Iron Horse Pipeline Receives Temporary Embargo As River Floods

Last week, Tallgrass Energy LP placed a temporary embargo of deliveries for both the Tallgrass Iron Horse Pipeline and the Pony Express Pipeline, because of the major flooding in Oklahoma on the Cimarron River.

The Iron Horse pipeline is a project between Tallgrass Energy and Silver Creek Midstream with the goal to allow access of crude oil from Powder River Basin to Guernsey, Wyoming. When operations are safe to begin again, they are to restore service. 

The flooding is causing major concerns as reports say 10 homes have fallen into the water since water levels began to rise last week.

The Cimarron River extends 698 miles across New Mexico, Oklahoma, Colorado, and Kansas.

Source:
Reuters

Kinder Morgan and EagleClaw Authorize $2 Billion Permian Highway Pipeline

Kinder Morgan and Midland-based EagleClaw Midstream said they’ve authorized the proposed $2 billion Permian Highway Pipeline project to transport natural gas from West Texas to Houston and other hubs.

Exxon Mobil and Houston-based Apache Corp are both major customers of the project. Apache Corp also has the option of buying a one-third stake in the pipeline through its proposed spinoff company, Atlus Midstream. Kinder Morgan and EagleClaw are currently 50-50 partners.

"With the continued growth in drilling activity in the Permian Basin, this project will help to provide key infrastructure for producers to move natural gas to the best premium markets along the Gulf Coast and South Texas," said EagleClaw President Jamie Welch.

The PHP Project will serve as an additional outlet for the increase in natural gas production that links the Permian Basin to the growing markets that stretch across the Texas Gulf Coast.

The project would transport a maximum of 2 billion ft^3/d of natural gas that crosses 430 miles of 42-inch pipeline from the Waha, Texas area to US Gulf Coast and Mexico markets.

Kinder Morgan is also looking at the feasibility of a 48-inch pipeline to increase transportation capacity. 

The project is expected to be in service in late 2020.

Source:
Reuters

 

Plains All American Hit with $40 Million Tax on Cactus II Steel Import

Plains All American Pipeline (PAA) has been hit with a $40 million tax because of steel tariffs that were enforced under the Trump administration.

The pipeline project will go forward, but Plains' COO has said that the financial impact is worrisome.

“We can’t let trade officials determine product specification for companies. It’s our pipeline, it’s our asset," Plains' COO said.

The COO also told Congress that the material needed to build oil and gas pipelines should be exempt from the steel tariff considering that it only makes up ~5% of the total volume of steel imports.

He also emphasized that steel orders already made should stand, tariff free, at least until U.S. manufacturers are able to build the capability and capacity to deliver timely materials to meet America’s energy production growth.  

The $40 million tax is for high-grade steel from Greece that would be used to build the 585,000 bbl/day Cactus II pipeline. The Cactus II pipeline was one of the main projects meant to alleviate the lack of pipeline capacity problem that the Permian faces.

Plains has already applied to receive exemptions, however the U.S. government denied an exclusion from the tariff.

Source:
Seeking Alpha

Study Reveals that Millennials are Choosing Natural Gas and Oil Industry

The natural gas and oil industry is expected to have a 20 percent increase in millennial workforce joining the industry by 2025 making them account for 41 percent of the workforce, according to a new HIS Markit study commissioned by the America Petroleum Institute.

In 2015, millennials accounted for more than one third of the workforce, a nearly identical percentage to the overall U.S. economy.
 
“Harnessing the energy, technological prowess and the innovative spirit of the next generation will be critical to achieving progress on societal and environmental goals and delivering energy reliably and affordably for decades to come,” said API President and CEO Jack Gerard. “The natural gas and oil industry projects more than 1.9 million new job opportunities by 2035, which provide significant opportunities for the industry to recruit and retain talent in the millennial and rising generation.” 

The fact that the natural gas and oil industry pays nearly $50,000 higher than the 2016 U.S. average is another factor in millennials choosing to work for the natural gas and oil industry at increasing rates.

“Millennials today have unique characteristics that will help forge the innovations and breakthroughs in energy only imagined today,” added Gerard. “By harnessing this generation’s unshakable confidence in a better future and use of technology, the industry is positioned well to address tomorrow’s greatest challenges.”

Source:
Energy API

New Approved Law in Iowa Increases Punishment of Pipeline Sabotage

Criminal sabotage of Iowa pipelines could result in heavier punishment under new laws approved by the Iowa Legislature in its 2018 session.

After millions of dollars of damage to the Dakota Access Pipeline, measures were drafted by state homeland security officials creating a new crime of “critical infrastructure sabotage” which is a class B felony and punishable by up to 25 years in prison and a fine up to $100,000.

The Republican-led Iowa Senate rejected an amendment that would have clearly excluded picketing or other public demonstrations from being banned.

Hundreds of Iowans protested the construction of the pipeline, and many were arrested, but owners wanted a law that specifically included “critical infrastructure” so criminals could be charged when their operations are damaged.    
                                                                                                     
Although most protests were peaceful, some protestors intended to delay completion of the pipeline project.

Source: 
Des Moines Register

 

Meridian Energy Group Begins North Dakota Site Work Despite Lawsuits

Meridian Energy Group said Tuesday that it has begun working on an oil refinery 3 miles from Theodore Roosevelt National Park in western North Dakota despite the project facing obstacles such as lawsuits by environmental groups. The work began on Monday, according to a company spokesman.

Construction of the $800 million Davis Refinery isn’t planned until next year, with operations planning to start in 2020. According to the U.S. Energy Information Administration, it would only be the seventh oil refinery build in the U.S. in the last 20 years. The project first began five years ago.

North Dakota Air Quality Director said that Meridian is proceeding at its own risk with the lawsuit being filed Thursday in state court by the National Parks Conservation Association, the Environmental Law and Policy Center, and the Dakota Resource Council.

The groups fear the pollution from the refinery will ruin the park’s scenery and lower the quality of air breathed by wildlife and visitors.  The park draws in more than 700,000 visitors annually and is one of the state’s top attractions.

Meridian has stated that the refinery will be “the cleanest refinery on the planet” and a model for future refineries due to modern technology. Supporters also back the potential economic impact by creating future jobs and generating millions in local property taxes each year.

The refinery would initially process about 27,500 barrels of oil every day but still has potential roadblocks because of the need of water and wastewater permits as well as needing to prove that it meets air quality standards once it's built.

The refinery will still be able to begin being built despite not having the permits yet.

Source:
The Press of Atlantic City

Leach Xpress NatGas Pipeline to Return to Service July 15

TransCanada Corp’s Columbia Gas Transmission has announced July 15 as the date it expects its Leach Xpress natural gas pipeline to resume service after it was damaged in a blast in West Virginia on June 7.

Federal pipeline safety regulators will first need to approve the returning service, Columbia Gas Transmission said in a Thursday notice given out to customers using the pipeline.

PHMSA gave Columbia 30 days to respond to a list of concerns that would improve the safety of the Leach Xpress. Those actions included mechanical and metallurgical testing as well as enhanced surveillance and monitoring, among other actions required.

Since the blast, Columbia identified six other areas that PHMSA said were concerning based on soil conditions and steep slopes. The soil condition was the cause of a landslide that put stress on the pipelines resulting in a blast, according to preliminary investigations.

Shutting down the Leach Xpress forced producers to find other pipes to ship gas out of Marcellus and Utica shale regions of Pennsylvania, West Virginia, and Ohio.

The blast damaged sections of the pipe that could affect 1.3 billion cubic feet per day, which is enough energy to fuel more than 5 million U.S. homes a day.

Energy analysts said that the blast hardly affected Appalachian region’s overall output because of other pipes being found by different producers.

Source: 
Reuters

 

Oryx Midstream to Increase Capacity of its Permian Oil Pipeline to 650,000 Barrels After Expansion

Midland-based Oryx Midstream Services II is expanding an under-construction crude oil pipeline system in the Permian Basin by adding 180 miles of additional pipeline to its regional pipeline system.

After the expansion is completed, the project’s total system will consist of 400 miles of pipeline capacity, resulting in 650,000 barrels of crude oil with a total of 1.5 million barrels of crude oil storage.

It will serve West Texas’ Permian Basin in New Mexico and Texas by sending oil from the field to larger pipelines that will send the oil further east.

The pipeline is expected to be fully operating by the second quarter of 2019, with Oryx Midstream Services initially announcing the construction of the system in September with 220 miles of pipeline and 400,000 barrels of capacity.

The lack of construction and continued production remains an issue for crude oil leaving West Texas as producers work to increase construction in order to increase transportation and match output.

Source:
Houston Chronicle

Landslide Apparent Cause of Rupture and Explosion of West Virginia Pipeline

Columbia Gas Transmission told federal pipeline regulators that the cause of last month’s pipeline explosion in West Virginia was apparently due to a landslide.

The site of the break was at the bottom of a steep hill on Nixon Ridge, south of Moundsville, and exploded after the landslide caused a rupture in the new natural gas pipeline.

No one was injured, and no homes were in danger at the time of the incident that occurred Thursday morning around 4:15 AM, authorities told local news media.

The expected in-service date has been pushed back from early July to the middle of the month as TransCanada, the owner of the Columbia Gas Transmission system, works on repairing the pipeline.

A TransCanada spokesperson said that it could take months or years for federal regulators to complete their investigation of the incident, although “internal findings point to land subsidence as the cause of the rupture.”

The company added on their website that “the weather in the region has continued to create challenging conditions during the remediation process.”

A Reuters analysts said West Virginia was producing about 4.8 billion cubic feet per day of gas near the time of the explosion, which was the same amount as earlier in the week.

The pipeline was not operating above its maximum pressure at the time of the incident.

Source:
Pittsburgh Post-Gazette

Kinder Morgan to Join EagleClaw Midstream, Apache Corporation in Permian Highway Pipeline Project

Kinder Morgan Texas Pipeline LLC, EagleClaw Midstream Ventures, and Apache Corporation made an announcement yesterday that they signed a letter of intent to develop the proposed Permian Highway Pipeline Project (PHP Project).

The PHP Project will serve as an additional outlet for the increase in natural gas production that links the Permian Basin to the growing markets that stretch across the Texas Gulf Coast.

The project would transport a maximum of 2 billion ft^3/d of natural gas that crosses 430 miles of 42 inch pipeline from the Waha, Texas area to US Gulf Coast and Mexico markets.

Kinder Morgan is also looking at the feasibility of a 48-inch pipeline to increase transportation capacity. 

The project is expected to be in service in late 2020.

Source:
World Pipes

 

Mountain Valley Pipeline Construction Delayed After Permit Challenged

The Mountain Valley Pipeline (MVP) project owners are evaluating alternative options after Thursday night’s halt of a key permit to cross four waterways through West Virginia.

A judge in the Fourth Circuit Court of Appeals in Richmond, VA issued the order to challenge the permit that involves a waterway crossing permit from the U.S. Army Corps of Engineers involving rivers and streams.

The challenged permit cites concerns over environmental damage involving 160 miles of the total 303-mile route of the Mountain Valley Pipeline.

The pipeline had been under development for multiple years and had a scheduled completion date by the end of this year. The MVP team is disappointed in what will ultimately cause a temporary delay.

“The MVP team is evaluating options to understand its ability to continue with construction activities that do not include stream and wetland crossings along this portion of the route, “ a statement said. “MVP will continue to target a late 2018 in-service date while options are evaluated for this portion of the route.”

Support for the pipeline came from West Virginia Gov. Jim Justice who issued a statement noting the importance of the project to the state's economy, but The Sierra Club suggested that the MVP’s permit wasn’t sufficient to protect waterways. They tweeted:

“Today’s court-mandated pause is a welcome opportunity for regulators to take a new look at the impact of this massive project, which we’re confident will lead them to conclude that there is simply no safe way to build the Mountain Valley Pipeline.”

Source:
Pittsburgh Business Times

Columbia Gas Transmission Pipeline to Resume in Early July After Blast

After reports of the Leach Xpress natural gas pipeline blast restorations being in progress, TransCanada Corp’s Columbia Gas Transmission (TCO) unit has stated that operations will resume in early July. Operations have been down since the blast occurred on June 7th.

TCO said all the other meters affected by the blast will stay at zero until the pipeline is back up and running.

The company is continuing to work with pipeline safety regulators on a repair plan.

Shutting down the Leach Xpress forced producers to find other pipes to ship gas out of Marcellus and Utica shale regions of Pennsylvania, West Virginia and Ohio.

The blast damaged sections of the pipe that could affect 1.3 billion cubic feet per day which is enough energy to fuel more than 5 million U.S. homes a day. Energy analysts said that the blast hardly affected Appalachian region’s overall output because of other pipes being found by different producers.

TCO has still not given any information on what caused the blast.

Source: 
Reuters