pipelines volume 13 number 12 - december 0213 …
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Volume 13 Number 12 - December 2013
®
Think big.
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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ON THIS MONTH'S COVER
Copyright© Palladian Publications Ltd 2013. 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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ISSN
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WORLD PIPELINES | VOLUME 13 | NUMBER 12 | DECEMBER 2013C ntents
4018 58 74
WORLD PIPELINES | VOLUME 13 | NUMBER 12 | DECEMBER 2013C ntents
Serimax brings over 40 years of pipeline welding expertise and develops trend-setting technologies for the most challenging offshore and onshore projects worldwide. For more information: www.serimax.com
REGIONAL REVIEW
12 Global shift to shaleGordon Cope discusses global pipe trends for the international shale gas revolution.
PIPELINE INTEGRITY MANAGEMENT
18 Testing with wavesHermann Schubert, MISTRAS Group, Germany, and Thomas Vogt, GUL Ltd., UK.
27 Subsea surveyJose H. Garcia and Adriana Botto, Wood Group Integrity Management, USA.
33 A valuable framework for risk evaluations David Rodrigues de Miranda, Gassco AS, Norway, Bente Helén Leinum and Felix Saint-Victor, DNV GL, Norway.
INLINE INSPECTION
40 Precision pigletL.J. Gruitroij (Hans), A.Hak Industrial Services B.V., the Netherlands.
47 Nord Stream: inaugural inline inspectionJean-François Plaziat, Deputy Technical Director Operational Maintenance/Engineering, Nord Stream AG, Switzerland.
53 Defect diagnosisMarceli Lewandowski, Senior Engineer, CDRiA Pipeline Services Ltd., Poland.
DIRECTIONAL DRILLING
58 Dedicated to drilling: the ultimate operatorDarrin Cline, Vermeer, USA.
64 Hard rock drillingJeri Lamerton, Ditch Witch, USA.
WELDING CASE STUDIES
69 Optimised welding systemsGiovanni Merli, SICIM, Italy.
SUBSEA TECHNOLOGY
74 A full package of subsea servicesPaul Schipper and Christian Veraart, Boskalis Offshore, the Netherlands.
81 Finding flaws around every bendHugh Davies, Optical Metrology Services (OMS), UK.
COATING REHABILITATION
85 Composites, not just for repairMolly Laughlin, Clock Spring, USA.
89 In the field and over the ditch: repair & rehabilitationRay Sams, Technical Consultant, Spencer Coatings, UK.
93 World Pipelines' pipeline machinery reviewFeaturing CASE Construction Equipment; Maats; PipeLine Machinery International; and Worldwide Machinery.
03 Editor's commentTalk the talk, walk the walk.
05 Pipeline newsUpdates on South Stream, Keystone XL, TAPI and more.
Reader enquiries [www.energyglobal.com]
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Volume 13 Number 12 - December 2013
®
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Gordon Cope discusses global pipe trends for the international shale gas revolution. Natural gas in North America is on a roll. In the US, production stood
at 48 billion ft3/d in 2007; in July 2013, the Energy Information Administration (EIA) reported that total wet gas production for the lower 48 states had exceeded 74 billion ft3/d.
The phenomenal growth can be attributed to two technological innovations: horizontal drilling, which immensely increases the wellbore’s exposure to a reservoir; and hydraulic fracturing, which shatters the reservoir in order to allow large volumes of hydrocarbons to escape. In the mid 20th Century, operators began to unlock the gas rich but impermeable Barnett Shale in Texas, which now produces approximately 5 billion ft3/d. Other shale formations, including the Utica, Marcellus and LaFayette have since been tapped, and the EIA says shale gas now accounts for 40% of US production.
In Canada, shale formations in Northeast British Columbia and Northwest Alberta hold several hundred trillion ft3 in place; Calgary-based Encana and other producers are busily drilling up reserves. A recent study by the Alberta Geological
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WHAT’S IN THE PIPELINE FOR YOU?See our full spectrum of onshore capabilities at www.crc-evans.com/onshore-construction
ONSHORE.ON TARGET.
Bringing you the power of information
Energy Global
EDITORElizabeth [email protected]
C mment
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TALK THE TALK, WALK THE WALK
In September 2012, Ken Ilgunas embarked on a trek that would travel the route of the proposed Keystone XL pipeline. Walking from Alberta to the Texas Gulf
Coast, Ken set out to trespass the entire route of the line, challenging North America’s ‘No Trespassing’ reputation. In fact he encountered nothing but generosity and kindness on his travels, according to his upcoming book on the episode. He anticipated meeting opposition from landowners, but experienced a warm welcome wherever he went. Keeping his views on the KXL project to himself throughout his journey (for the record, he is not a supporter), Ilgunas nevertheless made personal the path of Keystone XL and, in 11 months, made more progress than the project itself in that time.
Further delays to the proposed pipeline were announced last month: TransCanada Corp. has put back the project start date to 2016 (which tallies up to five years of delay in total).
TransCanada had hoped to have the project completed by mid 2015 but estimates that it will take at least two years to build the pipeline. Even the delayed 2016 start date would require presidential approval early next year.
Meanwhile, TransCanada makes efforts to prepare for the project as best as it can. It has invested over Cdn$ 2 billion in equipment for the KXL and Gulf Coast pipeline legs; some 600 000 t of pipe is currently in storage in Little Rock, Arkansas (maintained at a cost of Cdn$ 1 billion); and valves and pump stations have been kept on order for years. The total cost estimate for the project has now been raised by another Cdn$ 100 million, bringing it to Cdn$ 5.4 billion.
US President Obama has delegated to the State Department to determine whether KXL is in the national interest, and he also continues to stress the importance of the pipeline’s impact on the climate.
Stephen Chu, who was the US Energy Secretary when President Obama first delayed
approval on the Keystone XL pipeline, recently addressed a Calgary business audience about the issues that are keeping Keystone at a standstill. He argued that Canada and the US need to find some more common ground over matters of climate change before the project can progress. He stressed that Canadians need to invest in making fossil fuels cleaner and show willingness to co-operate with the environmental aims of the US.
Making similar comments in October, Leader of the Liberal Party of Canada Justin
Trudeau accused Canada’s federal government of failing to come up with a productive national strategy on greenhouse gases. He argued that “we are further than ever from a sensible policy to reduce carbon pollution and the oilsands have become the poster child for climate change”.
More encouragingly, Alberta Premier Alison Redford reported a shift in discussions during her last visit to Washington DC, noting that some US officials were beginning to see that shipping oilsands crude by rail is more damaging in terms of greenhouse gases
than sending it via pipeline. TransCanada has, in fact, been warning
that further KXL delays will mean increased oil transport by rail. Statistically, pipelines are more cost-effective, safer and more environmentally friendly than rail transport.
Mark Twain first coined the concept of ‘eating the frog’, as a way of explaining how best to prioritise important tasks. Popular theory holds that the average person, when tasked with 24 hours in which they must, say, eat a frog would spend 23 and a half hours fretting, agonising, procrastinating and delaying the task, before tucking in with a few minutes or so to go. The most enlightened among us might tackle the frog eating in the first 30 minutes, thereby freeing ourselves to enjoy the next 23 and a half hours in peace (bar the occasional stomach grumble I should imagine). The allegory makes me draw comparisons with the approval process for Keystone XL. It’s time to say “President Obama: eat the frog”.
SOME 600 000 T OF PIPE IS CURRENTLY IN STORAGE IN LITTLE ROCK, ARKANSAS (MAINTAINED AT A COST OF CDN$ 1 BILLION)
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0 5DECEMBER 2013 | World Pipelines
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South Stream advancing steadilyThe South Stream gas pipeline project is advancing steadily and intensive efforts are being made in all of the countries to be crossed by the pipeline, according to the Gazprom Management Committee.
As part of the offshore construction process, all the design and survey activities are completed for a deepwater section. Offshore and onshore designs for the Russian and Bulgarian sectors continue. For the Russian sector, approval is received in regard to the Environmental Impact Assessment (EIA). EIA findings for the Bulgarian offshore section are expected this month.
In October, the first joint of South Stream’s Bulgarian section was welded. Construction will soon commence in the Republic of Serbia. A plan of the Serbian section route is approved, archaeological surveys are performed and EIA data is prepared.
In January 2014, the technical part of the design documentation, determining a route for the Hungarian section, is expected. The bidding procedure has been performed for the selection of contractors carrying out the design, survey activities, spatial planning and EIA procedures.
In Slovenia, work is underway on the preparation of the EIA and spatial planning documents. In Croatia, the Shareholders Agreement on the joint project company management is being developed, as well as a draft agreement for devising the design documentation.
In June 2013, a roadmap was signed for the implementation of South Stream related energy projects in Republika Srpska. An intergovernmental agreement is currently being devised as regards to co-operation when building and operating a South Stream branch.
In Russia, work is in progress on the construction of the Southern Corridor – the gas transmission designed, inter alia, for feeding gas into South Stream.
Activities relating to the Southern Corridor and South Stream are meeting onschedule. As planned, the first gas will be supplied via South Stream in late 2015.
Oil and gas pipelines benefit Canada’s economy A new study released by the Canadian Energy Pipeline Association (CEPA) shows that the economic benefits of transmission pipelines add billions of dollars to the Canadian economy annually.
The ‘Economic Impacts from Operations of Canada’s Energy Pipelines’ study was prepared by Angevine Economic Consulting Ltd. It details the impact that crude oil, natural gas liquids and natural gas transmission lines has on the Canadian economy. According to the report, the industry is expected to add Cdn$ 130 billion to Canada’s GDP over the next 30 years. This does not include the potential that major pipeline projects currently being planned could add if they became operational.
“Canada’s energy pipelines are an overlooked source of economic prosperity,’ said Brenda Kenny, President and Chief Executive Officer of CEPA. “Not only do they add billions to our GDP, they’re also a source of high income jobs for many thousands of Canadians.”
The pipeline industry is responsible for over 25 000 full time equivalent jobs across Canada, accounting for approximately Cdn$ 1.9 billion in labour income in 2012. Of the 25 000 jobs created by the pipeline industry, 30% are located in Alberta, 21% in Ontario and 20% in Saskatchewan, with the remaining 29% spread across the rest of Canada.
“There’s a perception that only Alberta and their workers benefit from the energy industry as a whole and from pipelines in particular,” said Kenny. “This report clearly shows that the economic benefits of pipelines are spread across the entire country and contribute to the prosperity of all Canadians.”
Not captured in the report are the spin-off benefits of pipeline infrastructure. Upstream, energy producers are able to move more of their product and invest more heavily in expanding their operations. Downstream, Canadian refineries, petrochemical plants and distribution companies generate GDP contributors and provide employment and income. This is due, in great part, to the energy transported by Canada’s transmission pipelines.
“Pipelines generate significant spin-off benefits that far exceed the direct investment made in them. Our member companies are committed to building and operating a safe, socially and environmentally responsible pipeline infrastructure that will contribute to a strong and prosperous Canada for many decades to come.”
Spectra Energy places NJ-NY pipeline into serviceSpectra Energy Corp. has successfully completed its New Jersey-New York (NJ-NY) expansion project. The new pipeline, a US$ 1.2 billion extension of Spectra Energy’s Texas Eastern and Algonquian gas system, is designed to bring customers approximately 800 m3/d of natural gas, as well as economic and environmental benefits.
Greg Ebel, President and Chief Executive Officer at Spectra Energy said, “Successfully completing this pipeline is a testament to our ability to secure, permit and execute on large and complex growth projects. We’ve built the first natural gas pipeline into Manhattan in more than 40 years, one that will supply the region with safe, affordable, clean, domestic natural gas. Completing this pipeline is a great accomplishment, and one in which our team can take great pride.”
Bill Yardley, President of US Transmission and Storage at Spectra Energy said, “The natural gas in this pipeline will warm homes, cook food and keep businesses running in New Jersey and New York for years to come. Customers could save US$ 700 million in energy costs each year while also replacing fuel oil with domestic and cleaner-burning natural gas.” He added, “We’ve invested the past five years speaking with stakeholders and officials, planning and re-planning, designing and constructing this pipeline, all to ensure it was completed safely, efficiently and to the highest standards.”
Construction of the pipeline included drilling nine tunnels to route the pipe under rivers and streets, one of which holds the industry record for the longest 30 in. HDD in North America – the crossing at the Kill Van Vull at just over 8100 ft.
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0 6 World Pipelines | DECEMBER 2013
TexasWillbros Group, Inc. has been awarded a contract by NET Mexico Pipeline Partners to construct the NET Mexico Pipeline. The scope of work includes construction of approximately 120 miles of natural gas pipeline from a location near Agua Dulce, Nueces Country, Texas, to a delivery point near the City of Rio Grande. Construction will begin in February 2014 and be completed in October 2014.
UkraineUkrainian Prime Minister Mykola Azarov has announced Ukraine’s interest in the Trans Anatolian pipeline project (TANAP). During a meeting with Turkish Deputy Prime Minister Ali Babican last month, Azarov said Ukraine is wishing to make “a financial contribution and provide pipes and compressor stations.”
TANAP is currently under construction by Azerbaijan and Turkey. The State Oil Company of Azerbaijan Republic has said that it would divest some of its 80% share to other parties.
ColombiaColombia is planning a new pipeline to export oil via its Pacific coast to Asia, as increased production from US shale fields forces it to seek new markets. The majority of Colombian oil is currently exported through the Caribbean port of Covenas. Colombia Mines and Energy Minister Amyikar Acosta said, “From a security perspective, Colombia can’t keep replying on a single port for oil exports [...] We must have alternatives, and this would be via the Pacific.”
IndiaIndia’s Numaligarh Refinery Limited (NRL) is planning to construct a 1338 km crude oil pipeline from Dharma port, Odisha, to its oil refinery in Assam, India. NRI is currently conducting a feasibility study of the pipeline project, and construction is expected to commence in 2014.
ADB appointed for TAPI pipeline
The Asian Development Bank (ADB) has been appointed transaction advisor for the Turkmenistan Afghanistan Pakistan India (TAPI) 1800 km gas pipeline.
As part of the agreement, ADB will help to attract a commercial consortium leader that will build, own and operate the pipeline. During the process, ADB will handle the bidding and selection of a leader, advise on the establishment of the TAPI pipeline company and undertake technical due diligence.
Director General of ADB’s Central and West Asia department said that ADB will help “move the important gas
project one step closer to fruition [...] It will bring multiple benefits to the participants, including access to new markets, enhanced energy security and job opportunities, and have transformational impact on regional co-operation and boost other initiatives aimed at bringing peace and stability to the region.”
The company will be jointly owned by the four state gas firms: State Concerns, Afghan Enterprise, Inter State Gas Systems Ltd and Gail (India) Ltd. When selected, the commercial consortium leader will take a majority stake in the company.
EU considers Trans-Caspian conditionsRepresentatives of the European Union (EU) have expressed confidence that favourable conditions have been created to conclude an agreement for the construction of the Trans-Caspian natural gas pipeline from Turkmenistan to Azerbaijan.
At the Oil and Gas Conference in Ashgabat, the EU’s Charge of Affairs and Interim Denis Daniilidis said, “The Trans-Caspian pipeline is principal and the EU believes there are now the most favourable conditions for reaching agreements and beginning construction.”
According to Daniilidis, the EU and Turkmenistan are in the final stage of negotiations. He also added, however, that some final outstanding issues remained before a document could be signed.
Prospects for the pipeline could be hindered by the uncertain territorial status of the Caspian sea, which the pipeline is to run under. Five coastal states (Russia, Kazakhstan, Azerbaijan, Iran and Turkmenistan) are capable of deciding the fate of the Caspian sea, without the intervention of third countries.
Last month, Russian Foreign Minister Sergei Lavrov expressed opposition to the pipeline, “Our European partners are imposing the Trans-Caspian pipeline on Azerbaijan and Turkmenistan, disregarding the fact that such issues are to be resolved between the coastal nations rather than in Brussels.”
ACEC urge Keystone XL approvalThe Associaton of Consulting Engineering Companies (ACEC-Canada) has joined forces with the American Council of Engineering Companies (ACEC) to express support of TransCanada’s Keystone XL pipeline.
ACEC and ACEC-Canada sent a joint letter to US President Barack Obama, Canadian Prime Minister Stephen Harper, Canadian Natural Resources Minister Joe Oliver and US Secretary of State John Kerry, urging for the prompt approval of the pipeline that will carry Canadian oil to US refineries.
ACEC President Dave Raymond and ACEC-Canada President John Gamble wrote, “On behalf of our thousands of member firms and their hundreds of thousands of employees, we urge prompt approval of the pipeline [...] The pipeline should be approved for strong economic, environmental and national security reasons. Canada is a secure and reliable source of energy for the US for years to come. The American and Canadian engineering industries have the know-how and means to bring Canada’s vast energy reserves to market while minimising any negative environmental impacts.”
Facing delays from US review, TransCanada has pushed the forecast start-up date for the project into 2016. According to Chief Executive Officer Russ Girling, the pipeline can begin operating no sooner than two years after it gets a US presidential permit.
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MFL measurements are indirect and the resulting wall thickness calculations are inferred. UTWM technology makes a direct measurement of remaining pipeline wall thickness. Direct measurements result in far greater accuracy of wall thickness and associated safe maximum allowable operating pressure (MAOP). A more accurate determination of metal loss on each individual anomaly can increase the rated MAOP and rule out unnecessary digs and repairs normally reported during an MFL survey. These operating improvements and the reduction in the number of digs, when compared to MFL, could more than pay for the UTWM survey.
Detects defects that MFL can miss. UTWM also detects and characterizes many anomalies that often go undetected by MFL such as laminations, inclusions, narrow axial corrosion, longitudinal scratches and notches, hydrogen-induced cracking, and girth-weld misalignment. UTWM also inspects internally coated pipe without the concern of damage being caused to the lining integrity by MFL brushes.
Safe and sound investment. Why take chances when UTWM makes so much economic sense. In fact, you’ll want to consider running it simultaneously with our ultrasonic crack detection (UTWM+CD combo). Email [email protected], or visit weatherford.com/pipeline.
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FOR FURTHER INFORMATION ON EVENTS VISIT WWW.ENERGYGLOBAL.COM/EVENTS
EVENTS DIARY
W rld News
0 8 World Pipelines | DECEMBER 2013
28 - 30 January 2014European Gas ConferenceVienna, Austriawww.europeangas-conference.com
10 - 13 February 2014PPIMHouston, USAwww.clarion.org/ppim/ppim14/index.php
26 - 27 February 2014Offshore Pipeline Technology ConferenceAmsterdam, the Netherlandswww.ibcenergy.com/event/opt
9 - 13 March 2014CORROSION 2014 Conference and ExpoSan Antonio, USAwww.nace.org/Events
24 - 27 March 2014Gastech Conference and ExhibitionKintex, Koreahttp://www.gastechkorea.com/
7 - 11 April 2014Tube DusseldorfDusseldorf, Germanywww.tube-tradefair.com
5 - 8 May 2014OTCHouston, USAhttp://www.otcnet.org/2014/
11 - 15 May 2014PLCACVancouver, Canadahttp://www.pipeline.ca/
12 - 14 May 2014PTCBerlin, Germanyhttp://www.pipeline-conference.com/
Kurdistan plans second pipeline to TurkeyThe Kurdistan Regional Government (KRG) plans to build a second oil pipeline to Turkey, having just completed the first pipeline to carry oil out of the Kurdish region of northern Iraq to Turkey.
As Kurdish output grows, with several new fields coming online this year and next, KRG has proposed that a second pipeline is essential. The pipeline is expected to be mainly for the heavy oil that will come from the northern fields.
KRG’s Natural Resources Minister Ashti Hawrami said, “We hope to complete this [second] pipeline in the next 18 months to two years”. He added that the pipeline’s capacity would be at least 1 million bpd.
Turkish state pipeline company Botas will be instrumental in building the second pipeline, and a private Turkish company has also expressed interest in the project.
Enbridge to develop Wood Buffalo pipeline Enbridge Inc. has been selected by the Fort Hills Partners and Suncor Energy Oil Sands Ltd. Partnership (Suncor) to develop a new Cdn$ 1.6 billion pipeline to transport crude oil production under long-term transportation commitments to Enbridge’s mainline hub at Hardisty, Alberta.
The project will include a 450 km, 30 in. pipeline from Enbridge’s Cheecham terminal to the Battle River Terminal, Hardisty. It is targeted to come into service in the second quarter of 2017. Once completed, the Wood Buffalo Extension pipeline will transport up to 490 000 bpd of oil from the proposed Fort Hills oil sands project as well as from Suncor’s growing oil sands production in the Athabasca region.
The initial term of the transportation agreement is 25 years, with Fort Hills Partners and Suncor having the right to extend the agreement for successive five year terms. According to Stephen Wuori, President, Liquids Pipelines and major projects, this opportunity reflects “Enbridge’s strong competitive position in the region.”
NEUP and MPP placed into serviceTennessee Gas Pipeline Company (TGP), a subsidiary of Kinder Morgan Energy Partners, L.P, has placed the fully subscribed Northeast Upgrade Project (NEUP) into service. The US$ 500 million project boosts capacity on TGP’s 300 line system in Pennsylvania and New Jersey by 636 000 dth/d and provides additional takeaway capacity from the Marcellus Share area.
TGP has also placed its US$ 650 million Marcellus Pooling Point (MPP) project into service. The project provides 240 000 dth/d of additional firm Marcellus transportation capacity on TGP’s pipeline system in Pennsylvania.
Natural Gas Pipelines East Region President Kimberly Watson said, “We are delighted to place both the NEUP and MPP projects in service as scheduled and provide our customers with reliable, efficient pipeline service to more Marcellus Shale natural gas to the growing northeast market. We continue to make progress on approximately US$ 300 million of additional TGP projects that have been previously announced.
F Government letter lists concerns over draft Keystone XL environmental impact statement
F Energy development helps promote local economy diversity
F Exova develops innovative testing method for oil and gas industryTo read more about these articles go to:
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Tata Steel signs key Iraq pipe contract Tata Steel has announced a multi-million pound contract with Korea Gas Corporation (KOGAS) for the manufacture and supply of pipe in the Middle East.
The deal between KOGAS and Tata Steel’s Energy and Power division has seen the company manufacture 110 km of pipeline and coatings for the Kirkuk to Baiji Dry Gas Project in Iraq.
A total of 10 000 t of pipeline was manufactured and coated at the company’s 42 in. mill in Hartlepool, and has now been shipped to Iraq for installation. The 16 in. dia. pipe is designed and manufactured specifically for the transportation of dry gas.
Carol Hughes, Business Development Manager, Energy and Power for Tata Steel said, “The contract with KOGAS is our largest ever in Iraq and indicates the current opportunities that are in the marketplace. Large-scale oil and gas projects, particularly brownfield, are beginning to receive significant investment in the country and our large presence in the region means we are well placed to capitalise on the increased activity.”
The project comes on the back of strong growth for Tata Steel in the Middle East. The company has been involved in several large projects and view ongoing activity in the region as crucial going forward.
Hughes added, “The Middle East offers many opportunities for Tata Steel and our customers. Recent growth and investment in the region has made it an attractive place to develop and do business, with many of our customers starting to increase activity in the region.”
Lloyd’s secures £25 million Talisman contractLloyd’s Register has been awarded a substantial long-term contract for Talisman Sinopec Energy UK to deliver a suite of integrity management services.
The five year deal will support the operator’s commitment to meet the global demand for energy in an efficient, safe and environmentally responsible manner. It is a significant win for Lloyd’s Register as Talisman Sinopec Energy UK is one of the North Sea’s largest operators, and has installations on some of Scotland’s longest-established oilfields including Calymore, Montrose and Fulmar.
“Ensuring consistent standards of integrity management across a major network of high value offshore assets at differing levels of asset maturity is an increasingly complex task,” said Tim Walsh, SVP Asset Integrity Services at Lloyd’s Register. “Duty holders need to meet strict legislative and environmental requirements under growing public scrutiny, while continuing to satisfy business needs and shareholders.”
Taking a holistic view to integrity management, the work will cover the technical disciplines of corrosion, materials, subsea, pipelines, marine, mechanical and inspection engineering. The significant scope covers the topsides process plant – including utilities systems – pipelines and subsea facilities for 11 offshore locations. There are over 160 pipeline systems, 70 umbilicals and over 20 subsea fields connected to the various assets.
TAQA sells Dutch pipeline stake Abu Dhabi National Energy Company (TAQA) is selling its 40% stake in a Dutch natural gas pipeline to a Danish pension fund for US$ 240 million. According to TAQA, the pipeline investment no longer meets its growth strategy.
The sale of the stake in Noordgastransport (NGT) to pension fund PensionDenmark A/S, which is still subject to regulatory approvals, is expected to close by the end of 2013, TAQA said.
David Cook, Executive Officer of Oil and Gas Operations, said TAQA’s strategy was to maximise its portfolio’s value and it would focus on an US$ 1 billion storage project, Bergermeer, in which it has a 60% stake. Phase one of operations at Bergermeer, which will be Europe’s largest storage facility, is scheduled to begin in the middle of next year, with full capacity to come online in 2015.
Cook said, “We decided that the investment in the NGT pipeline no longer fitted with our growth strategy in the Netherlands, which is focused on maximising the value of our portfolio and delivering Gas Storage Bergermeer.
NGT consists of approximately 470 km of offshore pipeline with a daily gas capacity of around 42 million m3. The pipeline is operated by GDF Suez E&P. TAQA acquired its stake in NGT when it took over its parent company DSM Energy in July 2009, from Royal DSM, a Dutch life sciences and materials company for US$ 380 million.
PTL awarded Ceona contractSURF and subsea construction contractor Ceona has entered a three year partnership agreement with Scottish welding contractor Pipeline Technique Ltd (PTL) for welding services and pipeline production management on-board the company’s flagship vessel, the Ceona Amazon. The partnership will facilitate delivery of a best-in-class pipeline welding production system on-board the unique multifunction rigid, flexible pipelay and subsea construction vessel.
The Ceona Amazon is currently under construction and on track to enter service in January 2015. With this new build, Ceona will bring to the deepwater market a large cutting-edge multifunctional construction vessel capable of operating in multiple pipelay mode. The features, combined with its heavy lift capabilities and large storage capacity, proves that Ceona is ideally suited to execute full-service remote deepwater subsea construction and field development projects.
Under the agreement, PTL will deliver full pipeline production services management, covering onshore engineering and offshore welding, as well as non-destructive testing of pipe on board the Ceona Amazon. PTL will also supply a crew of about 55 specialist welders to work on both carbon steel and exotic rigid pipes of between 4 in. and 16 in overall diameter.
Ceona’s Chief Operating Officer Stuart Cameron said, “This is an important strategic partnership for Ceona, and one that will enable Ceona to deliver a robust offshore pipeline capacity.”
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noRTH & SoUTH AMeRICA: 918-447-5000
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TDW SMFL Change-Face Chris Ad 2013 WP.indd 1 8/30/13 10:11 AM
We’re changing the face of inline inspection
At TDW, we believe in total
pipeline integrity solutions. Solutions driven
by unprecedented multi-dataset capabilities.
Leading-edge data analysis. And more than
90 years of engineering expertise. After all,
inspection technology is only as good as the
people behind it. And we think ours
are the best.
For more information about SpirALL MFL technology
and our entire line of pipeline integrity solutions,
contact your nearest TDW representative or
visit www.tdwilliamson.com.
SpirALL®MFL Technology
Patented SpirALL MFL technology lets
you see what you’ve been missing.
®Registered trademarks of T.D. Williamson, Inc. in the United States and other countries. / TM Trademarks of T.D. Williamson, Inc. in the United States and other countries.
Chris Goller TDW Senior Engineer
GLobAL PIPeLIne InTeGRITy CenTeR: 801-747-1400
noRTH & SoUTH AMeRICA: 918-447-5000
eURoPe/AFRICA/MIDDLe eAST: 32-67-28-36-11
ASIA/PACIFIC: 65-6364-8520
oFFSHoRe SeRVICeS: 832-448-7200
…with a whole new look at mechanical damage.
TDW SMFL Change-Face Chris Ad 2013 WP.indd 1 8/30/13 10:11 AM
Gordon Cope discusses global pipe trends for the international shale gas revolution.
Natural gas in North America is on a roll. In the US, production stood at 48 billion ft3/d in 2007; in July 2013, the Energy Information Administration (EIA) reported that total wet gas production for the lower 48 states had exceeded 74 billion ft3/d.
The phenomenal growth can be attributed to two technological innovations: horizontal drilling, which immensely increases the wellbore’s exposure to a reservoir; and hydraulic fracturing, which shatters the reservoir in order to allow large volumes of hydrocarbons to escape. In the mid 20th Century, operators began to unlock the gas rich but impermeable Barnett Shale in Texas, which now produces approximately 5 billion ft3/d. Other shale formations, including the Utica, Marcellus and LaFayette have since been tapped, and the EIA says shale gas now accounts for 40% of US production.
In Canada, shale formations in Northeast British Columbia and Northwest Alberta hold several hundred trillion ft3 in place; Calgary-based Encana and other producers are busily drilling up reserves. A recent study by the Alberta Geological
Survey reports that shale formations in the central part of the province could contain over 3300 trillion ft3 of gas and over 420 billion barrels of oil.
The glut of gas has driven down prices, creating demand in many different sectors;
F In the US, gas fueled electricity generation (commonly referred to as gas-to-power, or GTP), has risen from 19% share to 32%, largely at the expense of coal-fired generation (which has also reduced that country’s GHG emissions to their lowest levels in 20 years).
F Petrochemical plants that rely on natural gas (as well as natural gas liquids like ethane, butane and propane) as a feedstock are being built at a tremendous clip; the American Chemical Council recently announced that they had recorded almost 100 chemical and plastics projects totaling US$ 71.7 billion in potential new investment by the year 2020.
F Shell and Southern Liquefaction received approval to build the Elba Island LNG export terminal near Savannah, Georgia. The facility will have a total liquefaction capacity of about 2.5 million tpy.
F In 2011, EnCana, Apache Canada and EOG Resources received approval to build the Cdn$ 5.6 billion LNG project in Kitimat, BC, capable of liquefying 1.4 billion ft3/d.
All of the growth in new supplies and customers has meant the need for new pipe. In Ohio, DTE Energy, Enbridge Inc., and Spectra Energy Corp. are developing the NEXUS gas transmission project that would move up to 1 billion ft3/d of Utica shale gas to consumers in the US Midwest and Ontario. Elba Express Co. LLC and Southern Natural Gas Co. are expanding their gas gathering and transportation systems in the South US by as much as 1 billion ft3/d in order to serve the Elba Island LNG terminal in Georgia. EnCana’s Kitimat LNG project will be supplied by the Pacific Trail Pipeline, a proposed, 36 in. dia. pipe stretching 463 km from Northeast British Columbia. Enterprise Products Partners is expanding its Aegis pipeline system in Texas and Louisiana to gather and deliver up to 425 000 bpd of pure ethane to customers along its 270 mile length. In all, the Interstate Natural Gas Association of America (INGAA) predicts tens of billions of dollars’ worth of investment in the next several years.
Rest of the worldHow can the rest of the world benefit from the shale gas revolution? Recently, the EIA examined 137 shale basins around the world and concluded that there were almost 8000 trillion ft3 of technically recoverable natural gas in regions outside North America; China, Argentina, Algeria and Mexico accounted for almost half of these resources. However, the experience in North America may not necessarily play out on respective pipeline sectors elsewhere due to different circumstances, including the extent and location of resources, regulatory frameworks, environmental concerns, public opposition to fracking and existing energy infrastructure.
Countries in the European UnionCountries in the European Union possess significant shale gas resources. The UK’s Office of Gas and Electricity Markets (Ofgem) estimated European shale gas resources at around 1250 trillion ft3 in place, much of it in Poland, France and the UK. In the UK, Cuadrilla Resources estimates 200 trillion ft3 of natural gas in place at its exploration license area in the Bowland basin shale.
The development of shale gas in the EU faces significant hurdles. France has issued an outright ban, and President Francois Hollande is adamantly opposed to discussing the issue further. Initial well output in Poland has been disappointing, and several companies have cut back on exploration plans. Protesters in the UK have impeded efforts by exploration companies to drill wells. The influx of cheaper coal from the US and policies favouring renewables have undercut gas utilities to the point where facilities are being mothballed. The Nord Stream pipeline system running from Russia to Germany beneath the Baltic Sea is delivering large new volumes to the region.
Still, the benefits that have accrued to the US and Canada are motivating some jurisdictions to promote shale gas development. The UK government is dangling tax breaks to encourage shale gas exploration and production in order to meet future utility demand; officials estimate that 26 GW of gas-fired capacity will added to the national grid by 2030. Ukraine sees shale gas as a means of gaining energy independence from Russia, which has cut off supplies several times over payment disputes. The government signed a US$ 10 billion, 50 year deal with Royal Dutch Shell to explore for shale gas in the country’s eastern regions.
Even if shale gas were to be developed, the EU does not have an integrated pipeline gathering and distribution system similar to North America. Creating such as system would be a multi-billion Euro exercise and involve the co-ordination of not only dozens of regulatory agencies, but reconciling contradictory energy policies in member states.
ArgentinaArgentina contains both significant conventional gas supplies, as well as unconventional; according to the EIA, the country could contain up to 774 trillion ft3 of recoverable shale gas, mostly in the Neuquen Basin in western central Argentina, and Golfo San Jorge, in the southeast.
Several international oil and gas companies have negotiated land packages in the shale regions and are beginning to gain a stronger understanding of its potential. Earlier this year, Chevron signed a deal with Argentinian oil and gas firm YPF to develop shale oil and gas reserves in the Vaca Meurta formation in Neuquen province. The company will invest US$ 1.24 billion in the first phase, which will see 100 wells drilled in a 5000 acre parcel. Bridas, a China based firm, signed a similar deal with YPF to invest US$ 1.5 billion.
While the shale gas play holds minor below-ground risk, Argentina itself has significant above-ground risks. The federal government has imposed price and export controls on oil and natural gas prices. Production has fallen from over
14 World Pipelines | DECEMBER 2013
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