July 2021, Vol. 248, No. 7


Projects July 2021

‘Critical’ Coastal GasLink Pipeline on Target for 2023 

Coastal GasLink pipeline, which will feed natural gas to one of the biggest LNG projects in Canada’s history, is almost halfway complete and on track to start up by 2023, experts say.

The project involves the construction and operation of a 48-inch (1,219-mm), 416-mile (670-km) pipeline from northeastern British Columbia to the liquefied natural gas (LNG) Canada Export Terminal now under construction near Kitimat. LNG Canada's Joint Venture Participants include Shell, Kogas, Mitsubishi, PetroChina and Petronas.

“It tends to get lost in the shuffle, but it is a massive, massive development,” said Chris Bloomer, president and CEO of Canadian Energy Pipeline Association. “From an investment point of view, it’s huge. (LNG Canada) is the first LNG project off the west coast of Canada.”

Coastal GasLink will be the first large-scale transmission pipeline moving gas across the Rockies to the coast, Bloomer said, and it will tap into one of the largest natural gas reserves in the world.  

TC Energy is building the pipeline, which will be capable of moving 2.1 Bcf/d (59 MMcm/d) of natural gas with the potential for delivery of up to 5 Bcf/d (142 MMcm/d).

The project, including engineering, procurement and construction, was 43% complete as of Coastal GasLink’s April construction update. Construction was 26% complete.  

“Across the project, significant progress has been made to ensure the project moves through spring freshet in an environmentally responsible manner to prepare for the summer construction program,” a Coastal GasLink spokesperson said. “The Coastal GasLink team did recently achieve a significant milestone: the completion of 692 km [430 miles] of pipe delivered along the 670-km [416-mile] project route with zero safety incidents.”  

– By Maddy McCarty, P&GJ Digital Editor 

TC Energy Terminates Keystone XL Pipeline Project  

It’s official: After a more than decade of controversy, the Keystone XL pipeline has been officially canceled by canceled.  

The $9 billion project, which was proposed in 2008 to transport oil from Canada to U.S. refiners, was terminated by owner TC Energy  a few months after U.S. President Joe Biden this year revoked a key permit needed for a U.S. stretch of the 1,200-mile project.  

North American oil pipelines, including Dakota Access and Enbridge Line 3, have faced constant opposition from environmental groups and affected parties, particularly on the legal front.​  

The Keystone XL pipeline was designed to ship 830,000 bpd of Alberta oil sands crude to Nebraska, but the project was delayed for the past 12 years due to opposition from U.S. landowners, Native American tribes and environmentalists.  

TC Energy said it would continue to coordinate with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the project.  

Double E Pipeline Construction on Track for 2021 Startup   

Summit Midstream’s Double E Pipeline is under construction and on track to be commissioned by the end of the year, Summit Midstream Partner’s CEO said.  

“We achieved several key milestones on the Double E project during the first quarter, including closing $175 million of non-recourse senior-secured credit facilities and commencing construction activities, which were both critical steps towards remaining on schedule,” said Heath Deneke, president and CEO, during a report on the company’s first quarter financial and operating results.  

The Double E system will provide firm natural gas transportation service from various receipt points in the Delaware Basin in the Permian Shale in New Mexico and Texas to various delivery points in and around the Waha Hub, connecting a growing associated natural gas supply basin to a liquid trading point, according to Global Energy Infrastructure’s project data. It should transport about 1.35 Bcf/d (38 MMcm/d) of gas.   

The Federal Energy Regulatory Commission in January gave its approvals for the 134-mile (217-km), 43-inch (1,092-mm) pipeline’s construction and implementation plan.   

“Our wholly owned, unrestricted subsidiary, Summit Permian Transmission LLC, utilized the credit facilities to fund all of Summit’s $4.6 million investment in Double E in the first quarter, and we expect that these credit facilities will fund the vast majority of Summit’s remaining Double E capital commitment,” Deneke said in a news release.  

Summit expects Double E to be completed at or below the $425 million cost estimate, which includes about $35 million of project contingency, he said. Summit Permian Transmission received $175 million of commitments from three leading commercial banks to finance the development.  

The pipeline should be commissioned in the fourth quarter of 2021, Deneke said.  

– By Maddy McCarty, P&GJ Digital Editor  

US to Waive Sanctions on Firm, CEO Behind Nord Stream 2 Pipeline  

The Biden administration will waive sanctions on the company and its chief executive behind Russia’s Nord Stream 2 pipeline to Europe, a Washington, D.C., source familiar with the plans told Reuters.  

A U.S. State Department report delivered to Congress concludes that Nord Stream 2 AG and CEO Matthias Warnig, an ally of Russian President Vladimir Putin, engaged in sanctionable activity but that it was in the U.S. national interest to waive the sanctions, the source said.  

German Foreign Minister Heiko Maas said the administration waived the sanctions on those two parties but also imposed sanctions on Russian entities and ships linked to the construction of Nord Stream 2.  

“We see this as a constructive step, which we are happy to further discuss with our partners in Washington,” Maas told reporters, adding the Biden administration had not made any promises beyond the waived sanctions.  

The administration under Democratic President Joe Biden still opposed the Nord Stream 2 pipeline but felt it was important to send a signal about its strategic commitment to rebuilding relations with Germany, which were badly damaged under former Republican President Donald Trump, the U.S. source said.  

Northern Natural to Soon Seek Final FERC Approval   

The first gas pipeline project to be weighed by a federal energy board for its potential greenhouse gas emissions effects is still waiting on some federal permits before construction can begin, a spokesman said.  

The Federal Energy Regulatory Commission (FERC) approved Northern Natural Gas Company’s A-Line Replacement project, which will replace 87 miles (140 km) of natural gas pipeline from South Sioux City, Neb., to Sioux Falls, S.D., by a 3-2 vote in March, agreeing the project’s greenhouse gas emissions would not be significant.  

The replacement project will enhance safety, security and operational efficiency of Northern Natural’s pipeline system in South Dakota and Nebraska, FERC said in a news release.  

Northern Natural expects its last federal permits by the end of this month, said Mike Loeffler, who is senior director of media and external affairs for Northern Natural. Once the company obtains those permits, it can file for authorization to proceed with construction from FERC.  

“Assuming prompt Commission approval of Northern’s request to proceed with construction … Northern plans to begin facility construction in June 2021 and to commence pipeline construction in early July 2021,” Loeffler said by email. “The project will be constructed over the next two years with an anticipated in-service date of September 2022.”  

– By Maddy McCarty, P&GJ Digital Editor  

Kinder Morgan to Buy Stagecoach Gas Services for $1.23 Billion  

Kinder Morgan agreed to buy Stagecoach Gas Services LLC for $1.23 billion as the pipeline operator looks to expand into the northeast U.S. market.  

Stagecoach is a natural gas pipeline and storage joint venture between Consolidated Edison and Crestwood Equity Partners.  

The deal, expected to close in the third quarter, will give Kinder Morgan access to Stagecoach’s four natural gas storage facilities and three pipelines serving the northeast market.  

Stagecoach has 185 miles (298 km) of natural gas pipelines with multiple interconnects to major interstate natural gas pipelines, including Kinder Morgan’s unit Tennessee Gas Pipeline.  

Kinder Morgan said it expects the deal to be immediately accretive to its shareholders.  

“Acquiring Stagecoach will enhance our service to customers in this part of the country,” said KMI’s President of Interstate Natural Gas Pipelines Kimberly S. Watson.   

Colonial Hit by Network Outage Days After Hack Shutdown  

Colonial Pipeline had network issues preventing shippers from planning upcoming shipments of fuel, the company said, just after the system reopened after a week-long ransomware attack.  

The disruption was caused by efforts by the company to harden its system as it restores service following the cyberattack, Colonial said, and not the result of a reinfection of its network. It did not say when the issue would be fixed, but said it was still delivering products scheduled by shippers.  

The closure of the 5,500-mile (8,900-km) system was the most disruptive cyberattack on record, preventing millions of barrels of gasoline, diesel and jet fuel from flowing to the East Coast from the Gulf Coast.    

Iran Starts Pumping Oil into Goreh-Jask Pipeline  

The National Iranian Oil Company (NIOC) began transferring oil through the Goreh-Jask pipeline, which runs from the Goreh oil terminal in the Bushehr Province to Jask oil terminal along the Gulf of Oman.  

The 620-mile (1,000-km) Goreh-Jask pipeline cost about $1.8 billion to build and will be able to transfer 300,000 bpd.  

“All parties involved in the project are working round-the-clock and are attempting to launch the first phase of this strategic plan. The Pumphouse No. 2, as the ‘beating heart’ of the first phase of the project, will be completed and launched in the next few days,” said Touraj Dehghani, managing director of Petroleum Engineering.  

Iran has been planning since at least 2012 to set up the Jask terminal, just outside of and bypassing the Strait of Hormuz. NIOC recently said it plans to start shipping crude from the terminal next month.  

While Iran is under U.S. sanctions that effectively bar it from selling oil, it has increased exports this year by often disguising the origin of the shipments, Bloomberg reported. Refiners in China are the main buyers, the report states.  

“Production of transmission valves, electric pumps, laying a thousand kilometers of pipeline along with the construction of storage tanks, terminals and the single point mooring (SPM) in Jask port using domestic capacities shows the national determination for completing this great and strategic project,” said NIOC CEO Masoud Karbasian, the Tehran Times reported. He added that the Goreh-Jask oil transfer project is the largest project in Iran’s oil industry.  

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