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Pipeline news
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FERC revisits review of policy statement on interstate natural gas pipeline proposals
The Federal Energy Regulatory Commission (FERC) has reopened course in the regulation of US pipeline construction projects, its review of the 1999 Policy Statement on the Certification of and reverse industry trends that destroy investor dollars, kill New Interstate Natural Gas Facilities by asking for new jobs, and cause unnecessary environmental and community information and additional perspectives that would assist the disruptions.” commission in moving forward with its review. The commission The statement went on to say: “The commission’s decision is looking to build upon the record already established in to reopen its policy review occurs as the inadequacies of the response to its April 2018 Notice of Inquiry. existing policy, which IEEFA analysed in a December report,
“It’s important to recognise that many changes have have become painfully apparent. FERC’s failures to curb occurred since our initial inquiry three years ago,” FERC overbuilding of pipeline capacity have caused adverse Chairman Rich Glick said. “I look forward to seeing the economic impacts and impaired the property rights of people comments and working with my fellow commissioners to whose lands lie in the paths of proposed pipelines. update our review process for reviewing proposed natural gas “Instead of conducting a rigorous analysis of public need projects.” for gas pipeline projects, FERC continued to rely on the false
To guide the process and focus on adding to the existing premise that the mere existence of business contracts for the record, the commission seeks comments on new questions that gas means the public needs it. modify or add to the April 2018 Notice of Inquiry. For example, “The report established that such deferential reliance on the commission requests comments on how it identifies and industry practices is misplaced. Pipeline developers have been addresses potential health or environmental effects of its missing the mark in adjusting to economic changes that have pipeline certification programmes, policies and activities on reduced the share of natural gas in the energy market, as well environmental justice communities. as the rate of growth in energy demand.
The Notice of Inquiry also seeks comment on how the “The report also demonstrated that FERC’s approach commission determines the need for a project, the exercise of resulted in poor decisions. FERC approved three major eminent domain and landowner interests, the commission’s pipelines that wound up being cancelled in 2020. The projects consideration of environmental impacts and improvements to had incurred substantial costs and imposed significant burdens the efficiency of the commission’s review process. on agencies and the public. Subsequent reviews exposed
Comments on the Notice of Inquiry are due 60 days after weaknesses in the projects that FERC should have identified at publication in the Federal Register. the outset.
The Institute for Energy Economics and Financial Analysis “The result of this process could be a major shift in (IEEFA) said in a statement: “The announcement marks an pipeline project analysis and in government action that important opportunity for FERC to chart a new, practical promotes economically sustainable energy development.”
Winter storm wreaks havoc on Texas power grid
Winter storms brought prolonged subzero temperatures to the midwest and southern US states in February. In Texas, the largest US crude-producing state, electricity demand soared and the power grid failed.
Production from oil wells and refineries was halted and restrictions were put in place by natural gas and crude pipeline operators. A large part of both the utility-scale wind and conventional power generation resources went offline due to mechanical issues from the cold temperatures. Demand outstripped supply by 30%, with 30 GW of power plant outages.
Whilst the power suppliers imposed rolling blackouts, authorities urged residents and businesses to conserve energy by limiting their consumption of electricity. Some three million homes and businesses were left without power.
The Electricity Reliability Council of Texas (ERCOT), which operates the electric grid and manages the deregulated market for 75% of the state, issued a report indicating that about 43 GW of capacity was forced off the Texas grid by the winter storm. It claimed that nearly twothirds of that stilled generation was thermal, while 38% was wind and solar combined.
Reuters reported that Kinder Morgan cited gas pipeline capacity constraints at locations in Arkansas, Illinois, Louisiana, New Mexico and Texas, while Enable Gas Transmission said it was taking measures to ensure adequate supply for customers.
Oil pipeline operator Enbridge Inc. said a 585 000 bpd crude oil pipeline that runs from its terminal near Pontiac, Illinois, outside of Chicago, to the largest US oil storage hub in Cushing, Oklahoma, was halted because of power outages.
Gasoline prices are expected to rise by 10 to 20 cents a gallon after the winter storms knocked out a dozen refineries. Refinery outages removed about 20% of the nation’s oil refining capacity.
Texas Attorney General Ken Paxton is set to investigate the state’s electricity system operator and other utilities in the wake of the deep freeze and resulting power outages. A release about the Civil Investigative Demands sent to ERCOT and other power companies focused on “The large-scale failure of Texas power companies to withstand the winter storm [which] left multiple millions of Texans without power and heat during lethal, record-low temperatures across the state.”
IN BRIEF
Kinder Morgan, Inc. and Brookfield Infrastructure Partners L.P. have jointly announced that they have agreed to sell a 25% minority interest in Natural Gas Pipeline Company of America LLC (NGPL) to a fund controlled by ArcLight Capital Partners, LLC (ArcLight) for US$830 million.
Integrated subsea technology and services provider Ashtead Technology has invested £1 million to develop a new R&D and engineering facility in Aberdeenshire.
Tailwater Capital LLC, a private equity firm based in Dallas, US, has announced that it has signed a definitive agreement to acquire NorTex Midstream Partners, LLC, an independently owned Houston-based natural gas storage and transportation company.
MOZAMBIQUE
EnerMech has appointed Celestino Maússe to the newly created role of Mozambique country manager as the company seeks to expand its business as local activity ramps up.
FRANCE
Total SE will focus on growth of energy production in LNG and Renewables & Electricity. The group will propose to its shareholders at an AGM on 28 May 2021 a name change to TotalEnergies.
Sandvik will invest in a new hydraulic and instrumentation tubing factory at its Mehsana Mill in Gujarat, western India.
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In 2020 global oil and gas M&A activity fell second half. As companies finalise to the lowest number of deals and value in impairments, bankruptcies reduce liabilities, more than a decade, according to Deloitte’s and debt is restructured or discharged, the new report, ‘2021 oil and gas M&A outlook: drag on M&A should lessen, and dealmaking Consolidation through the price cycle’. could return to pre-2020 levels in 2021, with
In 2020, the midstream sector proved financially more secure companies catalysing more resilient as deal count halved year on the deal making. year, but value was up more than 30%. Overall activity fell to 258 transactions as Notably, six of the nine largest midstream 2020 had the lowest number of deals and deals involved institutional and non-oil and value in more than a decade. Of the 10 gas buyers and focused primarily on gas and largest deals globally, five were in upstream, LNG. four were in midstream, and one was in
Looking forward to 2021 across all downstream. Seven of the 10 were in the US. subsectors of oil and gas, Deloitte notes four Upstream, there was a shift in M&A, with trends that will shape the industry near term, a focus on lower-premium, all-stock, including an industry reset on financials that corporate consolidations with an eye to the could spur dealmaking, a critical search for Permian, which remains the single largest new capital, continued consolidation beyond region for drilling and M&A. the Permian, and the acceleration of the There were 42 midstream deals worth energy transition into mid- and downstream. US$106 billion in 2020, compared with 81
The energy transition is accelerating: deals worth US$79 billion in 2019. lower-carbon M&A activity has focused on One challenge to further investment upstream, but Deliotte expects it to spill will likely be the energy transition, but over into midstream and downstream. midstream assets may have substantial value
Oil and gas dealmaking flatlined in the for alternative uses, such as transporting first half of 2020, but recovered in the biofuels, carbon dioxide, and hydrogen.
US to dominate oil and gas project starts in North America by 2025
The US will drive upcoming project starts the world, has a significant count of projects across the oil and gas value chain in North set to start operations across the value chain America, accounting for 70% of the total by 2025. Though the COVID-19 pandemic has projects expected to start operations by delayed some projects, the rebound of oil 2025, according to GlobalData. prices and the gradual recovery of the US
Of these, new build projects dominate economy is expected to slowly gather with 83%, while the remaining are expansion momentum in the US oil and gas industry.” projects mainly in the upstream sector GlobalData notes that midstream (fields, excluding shale). projects would constitute around 56% of all
GlobalData’s report, ‘North America Oil oil and gas projects in the US during the and Gas Projects Outlook to 2025 - period 2021 - 2025. Rio Grande Phase I, a Development Stage, Capacity, Capex and key midstream LNG liquefaction project Contractor Details of All New Build and with a capacity of 16.2 million t/y, is Expansion Projects’, reveals that 417 projects expected to cost US$11 billion to build. are expected to commence operations in the Other key midstream projects include Kenai US during the period 2021 - 2025. Out of II regasification terminal, Jupiter these, 47 are upstream projects (excluding transmission pipeline, Smithburg II-VI gas shale) and 234 midstream projects with processing plant, Plaquemines oil storage refinery and petrochemical at 18 and 118, project and Magnum under gas storage respectively. project.
Soorya Tejomoortula, Oil and Gas Downstream and petrochemical Analyst at GlobalData, comments: “The US, projects together constitute around 33% of being one of the largest producers, all upcoming oil and gas projects in the US transporters and consumers of oil and gas in during 2021 - 2025.
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Annual US LNG exports forecast to exceed pipeline exports in 2022
According to the US Energy Information Administration’s (EIA) ‘February 2021 Short-Term Energy Outlook’ (STEO), EIA forecasts that US LNG exports will exceed natural gas exports by pipeline in the first and fourth quarters of 2021 and on an annual basis in 2022.
Monthly US LNG exports exceeded natural gas exports by pipeline by nearly 1.2 billion ft3/d in November 2020. LNG exports have only exceeded natural gas exports by pipeline once since 1998 – in April 2020 – by 0.01 billion ft3/d.
US LNG exports set consecutive monthly records of 9.4 billion ft3/d in November and of 9.8 billion ft3/d in both December 2020 and January 2021, according to EIA’s estimates based on the shipping data provided by Bloomberg Finance, L.P. EIA forecasts that US LNG gross exports will average 9.7 billion ft3/d in February 2021 before declining to seasonal lows in the shoulder months of the spring and autumn seasons. EIA forecasts LNG exports to average 8.5 billion ft3/d in 2021 and 9.2 billion ft3/d in 2022, compared with average gross pipeline exports of 8.8 billion ft3/d in 2021 and 8.9 billion ft3/d in 2022.
Since November 2020, all six US LNG export facilities have been operating near full design capacity. In December, the Corpus Christi LNG facility in Texas commissioned its third and final liquefaction unit six months ahead of schedule, bringing the total US liquefaction capacity to 9.5 billion ft3/d baseload (10.8 billion ft3/d peak) across six export terminals. The November - January increase in US LNG exports has been driven by rising international natural gas and LNG prices, particularly in Asia, and lower global LNG supply because of unplanned outages at several LNG export facilities worldwide.
US pipeline exports to Mexico increased by 6.4% in the first 11 months of 2020 compared with the same period in 2019 as a result of the completion of a new segment of the Wahalajara pipeline system in June and the Cempoala compressor station in September. The completion of Mexico’s SamalayucaSásabe pipeline (0.47 billion ft3/d capacity) in January 2021 and the expected completion of Tula-Villa de Reyes pipeline (0.89 billion ft3/d capacity) later this year are expected to further increase US pipeline exports to Mexico.
Energy Transfer to acquire Enable Midstream
Energy Transfer LP and Enable Midstream Partners, LP announced that they have entered into a definitive merger agreement whereby Energy Transfer will acquire Enable in an allequity transaction valued at approximately US$7.2 billion.
The acquisition will increase Energy Transfer’s footprint across multiple regions and provide increased connectivity for its natural gas and NGL transportation businesses.
Energy Transfer will significantly strengthen its NGL infrastructure by adding natural gas gathering and processing assets in the Anadarko Basin in Oklahoma and integrate high-quality assets with Energy Transfer’s existing NGL transportation and fractionation assets on the US Gulf Coast. The acquisition will also provide significant gas gathering and processing assets in the Arkoma basin across Oklahoma and Arkansas, as well as the Haynesville Shale in East Texas and North Louisiana.
THE MIDSTREAM UPDATE
• Aegion to become a private company • Russian oil and gas regulations update • Turboden and Siemens develop
‘fi rst of its kind’ gas compressor station in Egypt • LaValley and SiteTec announce co-operation
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Crux OCM, a pioneer of robotic industrial process automation (RIPA™) for oil and gas operations, has been selected by Phillips 66 for a pipeline control centre operations pilot.
Using RIPA, Crux OCM helps energy companies create a safer operation that maximises utilisation and efficiency.
Phillips 66, a diversified energy manufacturing and logistics company, has chosen Crux OCM’s marquee product, pipeBOT™, for the pilot.
The number of manual commands it takes for control room operators to manage pipeline functionality is staggering. PipeBOT™ offers autonomous startup and shutdown controls to assist in pipeline control centre operations. It increases throughput by achieving target flowrates faster while enabling control rooms to operate at maximum safety, utilisation and efficiency.
Crux OCM pipeBOT is designed to reduce manual commands through intelligent automation, which curbs control room operator fatigue and enables control room operators to perform more essential higher-level functions, while ensuring safety and performance. Also, these improvements may reach target flow rates up to 40% faster, improve equipment reliability and reduce pressure cycle fatigue.
Vicki Knott, CEO of Crux OCM explains, “Pipeline operations have long relied on PLCs and SCADA for operations. At Crux OCM, we’ve reimagined what PLCs and SCADA are capable of, bundling functionalities of multiple controllers and ML to create fully automated procedures, checklists and rules of thumb for control room operators to leverage within our RIPA™ platform. You may think you’ve reached the peak of what automation can do for your operations, but the reality is most industries are still just scratching the surface. Crux OCM is the engine that will drive the control rooms of the future.”
Trelleborg awarded thermal insulation project offshore Norway
Trelleborg’s offshore operation in Norway has been awarded a contract by Randaberg Industries AS, to provide Vikotherm® R3 thermal insulation for the 10 in. VFS-2 spool skid to be installed on the Hod Field Development Project, located on the Norwegian Continental Shelf in the North Sea.
This collaboration between Trelleborg, Randaberg Industries AS and Subsea 7, is the first contract for application of Trelleborg’s Vikotherm R3 material on pipeline spool field joints.
Trelleborg’s Vikotherm R3 material will insulate 13 pipeline spool field joints, protecting the welded joints from seawater corrosion and damage. It will also lower heat loss to ensure the pipeline spool temperature is maintained, providing flow assurance to reduce the likelihood of production stoppage.
The Hod field is Iocated in the southernmost part of the Norwegian Continental Shelf and is operated by Aker BP ASA.
PSA Norway awards risk consulting contract to Vysus Group
Vysus Group (formerly LR Energy), the global engineering and technology company, has secured a framework agreement with the Petroleum Safety Authority Norway (PSA), the government agency with regulatory responsibility for safety in the petroleum sector across the Norwegian continental shelf.
The agreement, which was awarded at the end of 2020, will see Vysus Group support continuous improvement related to safety and provide advice in risk analysis and emergency preparedness, helping the PSA investigate accidents and incidents over a two year period, with the option to extend the agreement for an additional two years into 2024.
The scope of work will include assessments to determine risk that may cause damage to offshore personnel or the environment, the evaluation of emergency preparedness conditions to limit the impact of an incident, and various studies which may include the assessment of new technologies, fire and explosion calculations, security systems or process solutions. Leveraging decades of experience working in the Norwegian offshore industry, Vysus Group’s team of experts will also support the PSA on projects to highlight the level of risk within the petroleum activities.
A recent survey by the Norwegian Statistics Bureau (SSB) has found that investments in oil and gas activity in 2021 are accelerating, with an estimated 166.3 billion NOK (US$18.4 billion) boost to the petroleum industry, up from the 148.6 billion NOK forecast in August 2020.
Robert Nyiredy, VP Risk Management Consulting, Vysus Group said: “By proactively identifying risk, and arming asset operators with key data and insights, the PSA is helping to prevent serious health and safety issues and catastrophic environmental disasters before they arise, thus protecting the environment and the hundreds of thousands of personnel working in Norway’s oil and gas sector each year. This has never been more important than it is today, as operators face the challenges associated with reduced manpower and COVID-19 restrictions .... We are proud to continue our relationship with the PSA, and to have the opportunity to support its sharp focus on safety through this latest agreement. The appointment is testament to the trust and confidence that Vysus Group has built with the government authority, and our commitment to making global oil and gas operations as efficient and safe as possible through our specialist risk management services.”
Following a strategic-carve out from Lloyd’s Register (LR), LR’s Energy business is now Vysus Group, a standalone engineering and technical consultancy, offering specialist asset performance, risk management and project management expertise across complex industrial assets, energy assets (oil and gas, nuclear, renewables), the energy transition and rail infrastructure.
Vysus Group retains LR Energy’s entire capability and continues to offer its full suite of technical, regulatory and operational expertise globally.
