Futures Comparisons

A change to the North Sea Brent crude oil futures contract will change the way prices for Brent futures are compared to futures prices for West Texas Intermediate (WTI) crude oil, according to a new report by Energy Information Administration (EIA). Beginning Jan. 29, the Brent contract will expire..

Company Executive Blames Decade-Old Oil Leak on 'Act of God'

BATON ROUGE, La. (AP) — A decade-old oil leak that could last for another century was caused by an “act of God” during a hurricane in the Gulf of Mexico, the president of the company responsible said Wednesday. Taylor Energy President William Pecue told a gathering of industry experts and environ..

Crowds Attack Mexico Pipelines, Steal Diesel with Buckets

MEXICO CITY (AP) — Rebellious crowds of townspeople in a rural area in central Mexico are defying police and soldiers to steal diesel from illegally tapped pipelines, creating what officials call an imminent threat of tragedies like fires that have burned dozens of people at other sites in Mexico. ..

Crude Oil Glut Putting Breaks on Rail

It’s been several months since an oil train accident grabbed big headlines – but not because there haven’t been any. A single weekend in November saw two trains derail in Wisconsin. The first spilled about 20,000 gallons of ethanol into the Mississippi River, followed a day later by a spill of about..

Crude Oil Prices to Remain Relatively Low Through 2016, 2017

The Short-Term Energy Outlook (STEO) released on Jan. 12, which is the first STEO to include projections for 2017, forecasts Brent crude oil prices will average $40 per barrel in 2016 and $50/bbl in 2017. West Texas Intermediate (WTI) crude oil prices are expected to be $2/bbl lower than Brent in 20..

EAI Expects Iran to Clear Storage Prior to Ramping Up Production

Implementation day for the Joint Comprehensive Plan of Action (JCPOA), an agreement among Iran, the the five permanent members of the United Nations Security Council and Germany (P5+1), and the European Union (EU), occurred  Jan. 16 when the International Atomic Energy Agency verified that Iran ha..

Exxon Says Oil and Gas Will Still Dominate Energy in 2040

DALLAS (AP) — The way oil giant Exxon Mobil sees it, the global energy landscape won’t be radically different in 2040 than it is today. Oil and gas will remain king, accounting for an even slightly larger share of the energy supply. Coal will fall behind natural gas to become the third-largest sourc..

Falling Oil Prices Push Chevron to 1st Loss Since 2002

DALLAS (AP) — Chevron suffered its first money-losing quarter since 2002 in the final three months of last year, as plunging crude prices chopped more than one-third from its revenue. Oil traded this month at levels not seen since 2003, although it has rebounded slightly in the last few days. Che..

Feds Seek Limit on Methane Gas Flaring at Drilling Sites

WASHINGTON (AP) — The Obama administration on Friday proposed new rules to clamp down on oil companies that burn off natural gas on public land, arguing the effort will reduce waste and harmful methane emissions as part of President Barack Obama’s bid to curb climate change. Energy companies freq..

FERC's Clark Won't Seek Reappointment when Term Ends

BISMARCK, N.D. (AP) — Federal Energy Regulatory Commission member Tony Clark says he won’t seek reappointment when his term ends June 30. The Republican made the announcement on his Twitter account Thursday, and his staff confirmed his intention. The federal agency regulates utilities, power gene..

Financial Expert High on Mexico’s Potential

For an expert’s perspective on Mexico’s expansive Energy Reform effort, P&GJ interviewed Richard Ennis, managing director, ING Capital. P&GJ: Why did President Enrique Peña Nieto institute the Energy Reform program?                                                                       Enrique Enni..

Henry Hub, Marcellus Spread Narrows as Pipeline Capacity Grows

Natural gas spot prices around the United States are often compared to prices at the Henry Hub in Louisiana. At trading points in and around the Marcellus and Utica shale plays in Pennsylvania, West Virginia and Ohio, natural gas prices consistently trade below the Henry Hub national benchmark pric..

Improving Pipeline Inspection Options for Inspectors, Contractors

One of the biggest obstructions to completing major pipeline construction projects on time and on budget, and with high quality, has been a shortage of experienced and qualified pipeline construction inspectors. Assurance of inspector qualifications, along with the application of a strong construct..

Industry Becoming More Comfortable with Excess Flow Valves

When I first joined the natural gas industry in 1981, excess flow valves (EFVs) were the most controversial issue in distribution pipeline safety. EFVs are simple devices installed in gas-service lines at the connection to the main that remain open under normal flows but close if a surge in flow exc..

Investigation Shows Safety Deficiencies in California Refinery Incident

REDONDO BEACH, CA (AP) — An explosion at an ExxonMobil oil refinery in California last year could have been prevented if managers had taken into account aging safety equipment and shut down a key, spark-generating part of the refinery  before attempting repairs elsewhere, federal investigators said...

Iran to Boost Oil Output by 500,000 Barrels

TEHRAN, Iran (AP) — Iran plans to increase oil production by 500,000 barrels per day now that sanctions have been lifted under a landmark nuclear deal with world powers. Deputy Oil Minister Roknoddin Javadi says Iran is determined to retake its market share, which plunged after the crippling sanc..

Iran Wasting No Time; Inks Deals with Italy, France

Balancing Iran’s increasingly closer ties with Russia and China, Iranian President Hassan Rouhani is touring Europe to drum up as much renewed business with the West as he can now that his country is free of crippling sanctions. On Friday, Iran and Greece signed what is described as a “long-term ag..

Leaders of Cyprus, Greece, Israel Consider Building Natural Gas Pipeline

NICOSIA, Cyprus (AP) — The leaders of Cyprus, Greece and Israel pledged on Thursday to work together to seize opportunities emerging from newly found offshore gas reserves in order to bolster stability and security in a region wracked by conflict. The talks in the Cypriot capital are the first tr..

Measuring Methane Emissions: Part of Gas Pipelines’ Future

When examining the growing cottage industry of methane emissions control, it is clear upfront that it is one of the toughest sub-specialties in the emerging conglomerate that makes up the national response to climate change impacts. Researchers, engineers and public-policy wonks must start with the ..

Mexico: An Expanding Market for Infrastructure, but Dependent on Reforms

A consultant in his native Mexico, Arturo Palacios is more than willing to share his considerable views on what’s going on in his nation, but he also suggests that anyone in the U.S. energy sector wanting to do business south of the border should do their homework. He can suggest websites, governme..

Microbially Induced Corrosion: Silent Killer of Infrastructure

You can’t see them, but microscopic marauders are eating away at the foundations of the oil and gas industry. Corrosion-causing bacteria generate billions of dollars of damage to pipelines and other oil and gas infrastructure each year. A new rapid field test for microbially induced corrosion (MI..

More Quakes Rattle Oklahoma but State Avoids Tough Measures

OKLAHOMA CITY (AP) — In Oklahoma, now the country’s earthquake capital, people are talking nervously about the big one as man-made quakes get stronger, more frequent and closer to major population centers. Next door in Kansas, they’re feeling on firmer ground though no one is ready yet to declare vi..

National Grid at Home and Abroad

National Grid is a British-based multinational pipeline and power networks company with operations in the United Kingdom and northeastern United States. It is one of the largest investor-owned energy companies in the world and is listed on both the New York and London Stock Exchanges. According to ..

Natural Gas Prices Expected to Rise over next 2 Years

The average natural gas spot price at the benchmark Henry Hub for December 2015 of $1.93 per million British thermal units (MMBtu) was the lowest monthly average since March 1999, according to EIA’s latest Short-Term Energy Outlook (STEO). The EIA expects natural gas prices to rise, averaging $2.65..

New Pipeline Projects Increase Northeast Natural Gas Takeaway

A number of recently completed and upcoming natural gas infrastructure projects are expected to increase the reach of natural gas produced in the Marcellus and Utica regions of the Northeastern United States. These projects are intended to transport natural gas from production centers to consuming m..

North Dakota Regulators Approve Dakota Access Pipeline

BISMARCK, ND (AP) — North Dakota regulators on Wednesday approved the biggest-capacity crude pipeline proposed to date that would move nearly 600,000 bpd from the oil patch to Illinois. Some things to know about the $3.8 billion, 1,150-mile project that crosses four states: The North Dakota Publi..

Oil Stranded by California Pipeline Break Could Be Trucked Out

LOS ANGELES (AP) — Eight months ago a ruptured pipeline created the largest coastal oil spill in California in 25 years, fouling beaches near Santa Barbara with crude and spreading goo as far as 100 miles away. The beaches reopened last summer, but the fallout is continuing. Santa Barbara County..

Only Recession Can Prevent Oil Price Spike

The biggest result from the collapse in oil prices could be a future price spike. Oil prices at $30 per barrel have put most producers under water. That has led to austere budgets and severe cuts to spending. Wood Mackenzie recently estimated that $380 billion in major oil projects have been delaye..

P&GJ’s 2016 Worldwide Construction Report

P&GJ’s 2016 survey figures indicate 94,799 miles of pipelines are planned and under construction worldwide. Of these, 49,848 miles represent projects in the engineering and design phase; 44,951 miles are in various stages of construction. Following is a list of new and planned pipeline miles in the..

Regulators to Give Written Reason for Cutting Oilfield Fines

BISMARCK, N.D. (AP) — North Dakota regulators announced Monday that written justification will be provided if fines and other sanctions are lowered against companies that violate the state’s oil and gas laws. It’s a major policy shift that comes amid public criticism for easing penalties as much ..

Russia Warns Cuts Needed to Avoid Repeat of '98 Crash

MOSCOW (AP) — Russia’s leaders are warning the government will need to make more cutbacks if the nation is to avoid a repeat of the 1998 financial crash, the country’s biggest post-Soviet economic trauma. The economy, which is heavily reliant on its massive oil and gas industry, is getting hammer..

Russian Companies Back Talks with OPEC on Cutting Volumes

MOSCOW (AP) — The head of Russian state oil pipeline monopoly Transneft says talks on output cuts are planned with Saudi Arabia and OPEC. Transneft head Nikolai Tokarev said that Saudi Arabia had “taken the initiative and come out with a proposal to discuss the possibility of reducing volumes,” i..

Russian-OPEC Coordinated Production Cut Remains Long Shot

The rumors of a coordinated production cut between OPEC and Russia continue to grow more serious. The latest comes from the Russian energy minister Alexander Novak, who insisted that Russia will hold talks with OPEC in February on a possible agreement to reduce output. “There are very many question..

Saudi Aramco Chairman Defends Oil Giant's Possible IPO Move

RIYADH, Saudi Arabia (AP) — The chairman of Saudi Arabia’s state oil giant, Aramco, said on Monday that plans for a possible initial public offering are not being driven by a need for cash amid a global slump in oil  prices, but instead signal a desire for greater openness to outside investors. S..

Schlumberger to Cut 10,000 More Jobs after Bad 4th Quarter

HOUSTON (AP) — Schlumberger said Thursday it lost more than $1 billion and slashed another 10,000 jobs in the fourth quarter as tumbling energy prices took their toll on the world’s largest oilfield services company. Like others in the industry, Schlumberger has been hard hit by the downturn in the..

Shell Shareholders OK $49 Billion Deal to Buy UK Rival BG

LONDON (AP) — Royal Dutch Shell shareholders have overwhelmingly backed the $49 billion bid to buy BG Group, despite a slide in oil prices that have had some critics wondering about the wisdom of the mega-deal. More than 80% of shareholders approved the move on Wednesday. The deal will boost Shel..

Southwestern Energy to Cut 1,100 Jobs Amid Oil Slump

NEW YORK (AP) — Southwestern Energy is cutting 1,100 jobs, with the price of crude wallowing at levels not seen in more than a decade. The company employed about 2,780 employees at the end of 2014, the last time it reported how many workers it had. The Houston-based company said in a government f..

State Severance Tax Revenues Decline as Fossil Fuel Prices Drop

Several states that collect significant revenue from fossil fuel extraction are re-evaluating current and upcoming operating budgets and taxation structures to address revenue shortfalls. Severance taxes are often imposed on the extraction of nonrenewable resources such as crude oil, natural gas, an..

Suncor to Buy Canadian Oil Sands in $6.6 Billion Deal

CALGARY, Alberta – Suncor Energy and Canadian Oil Sands (COS) have reached an agreement supporting Suncor’s purchase of all shares of COS, with Suncor increasing  its offer per share to 0.28. The amended offer has a total value of $6.6 billion, including an estimated debt of $2.4 billion. “Since S..

Survey Finds Natural Gas Industry Still Upbeat, Just Less So

While the majority of those in the natural gas industry remain optimistic about growth between now and 2020, the numbers from a Black & Veatch survey clearly indicate that “the exuberance of 2014 is waning.” According to the 2015 Strategic Directions: U.S. Natural Gas Industry Report, even as deman..

Warm Weather, Low Prices Reducing Home Heating Expenditures

Warmer temperatures and lower energy prices have contributed to a reduction in EIA’s current forecast average heating expenditures this winter compared with the forecast in the October 2015 Winter Fuels Outlook. Each October, EIA produces a Winter Fuels Outlook that projects heating fuel expenditur..

Where Do We Go From Here? Attend Pipeline Opportunities Conference to Find Out

With the future of the oil and gas industry on everyone’s mind, the 12th annual Pipeline Opportunities Conference on March 22 will bring together industry experts who will explain the challenges facing the energy sector, but will more importantly discuss an active future that awaits them. The confe..


U.S. Production to Fall to 8.1 MMbpd by Year End, Genscape Says

  With sustained weakness in crude prices and oil rigs at the lowest level since the economic crisis of 2008, production in the United States is set to see significant year-over-year declines. U.S. production for the year peaked at 9.6 MMbpd in April and declined to 9.2 MMbpd by December. Industry..

Willbros Wins Utility Contracts

Willbros Group’s Utility T&D segment won two projects with an aggregate contract value of $29 million. One project is for the installation of 115KVA duct bank in a congested urban setting. Project work is expected to begin shortly and scheduled for completion in 12 months. The second is for replac..

Willbros Wins Utility Contracts (1)

Willbros Group’s Utility T&D segment won two projects with an aggregate contract value of $29 million. One project is for the installation of 115KVA duct bank in a congested urban setting. Project work is expected to begin shortly and scheduled for completion in 12 months. The second is for replac..

World News: Pembina Sets $2.1 Billion Capital Program

Pembina Pipeline Corp. Board of Directors approved a capital program of $2.1 billion in 2016, which represents another record capital budget plan. Last year Pembina commissioned numerous large-scale, fee-for-service assets in its Conventional Pipelines and Gas Services businesses, which include its ..


Government: FERC Policy on ‘Cumulative’ Impact of Pipeline Projects Facing Tests

The Federal Energy Regulatory Commission issued its long-awaited decision clearing a Tennessee Gas Pipeline Co. project in Pennsylvania shale country after a federal court had forced the agency to revisit an environmental assessment FERC performed in 2012. The FERC order issued in November on the De..

In The News

In the News: Enbridge Cutting 500 Jobs, Leaving 100 Unfilled

Enbridge is reducing its workforce by 5% as low oil prices continue to reverberate through the energy sector. The move affects 500 people at all levels of the company in the U.S. and Canada. The company also is leaving 100 positions unfilled. TransCanada has also been cutting staff, starting with it..

Product Showcase

What’s New in Products & Services

Barben Analytical Barben Analytical has added the BOS SAFETAP retractable optical oxygen sensor to its product offering. Retractable (hot-tap) sensors allow the measurement element to be inserted directly into the process pipeline or vessel without the need for a dedicated sample line. When removal..


Coast Guard Issues Final EIS for Deepwater Port Project  

The federal Maritime Administration and U.S. Coast Guard issued a 4,242 page final Environmental Impact Statement (EIS) for the proposed Port Ambrose Project deepwater port. The EIS confirms that the project is needed, the location is safe, and that impacts to the environment are minimal. According..

Enable Gas Closes Binding Open Season

Enable Midstream Partners’ wholly owned subsidiary, Enable Gas Transmission, LLC, closed a binding open season Dec. 3, soliciting commitments for the company’s Cana and Stack Expansion (CaSE). Together with existing EGT system capacity and capacity on third-party pipelines, the CaSE project will pro..

Flint Hills Adding Ethanol Terminal in Texas

BUDA, TX – Flint Hills Resources (FHR) is ging forward with a project to build its first ethanol terminal in Texas. Construction will begin this month and the terminal is expected to be operational by December. The new terminal will include a rail spur, two storage tanks, a truck-loading rack, wate..

Honeywell to Supply System for Texas-Based LNG Project

Texas LNG, a Houston-based energy company, has selected Honeywell’s UOP Amine Guard™ FS process to remove contaminants from natural gas in preparation for liquefaction and export. The company’s two-phase project, located on the north shore of the Port of Brownsville’s deep-water ship channel, will p..

Howard Midstream to Build Dos Águilas Open Access System

Howard Midstream Energy Partners’ subsidiary, Dos Águilas, LLC, plans to permit, construct and operate the proposed Dos Águilas project, an open access system of refined products terminals and pipelines spanning from Corpus Christi, TX to northern Mexico. The Dos Águilas project will offer direct ..

KMI, TrailStone Form Mexican Gas Marketing Company

A subsidiary of Kinder Morgan signed a joint venture letter of intent with a subsidiary of the TrailStone Group to form a Mexican natural gas marketing company. The JV between KMI and TrailStone subsidiaries will combine North American gas supply and transportation to provide competitively priced g..

Magellan Midstream, TransCanada to Build Houston Connection

Magellan Midstream Partners and TransCanada announced definitive plans to connect TransCanada’s Houston tank terminal to Magellan’s East Houston terminal. HoustonLink Pipeline, a new company owned 50-50 by Magellan and TransCanada, will construct, own and operate a 9-mile, 24-inch  crude oil pipelin..

Tennessee Gas Seeks Approval for $170 Million Expansion

Kinder Morgan’s Tennessee Gas Pipeline has applied to FERC for a $170 million expansion of its gas transportation system to serve shippers that also have signed on with the Cameron LNG liquefaction and export facility. The Southwest Louisiana Supply Project would provide 295,000 Dth/d of incrementa..

TransCanada to Build, Own and Operate Mexican Pipeline

TransCanada Corp. has been chosen to build, own and operate the Tuxpan-Tula Pipeline in Mexico. Construction of the pipeline is supported by a 25-year natural gas transportation service contract with the Comisión Federal de Electricidad (CFE), Mexico’s state-owned power company. TransCanada expects..


EN Engineering President on Acquisitions, Growth and the Future

EN Engineering has been on an acquisition mode, both acquiring and being acquired, in recent years. On July 1, the company welcomed General Atlantic, a leading growth equity investment firm, as a partner and majority investor in the firm. In 2011, Thomas C. Ziegenfuss became president of EN Engineer..

Frost & Sullivan Director Discusses Likelihood of Oil Price Rebound

Carl Larry is the director of Oil and Gas at Frost & Sullivan, a consultancy that conducts research on oil and gas markets, to get his thoughts on the state of oil in 2016. Oilprice.com: I saw that you were on Bloomberg in December, and you said that you thought oil would go to the low $30s per b..


TDW Repairs Exposed Beach Gas Pipeline in 3 Weeks

A beach in a highly populated tourist area is hardly an ideal work site. But when a 42-inch gas pipeline laid parallel to the seashore shifted and became exposed on the beach near Ubhrat, India, crews had to overcome several unusual challenges posed by the surrounding landscape and notable environme..