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Volume 14 Number 12 - DECEMBER 2014
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Size does matter. ROSEN maintains the industry’s most com pre hensive technology portfolio, from hardware to soft ware, as well as the largest tool fleet. Meaning more flexibility for you.
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Contents
ON THIS MONTH'S COVER
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Copyright© Palladian Publications Ltd 2014. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. All views expressed in this journal are those of the respective contributors and are not necessarily the opinions of the publisher, neither do the publishers endorse any of the claims made in the articles or the advertisements. Printed in the UK.
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Volume 14 Number 12 - DECEMBER 2014
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03 Editor's commentJust what are your intentions with that crude oil?
05 Pipeline newsEnergy East Pipeline; Canadian Mainline Sytstem; TAP; Keystone XL; TANAP and more.
REGIONAL REVIEW
12 2014: the year of gasFor a number of reasons, gas consumption has been growing globally. Dr Hooman Peimani discusses the large number of significant pipeline projects that have emerged throughout the year.
TRENCHING
20 Specialised services in AustraliaKris Vlaeminck, Jan De Nul Group, Luxembourg.
PIPELINE STABILISATION
28 Inflatable buoyancy: making light work of pipelayingChris Sparrow, Unique Seaflex, UK.
33 Avoiding common mistakesNeil Parkinson, Technical Director, AV Technology Ltd (AVT), UK.
OFFSHORE OPERATIONS
40 A new method for subsea inspectionRienk de Vries, Technical Director at Applus RTD, the Netherlands.
COATINGS TECHNOLOGIES
45 Field applied coatings: rethinking paradigmsNathan Muncaster, Polyguard, USA.
49 Novel primersSanjeev Naik and Aurélie Rexach, TWI Ltd, Cambridge, UK, and Dirk Bentz, INM - Leibniz Institute for New Materials, Saarbruecken, Germany.
PIPELINE INTEGRITY
57 Reaching for European energy securityJohan Desaegher, Belgium, and Mike Kirkwood, T.D. Williamson, UAE.
61 The five stages of cyber griefTom Cross, Director of Security Research, Lancope, Inc., USA.
65 Staying at the forefrontDr. Rod Martin, Executive Vice President, Oil & Gas, Element Materials Technology, USA.
PIPELINE STEELS TECHNOLOGY
71 The future of Brazilian operationsAngus Townley, Market Intelligence Manager, Tata Steel, UK.
73 UT: a review of new techniquesAndré Lamarre, Olympus Scientific Solutions Americas, USA.
TURBOMACHINERY
78 Keeping the gas moving in ChinaDebby Wadsworth, Emerson Process Management, USA.
81 A promising investmentRick Barnes, Schneider Electric, Canada.
PUMPS AND VALVES
85 Pumping from El Paso to HoustonAaron Burton, Lead Field Engineer for Sulzer, USA.
89 Keeping it simpleMike Fynes, Smith Flow Control Ltd, UK.
95 A vital choreMike Shelton, GE Measurement & Control, UK.
PIPELINE MACHINERY REVIEW
99 World Pipelines' pipeline machinery reviewFeaturing Pipeline Machinery International; CLIMAX Portable Machining & Welding Systems; and Xiris Automation.
WORLD PIPELINES | VOLUME 14 | NUMBER 12 | DECEMBER 2014
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PAGE
12
2014the year of gas
For a number of reasons, gas consumption has been growing globally. Dr Hooman Peimani discusses the large
number of significant pipeline projects that have emerged throughout the year.
The global consumption of energy has been rapidly increasing for decades. Despite efforts to encourage more use of renewables to curb greenhouse gas emissions and contain global warming, fossil energy still has the largest share of this consumption. Although coal and oil account for the bulk of the global energy mix and will retain this rank in the foreseeable
future, gas consumption has been growing globally for certain reasons. Added to its availability in conventional forms, and increasingly so, in unconventional forms in a significant number of countries, and its lower price and emission when compared to oil and oil and coal, respectively, gas has become a preferable means or, at least, a transitional one for achieving low carbon economies. These reasons have encouraged more gas consumption in all regions although there are sharp differences among the gas consuming countries and their respective regions in terms of the role that this fossil fuel plays and can or will play in their energy mixes. Chief among the globally consumed types of gas is still natural gas despite inroads by other types especially in the US (shale gas) and China (CBM).
The increasing demand for natural gas (3346.7 billion m3 in 2013) has required its movement within and between the gas producing and consuming countries to meet their respective demand. When piped movement is not an option for various reasons such as security, geographical and financial, a small portion (less than 10% in 2013) is moved in the form of LNG. As the bulk of this demand must therefore be met through pipelines, pipeline activities have been on the rise in all regions. Of course,
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PUBLISHERNigel Hardy
JUST WHAT ARE YOUR INTENTIONS WITH THAT CRUDE OIL?
It seems to me that Keystone XL is submitted to a scrutiny never before witnessed for a pipeline project. Are pipeline projects always judged quite so
closely on; a) the environmental credentials of the product that they transport; b) the projected eventual destination of any refined product following delivery via the pipeline; c) the projected use of these refined fuels in an imagined future; d) the carbon emissions policies of the countries the pipeline crosses, plus a few that it doesn’t; e) the political motives of the President of one of the countries through which it passes; or in fact, on any other issue that should really be dealt with in a wider conversation about fossil fuels useage, rather than transport?
I may be aligning my argument with folks who ask: do computer games cause increased violence in teens? but here goes: do steel pipelines change the rate at which oil and gas is used, and the rate at which carbon emissions are released?
Last month, the US Senate shelved a bill that would have approved the construction of the extension to the Keystone pipeline. The Bill was passed in the House of Representatives first, but fell one vote short in the Senate, despite a lot of lobbying. President Obama may have used his veto on the project anyway, but this was the closest we’ve got to a yes on KXL. Will the Bill pass next time around? With the now Republican-controlled Senate, I’d imagine that a Keystone vote will be on the cards for early in 2015 and that it will succeed at getting the votes it needs to pass.
For now, though, we wait. Another TransCanada pipeline facing tough scrutiny is the Energy East line. The Canadian provinces of Ontario and Quebec have outlined a raft of new conditions for Energy East in the wake of the KXL bill failure. The most contentious of the conditions put forward by Ontario’s Kathleen Wynne and Quebec’s Philippe Couillard was that TransCanada’s proposal would need to account for the pipeline’s greenhouse gas emissions. In response to the new strictures, the provinces of Alberta and Saskatchewan
have fired back. Alberta Premier Jim Prentice and Saskatchewan Premier Brad Wall have something to say about this practice of using emissions as a roadblock. “Clearly, we’re talking about the emissions associated with carrying oil from this mode of transport,” Alberta Premier Jim Prentice said. “We’re not talking about an inquiry about the oilsands or any other field where this oil would come from. The market will carry this oil through to market, it will either go by pipeline or by rail or other modes of transport.”
Here lies the crux of the argument: the KXL and the Energy East lines are proposed as conduit lines for an oilsands product that is already being produced. KXL will deliver oilsands to refineries on the US Gulf coast that are ready and waiting for the heavy crude (and wanting in capacity in the meantime). Energy East will send crude from Alberta and Saskatchewan to refineries in Eastern
Canada. Alberta’s resource needs a market and it will find one. If KXL isn’t built and Energy East is, crude from Energy East may well be loaded onto tankers on Canada’s east coast and shipped down to the Gulf, as well as to world markets beyond.
We must consider the possibility that President Obama will ‘make a deal’ for KXL next year, using the approval of the project as leverage for another piece of legislation that he wants pushed through the system. Back in simpler times, when KXL was first proposed, it was always about feeding a crucial supply of crude to ‘the lower 48 states’ but has that now changed? What makes the pipeline viable again in the eyes of US leadership? Amid the swirl of falling oil prices, rising project costs, increased use of rail transport, Middle East tensions, Russian aggressions, the US gas boom and global climate wrangling (especially in Asia, a potential oilsands market) where does that leave KXL?
From all the team at World Pipelines – we wish you the very best in the holiday season! See you next year, for progress or postponements alike.
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BENDING HISTORY
Bending_history_A4_29-8-2013.ind1 1 29-8-2013 14:48:44
DECEMBER 2014 / World Pipelines 5
EU invests E647 million in key energy infrastructure
Member States have agreed to allocate e647 million to support key priority infrastructure projects. The bulk of the support goes to gas projects in the Baltic region as well as in Central Eastern and South Eastern Europe. Funding will come from an EU programme called the Connecting Europe Facility (CEF). The supported projects will increase Europe’s energy security and help end the isolation of Member States from EU-wide energy networks. They will also contribute to the completion of a European energy market and the integration of renewables to the electricity grid.
Vice President of the European Commission, responsible for energy, Günther Oettinger, said: “I welcome today’s decision, which will help us to quickly build the infrastructure we need to ensure Europe’s energy security. The geopolitical crisis has highlighted the need to better connect energy networks. This is also crucial for an integrated energy market where consumers get the best value for their money.”
Most of the money will directly or indirectly finance gas projects. Besides the construction of new pipelines, these gas projects also include terminals to ship liquefied natural gas (LNG) in the Baltic region, Central Eastern and South Eastern Europe. Innovative technologies in electricity will also be co-financed.
Of the 34 grants given, 16 are in natural gas sector, 28 grants are paid for studies, such as environmental impact assessments, and six grants go to construction works projects.
A number of projects supported have been identified as key security of supply projects in the European Energy Security Strategy of 28th May, 2014. CEF provides funding for those projects that have clear benefits beyond national borders and are commercially not viable or not affordable to users in certain Member States.
The European Commission proposal was supported by the CEF Co-ordination Committee, which consists of representatives from Member States. Later this year the Commission will formally adopt the list of proposals, which will receive financial assistance under CEF-Energy.
API: American voters in favour of energy policies
90% of voters in the US mid-term elections recognised that increased production of domestic oil and natural gas resources could lead to more jobs, while 86% recognised it stimulates the US economy, according to an election night telephone poll of actual voters conducted for API by Harris Poll.
Commenting on these results, API President and Chief Executive Officer, Jack Gerard, said: “In the 2014 election cycle, energy was a clear winner, because voters from every party recognise its key role in job creation and economic growth: the top priorities on Election Day...In race after race, voters from all regions of our nation and from both political parties voted for candidates who stood behind pro-development, all-of-the-above energy policies. The results of our poll provide a lesson for candidates running in 2016: pro-energy policies win.”
For the 2016 election, 66% of voters say they are more likely to support a candidate who supports producing more oil and natural gas, according to the poll (55% of Democrats and 82% of Republicans). Other poll results included 72% support for building the Keystone XL pipeline (58% of Democrats and 91% of Republicans).
Gerard added: “If the new Congress is serious about living up to their energy campaign promises, which we expect they are, they should waste no time advancing a pro-energy, pro-growth agenda. That includes approving the Keystone XL pipeline, expanding access to domestic oil and natural gas resources, repealing the RFS and reining in duplicative and unnecessary regulations.
“We hope that President Obama will take this opportunity to work with the new Congress on smart energy policies that grow our nation’s still shaky economy, create well-paying jobs and maintain our nation’s global energy leadership...[the] results clearly show that’s the direction a broad majority of American voters would like to go.”
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Energy East Pipeline Project takes important step forward
TransCanada Corporation has filed a formal project application for the Energy East Pipeline Project with the National Energy Board of Canada. The application for the 1.1 million bpd pipeline is the result of more than 18 months of environmental studies, engineering work and public consultation, making it one of the most extensive regulatory applications in TransCanada’s history. This US$ 12 billion project will enhance Canada’s energy security while providing thousands of jobs and billions of dollars for the Canadian economy.
“Not since the construction of the Canadian Mainline has there been an opportunity to connect the vast energy resources from Western Canada to eastern Canadian markets,” said Russ Girling, TransCanada’s President and Chief Executive Officer. “This is a project that will help support thousands of jobs across the country and generate billions of dollars in government tax revenues over both the short and long-term. It will provide the safest and most efficient access to markets for Canada’s growing crude oil production, ensuring we realise the greatest value for our natural resources. Energy East will also eliminate the need for Eastern Canada to import most of the 700 000 bbls it consumes every day.”
The project application is a significant milestone in a multi-step regulatory process to receive the necessary approvals to convert an existing 3000 km natural gas pipeline to crude oil service. In addition, 1600 km of new pipeline and new facilities will be constructed. The pipeline will transport crude oil from receipt points in Alberta and Saskatchewan to refineries in Montréal and Lévis, Québec, and to a proposed new marine terminal in Cacouna, Québec.
“Our application outlines how Energy East will be built and operated in a safe and environmentally responsible manner, while generating significant benefits for all Canadians,” added Girling.
The pipeline is anticipated to be in service for deliveries in Québec and New Brunswick by late 2018, subject to receiving the necessary regulatory approvals and permits. The project has secured more than 900 000 bpd of firm 20 year shipping contracts and is an important element of TransCanada’s US$ 39 billion capital programme.
6 World Pipelines / DECEMBER 2014
FOR FURTHER INFORMATION ON EVENTS VISIT WWW.ENERGYGLOBAL.COM/EVENTSEvents DIARY
TurkmenistanTurkmenistan has signed an outline deal with Turkey to supply gas to a new pipeline that could help Europe reduce its dependence on Russian gas imports.
The two countries struck a framework agreement for Turkmenistan, which is keen to diversify exports of its gas to world markets, to supply gas markets to the proposed Trans-Anatolian natural gas pipeline project (TANAP).
Turkish President Tayyip Erdogan and his Turkmen counterpart Kurbanguly Berdymukhamedov oversaw the signing of the agreement between state gas company Turkmengas and private Turkish firm Atagas for the purchase and sale of Turkmen gas for TANAP.
AustraliaNSW Premier Mike Baird and NT Chief Minister Adam have signed a MoU to work closely on the development of a pipeline connecting the Northern and Eastern Gas Markets. Under the MoU, the NSW and NT Governments will co-operate to accelerate and promote development of a national and competitive domestic gas market.
Giles said: “A gas pipeline between Central Australia and the East Coast is both a win for the Territory economy and a win for states such as New South Wales that urgently need to secure an affordable new energy supply. “Momentum for this nation-building project has been growing since the recent COAG meeting where leaders voiced unanimous support for the pipeline.”
GreeceDuring his recent visit to Greece, SOCAR President Rovnag Abdullayev met Antonis Samaras, Prime Minister of Greece.
During this meeting, issues related to the implementation of TAP project and the completion process of the acquisition of 66% shares in Greek National Gas Transmission System Operation DESFA by SOCAR were discussed.
World News
Russia and China sign agreement
Alexey Miller, Chairman of the Gazprom Management Committee and Zhou Jiping, Chairman of CNPC, signed a framework agreement on gas supplies via the western route. The document reflects such conditions as the volume and terms of supply and the take-or-pay level. The agreement defines the schedule of compiling a gas purchase and sale agreement, a technical agreement and an intergovernmental agreement on the western route.
In addition, Alexey Miller and Wang Yilin, Chairman of the CNOOC Board of
Directors, signed a confidential MoU for co-operation in the oil and gas sector.
Miller said, “Gazprom goes on boosting the co-operation with its Chinese partners. Power of Siberia, the world’s largest project for gas supplies via the eastern route, is well underway. Today the Framework Agreement has been signed for gas supplies via the western route. This legally binding document creates the necessary prerequisites for signing a gas purchase and sale agreement within this top-priority project.”
Canadian Mainline System enhancements
TransCanada Corporation is moving forward with its Vaughan pipeline project and associated facilities as part of Cdn$ 475 million in pipeline and facility expansions within the Eastern Triangle portion of the Canadian Mainline system. This is the next step of development for natural gas infrastructure in southern Ontario and is the result of collaboration between TransCanada, Enbridge Gas Distribution, Gaz Metro and Union Gas.
Construction of TransCanada’s Kings North Connection, Parkway West Connection and Hamilton Area Project is expected to cost Cdn$ 255 million and be in-service in November 2015. The Vaughan pipeline and associated facilities is expected to cost Cdn$ 220 million and be in-service in November 2016.
“Over the past year, TransCanada has announced plans to invest almost Cdn$ 2 billion in facility enhancements to allow growing supplies of Marcellus gas to reach Ontario and Quebec markets,” said Russ Girling, President of TransCanada. “These enhancements help minimise the duplication of infrastructure, reduce delivery costs and improve the diversification of gas supply to markets in Eastern Canada.” These projects are backed by long-term, binding agreements and have been developed to respond to changing market needs.
Girling said, “These enhancements demonstrate how we are responding to changing market needs, building new capacity to meet demand and maximising the efficiency of our Canadian Mainline System.”
Commitment to safety in GoM
T.D. Williamson was chosen by a major operator to execute a gas valve upgrade project on a deepwater gas export pipeline offshore New Orleans in the Gulf of Mexico.
Initially, TDW was required to isolate a 16 in. gas riser connected to a major subsea gas pipeline network in order to replace a valve. Plans changed when the operator decided to postpone replacement of the single valve so that three additional valves could be installed, and a launcher extension added to facilitate inline inspection tool runs. To ensure that the operation would go to plan, TDW re-verified the project engineering, performed additional communication and pull tests, and executed a new in-depth FAT. Working in co-operation with the operator’s team, 3500 hours were invested in preparing for the isolation.
The SmartPlug™ tool was pigged for 60 ft into the riser toward its set location. TDW used its remote-controlled SmartTrack™ tracking and monitoring system to track the tool’s progress, control its speed, and monitor conditions in real-time. During an 11 week period, the three valves were replaced and the launcher extension installed, which would greatly enhance future inline inspections of the line. Upon completion of these tasks, the SmartPlug tool was safely retrieved.
Bjørn-Olav Gilje, Project Manager for TDW, said that as a result of working in close co-operation with this strategic partner “the complex valve upgrade project and launcher extension installation were completed with minimal downtime, without disrupting production or supply to millions living on the Gulf Coast.”
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8 World Pipelines / DECEMBER 2014
FOR FURTHER INFORMATION ON EVENTS VISIT WWW.ENERGYGLOBAL.COM/EVENTSEvents DIARY
27 - 29 January 2015
European Gas Conference
Vienna, Austriahttp://www.europeangas-conference.com/
9 - 12 February 2015
Pipeline Pigging & Integrity Management Conference
Houston, USAhttp://www.clarion.org/ppim/ppim15/index.php
24 - 28 February 2015
PLCA
Carlsbad, Californiahttp://www.plca.org/
25 - 26 February 2015
OPT
Amsterdam, The Netherlandshttp://www.ibcenergy.com/event/opt
11 - 13 March 2015
AOG
Perth, Australiahttp://www.aogexpo.com.au/
15 - 19 March 2015
NACE Corrosion 2015
Dallas, USAhttp://nacecorrosion.org/
25 - 27 March 2015
OMC
Ravenna, Italyhttp://www.omc.it/
13 - 17 April 2015
HANNOVER MESSE
Hannover, Germanyhttp://www.hannovermesse.de/home
13 - 17 April 2015
PLCAC
Maui, Hawaiihttp://www.pipeline.ca/convention.html
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World News
China-Central Asia gas pipeline imports reach milestone
Natural gas imports to China through the China-Central Asia Gas Pipelines exceeded 100 billion m3 at the end of November.
As a part of major developments for the “Silk Road Economic Belt”, the China-Central Asia Gas Pipelines have a further three lines in production. The construction of the 1000 km Line D, one of China’s major energy co-operation projects in central Asia, started in September this year. Line D will run from Turkmenistan across Uzbekistan, Tajikistan and Kyrgyzstan to China, with an expected delivery capacity of 30 billion m3/yr of natural gas.
Cao Yaming, General Manager of CNPC’s central Asia gas pipelines, said investment in Line D had hit US$ 6.7 billion and the project would be completed by the end of 2020, when the annual equivalent amount of oil and natural gas imports will stand at 90 million t.
EnLink acquires pipeline assets
The EnLink Midstream companies have announced the acquisition of Gulf Coast natural gas pipeline assets, including the Bridgeline system, from Chevron Pipe Line Company and Chevron Midstream Pipelines LLC.
“The acquisition of these highly strategic assets builds upon our franchise position in the Louisiana market and provides a substantial platform for growth in an area we know well,” said Barry E. Davis, EnLink Midstream President and Chief Executive Officer. “Our core capabilities and strong financial position allow us to take advantage of growing demand in South Louisiana’s industrial, refining and petrochemical marketplace. We look forward to providing high quality midstream services to our customers, both existing and new.”
The natural gas assets include approximately 1400 miles of natural gas pipelines in three systems spanning from Beaumont, Texas to the Mississippi River corridor, approximately 11 billion ft of working natural gas storage capacity in three caverns in Southern Louisiana and ownership and management of the title tracking services offered at the Henry Hub, the delivery location for NYMEX natural gas futures contracts.
➤ White Cliffs Pipeline announces capacity expansion
➤ European gas market: Quarterly report
➤ Gazprom and Moldovagaz extend gas supply contracts
Keystone XL: what happens next
The Keystone XL pipeline bill failed to pass in the Senate, but incoming Majority Leader Mitch McConnell has promised to take up and pass the bill in the new year.
The Senate failed on 18th November to pass legislation authorising the Keystone XL pipeline, but a Republican majority in 2015 is expected to bring the project up for a vote again early in the next Congress, which could generate movement on a proposal that has stalled for six years because of environmental concerns and political division over the plan.
In failing to pass the bill, the US Senate spared President Barack Obama from having to make an expected veto of legislation that several fellow Democrats supported.
The measure fell just short of the 60 votes needed for passage, despite frantic last-minute lobbying by supporters.
Obama opposed the Keystone bill and wants the State Department to finish its review of the pipeline. He has said he would not approve the pipeline if it significantly raised greenhouse gas emissions.
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10 World Pipelines / DECEMBER 2014
TransCanada announces NGTL System expansions
TransCanada Corporation’s wholly-owned subsidiary, NOVA Gas Transmission Ltd. (NGTL), will contract approximately 4 billion ft3/d of firm new contracts that will lead to a system expansion through to 2017 of up to US$ 2.7 billion.
TransCanada has received requests from multiple parties for significant volumes of new firm services on the NGTL System. The requests result from significant growth in unconventional natural gas supplies in northwestern Alberta and northeastern B.C. and in delivery markets in the Western Canada Sedimentary Basin (WCSB).
“Expansion of the NGTL System is an important part of TransCanada’s industry leading US$ 46 billion capital growth plan that includes US$ 20 billion of new natural gas pipelines,” said Russ Girling, President and Chief Executive Officer of TransCanada. “The system plays a key role in meeting growing supply and demand requirements within the WCSB and North America.”
The NGTL System currently transports more than three-quarters of total WCSB production to markets within the basin and to downstream Canadian and US export markets. This demand for services is expected to result in a total of approximately 4 billion ft3/d of incremental firm service contracts.
“These new customer requests cover supply and market areas that are core to the NGTL System’s geography and services,” added Girling. “Capturing these incremental volumes and constructing the new facilities will position NGTL well into the future and enhance the long-term economic viability of the system.”
The estimated capital cost for the 2016/2017 expansion programme is approximately US$ 2.7 billion. The investment includes multiple projects that total 540 km of 20 - 48 in. dia. pipeline, seven compressors, 40 meter stations and other associated facilities.
Petronas awards Technip pipe framework agreement
Technip has secured a five year framework agreement with PETRONAS Carigali Sdn Bhd (PCSB) for engineering, procurement, construction and installation (EPCI) or supply-only of flexible pipes for PCSB’s projects in Malaysia.
This framework agreement further strengthens our long-standing relationship with our key client PETRONAS.
Asiaflex Products Sdn Bhd, Technip’s flexible pipe manufacturing plant located in Johor, Malaysia, will execute the framework agreement and manage the experienced project teams in Kuala Lumpur as well as the regionally-dedicated construction vessel, Deep Orient, which will in all, provide PETRONAS with a unique one stop solution for cost-effective field developments.
Kwee Keong Lim, President of Technip in Asia Pacific, commented: “Local content is of strategic importance to Technip. This framework agreement allows the long-term development of talents while helping in cost-effective solution for our client through the deployment of flexible pipe technology in both green and brownfield developments. This initiative is clearly in line with the guiding principles by which we do business and we look forward to support PETRONAS through the term of this agreement.”
Phillips 66 and Energy Transfer to build oil pipelines
Energy Transfer Equity, L.P., Energy Transfer Partners, L.P. and Phillips 66 have formed two joint ventures to develop the Dakota Access Pipeline (DAPL) and Energy Transfer Crude Oil Pipeline (ETCOP) projects. Energy Transfer holds a 75% interest in each JV and will operate both pipeline systems. Phillips 66 owns the remaining 25% interests and will fund its proportionate share of the construction costs. The DAPL and ETCOP projects are expected to begin commercial operations in Q4 of 2016.
“We look forward to working with Phillips 66 to build this much-needed pipeline infrastructure to link rapidly growing supplies of domestically produced light crude oil in the Bakken/Three Forks play to refineries throughout the country,” said Kelcy Warren, Chairman of ETE and Chairman and Chief Executive Officer of ETP.
“Energy Transfer is a valued partner with a proven track record of developing major interstate pipelines,” said Greg Garland, Chairman and Chief Executive Officer of Phillips 66. “These joint-venture projects will allow Phillips 66 to increase its access to advantaged North American crude oil.”
Based on contractual commitments to date, DAPL is expected to deliver in excess of 450 000 bpd of crude oil from the Bakken/Three Forks production area in North Dakota to market centres in the Midwest. DAPL will provide shippers with access to Midwestern refineries, unit-train rail loading facilities to facilitate deliveries to East Coast refineries, and the Gulf Coast market through an interconnection in Patoka, Illinois, with ETCOP. ETCOP will provide crude oil transportation service from the Midwest to the Sunoco Logistics Partners and Phillips 66 storage terminals located in Nederland, Texas.
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Speedcast awarded satellite contract by Allseas
SpeedCast International Limited has been awarded a satellite service contract by Allseas Group S.A. The contract covers its flagship vessel, the Pieter Schelte, the world’s biggest ship, which took to the seas for the first time for sea trials in September. The satellite service provides high performance broadband connectivity for mission-critical communications between the vessel and the land-based operations.
SpeedCast designed a customised communications solution to meet the unique requirements of Allseas for the Pieter Schelte, which include operational and ship management applications, as well as crew communications. SpeedCast’s advanced solution utilises dual maritime VSAT systems, with frequency diversity, including C-band and Ku-band, as well as an L-band backup, to provide Allseas with a highly reliable, highly resilient communication solution with worldwide coverage. The solution provides full system and equipment redundancy for both data and voice services to deliver guaranteed reliability under all operational conditions.
“We are thrilled to be working with Allseas on such an impressive vessel,” said Pierre-Jean Beylier, Chief Executive Officer of SpeedCast. “It is a testament to SpeedCast’s ability to deliver highly complex and customised solutions on vessels with unique requirements.” SpeedCast is already serving the rest of the Allseas fleet: Solitaire, Audacia, Lorelay, Calamity Jane and Tog Mor.
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2014the year of gas
For a number of reasons, gas consumption has been growing globally. Dr Hooman Peimani discusses the large
number of significant pipeline projects that have emerged throughout the year.
The global consumption of energy has been rapidly increasing for decades. Despite efforts to encourage more use of renewables to curb greenhouse gas emissions and contain global warming, fossil energy still has the largest share of this consumption. Although coal and oil account for the bulk of the global energy mix and will retain this rank in the foreseeable
future, gas consumption has been growing globally for certain reasons. Added to its availability in conventional forms, and increasingly so, in unconventional forms in a significant number of countries, and its lower price and emission when compared to oil and oil and coal, respectively, gas has become a preferable means or, at least, a transitional one for achieving low carbon economies. These reasons have encouraged more gas consumption in all regions although there are sharp differences among the gas consuming countries and their respective regions in terms of the role that this fossil fuel plays and can or will play in their energy mixes. Chief among the globally consumed types of gas is still natural gas despite inroads by other types especially in the US (shale gas) and China (CBM).
The increasing demand for natural gas (3346.7 billion m3 in 2013) has required its movement within and between the gas producing and consuming countries to meet their respective demand. When piped movement is not an option for various reasons such as security, geographical and financial, a small portion (less than 10% in 2013) is moved in the form of LNG. As the bulk of this demand must therefore be met through pipelines, pipeline activities have been on the rise in all regions. Of course,
13
reasons behind moving gas through pipelines determine their specifics such as their length, capacity and routes to create a host of challenges to their construction, repair, maintenance, security and decommissioning. Thus, pipeline construction is a major undertaking for gas suppliers and consumers, alike.
Yet, this reality has not deterred gas pipeline construction in 2014. In fact, a large number of pipeline projects have emerged throughout this year in all regions. Many of these projects have gone beyond proposals to be affirmed as contracts at different stages of implementation. Europe’s switching to gas as a cheaper alternative to oil for power generation due to financial and environment considerations has triggered major projects more than those justified by its economic and energy realities. Otherwise, the continent’s low growth of energy consumption due to its ageing population, overall lowering economic activities or limited growth of most of its economies thanks to the rising Asia as an economic powerhouse and its slow rise out of recession are not the right combination to prompt pipeline construction. Nevertheless, the mentioned factors and the availability of cheap coal have capped the continental gas demand. As a result, a significant amount of imported gas in the form of LNG was left unused in 2013 to be re-exported by the affected countries (Portugal, the Netherlands, Belgium, Spain and France).
The Americas, Africa and the Middle East have also embarked on many natural gas pipeline projects, including large ones. However, Asia is the main arena for these projects owing to its large and growing energy requirements and an elaborate effort to reduce the continental carbon print. China has been the leading country in this regard whose US$ 400 billion natural gas deal with Russia has rightly been nicknamed as the “deal of the century” as it is the world’s single largest contract ever made, a major reason to signify 2014 as a natural gas year.
While having lost its preeminent status as the home for the world’s largest conventional gas reserves to Iran (33.8 trillion m3) thanks to the latter’s major gas discoveries, Russia (31.3 trillion m3) has certainly preserved its leading gas supplying role. It has been the single largest player in Europe while looking increasingly eastward to Asia as its main market. This strategic shift began a few years ago as Russia realised the limits of the European market and its inevitable declining demand while the Asian market was taking the opposite direction. Hence, its eastward orientation has not been triggered by its disputes with the European Union (EU) over Ukraine although its resulting worsening relations with the Western countries, particularly the EU ones, have certainly reinforced its determination to expand its currently small share of the Asia natural gas market confined to LNG exports to mainly China, Japan and South Korea.
The “deal of century” (38 billion m3/yr) will certainly be a giant leap for the Russians in this regard, but will not grant them the lion share of the Asian piped gas market; the Central Asians will retain this status in the foreseeable future thanks to the Central Asian Gas Pipeline System whose Line D’s completion will enable China to import 85 billion m3/yr of gas from Turkmenistan, Uzbekistan and Kazakhstan. In the mean time, the completion of the ongoing South Stream
will consolidate the Russian supply role to Europe unless the EU decides to stop this pipeline for which it needs to find an alternative supplier to Russia. Practically, it is a mission impossible, not because of the absence of potential suppliers, but mainly due to Brussels’ own policies (excluding Iran from its market) and the challenging nature of added long-term large scale piped gas imports from Africa because of Nigeria’s, Libya’s and Egypt’s expanding instability. Azerbaijan’s piped gas exports to the EU, while expanding, has its limits arising from its comparatively limited gas reserves and production and the difficulty of exporting Azeri gas due to the shelving of the Nabucco and its downsized version, Nabucco West in 2013 and doubts about the realization of their rival pipeline, the Trans-Adriatic Pipeline.
Several natural gas pipeline projects have started in 2014 while progress has been made in the implementation of many others. Of these, the major ones have been summarised in the following account.
Asia-PacificUndoubtedly, the Russian-Chinese gas pipeline is the Asia-Pacific region’s most important pipeline project scheduled for operation by 2018. While reducing China’s dependency on expensive sea-based imported gas (LNG) when it lacks naval supremacy over its importing sea routes, the project’s phenomenal volume (1 trillion m3 over 30 years) and value (US$ 400 billion) will certainly elevate Russia’s gas role in the world’s largest energy-consuming market. Of the US$ 400 billion, Russia will invest US$ 55 billion in developing its eastern Siberian gas fields and building a pipeline by Gazprom to supply CNPC with 38 billion m3/yr of gas equal to approximately 20% of Gazprom’s sales to Europe, according to Gazprom President Alexi Miller. The pipeline’s cost has not yet been announced, but it seems to be quite large as China may make up to US$ 25 billion in advance payments under the contract to invest in the necessary Russian infrastructure, as stated by Russian Energy Minister Alexander Novak in May. Reportedly, China will spend at least US$ 20 billion on constructing its own section.
Even though the required pipeline’s specifics have not yet been released, the Power of Siberia GTS (approximately 4000 km, 52 in, 61 billion m3/yr) seems to be the Russian pipeline for exporting gas to China meant for gas delivery from the Irkutsk and Yakutia gas production centres to the Russian Far East and also China. Gazprom will start developing its Chayandinskoye field’s gas while constructing its first section (3200 km Yakutia-Khabarovsk-Vladivostok) scheduled to be completed by late 2017. The second line (800 km Irkutsk Region-Yakutia) will be constructed at a later date with an unknown completion date. Reportedly, Gazprom has instructed all of its specialised structural units and subsidiary companies to begin the implementation of the deal’s investment projects, including gas production, transmission, and processing capacity projects.
EurasiaWithout a doubt, the most significant Eurasian and, in fact, global pipeline project is the Central Asian Gas Pipeline
14 World Pipelines / DECEMBER 2014
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