May 2021, Vol. 248, No. 5


Projects May 2021

Midcoast Energy Completes CJ Express Pipeline Expansion 

Texas-based Midcoast Energy completed its CJ Express pipeline expansion project, and it is now in service, the subsidiary said. 

Midcoast Energy, an affiliate of ArcLight Capital Partners, entered into a commercial agreement with an anchor shipper to support the expansion of its pipeline system and transport natural gas supplies from East Texas to the Texas Gulf Coast, according to the company. 

CJ Express added a compression and pipeline facility at multiple locations on the existing East Texas pipeline system, a news release stated. This increases Midcoast’s Clarity pipeline transmission capacity to Gulf Coast markets to about 1 Bcf/d (28 MMcm/d) and increases gathering capabilities in the Shelby Trough area of the Haynesville Shale, the release said. 

Midcoast Energy also announced a firm transportation agreement and natural gas purchase and sales agreement with Golden Pass LNG Terminal, which will become effective after the Midcoast Clarity pipeline in the Beaumont, Texas, area is extended to a new interconnect with Golden Pass Pipeline. The construction and effective date of commitments will align with Golden Pass LNG’s feed gas needs.

New Ukraine Pipeline to Provide Boost for Polish Market  

Klaipeda’s liquefied natural gas (LNG) import terminal operator says its gas could reach Poland, Ukraine and other countries south of Lithuania next year, when a new pipeline comes online. 

The Gas Interconnection Poland–Lithuania (GIPL) pipeline to Poland is due to be completed by December and will give Finland, Estonia and Latvia access to LNG from continental Europe. The link is designed to transport up to 21 terawatt-hours (TWh) of gas per year to Poland, or 27 TWh to Lithuania. 

“It’s likely the GIPL pipeline will flow solely from Lithuania to Poland,” Mindaugas Navikas, chief sales officer at the terminal’s operator Klaipedos Nafta (KN) told Reuters. 

No terminal capacities have been booked for supply via GIPL, but Navikas said Orlen’s decision to connect its 750 MW gas-fired power plant directly to GIPL is a “positive signal.” 

Lithuanian energy company Ignitis Group said last month it will start supplying LNG to Poland next year via the pipeline. 

Arunas Molis, LNG director at KN, said Poland, Ukraine and other countries to the south of Lithuania were likely destinations for gas from Klaipeda. 

Russia’s Gazprom lost a third of its share of the Finnish gas market last year, after a new pipeline made it possible to import LNG from Klaipeda. 

Democrats Asking Biden to Shut Down Dakota Access Pipeline 

A group of 33 Democratic Congress members signed off on a letter to President Biden asking him to shut down the Dakota Access Pipeline while it undergoes a court-mandated environmental review.  

The Democrats, led by Reps. Nanette Diaz Barragán (D-Calif.), Raul Ruiz (D-Calif.) and Raúl Grijalva (D-Ariz.), along with Sens. Jeffrey Merkley (D-Ore.) and Elizabeth Warren (D-Mass.), argue the U.S. Army Corps of Engineers failed to consider the potential impacts of the pipeline on the Standing Rock Sioux Reservation and other communities when the Corps issued a permit for the pipeline to cross a federal reservoir along the Missouri River. 

“The tribe draws its water from the Missouri River and rightfully fears an oil spill could disproportionately affect their drinking water, as well as hunting and fishing rights,” the letter dated April 1 said. 

The 1,172-mile (1,886-km) Dakota Access Pipeline transports oil underground from the Bakken/Three Forks production area in northwest North Dakota through South Dakota and Iowa to Pakota, Ill.  

The pipeline partners and operators maintain that it is the safest and most environmentally sensitive way to transport crude oil from domestic wells to American consumers. 

The 570,000-bpd pipeline was completed in 2017, and Energy Transfer in 2019 began filing and making notifications about plans to optimize the existing pipeline to accommodate additional volumes of crude oil. 

Russia Wants Maritime Rules Respected Amid Nord Stream 2 Concerns 

Russia expects all maritime traffic rules “to be strictly observed” in the area of the construction site of the Nord Stream 2 gas pipeline, a foreign ministry official told Reuters, as security concerns mounted. 

The consortium building the underwater gas pipeline from Russia to Germany recently cited security risks to the Nord 2 from warships and planes, as the link nears completion. 

The pipeline, which was designed to avoid Ukraine land, would double the capacity of the Nord Stream gas link from Russia to Germany. However, for months now, it has created tension between Russia and the United States. 

Andrey Minin, a senior official at the Nord Stream 2 AG consortium, has said that the project’s fleet has been the target of “regular provocations by foreign civil and military vessels,” including from nearby Poland. 

U.S. Secretary of State Antony Blinken said recently that completion of the construction is up to companies involved. 

Egypt’s SUMED Pitches Use of Pipeline as Suez Crisis Drags 

Egypt’s SUMED pipeline operator has approached oil traders to ask if they wanted to book their system to transport crude oil as a blockage of the Suez Canal by a container ship drags, three trading sources told Reuters. 

The 430-yard (400-meter) Ever Given, almost as long as the Empire State Building is high, is blocking transit in both directions through one of the world’s busiest shipping channels for oil and grain. 

SUMED links the Red and Mediterranean Seas with a capacity of over 2.5 MMbpd. About 1.3 MMbpd flowed through the system in 2018, the U.S. Energy Information Administration said. 

The pipeline is majority-owned by Egypt’s state oil company EGPC while Saudi Aramco, the Kuwait Investment Authority and Qatar Petroleum have smaller shares. 

Traders have had to replace some empty tankers that were due to head north through the canal to pick up Mediterranean crude.  

“Rerouting via the Cape (Africa) could cost about $400,000 extra in freight, plus you need to factor in two to three weeks of extra travel time,” a shipping source told Reuters. 

Venezuela Gas Pipeline Tract Explosion Blamed on Attack 

A tract of a gas pipeline in eastern Venezuela suffered an incident the country’s oil minister blamed on an attack, according to a report from state oil company PDVSA (Petróleos de Venezuela, S.A.), 

The 36-inch (914-mm) pipeline ships natural gas to the Pigap II gas reinjection plant in northern Monagas state. The explosion caused PDVSA to temporarily shut the plant to put out the blaze and evaluate damages. 

On state television, Oil Minister Tareck El Aissami called the incident a “terrorist attack,” but did not provide details about damages to the pipeline or other infrastructure. 

OPEC (Organization of the Petroleum Exporting Countries)-member Venezuela is home to massive crude and natural gas reserves but has seen output tumble to decades-low levels in recent years amid a nationwide economic collapse that has reduced PDVSA’s cash flow, leading to an exodus of qualified personnel. 

Officials in the past have blamed explosions at pipelines and refineries, as well as blackouts and other infrastructure failings, on attacks aimed at sabotaging the country’s economy. Critics say the incidents are due to chronic lack of maintenance, underinvestment and mismanagement. 

FERC Approves Northern Natural’s Pipeline Replacement Project 

The Federal Energy Regulatory Commission (FERC) approved Northern Natural Gas Company’s request to replace 87 miles (140 km) of natural gas pipeline, agreeing that the project’s greenhouse gas emissions would not be significant. 

Northern Natural’s South Sioux City to Sioux Falls A-line 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. 

FERC Chairman Richard Glick tweeted that he was proud to see FERC comply with the National Environmental Policy Act and the Natural Gas Act by assessing the significance of a proposed natural gas pipeline project’s greenhouse gas emissions and contribution to climate change.  

This was the first time FERC considered how a proposed natural gas pipeline would affect greenhouse gas emissions, which is one of the steps the Biden administration initiated in its effort to slow climate change, the Associated Press (AP) reported. 

The commissioners approved the project by a vote of 3-2, according to the AP article. 

“Going forward, we are committed to treating greenhouse gas emissions and their contribution to climate change the same as all other environmental impacts we consider,” Glick said in the news release. 

FERC’s approach to natural gas project greenhouse gas emissions has been a subject of disagreement among the commissioners for several years, the news release states, leading Glick to praise the compromise. 

Canadian Pipeline Companies See Green Energy Push 

Canada’s largest pipeline companies TC Energy and Enbridge Inc. see opportunities in their extensive natural gas businesses as a transition to cleaner energy evolves, their chief executives said during the Scotiabank CAPP Energy Symposium. 

Storage and transportation assets will be key as the energy transition moves forward and new technologies aimed at reducing greenhouse gas emissions like carbon capture and storage and hydrogen are developed, TC Energy CEO François Poirier said at the online symposium. 

“Transition can’t come fast enough from our perspective, but we have to pace it appropriately,” Poirier said. “I believe natural gas and liquids will continue to play a prominent role in the energy economy for decades to come,” he said. 

Enbridge CEO Al Monaco, speaking at the same conference, said he saw gas as the “great enabler” for the energy transition, because it is a reliable source of power that can backstop renewables. 

“It’s low-cost, abundant and important in reducing utilization of coal, but it’s equally important in fostering renewables. You’ve got to be able to create baseload capability, and it addresses the enormous intermittency challenges,” he said.

PennEast Expects First Phase of Gas Pipeline in Service Next Year 

PennEast Pipeline still expects to put the first phase of its $1.2 billion natural gas pipeline project in Pennsylvania in service in 2022 and complete the second phase from Pennsylvania to New Jersey in 2024. 

The pipeline is involved in a case before the U.S. Supreme Court with New Jersey over whether the company can seize state-owned or controlled land under federal eminent domain rules. 

On a positive note for PennEast, the Biden administration filed a brief with the Supreme Court that agreed with a filing by the Trump administration urging the court to overturn a 2019 ruling by the U.S. Court of Appeals for the 3rd Circuit. That ruling blocked PennEast from using federal eminent domain to seize state land. 

“PennEast appreciates the continued support of the United States, which underscores that this case presents an issue that cuts across party lines,” the company said in a statement. 

The U.S. Federal Energy Regulatory Commission (FERC) approved PennEast’s request to build the pipeline in January 2018. The company had hoped to complete the project in 2019. 

PennEast needs the New Jersey land to build its 120-mile (193-km) pipeline, which is designed to deliver 1.1 Bcf/d (31 MMcm/d) of gas from the Marcellus shale formation in Pennsylvania to customers in Pennsylvania and New Jersey. 

The PennEast partners include units of South Jersey Industries Inc., New Jersey Resources Corp., Southern Co., Enbridge Inc. and UGI Corp.

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