Pipeline Construction Projects

Officials Halt Construction of Mariner East 2

Pennsylvania environmental officials ordered Sunoco to halt construction on the Mariner East 2  natural gas pipeline, which crosses the southern part of the state. The Department of Environmental Protection (DEP) cited a series of spills and other “egregious and willful violations” of state law.

The DEP said it ordered stoppage on the $2.5 billion project until Sunoco complies with the terms of its permit. The agency said it issued dozens of environmental violations to Sunoco since May.

The 350-mile pipeline will carry propane, butane and ethane from the Marcellus Shale natural gas formation in western Pennsylvania to an export terminal near Philadelphia. Sunoco has said construction on the 20-inch pipeline is scheduled to be complete in the second quarter of 2018, with a separate 6-inch pipeline expected in service by the end of year.

“Until Sunoco can demonstrate that the permit conditions can and will be followed, DEP has no alternative but to suspend the permits,” DEP Secretary Patrick McDonnell said in a written statement.

Keystone XL Moves Forward Based on Commitments

TransCanada said it has confirmed strong commercial support for its controversial Keystone XL pipeline. The company says it has concluded an open season for the pipeline project with roughly 500,000 bpd of firm, 20-year commitments.

Interest in the project remained strong, and TransCanada plans to continue to secure additional long-term contracted volumes, the company said in a on Jan. 18 statement.

“Over the past 12 months, the Keystone XL project has achieved several milestones that move us significantly closer to constructing this critical energy infrastructure for North America,” said Russ Girling, TransCanada’s president and CEO.

In November, Nebraska regulators approved a route for the pipeline though the state, but not the company’s preferred choice, instead shifting the path away from sensitive ecological areas. TransCanada said it’s working with landowners to obtain the necessary agreements for the approved route.

Construction preparation have started and will increase as the permitting process advances throughout this year, the company said. Primary construction is expected to begin in 2019.

Tellurian Planning 3 Major Natural Gas Pipelines

Tellurian plans to develop a pipeline network, which would include the Driftwood Pipeline and two additional pipelines from the Permian Basin to supply growing natural gas demand in Southwest Louisiana.

The Driftwood Pipeline is expected to be in-service mid-2021 and the additional two pipelines are anticipated to be in-service by the end of 2022, subject to commercialization.

The newly proposed Permian Global Access Pipeline (PGAP) would be 625-mile, 42-inch pipeline transporting 2 Bcf/d of natural gas. PGAP would originate at the Waha Hub in Pecos County, Texas, and would connect to the Permian and associated shale plays located around Midland, Texas.

PGAP would terminate near Gillis, LA, with proposed deliveries to the Creole Trail Pipeline, Cameron Interstate Pipeline, Trunkline Gas Company, Texas Eastern, Transco, Tennessee Gas Pipeline, Florida Gas Transmission, and DWPL, among others.

The newly proposed Haynesville Global Access Pipeline (HGAP) would be an approximately 200-mile, 42-inch pipeline also transporting 2 Bcf/d with proposed deliveries to the same interstate pipelines near Gillis.

The previously announced Driftwood Pipeline is a 96 mile, 48-inch natural gas pipeline transporting 4 Bcf/d from near Gillis, and terminating at Driftwood LNG. It is under permitting with the Federal Energy Regulatory Commission (FERC).

Wolf Midstream Plans Permian Crude Gathering System

Wolf Midstream Partners executed a crude oil gathering and transportation agreement with an independent producer for  25,000 dedicated gross leasehold acres in the Permian Basin.

To support the agreement, Wolf plans to construct 50 miles of new crude oil gathering pipelines, with an expected capacity of 55,000 bpd. Additionally, Wolf has established a delivery point near Colorado City, TX and plans to construct terminal facilities, with interconnects into multiple downstream pipelines.

Companies, Pipeline to Ease Conversion of Coal Units

TransAlta and Tidewater Midstream and Infrastructure signed a letter of intent for Tidewater to construct a 120-km natural gas pipeline from its Brazeau River Complex in Alberta to TransAlta’s generating units at Sundance and Keephills.

The pipeline will boost TransAlta’s strategy to convert its coal units at the two locations to natural gas, providing initial capacity of 130 MMcfd by 2020, and expandable to 340 MMcf/d. TransAlta has the option to invest up to 50% in the pipeline.

“Construction of the natural gas pipeline supports our strategy of being a low-cost provider of firm, clean and reliable energy,” said Dawn Farrell, president and chief executive officer of TransAlta. “In addition, having greater access to natural gas allows TransAlta to blend natural gas with the coal, prior to fully converting the units, allowing us to take advantage of low natural gas prices and reduce our carbon costs.”

Enterprise to Convert Permian NGL Pipeline to Crude Oil 

Enterprise Products Partners plans to convert one of its natural gas liquids pipelines from the Permian Basin to the Texas Gulf Coast to crude oil service. The conversion is expected to be completed in the first half of 2020.

This pipeline conversion would provide the partnership with total crude oil pipeline capacity of over 650,000 bpd from the Permian Basin to Enterprise’s crude oil hub in the Houston area. Enterprise has three existing NGL pipelines that stretch from the Permian Basin to the Texas Gulf Coast: the Seminole Blue, Seminole Red and Chaparral.

The Shin Oak NGL pipeline, which is currently under construction, will be the partnership’s fourth NGL pipeline from the Permian Basin to the Texas Gulf Coast. The pipeline is expected to be in service in the second quarter of 2019.

Russia’s South ULSD Pipeline Launched

The start of ultra-low-sulfur diesel (ULSD) exports to the Black Sea and Mediterranean markets via Russia’s South pipeline is not a prelude to massive upgrading investment and soaring diesel production, according to market analyst firm ESAI Energy.

In December, the first ULSD will be exported from the new South pipeline, Russia’s Black Sea counterpart to the North pipeline used to export ULSD to Northwest Europe. Initially, the South pipeline will transport 100,000 bpd of ULSD, less than one-third of what the North pipeline transports. But the South pipeline is unlikely to be extended further north or increase capacity anytime soon.

With rare exceptions, the dozen refineries in this area have failed to invest in cracking and coking capacity. For example, completion of the hydrocracker at Rosneft’s Tuapse refinery is at least two years away. In the meantime, what could be Rosneft’s flagship exporting refinery will remain the country’s biggest teapot.

Anadarko Subsidiary Holds Open Season on Oil System

Anadarko Petroleum’s wholly owned subsidiary, DBM Oil Services (DBMOS), has begun a binding open season to identify interest in a new high-vapor-pressure oil-gathering and treating system serving portions of Reeves, Loving, Ward, and Winkler counties in West Texas.

The system is expected to have a gathering capacity of about 400,000 bopd and a treating capacity of 120,000 bopd by the end of 2018, increasing to 180,000 bopd in 2019 with future expansions as needed.

If enough interest is shown, DBMOS expects the initial phase of the system to be operational in the second quarter of 2018.

Plains All American Conducting Permian Open Season

A subsidiary of Plains All American Pipeline received sufficient interest to conduct an open season for committed crude oil transportation from the Permian Basin to the Corpus Christi  area.

Origin points will be Orla, Wink South, Midland, Crane and McCamey, Texas. The open season provides an opportunity for shippers to enter into services agreements  for long-term crude oil transportation and committed tariff rates.

The pipeline will include a combination of existing pipelines and two new pipelines. The first new pipeline will extend from Wink South to McCamey, Texas. A second pipeline will extend from McCamey to the Corpus Christi/Ingleside area and could be operational in third-quarter 2019.

Magellan Midstream Eyeing Pipeline to Houston Market

Tulsa-based Magellan Midstream plans to develop a new pipeline starting at Crane, near Three Rivers, Texas that will transport various grades of crude and condensate from the Permian and Eagle Ford to the Corpus Christi and Houston markets. The company launched an open season through Feb. 1.

The project would include construction of a  375-mile, 24-inch pipeline from Crane, where shippers could make Houston-area deliveries through a new 200-mile pipeline, or to the Corpus-Christi area via a new 70-mile pipeline.

The system is expected to have an initial capacity of 350,000 bpd, with expansion capabilities up to 600,000 bpd for each destination. Magellan is looking into additional extensions for Midland and Orla to tie into the company’s 60-mile, 24-inch Delaware Basin pipeline being built from Wink to Crane to carry Delaware Basin crude and condensate.

Magellian Proposed Crude Oil Pipeline to Corpus Christi and Houston

Hilcorp Affiliate, Vitol Looking at Joint Corpus Terminal

Hilcorp Energy affiliate Harvest Pipeline Co and energy company Vitol will explore jointly developing a crude oil terminal at the Port of Corpus Christi.

The companies reached an agreement with the Port of Corpus Christi Authority for a location and dock access for a 22-acre lease,  Hillcorp said. A 16-inch lateral will connect Harvest’s pipeline to the terminal and a private dock is also under consideration.

The project would provide a terminal connection from the Harvest Midway Junction for Eagle Ford shipments and provide an outlet for shipments from the Permian Basin to international markets.

“Crude demand, particularly in emerging markets, continues to grow, and U.S. shale has an important role to play in satisfying this demand,” Mark Couling, head of crude oil for Vitol, said. P&GJ


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