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Pipeline & Gas Journal

Contents TABLE OF

September 2015 • Vol. 242 • No. 9

Since 1859, the worldwide authority in pipeline operations.

20 | Strategy Report Points to Improved Safety, Smart Pigs Even though use of oil pipe-

lines is increasing, the number of incidents continues to decline, thanks to integrity management.

26 | Pipeline Reversals and Conversions: Case Studies and Best Practices It’s the new

trend in pipelines these days, and is a crucial element of the continued success of the energy boom.

34 | Natural Gas Infrastructure Intelligence Report Genscape offers an in-depth

look at the future natural gas infrastructure landscape.

55 | PRCI Welcomes Pipeline Community to Tech Development Center The

Compression Report

research organization opens a new center in Houston.

38 | Safety Emphasis Wins Exterran NSC Kudo The

56 | Building a Career Pipeline: New Generation of Industry Talent Awaits The

Pipeline & Gas Journal’s

Houston-based compression company’s focus on safety has not gone unnoticed.

44 | Compression Trade Keeps Sharp Eye on Changing Market An execu-

tive with compression giant Valerus discusses the fast-changing business its future challenges.

50 | Ensuring Contractor Workforce Through Standardized Training GTI is

helping the energy industry move forward in ensuring that contractors working on natural gas distribution projects are as knowledgeable as possible.

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future of the pipeline business will be in good hands, thanks to groups like Young Pipeline Professionals.

61 | Southern Company to Acquire AGL Resources for $12 Billion 62 | A Pragmatic Approach to Understand Indian Natural Gas Market India is gradually making a difficult shift to increase natural gas usage, with cross-border pipelines and LNG figuring prominently in the mix.

64 | Orifice and Ultrasonic Meters in Wet Gas Flow Service The economic reality of many applications is that standard gas meters must be used so understanding the wet gas performance of gas meters is essential.

66 | Control Room Management Best Practices A key responsibility for the oil and gas industry is ensuring that their control rooms are equipped to handle any challenges that come along.

68 | ROSEN Sponsors Roundtable on Linear Threats The ROSEN Group gath-

ered key industry stakeholders to their new center in Ohio for a forum to discuss ways to solve “Linear Threats in Pipelines.”

69 | Alaska LNG Reviews Pipeline Route with Government Agencies 72 | Beyond Compliance: Reducing Major Incidents, Creating Business Value Departments

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2 | Editor’s Notebook

4 | In The News 8 | Government 12 | Projects 16 | World News 75 | What’s New 76 | Business 77 | Sales Representatives 78 | Meetings 79 | Business Card Directory 94 | Advertiser’s Index 96 | Q&A: Executive Profile

Next Month

55 On The Cover Honeywell Process Solutions is involved in a project to improve operations for China’s long-distance Guangxi natural gas high-pressure pipeline which will play a critical role in optimizing China’s energy structure and meeting the demand for natural gas. The project will use HPS gas measurement and equipment and software to measure the flow and pressure in the pipeline, which should be completed later this year. It will have a capacity of 8 Bcm/y of LNG and a total length exceeding 1,300 miles as part of a network that transports natural gas and LNG from as far away as Kazakhstan to China. Photo shows a similar LNG facility in northern Europe.

October’s P&GJ focuses on pipeline integrity projects and includes reports from Southern California Gas Co., an outlook on the compression business as well as an interview with Gary Gapinski, president of Snelson Companies. Scan with your smartphone and directly connect to pgjonline.com. Download FREE scanning app from your smartphone's app store today!

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EDITOR’SNOTEBOOK

Jeff Share Editor OK, I’m a sucker for natural gas. Maybe I’ve learned something these past 25 years that George Mitchell tried to explain: natural gas is the fuel of the future and can revitalize America. After I read this story off the Reuters news wire, can you blame me? “There’s some good news for workers in Ohio: for the first time ever, Ford will shift medium-duty truck production to the Buckeye State, out of Mexico. Ford Motor Co (F.N) will start building its medium-duty F-650 and F-750 commercial trucks at a Cleveland-area plant, moving production out of Mexico for the first time. The shift to the 41-year-old plant in Avon Lake means that about 1,000 workers represented by the United Auto Workers union will keep their jobs, Jimmy Settles, UAW vice president, said in a statement issued by Ford. Now I’m not saying the shale boom was the reason for this decision, but read on and you’ll see that it certainly wasn’t a negative factor. Ohio and Pennsyvania, along with all of their Rust Belt neighbors, have long suffered

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from a never-ending loss of manufacturing jobs, zero population growth, diminishing tax base and steady economic decline. And there was little reason for hope. If you were young and wanted to earn a real living, you left, as many young people did, never to look back. West Virginia was always an economic disaster due to its terrain that inhibits any type of development except mining. But with growing environmental resistance to coal and a desire for a life outside of the mines, West Virginia is now well-positioned in the enormously productive Marcellus and Utica shale plays, as are Ohio and Pennsylvania. Western Pennsylvania is undergoing an economic renaissance that some optimists expect to outmatch the steel industry. Companies assured of cheap, long-term fuel costs are moving in, expanding or staying put. The few problems that do emerge tend to be resolved quickly. An op-ed piece by Bud Weinstein, associate director of SMU’s Maguire Energy Institute, was published in the Cleveland Plain Dealer on Aug. 12. It sums up rather nicely what the fracking boom has done for America. “Until a few years ago, prevailing conventional wisdom viewed America’s manufacturing sector in secular decline, unable to compete with lower-cost production platforms in Mexico and China. The data seemed to bear this out. From 2000-10, the number of manufacturing jobs in the U.S. dropped by a third, a decline of over 5.8 million. “But since 2010, manufacturing companies have added over 1 million workers. Similarly, the value of production from America’s factories has jumped from $1.7 trillion in 2010 to $2.1 trillion last year and now accounts for 12% of our gross domestic

product (GDP). There are several explanations for this rebound. Labor costs have been rising rapidly in Mexico and China, as well as other export-oriented Asian economies, while American companies have boosted productivity faster than their competitors abroad. “The most important factor in America’s industrial renaissance has been cheap and abundant energy, a result of the “fracking boom” that started about six years ago and has boosted America’s oil and natural gas output by 70%. Consequently, the average cost to manufacture goods in the U.S. is now only about 5% higher than in China and 10-20% lower than in major European economies. The Boston Consulting Group says by 2018 production costs in America will be 3% cheaper than in China. “Natural gas, diesel and gasoline prices have dropped dramatically in recent years, significantly lowering energy costs for households and businesses. But most beneficial to manufacturers has been the falling cost of electricity, much of it now generated by natural gas turbines. Energy-intensive industries like steel, aluminum, paper, and petrochemicals are now enjoying power costs 30-50% lower than their foreign counterparts. “Steel mills in places like Wheeling, WV and Youngstown have sprung back to life making pipe and other products for use in the Marcellus and Utica plays. “Cheap energy is helping the auto industry rebound with the result that Michigan has recovered 40% of the manufacturing jobs it lost during the Great Recession while Detroit has added over 89,000 industrial jobs since 2009, an increase of 31%.” You know the Chinese are well-aware of this. Just like the Saudis.

Editor: Jeff Share, ext. 218, [email protected]

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PIPELINE & GAS JOURNAL | USPS 040-970 (ISSN 32-0188) is published monthly by Oildom Publishing Co. of Texas, Inc., 1160 Dairy Ashford, Suite 610, Houston, TX 77079. Circulation office: Knowledge Marketing Publishing Services, P.O. Box 47462, Plymouth, MN 55447-9865. ©Copyright 2015 by Oildom Publishing Co. of Texas, Inc. All rights reserved. No part of this publication may be transmitted or reproduced in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the publisher. Subscription rates are: one year $33, two years $50 in the United States; one year $60, two years $90 in Canada; one year $70, two years $105 in all other countries. One year airmail is $140. Current year single issue copies (pre-paid only): $20 plus postage. Back issues one year old or more: $20 plus postage. November Annual 500 Report $25 plus postage. Cumulative editions of this publication are available in microfilm from University Microfilms Inc., 300 N. Zeeb Rd., Ann Arbor, MI 48106. Ph: (313) 761-4700 Periodical class postage paid at Houston, TX and additional mailing offices. Postmaster send address changes to: Pipeline & Gas Journal, P.O. Box 47462, Plymouth, MN 55447-9865.

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Pipeline & Gas Journal • September 2015

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IN THE NEWS Crude Oil Prices Poised to Drop Further

Since the oil price collapse, global oil production has risen, not fallen. Since the fateful Nov. 27, 2014 OPEC meeting, aggregate production from the U.S., Saudi Arabia, and Iraq is up 2 MMbop/d – far more than demand. November is also when the U.S. inadvertently became the swing oil producer. Prices have not yet fallen far enough or for long enough for an appreciable U.S. supply adjustment to occur. It may not be far off, especially if oil prices fall further with new Iranian supplies, says a study from IHS Energy that notes: n Oil prices will be under downward pressure until there is evidence the glut is shrinking. This won’t happen quickly unless prices fall even further from recent levels. n For a decline in U.S. output to appreciably erode the global surplus, prices would need to range in the low $40s or less for several months. In 2014, production from wells with a break-even cost of around $60 for WTI produced enough oil to offset declines from pre2014 wells and keep U.S. production flat with 2013. The rest of last year’s incredible growth came from highercost wells. But costs are lower this year by about 20%. A break-even cost of $60 in 2014 is now in the upper $40s per barrel for WTI. This is why only lower prices will catalyze a faster supply adjustment. n With lower prices, U.S. production in the second half of 2015 would record its first significant decline in seven years. A severe drop in prices, lasting several months, would increase the likelihood of a significant price increase in 201617. Production growth from elsewhere, including Saudi Arabia and Iraq, is unlikely to keep pace with demand growth if U.S. production falls appreciably.

Natural Gas No. 1 for Power Generation, at Least for Now

Natural gas overtook coal as the top source of U.S. electric power generation for the first time ever earlier this spring, a milestone that has been years in the making as the price of gas slides and new regulations make coal more risky for power generators. About 31% of power generation in April came from gas and 30% from coal, according to research company SNL Energy, based on data from the Energy Information Administration. Nuclear power

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Pipeline & Gas Journal • September 2015

was third at 20%. As the shale boom drives the price of natural gas sharply lower to levels about a third of what they were 10 years ago, power companies have been installing more gas turbines as their plants become more flexible and retire some older coal-fired facilities. They have long switched between natural gas and coal, depending on commodity prices. However, new regulations that aim to restrict the emission of greenhouse gases, and the risk that more are on the way, have added pressure to make the switch. Federal data shows that in April, the amount of electricity generated with natural gas climbed 21% compared to April 2014, while the amount generated with coal fell 19%. In April 2010, 44% of electric power generation came from coal and 22% from gas. The EIA said in a May report that it expects the level of coal-generated electricity to rebound as gas prices rise later this year and coal-fired plants return from spring maintenance. Overall, the EIA expects about 36% of total U.S. electricity generation to come from coal in 2015 and 31% to come from gas. Federal analysts predict that this year the amount of electricity from natural gas will increase 3% compared to last year while the power from coal will go down 10%. Meanwhile, the Energy Department reported that heat-trapping pollution from U.S. power plants hit a 27-year low in April. Economist Allen McFarland said a big factor was the long-term shift from coal to cleaner and cheaper natural gas. Outside experts also credit more renewable fuel use and energy efficiency. Electric power plants spewed 141 million tons of carbon dioxide in April, the lowest for any month since April 1988. The power plants are responsible for about one-third of the country’s heat-trapping emissions.

Marathon to Buy MarkWest for $15.6 Billion

Refiner Marathon Petroleum Corp will expand into natural gas processing with its $15.6 billion acquisition of MarkWest Energy Partners LP. Marathon Petroleum is buying MarkWest through its pipeline unit, MPLX LP. The cash-and-stock deal will create the fourth-largest master limited partnership valued at $21 billion. MarkWest, the second-largest U.S. natural gas processor, has plants across the country, including the Marcellus and Utica shales. It has over 4,000 miles of pipelines, mostly natural gas and gas liquids, and one crude oil pipeline.

“Strategically, this brings MPC/MPLX a major Northeast natural gas gathering and processing footprint, which complements MPC’s nearby refining footprint,” said Raymond James analyst Cory Garcia. The deal enables Marathon Petroleum to add condensate storage and stabilization plants in anticipation of the export of processed condensate after relaxation of the crude export ban. MPLX operates crude oil and refined product pipelines in the Midwest and Gulf Coast and is building a condensate pipeline in Ohio to move output from the Utica Shale. MarkWest will operate as a unit of MPLX after the deal closes.

Black Hills Corp. Acquiring Source Gas Holdings

South Dakota-based Black Hills Corp. will acquire SourceGas Holdings LLC from investment funds managed by Alinda Capital Partners and GE Energy Financial Services for $1.89 billion. SourceGas operates four regulated natural gas utilities serving 425,000 customers in Arkansas, Colorado, Nebraska and Wyoming and a 512-mile regulated intrastate natural gas transmission pipeline in Colorado. The combined entity will serve over 1.2 million electric and natural gas utility customers in 790 communities in eight Rocky Mountain and Midcontinent states. Black Hills Corp. will operate the acquired company under the name Black Hills Energy.

Enterprise Sells Offshore Business to Genesis Energy

Enterprise Products Partners L.P. is selling its offshore Gulf of Mexico pipelines and services business, which primarily consists of its Offshore Pipelines & Services business segment to Genesis Energy, L.P. for $1.5 billion. Enterprise’s offshore assets include ownership interest in nine crude oil pipeline systems with over 1,100 miles of pipeline, nine natural gas pipeline systems with 1,200 miles of pipeline and interest in six offshore hub platforms. “Earnings from our offshore business represented only 3% of Enterprise’s gross operating margin, and our offshore assets do not effectively integrate with our downstream crude oil and natural gas pipeline systems,” said Michael A. Creel, CEO for Enterprise’s general partner. “We plan to redeploy proceeds from this sale into attractive growth opportunities that would extend and expand our integrated midstream system and should generate higher risk-adjusted returns on capital, such as acquisitions and organic projects in the Eagle Ford and Permian shale plays.”

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IN THE NEWS Scientists Study Effect of Oil Spill in Relation to Human Well-Being

Some of the greatest impacts of the 2010 Deepwater Horizon oil spill occurred deep below the water’s surface, hidden from the eyes and minds of people who live on the coast. A project by Dr. Paul Montagna, chair for Ecosystems and Modeling with the Harte Research Institute (HRI) for Gulf of Mexico Studies at Texas A&M UniversityCorpus Christi, is designed to determine if there are links between environmental damage done offshore in the Gulf and the overall well-being of coastal residents.  The project is among the first funded by the National Academies of Sciences’ (NAS) Gulf Research Program. After the oil spill, the federal government asked the NAS to establish a program to fund research to enhance oil system safety, human health, and environmental resources in the Gulf of Mexico. The program has $500 million in funding over a 30-year period. Montagna was awarded $118,000. The study will look at three categories of ecosystem services from the Gulf: n Provisioning, which is the ability for the Gulf to sustain a food web that benefits human activities like fishing n Recreational activities like birding and swimming n Cultural heritage benefits, like the satisfaction and joy people get from visiting the ocean. n Deepwater production already accounts for over 80% of oil and 45% of natural gas extracted in the Gulf.

Utica Shale Much Richer than First Thought

The Utica Shale and associated hydrocarbon-rich rock zones hold significantly more potentially recoverable natural gas than early estimates predicted, according to new research, which suggests it could hold technically recoverable volumes of 782 Tcf of natural gas and nearly 2 Bbbls of oil. The estimates from a research partnership organized by West Virginia University represent the average of a wider range of possibly recoverable amounts of oil and gas in the Utica, which includes parts of Ohio, West Virginia, Pennsylvania and other states and includes neighboring oil- and gasbearing geologic layers.

UIL Holdings Investing in Northeast Energy Direct

UIL Holdings Corp. will invest in a natural gas transmission pipeline project designed to alleviate capacity constraints

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in the system that serves New England and the Northeast. Kinder Morgan’s proposed Northeast Energy Direct (NED) project would extend 188 miles of transmission pipeline from New York state through Massachusetts and New Hampshire. The new pipeline is expected to begin commercial operation in 2018. UIL has acquired a 2.5% interest ($80 million) in Northeast Expansion LLC. UIL will have additional options — under limited circumstances — to increase its equity participation. Northeast Expansion is the joint venture responsible for development, construction and ownership of the pipeline, which will be part of Kinder Morgan’s Tennessee Gas Pipeline system. Earlier this year, regional transmission pipeline constraints led a UIL subsidiary, The Berkshire Gas Company, to impose a moratorium on new natural gas customers in its eastern region. The company acknowledged the moratorium would be lifted as a result of this project’s commercial operation. Public reports have identified natural gas transmission pipeline constraints as a key factor behind wintertime spikes in the price of electricity generated at natural gas power plants.

Keystone Pipeline Delivers Billionth Barrel of Oil to U.S.

TransCanada reported July 30 it has safely delivered the 1 billionth barrel of Canadian and U.S. crude oil on the Keystone Pipeline System, generating nearly US$200 million in property taxes, schools, roads, hospitals and over 14,000 construction jobs for the 11 states and provinces it crosses. The system is one of the most extensive crude oil pipeline systems in North America, delivering to refineries at Wood River and Patoka, IL, Cushing, OK and Port Arthur, TX. Russ Girling, TransCanada’s president and CEO, said, “To put this achievement in perspective, it would take approximately 1.7 million train cars or 3.3 million trucks to transport 1 billion barrels of crude oil.”

Low Natural Gas Prices Drive Demand Growth at U.S. Industrial Users

Reversing a decline that lasted over a decade, U.S. industrial natural gas consumption has risen steadily since 2009 as low prices have supported use of natural gas as a feedstock for the production of bulk chemicals. Industrial facilities, including methanol plants and ammonia- or urea-based fertilizer plants, consumed an average of 21Bcf/d in 2014, a 24% increase from 2009.

Several new industrial facilities began service this year, with additional projects scheduled to come online through 2018, the Energy Information Administration (EIA) said. The EIA forecasts that new projects will help drive growth in industrial natural gas demand through the end of 2016, climbing to 22.5 Bcf/d. In 2016, three methanol plants are expected to come online in the Gulf of Mexico area, and a large nitrogen fertilizer plant is under construction on Louisiana’s Gulf Coast. Ammonia- or urea-based fertilizer plants are planned in agricultural areas outside of the Gulf Coast to take advantage of higher domestic gas production. A large fertilizer/ urea plant in Iowa is set to come online and two fertilizer plants are planned for towns in southern Indiana. Each of the two plants would use 100 MMcf/d.

EIA Releases Short-Term Outlook

The U.S. Energy Information Administration forecasts that Brent crude oil prices will average $54/b in 2015 and $59/b in 2016, $6/b and $8/b lower than its July estimate, respectively. Forecast West Texas Intermediate (WTI) crude oil prices in both 2015 and 2016 average $5/b less than the Brent price. The current values of futures and options contracts for November 2015 delivery suggest the market expects WTI prices to range from $34/b-64/b (at the 95% confidence interval) in November 2015. If the nuclear arms agreement with Iran is implemented and sanctions relief occurs in 2016, it will contribute to an annual average increase in Iranian crude oil production of 0.3 million b/d from 2015 to 2016, with most of the increase coming in the second half of 2016, EIA suggests. U.S. regular gasoline monthly average retail prices averaged $2.79/gal in July, a decrease of 1 cent/gal from June and 82 cents/gal lower than in July 2014. EIA expects monthly average gasoline prices to decline from their July level to an average of $2.11/gal during the fourth quarter of 2015. EIA forecasts U.S. regular gasoline retail prices to average $2.41/gal for all of 2015. EIA estimates total U.S. crude oil production declined by 100,000 bpd in July compared with June. Production is expected to continue decreasing through mid2016 before growth resumes late in 2016. Projected U.S. crude oil production averages 9.4 million bpd in 2015 and 9 million bpd in 2016, 0.1 million b/d and 0.4 million b/d lower, respectively, than in July’s estimate. P&GJ

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GOVERNMENT PHMSA Sets Standards for State Excavation Policies

House members of both parties drubbed the latest top PHMSA official to appear before Congress to answer questions about lagging pipeline safety rule implementation. Stacy Cummings, the interim executive director and apparently top official at the Pipeline and Hazardous Materials Safety Administration (PHMSA), was calm and vague at a hearing July 17 in the House Energy and Commerce Committee. She defended the agency by pointing to one new rule on state excavation programs and one proposed rule on excess flow valves which had been issued in the past month. She said other final and proposed rules required under the 2011 Pipeline Safety Act (PSA) would be out by the end of 2015. At the last congressional hearing in April before the House Transportation Committee, PHMSA was represented by acting Administrator Timothy Butters, who left June 8 to take a senior position at the Federal Aviation Administration. The Obama administration nominated Maria Therese Dominquez to be administrator and on Aug. 5 she was finally confirmed by the Senate. The agency has only finalized onethird of the 42 mandates in the 2011 law. Cummings cited the July-published final rule on state excavation damage programs and a same-month proposed rule on excess flow valves as an indication the agency was on the job. The excavation damage rule was required by the 2006 PIPES Act. Excess flow valves were one of the 42 PSA mandates. The final rule on state excavation programs establishes nine requirements for state programs. If a state’s law doesn’t meet all nine, PHMSA can take civil action against excavators in those states. All states have damage prevention programs, many with one-call responsibilities accruing to excavators, but no two are the same. Many are actually stronger than what is required by this final rule. Even in the absence of this final rule, PHMSA has periodically checked the states and rated them on the nine requirements. Probably half to two-thirds of all states are rated as meeting all nine requirements. Most of the remaining states have met at least seven of the nine. However, the final rule provides additional details about what a state has to do to qualify as having met a particular requirement.

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For example, enforcement is one of the nine state program requirements. In the final rule PHMSA said it will judge state adequacy on issues such as whether the state is assessing civil penalties and other appropriate sanctions for violations at sufficient levels and whether the enforcement authority has a reliable mechanism (such as mandatory reporting, complaint-driven reporting) for learning about excavation damage to underground facilities. Scott Berry, director of Utility Infrastructure Division, Environment and Trade, Associated General Contractors, said his group is glad the final rule has been finally published. He believes that even states rated as meeting all nine requirements may be encouraged to upgrade some of their programs. PHMSA will survey each state annually, and if it finds that no enforcement is happening, that state could be moved from the “in compliance” to the “out of compliance” category. There were a number of issues which cropped up during PHMSA’s rulemaking process. The National Utility Contractors Association (NUCA) suggested PHMSA include in the final rule a provision requiring pipelines to reimburse excavators for costs associated with any accident caused by a failure on the part of the pipeline or its contractors to accurately mark a pipeline. NUCA stated this should include any damages to the excavator’s equipment or property and any downtime incurred by the excavator while the true location of the pipeline is determined. In the final rule, PHMSA answered, “It would be an inappropriate use of federal regulations to entitle any specific group to downtime compensation.”

Gas Distribution Groups Take Issue with Aspects of EFV Proposal

The gas distribution industry apparently has no problem with the objectives of the PHMSA-proposed rule on excess flow valves, but they have decided problems with how some objectives may be implemented. Christina Sames, vice president, Operations and Engineering for the American Gas Association (AGA), says, “The AGA and its members support expanding the use of excess flow valves in new and fully replaced service lines to applications other than single-family residences where operating conditions allow their use.” But Sames did not give the proposal a blanket endorsement, noting concerns about elements that are beyond the expan-

sion of EFVs. AGA will provide comments and will suggest modifications that will make the proposal “reasonable, feasible and practical.” John Erickson, P.E., vice president, Operations, American Public Gas Association, is more specific. “APGA supports the EFV installation portion of the rule proposed by PHMSA. We have major concerns with the proposal that operators notify all customers about EFVs and install an EFV on an existing service if the customer requests one.” PHMSA has not addressed how operators will handle multiple customers on a single service line. Erickson states PHMSA leaves cost recovery up to the “appropriate state regulatory agency” apparently not understanding that only about 25% of the distribution operators PHMSA regulates are under state PUC jurisdiction for rates. Few of APGA’s 729 members have PUCs approve their rates. Installing an EFV with a new service line is relatively inexpensive ($20 or less), retrofitting an EFV on an existing line will be expensive ($500 to over $1,000). It could easily exceed the customer’s entire annual gas bill, Erickson said. If a significant number of customers request retrofitting an EFV on their service lines in the initial notification, it could divert a large portion of the utility’s construction crews from more important main replacement projects. The proposed rule says curb valves should be accessible to first responders as well as distribution company personnel. A buried curb valve looks no different at ground level than a buried mainline valve, so Erickson worries firefighters could inadvertently close the wrong valve and shut off gas to hundreds or thousands of customers. Worse yet, they could open a valve that should remain closed. Suggesting these valves be accessible to first responders other than utility personnel “is a terrible idea,” he says. There has been a push for over a decade to expand the use of EFVs. The National Transportation Safety Board (NTSB) has been a leading advocate based on investigations and recommendations it has issued going back to a 1998 incident in South Riding, Virginia. The NTSB has investigated an additional eight incidents. P&GJ

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PROJECTS JV Constructing Texas-toLouisiana Crude Line

Phillips 66, Energy Transfer Partners and Sunoco Logistics Partners have formed a joint venture to build the Bayou Bridge pipeline that will deliver crude oil from the Phillips 66 and Sunoco Logistics terminals in Nederland, TX to Lake Charles, LA. The venture will also launch an expansion open season for service to the market hub in St. James, LA. Phillips 66 holds a 40% interest in the joint venture and Energy Transfer and Sunoco Logistics each hold a 30% interest. Sunoco Logistics will be the operator of the system. Construction is underway on the Nederlandto-Lake Charles segment of the 30-inch pipeline, which will begin commercial operations early next year. The companies will also launch a binding expansion open season to assess additional shipper interest for service with connectivity to existing terminal infrastructure and refineries near the St. James area. The open season, which will begin shortly, will determine the size of the pipeline to St. James, which has a forecasted in-service date of the second half of 2017.

Bechtel Building First U.S.Based Floating LNG Vessel

Bechtel was selected by Delfin LNG, a wholly owned subsidiary of Fairwood Peninsula Energy Corp., to perform frontend engineering and design for the first U.S.based floating liquefied natural gas vessel (FLNGV) to go into service at Port Delfin. Port Delfin is a proposed deepwater port and floating LNG facility that will be located about 50 miles off the coast of Cameron Parish, LA. Upon the final investment decision, Bechtel is expected to design, build and commission the FLNGV. Plans call for Port Delfin to receive natural gas from the Delfin Offshore Pipeline. Once in service, the FLNGV will be able to disconnect from the port facility and move to protected waters in case of a hurricane.

ETP CRUDE Holds Open Season for Texas-New Mexico Crude Line

Energy Transfer Partners’ affiliate ETP Crude LLC, closed a binding open season Sept. 15 for a new pipeline, the Delaware Basin Crude Gathering Pipeline. The pipeline will have capacity of 120,000 bpd of crude oil from receipt points in Reeves County, TX and Lea County, NM for delivery in Loving County, TX and Lea County, NM. The project will include three gathering systems with an aggregate of 130 miles of

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pipe. The gathering systems will deliver crude oil into the Sunoco Logistics Partners L.P. Delaware Basin Extension. The pipeline is expected in service early next year.

Kinder Morgan Gives Green Light to TGP’s NED Project

existing defect. The 30-inch natural gas pipeline, Line 400-1, ruptured and ignited at the site of Mainline Valve 402 near Otterburne, Manitoba. It was determined Line 400-1 failed from a fracture at a pre-existing crack that had remained stable for over 50 years prior to

Kinder Morgan authorized Tennessee Gas Pipeline (TGP) to proceed with the Northeast Energy Direct (NED) project’s “market path” segment from Wright, NY to Dracut, MA. NED will be an extension off of Kinder Morgan’s existing TGP pipeline, which has delivered natural gas to New England since the 1950s. The 30-inch pipeline’s capacity will be 1.3 Bcf/d and will serve commitments from New England LDCs and electric companies to New England’s residential and industrial consumers. NED is expected in service in November 2018.

North America’s First LNG Powered Ferry Commissioned The solid red line shows the path that Paiute Pipeline Co.’s natural gas pipeline will follow to connect the Ruby Pipeline (dotted line running across the top of the map) to Elko.

Gaz Métro celebrated the commissioning of the NM F.-A.-Gauthier, the first ferry to run on LNG in North America. It is also the first ship of any kind to run on LNG in Canada. The use of LNG makes it possible to reduce greenhouse gas emissions by up to 25%, compared to marine diesel. It almost completely eliminates fine particle emissions and other air pollutants.

Pre-Existing Defect Caused TransCanada Pipeline Rupture

The Transportation Safety Board of Canada’s investigation into the Jan. 25, 2014 rupture of a TransCanada PipeLines Limited pipeline attributed the incident to a pre-

the occurrence. The crack had formed at the time of the pipeline’s construction likely due to an inadequate welding procedure and poor welding quality, investigators said. There was no requirement for inspections of every weld by radiography at the time of construction. The National Energy Board required TransCanada to perform several engineering assessments along Line 400-1. TransCanada performed numerous excavations, inspections and repairs along the line before returning it to service. TransCanada also did inline inspections to rule out other threats to the pipeline’s integrity.

BLM Approves Route for Nevada Pipeline Expansion The Bureau of Land Management

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T.D. WILLIAMSON / MCG PRODUCTIONS PRESENT“OPERATION OFFSHORE” m MARK SIM, TODD BEADLE, GORDON BLAIR, ALEXEY TUGANOV, ANTON KOVALENKO, LAURENT FABRY, TAMMY WISENBAKER, KEVIN MCNAUGHTON, PAOLA CORRALES, STEVE APPLETON, ALEXANDRE PETRAGLIA, /ROLF GUNNAR LIE DEVELOPMENT TECHNICAL BASED ON DIRECTORS LARRY RYAN, GEORGE LIM DIRECTORS JEFF WILSON, GARY ANDERSON x MIKE BENJAMIN, CHAD FLETCHER THE STORY RISK ON THE PLATFORM © Copyright 2015 T.D. Williamson, Inc

PROJECTS approved the route of a natural gas pipeline that will be built by Paiute Pipeline Co. to connect Elko, NV with El Paso’s Ruby Pipeline, north of town. The project will expand available capacity of gas delivered to Elko by installing 35 miles of 8-inch pipeline from the city to Ruby Pipeline LLC’s Wieland Flat Compressor Station. According to the BLM, the project would address growing demands for natural gas, including increased residential and business load, and the greater energy needs of mining operations in the Elko area. The pipeline requires a 75-foot temporary right-of-way during construction and a 50-foot permanent right-of-way after construction is complete. El Paso Corp.’s Ruby Pipeline, which stretches 680 miles from Wyoming to Oregon and crosses through Elko County, was completed in 2011. Paiute Pipeline Co. is a subsidiary of Southwest Gas Corp.

Sempra Wins Gas Transportation Contract in Mexico

Sempra Energy’s Mexican unit Infraestructura Energética Nova, S.A.B. de C.V. (IEnova), through its subsidiary Gasoducto de Aguaprieta S. de R. L. de C.V., has been awarded a natural gas transportation contract in Chihuahua by the Comisión Federal de Electricidad (CFE). The project includes a header facility with a capacity of 3 Bcfd of natural gas and a 14-mile pipeline with a capacity of 1,135 MMcf/d. The pipeline will provide gas to the Norte III Combined Cycle Power Generation Plant and will interconnect with Gasoductos de Chihuahua, Tarahumara and Samalayuca-Sásabe pipelines. The estimated $108 million project is expected to begin operations in early 2017. The project is contracted by CFE under a 25-year capacity contract in U.S. dollars.

2H Offshore Awarded Contracts for Stampede Development in Gulf

2H Offshore, an Acteon company, was awarded two separate contracts, one by Hess Corp. and a second by Enbridge Energy Co., to verify the design, fabrication and installation phases of the Steel Catenary Risers (SCRs) for the Stampede field development in the Gulf of Mexico. The field is operated by Hess. Enbridge plans to build, own and operate the 18-inch, 16-mile export pipeline from the Stampede tension leg platform (TLP). The pipeline will originate in Green Canyon Block 468, 220 miles southwest of New Orleans. The $130 million pipeline could be operational by 2018. 2H’s Houston office

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Pipeline & Gas Journal • September 2015

will be responsible for the contract and the execution of the work.

Williams’ Transco Seeks Approval for NYC Pipeline Expansion

Williams’ Transco applied with the Federal Energy Regulatory Commission for its New York Bay expansion project to deliver additional natural gas to New York City in time for the 2017-18 heating season. Earlier this year, Williams’ Transco placed two major New York City natural gas pipeline projects in service, the Rockaway Delivery Lateral and the Northeast Connector. They serve 1.8 million National Grid customers in Brooklyn, Queens, Staten Island and Long Island. The New York Bay expansion would deliver an additional 115,000 Dth/d of gas into National Grid’s distribution system through the Rockaway Delivery Lateral and the Narrows meter station, enough to meet the needs of 500,000 homes and supply National Grid’s immediate and growing needs for the 2017-18 winter. The project, estimated at $130 million, includes installation of additional horsepower at three Transco compressor facilities in addition to uprating Transco’s Lower New York Bay Lateral and replacing 0.25 miles of 42-inch pipe in Middlesex County, NJ. The project includes modifications to meter and regulator stations in Middlesex County, NJ, Chester County, PA and Richmond County, NY.

Enterprise Products to Expand Petrochemical Pipeline Network

Enterprise Products Partners announced a series of projects to convert and expand segments of its petrochemicals pipeline network to increase throughput capacity for polymer grade propylene (PGP) and enhance system flexibility and reliability. These include the North Dean pipeline conversion and expansion that would convert a 149-mile pipeline from refinery grade propylene (RGP) service to PGP service. The conversion is scheduled for completion in January 2017. Originating at Enterprise’s Mont Belvieu, TX complex, the converted pipeline will serve petrochemical facilities as far south as Seadrift, TX in Calhoun County. Construction of a 33-mile lateral pipeline, new metering stations and additional pumping capacity will accommodate the additional volumes and increase total PGP delivery capacity to over 150,000 bpd. The Lou-Tex propylene pipeline project involves a 263-mile, bidirectional pipeline that transports chemical grade propylene (CGP)

between Sorrento, LA and Mont Belvieu which will be converted to PGP service. The conversion is scheduled for completion in 2020.

ONEOK Partners Plans Permian Expansion to Serve Mexico

ONEOK Partners plans to invest $70100 million to expand its ONEOK WesTex Transmission intrastate natural gas pipeline system by increasing its throughput capacity by 260 MMcf/d by early 2017. The ONEOK WesTex expansion project, located in the Texas Panhandle and the Permian Basin in West Texas, includes construction of new compressor stations and upgrades or expansions to three compressor stations. Ninety percent of this total available capacity was subscribed with firm take-or-pay agreements through an open season process in February. The Comision Federal de Electricidad (CFE), Mexico’s national electric utility, has agreed to be the anchor shipper and has subscribed to firm capacity (take-or-pay) for a 25-year term. CFE generates, distributes and markets electric power for almost 35.3 million customers in Mexico. The first phase of capacity is 100 MMcf/d and will be available early next year. Second phase of capacity is 400 MMcf/d, available in first quarter 2017. The Roadrunner Gas Transmission pipeline project is a 50-50 joint venture with a subsidiary of Fermaca Infrastructure B.V. (Fermaca), a Mexico City-based natural gas infrastructure company that will transport gas from the Permian Basin in West Texas to Mexico. It includes 200 miles of 30-inch pipeline for transporting up to 640 MMcf/d of gas – 570 MMcf/d to Mexico’s growing markets. The pipeline will extend from ONEOK WesTex’s system at Coyanosa, TX west to a new international border-crossing connection at the U.S.-Mexico border near San Elizario, TX.

TransCameron Plans Pipeline in Louisiana

TransCameron Pipeline held a binding open season last month for firm commitments on a natural gas pipeline to link the Calcasieu Pass LNG project with intrastate and interstate interconnections in Cameron Parish, LA. Facilities will include 42 miles of pipeline: 24 miles of 42-inch pipeline extending to Grand Chenier, LA and 18.3 miles of 42-inch pipeline extending to Johnson’s Bayou, LA. The facilities will be designed to deliver 2 MMDth/d with a maximum allowable operating pressure of 1,200 psi. The targeted in-service date is late 2019. P&GJ

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Offices Worldwide

WORLDNEWS Algeria Reforms Laws to Attract Foreign Investment

MW of power generation to replace oilburning electricity. Once the field produces gas in 2018, Ghana hopes to reduce its oil imports by 12 MMbbls a year and cut carbon emissions by 1.6 mmta of CO2.

Edvard Grieg Field Nears Completion

Source: U.S. Energy Information Administration, International Energy Statistics

A Today in Energy brief from the U.S. Energy Information Administration said Algeria is reforming its laws to attract foreign investment in hydrocarbons. Algeria is the third-largest oil producer in Africa, after Nigeria and Angola, and the largest natural gas producer in Africa. However, production of both oil and natural gas has declined over the past decade. Laws on foreign investment and technology improvements in hydrocarbons were altered to attract the investors. In 2014, national oil and gas company Sonatrach offered 33 blocks, located in four sedimentary basins, with high shale gas and oil potential. The auction led to contracts with Repsol, Shell, Statoil and Dragon Oil-Enel. By law, Sonatrach takes a mandatory majority share of any resulting projects.

POGC Starts Pipelay for Phases 20-21 in South Pars

Pars Oil and Gas Company (POGC) has begun underwater pipe-laying operations for phases 20-21 of the South Pars gas field. Once completed the 105-km pipelines will deliver sour gas to onshore refining facilities in Assaluyeh, south of Iran. So far, 40 km of Phase 21 subsea pipes have been laid while a record has been set for laying 171 in a day. Platforms for the two phases, due to be completed by mid-September, will be installed once the pipelay operations are over.

$700 Million Approved for Ghana’s Energy Program

The World Bank approved a record investment of $700 million in guarantees for Ghana’s Sankofa Gas project designed to help address energy shortages by developing new sources of natural gas for domestic power generation. The guarantees could mobilize $7.9 billion in private investment for offshore natural gas, representing the biggest foreign direct investment in Ghana’s history. Developing the Sankofa Gas Project, located 60 km offshore, should bring large benefits for Ghana by fueling up to 1,000

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Lundin Norway, a subsidiary of Lundin Petroleum AB, recently completed the installation of the topside modules on the Edvard Grieg field, off Norway. The topside

installation consisted of lifting four modules onto the pre-installed jacket: the main deck frame, the utility and living quarters module, the processing module and the flare boom at weight of 22,000 tons. The lift operation was carried out by Heerema’s heavy lift vessel Thialf. The final offshore hookup and commissioning of these modules is underway with production starting in the fourth quarter. The Edvard Grieg platform is designed as a field center and will receive and process hydrocarbons from other nearby discoveries. A dedicated pipeline was laid from the Edvard Grieg platform to the existing Grane oil pipeline for export to the Sture oil terminal. Similarly, a dedicated gas pipeline was laid to the SAGE transport system on the U.K. shelf for export of rich gas to St. Fergus in Scotland.

European Nations Join Forces on Integrated Gas Network

Fifteen EU and Energy Community countries in central eastern Europe and south east European regions have signed a memorandum of understanding (MOU) to quicken the building of missing gas infrastructure links and to tackle the remaining technical and regulatory issues which hamper security of supply and the development of a fully integrated and competitive energy market in the region. EU Commission Vice President for Energy Union Maroš Šefčovič said, “The improvement of infrastructure through realistic and feasible projects is crucial to diversify energy resources and strengthen the region’s resilience to supply shocks.” The joint work will not only focus on building new gas pipelines, but also on making the best use of existing infra-

structure for example by allowing reverse flow. Several projects – such as the TransAdriatic Pipeline (TAP), are identified as top priorities in the action plan. Ultimately, each member state in the region should have access to at least three different sources of gas. The MOU and action plan were signed by Šefčovič, EU Commissioner Miguel Arias Cañete, the energy ministers, along with representatives from Austria, Bulgaria, Croatia, Greece, Hungary, Italy, Romania, Slovakia, Slovenia, Albania, Former Yugoslav Republic of Macedonia, Serbia and Ukraine. Bosnia and Herzegovina and the Republic of Moldova will sign at a later date.

Petrofac to Build Gathering System in Kuwait Petrofac has received a $780 million contract to construct a gathering system for the Kuwait Oil Company’s (KOC). Three gathering centers, which form part of the overall project, are under construction with Petrofac executing the EPC contract for one of the centers. Due for completion in 2017, the gathering system will provide feedstock to each of the centers via three independent networks of intermediate manifolds and pipelines. Each center will be capable of producing 100,000 bpd of oil together with associated water and gas.

Eni: Important Gas Discovery in Egyptian Nile Delta Eni made an important gas discovery in the Nooro exploration prospect, located in the Abu Madi West license in the Nile Delta, 120 km northeast of Alexandria, Egypt. Preliminary estimates indicate the potential of 15 Bcm of gas in place, plus associated condensates. The new discovery will be put into production in two months through a tie-in to the existing Abu Madi gas treatment plant, located 250 km to the southeast.

Tallow Oil Looks for Production 10 Project in Ghana by 2016 Tallow Oil’s half-year results indicate the TEN project in Ghana is 65% complete and the field development is on budget and on schedule for first oil by mid-2016. Conversion work on the TEN FPSO continues at the Jurong Shipyard in Singapore with all major modules now installed and integration works under way. The FPSO is due to sail to Ghanaian waters at the end of the year.P&GJ

CARE! O T E R A D

FROM THE

BURNER TIP

By Jeff Share, Editor

Goodbye to a Colleague and Friend

I “

want to tell you something,” he said to me on many occasions during the quartercentury of our relationship. “As long as I’ve been in this business, I’m still learning because there’s still so much I don’t know.” That was Carol Freedenthal, one of the smartest men I’ve ever known. So smart, in fact, that he was always the first to admit he still had so much to learn about a changing business in an even faster changing world. For someone Carol Freedenthal 1935-2015 like me, who would never know a tenth as much about the business as he did, those words taught me a lifelong lesson. It’s with a heavy heart and a tear in my eye that I take the liberty of writing this last From The Burnertip column, for as you may know by now, Carol, our longtime contributing editor and devoted colleague, died July 16 at a Houston hospital after a short illness. He was 80. Carol was so much more than just a colleague and contributing editor during the 20 years he wrote for Pipeline & Gas Journal. He was a close personal friend, simply irreplaceable. Carol was from Georgia, attended George Tech and was a chemical engineer. He worked as a manager of several large companies and was an expert witness in litigation trials. Our paths first crossed about 25 years ago when I embarked on a project that I hoped would launch a new career. I worked on the business desk of the nowdefunct Houston Post and decided I would write a book on the petroleum industry that would discuss the key issues facing the business from an executive’s perspective. I often saw Carol’s name in the paper as he was the principal of a thriving consulting company, named Jofree, and was a foremost expert on natural gas, so much so that his annual price forecasts were closely followed by the industry. Carol was among the first I contacted for an interview to which he quickly agreed.

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We met in his office in a high-rise tower in downtown Houston. The room was a bit disheveled, which I could appreciate, the antithesis of his brilliant and uncluttered engineering mind. We did two interviews for the book, The Oil Makers, Insiders Look At The Petroleum Industry, the first that day and the second in February 1995, shortly before the book was published. In between, we became friends. I’m not exactly sure why or how it happened. I never asked him. Perhaps he saw an inquisitive fellow determined to break into his industry and wanted to help. Maybe he liked talking about business and life in general to someone he could relate to, as there aren’t a lot of Jewish people in the energy business. We frequently met for lunch or breakfast. He suggested a number of names for me to reach out to for The Oil Makers, explaining their significance to the industry, what they could add to the book, and often paving the way for me by contacting them personally. At one point in 1995, he, a well-known PR executive and I discussed starting our own PR business. We each had something to bring to the table. Shortly afterwards, Carol suffered a heart attack and underwent open-heart surgery. His recovery was slow and arduous. In fact, he never fully recovered his health, and his consultancy slowly began to suffer the consequences. If you’re not there and can’t satisfy your clients at a moment’s notice, business has a tendency to go elsewhere. There went the PR shop, which disappointed me because I was living off of freelance work after the Post closed in April 1995, as I waited for my book to get published, which Rice University Press did later that year. I was hired as editor of P&GJ in December 1995. Carol and I chatted on the phone and still met occasionally for lunch. One day I approached him with the possibility of writing a column for our journal. With his expertise and knowledge of the issues and players, this would be a win-win for us while giving him additional exposure. It was my first contribution to the success of our magazine and as it turned out, one of my most important. During the 20 years he wrote his semimonthly From The Burnertip column, Carol covered every conceivable issue involving natural gas, crude oil and liquids products. He wrote about the Keystone Pipeline, both the one already in service and the one still waiting

presidential approval; the perceived need at one time for LNG imports, then later the switch to LNG exports. He wrote about the shale boom as it was happening, picked out the most likely targets for development and explained why. He discussed pending legislation in Congress and on the president’s desk, and what the implications were for the industry. Carol also knew his way around statistics, much like a baseball fan can relate to qualitative analysis, except he explained what those numbers meant so that even a neophyte understood them. He continued to delve into natural gas and oil pricing, again with uncanny accuracy. He would call me a few times a month to discuss future columns, so what he came up with was often an amalgamation of our thoughts. Between his contacts and mine, we were always certain to produce an informative piece. That doesn’t mean there weren’t a few complications involved in the process. Like many truly brilliant people, Carol had so much he wanted to say in a limited amount of space and when his columns reached my desk, usually right on deadline, they required every bit of editing skill I had. But the end result was something that he and I and our readers could live with. Carol’s column developed quite a following through the years, both in terms of reader feedback and our third-party surveys. During these years, Carol’s consulting business grew smaller, though he still retained several clients. I feel honored that P&GJ helped keep him active in the business until the very end. As his business slowed, something much more important began to consume Carol: the grandchildren being raised by his three daughters, Robin in Dallas, Shelly in Los Angeles and Stacey in Denver, and their husbands. Carol was enchanted by each of his grandchildren, remarking how bright and savvy they were, even as infants. His love and adoration for them just continued to grow, and more often than not, Carol called me from one of their homes about his next column. I have never known anyone who was so dedicated to his family. He and his wife of 54 years, Beverly, could not miss any of those grandchildren’s important events, be it a bar of bat mitzvah, graduation or a birthday. Last summer, Carol’s son-in-law in Los Angeles died suddenly, leaving a widow and three teenagers. Carol and Beverly became much more than just grandparents in helping to ease that family’s grief.

He was also an instrumental part of our annual Pipeline Opportunities Conference from its inception in 2005. He helped me assemble the agenda every year, moderated sessions, interviewed speakers, and eloquently summarized the conference at the beginning and end of the day. This past year he brought in our keynote speaker, EIA Administrator Adam Sieminski. Carol was also like an official greeter, speaking to as many people as possible and making sure that each of them felt welcome. He helped our conference become a premiere event for the North American pipeline industry. Carol wasn’t feeling well at our last conference on March 25. He was looking forward to celebrating his 80th birthday May 5 when the daughters would come to Houston for the celebration; then he and Beverly had a few more graduations on their agenda. I never saw Carol again, nor did he make those trips. He called me in May and June, apologizing for being unable to do his column. Then one morning in July, Stacey called at Carol’s request to tell me he wasn’t going to be able to do his column that week. A few days later, he passed away. It’s impossible to sum up a man’s life, much less a friendship, with just words but it’s been cathartic for me to finish Carol’s work. Let’s end with those first two words that Carol would say every time he met someone. It’s how I choose to remember him. “Good day!” P&GJ

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Strategy Report Points to Improved Safety, Smart Pigs

W

ith liquids pipeline incidents down by half since 1999, even as their use to transport crude oil pipeline has increased, there is little doubt among experts about what has led to this success on the safety front – preventive maintenance and integrity management programs. “The ILI inspections using smart pigs are finding early signs of corrosion and other issues, which allows for repair before the situation becomes a problem,” said Andrew Black, president and CEO of the Association of Oil Pipe Lines (AOPL). “Preventive maintenance and the advances in technology are the big reasons for these results.” The American Pipeline Institute (API) recently surveyed its members and found that $2.1 billion was spent on integrity management since 2013. Still, even with crude oil and petroleum products reaching their destinations safely a stunning 99.999% of the time, according to the API-AOPL Annual Liquids Pipeline Andrew Black Safety Performance Report & Strategic Plan, Black said the industry is committed to doing better. This is all the more impressive when considering U.S. transmission pipelines delivered over 14.94 billion bbls of crude oil and petrochemical products in 2013, an increase of 6.2% over the previous year. The impressive array of statistics found in the performance report doesn’t end there: n In all, crude oil and petroleum products delivered by U.S. transmission liquids pipeline rose 6.2% from 2012 to 2013. Of that, operators delivered 8.3 billion bbls of crude oil by U.S. transmission pipeline in 2013, an increase of 11.3% over the previous year. n Over the last five years, crude oil barrels delivered by U.S. transmission pipeline rose 1.351 billion bbls or 19.4% as crude pipeline mileage grew to 192,396 miles, a 15.4% increase over the last 10 years. n According to the U.S. Energy Information Administration (EIA), U.S. crude oil production has grown by 3 MMbbl/d since January 2011 and is projected to grow 3.1 MMbbl/d to reach 9.6 MMbbl/d in 2019, near the nation’s historical high in 1970. Total production of crude oil and other petroleum liquids is expected to grow from 11.1 MMbbl/d in 2012 to 14.6 MMbbl/d in 2019.

Goal: Zero Incidents

“Zero pipeline incidents is the statistical goal,” Black said. “Even with the reduction of incidents, we are undertaking efforts to improve performance. We are working to improve technology to find and diagnose potential problems.” With the advancement of inspection technology and the ability to find early signs of corrosion there have been 76% fewer corrosionrelated incidents in the last 15 years, according to the performance report. In 2013, liquids pipeline operators inspected 47,089 miles of pipelines with “smart pig” inline inspection tools. “The ILI inspections using smart pigs are finding early signs of corrosion and other issues, which allows for repair before the situation becomes a problem,” Black said. Development of smart pigs using ultrasonic sound waves to find potential cracks in pipes has been a game changer. These tools that

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Pipeline & Gas Journal • September 2015

By Michael Reed, Managing Editor

Barrels of Crude Oil & Petroleum Products Delivered by U. S. Transmission Pipeline

Liquids Pipeline Incidents Are Down 50% Since 1999

can find subtle, microscopic, hairline features in a pipe often hidden in welding seams are the current research effort. “We are hoping in the next 15 years that one of the great technological innovations is further improvement in finding hairline crack features,” Black said. According to the performance report improvement in smart pig technology that led to the “steep drop in the number of corrosioncaused incidents is apparent.” Other incident causes, such as operator error and flawed seams and welds are “relatively flat over time,” the data showed. Two big factors beyond inspections have contributed to the success in the war on corrosion, Black said. One is the ongoing improvement to enhanced coatings, which continues to get better. The other is cathodic protection, which has helped the industry in minimizing external corrosion. “Successful cathodic protection programs have gone on longer than that [15 years], but they are very important,” he said. “When the liquids pipeline industry looks at where to address strategic planning efforts, we’re finding satisfaction comparatively on corrosion-related incidents.” While the performance report revealed other good news in that third-party damages resulting in incidents have declined by 78% since 1999, operator error-related incidents have increased slightly over the past several years. “We do see an uptick in pipeline operator errors,” Black said. “This is the smallest category of barrels released per incident [38 barrels], and it’s only 2% of the total release volume. An industry team has been reviewing operator incidents and hasn’t found a single specific trend, but we continue to dig deeper.”

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Causes of top 10 Liquids Releases in 2013

Incidents caused by third-party excavation are down over time as well, the performance report said, “reflective of efforts to increase public awareness and 811 call-before-you-dig programs.” In 2013, about two-thirds of liquids pipeline incidents occurred within operator facilities, often at pump stations, located every 35 to 50 miles along a pipeline, or at storage locations, primarily located at the beginning, junction point and end of pipelines, according to the Pipeline and Hazardous Materials Safety Administration (PHMSA). Incidents at facilities are generally smaller, involving pump leaks or seepages from valves and other equipment. Incidents reported to PHMSA can be as small as five gallons. Because of their size and remote location, operator-facility incidents are unlikely to affect public safety.

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Pipeline & Gas Journal • September 2015

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Safety Principles Cut Across the Board

These safety principles reflect the shared commitment of pipeline operators to safety. They represent not only aspirational goals all operators strive toward, such as zero incidents, but also everyday ways of doing business that promote continuous improvement and excellent safety performance: Zero Incidents — Only with a goal of zero safety incidents can we minimize accidents. Pipeline operators believe that every incident is preventable and work to that high standard. Organization Commitment — Not only do senior leaders of pipeline companies value safety, but safety is emphasized at every level of the organization from employees who accept personal responsibility for safety to front-line managers who are vital to reinforcing a safety culture and implementing continuous improvement. Culture of Safety — Pipeline operators embrace the need to provide a workplace culture where safety is an enduring value that all employees share, act upon, learn from, are rewarded for and judged upon. Continuous Improvement — Pipeline operators believe that no matter how safe they already are, they can always improve safety. Vision, commitment, culture, and systems are necessary to improve safety continuously. Learn From Experience — Pipeline operators learn how they can improve safety from their own experiences and by sharing lessons learned with and from other pipeline operators. Systems for Success — Safety management systems demonstrate that safety efforts are succeeding by measuring performance, tracking changes and confirming improvements. Employ Technology — From in-line inspections with diagnostic robots traveling inside pipelines called “smart pigs” to innovative ways to interpret integrity data, operators constantly research and develop new ways to maximize safety. Communicate with Stakeholders — Operators know communicating with the public and stakeholders who value safety is vital to improving safety. n

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In fact, analysis of 397 pipeline incidents reported to PHMSA in 2013 showed 35% were smaller than one barrel while 20% exceeded 500 barrels. By focusing on rights-of-way, this allows operators to develop strategies to decrease these types of incidents, Black said.

Better Diagnostics In order to improve technology, Black said, the industry is working at getting better in diagnosing potential problems before they happen. He pointed to research and development underway on inline crack detection tools as well as efforts to better identify and respond to threats through regulating practice on crack detection and management. “There is so much information now that we think operators could benefit from some guidance on integrating data and proper guidance on the use of video tests,” he said. “We know hydrotests have an important role in commissioning new pipelines, but we also need to do more critical thinking about the use of hydrotesting on existing pipelines.” Pipeline operators have been boosting local emergency response capabilities, too, with the addition of free online training programs. “This is one of the most active efforts we’ve had over the last couple of years,” Black said. “We’ve heard there are resource constraints on first-responders and time constraints. We’re bringing the free online training portal to them.” The operators have worked with the National Association of State Fire Marshals in presenting the training program and with the Emergency Response Advisory Board, which meets twice a year. The completion rates for the program have increased in each state since the program’s inception. The upshot of all this, according to Black, is that “Pipelines are the safest way to transport large volumes of crude oil and petroleum products. The Department of Transportation confirms that and the State Department confirmed that in the study on Keystone XL.” P&GJ For further information or to read the report in its entirety, visit aopl.org.

Teamwork Counts When it Comes to Safety Industrywide safety groups pursued pipeline performance improvement goals: Pipeline Safety Excellence (PSE) Steering Committee: This group of pipeline executives focuses on ensuring progress on industrywide safety performance improvement initiatives. Each executive serves as a “champion” on one of the industry’s strategic initiatives supporting work on that initiative, facilitating additional resources if appropriate, keeping the PSE Steering Committee informed on initiative progress, and raising issues needing resolution with the broader group. In 2014, the PSE Steering Committee oversaw API-AOPL strategic initiatives to improve inspection technologies, enhance pipeline threat identification and response, expand safety culture and management practices, and boost response capabilities. The PSE Steering Committee is continuing this executive leadership and oversight role in 2015. Performance Excellence Team (PET): The PET brings together senior managers from across industry to exchange the latest information on pipeline safety. PET members also engage in three standing sub-teams focusing on pipeline performance data management, pipeline damage prevention and safety culture. In 2014, PET led the pipeline industry’s annual industry-wide pipeline safety performance strategic planning process. This year, in addition to its strategic planning process role, PET is leading strategic initiatives to implement new API recommended practice on pipeline safety management systems and

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Pipeline & Gas Journal • September 2015

foster pipeline safety culture with an industrywide sharing, learning and improvement program. Pipeline Integrity Work Group (PIWG): PIWG is an API-led group of industry managers with responsibility for ensuring the integrity of the pipelines at their companies. The managers oversee programs to evaluate, inspect and perform maintenance on their systems. As part of PIWG, they share learnings and best practices to improve pipeline integrity. PIWG recently completed an update to the industrywide standard for managing integrity of pipelines. PIWG led two 2014 strategic initiatives to develop an APIrecommended practice on crack detection, analysis and response with an emphasis on seam-related cracks, as well as one to develop industrywide guidance on implementing threat data integration programs and activities. In 2015, PIWG will complete its development activities from 2014, and then lead three strategic initiatives: implementation of new API-recommended practice on crack detection, analysis and response; implementation of industrywide guidance on integrating pipeline threat data; and development of industrywide guidance on the appropriate use of hydrotesting. Operations and Technical Group (OTG): The OTG is an APIled group of industry managers with responsibility for pipeline operations and engineering. They meet regularly to share operating experiences and best practices. Each year, OTG hosts an industrywide pipeline information exchange to share information on incidents or near misses that

yielded learnings and improvements in pipeline safety. OTG also facilitates the consideration and adoption of industrywide operations and safety standards. Cybernetics Work Group: Cybernetics is an API-led group of operations managers responsible for leak-detection technology and control room systems. In 2014, the group began developing an API-recommended practice for leak-detection program management. The group is completing development of an API 1149 technical report and will undertake the 2015 strategic initiative to implement API recommended practice for pipeline leak-detection program management. Public Awareness Group (PAG): PAG is an API-led group of community outreach managers working to improve programs to raise public awareness of local pipelines and “call-before-you-dig” programs. Operator Qualification Work Group (OQ): OQ is an APIled group that ensures operator qualification practices meet regulatory requirements that contribute to safe operations and a safe operating culture. Environment, Health and Safety Group (EH&SG): EH&SG is an API-led group that promotes environment, health and personal safety issues within pipeline operators. Pipeline safety leadership teams: In 2011, the executive leadership of the liquids pipeline industry launched several industrywide teams to address specific safety performance issues. In 2012, the leadership created an additional team to address emergency response. The groups take on special projects that are time-sensitive or meet a specific program need. n

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Pipeline Reversals and Conversions: Case Studies and Best Practices By Mike Kirkwood, Director of Transmission Market Development, T.D. Williamson, Tulsa, OK

T

he boom in U.S. shale plays and Canadian oil sands has provided North America with a huge new source of petrochemical and energy-generation feedstock. For the most part, the results of this “shale boom” have been quite positive. But the sudden abundance of oil and natural gas is putting pressure on North America’s existing pipeline infrastructure, which simply cannot cope with this additional demand. This pressure is compounded by the fact that most of this new oil and gas production is happening in regions not currently served by the existing pipeline infrastructure (Figure 1). Before the Marcellus boom, for example, Pennsylvania and West Virginia relied largely on natural gas from the western and southwestern U.S. In recent years, however, increased local production has resulted in a supply of gas that is more than sufficient to meet current local demand, with plenty left over to ship to other U.S. states and to Canada. Similarly, the recent oil boom in Canada has resulted in the need to ship large amounts of Canadian oil south to the vast refinery complexes along the Gulf Coast. As a result of the increase in demand for North American oil and gas shipping, onceuncommon flow reversals and the reuse of existing pipeline assets have become fairly routine for operators, with large incentives being quoted, such as $10-15 million in additional earnings for just one pipeline reversal – Tesoro Logistics LP. In recent years, for example, gas capacity shipped in pipelines has risen significantly along with the growth in shale production (Figure 2).

Minimizing Failure

One of the most important aspects of pipeline reversals is risk assessment. Many of the pipelines undergoing reversals are older and were manufactured using outdated processes, materials or design elements that aren’t acceptable by today’s standards. Operators need to perform thorough assessments to determine how risks can change when an older pipeline is reversed or repurposed. Due to a couple of well-publicized rever-

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Pipeline & Gas Journal • September 2015

Figure 1: Areas of Oil Abundance vs Areas of Demand

Figure 2: Shale Gas Growth vs Pipeline Capacity Growth

sal failures, the public is all too aware of what can potentially go wrong with a pipeline reversal. In March 2013, a pipeline leaked about 200,000 barrels of oil near Mayflower, AR. In September 2013, a 20-year-old pipeline spilled over 800,000 gallons of oil in Tioga, ND. These failures often overshadow the many successful pipeline reversal over the years. Unfortunately, success stories rarely make headlines. But the truth is that, when completed carefully and after a thorough risk assessment, pipeline reversals can be safe and effective.

Longhorn Reversal, 2001

The original Longhorn Pipeline System – comprised of 18-inch and 20-inch pipelines

– was built to ship crude oil from Crane to Baytown, TX in 1949 and 1950. In 1998, the line was converted to refined products service with the addition of pumps, terminals and new pipeline segments to transport product from Houston to Odessa and El Paso. To manage and reduce risks, Longhorn Partners Pipeline went above and beyond the requirements at the time and followed industry best practices for conversion. In 2001, Longhorn Partners (later Magellan Pipeline Company) began a project to again reverse the flow of the Longhorn Pipeline, from Crane to Houston, to transport crude oil. Looking again to best practices, Longhorn produced the Longhorn Mitigation Plan, with 40 mitigation commitments covering management programs, risk-management processes and integrity issues.

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| 27

Centennial Conversion, 2001

This huge project involved converting 700 miles of 50-year-old, large-diameter pipeline running from South Texas to the Midwest. The pipeline was built to transport natural gas, but when demand for natural gas declined and demand for petroleum products increased, the joint owners of the pipeline – CMS Energy, Marathon Ashland and TEPPCO – began a conversion project. The project began with major reviews of

the pipeline’s condition and history, including: n Laterals and connections n Piggability and line cleanliness n Right-of-way conditions n Existing threats, such as corrosion or mechanical damage n Potential threats, such as fatigue n Equipment required for conversion n Inline inspection (ILI) and hydrotesting As a result of this thorough planning, the Centennial Pipeline owners completed the

Line 9 reversal phase project (approved) Line 9B reversal phase project (proposed) Existing Line 9 pipeline.

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Pipeline & Gas Journal • September 2015

conversion while ensuring maximum pipeline integrity and performance, and minimal customer interruption.

Enbridge Line 9 Reversal, 2014

Enbridge, Canada is planning to reverse an existing oil line, Line 9, between North Westover, Ontario and Montreal, Quebec. The plan is similar to the Longhorn reversal as this will not be the first time this line has been reversed: Line 9 was originally built

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in 1976 to supply Quebec refineries with western Canada crude oil. In 1998, the line was reversed to take imported oil from the United Kingdom, West Africa and the Middle East. Now that western Canadian oil is cheaper than the imports, Line 9 will be reversed again. What’s also interesting about this reversal is the amount of public communication involved in the project that Enbridge made information available to the general public. Available information includes a website (http://www.enbridge.

com/line9), as well as a brochure detailing the how, when and why of the reversal. Of course, these are just a few examples of recent projects. Figure 3 shows the reversed and repurposed pipeline has been steadily increasing since the late 1990s.

What Do Regulators Think?

In an effort to establish best practices and safeguard against failures on reversed and repurposed pipelines, regulatory organizations worldwide are beginning to release standards and recommendations. In the Figure 3: Conversions

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Pipeline & Gas Journal • September 2015

Pipeline

Reversals

and

U.S., the Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued guidance on pipeline flow reversals, product changes and conversion, alerting U.S.-based operators of the potential impacts. Though the new guidance is not prescriptive, except when the cost to make these changes exceeds $10 million, PHMSA strongly encouraged operators to submit a comprehensive written plan before beginning a conversion or reversal. PHMSA also advised operators to review their existing integrity plans and be prepared to demonstrate how any additional or increased risks are mitigated. In addition to issuing new guidance, PHMSA suggested some pipelines are simply not candidates for reversal or conversion, including: n Grandfathered pipelines with incomplete test or historical data. n Low-frequency electric-resistancewelded (ERW), lap-welded and unknown seam-welded pipelines. n Pipelines with a history of failures. n Pipelines with a design factor of greater than 72% specified minimum yield strength (SMYS). n Conversions involving volatile liquids. The recent PHMSA guidance provides valuable recommendations for reversing or repurposing a pipeline. Canada’s National Energy Board (NEB) doesn’t have regulations pertaining to reversals or conversions, but there is a thorough review process that considers all stakeholders, garners their objections, and allows the operator to demonstrate compliance through publicized mitigation strategies. The main issue appears to be that the reversal calls into question the original need and current design of the pipeline. This is largely a political/economic argument, but it has recently generated media attention. In the United Kingdom, for the revalidation or uprating of a pipeline under the Pipeline Safety Regulations, the operator must provide technical and safety justifications to the UK Health and Safety Executive (HSE) to demonstrate that the pipeline and associated facilities are “fit for purpose.” Though not a reversal or re-utilization regulation, the HSE clearly spells out the considerations that would also apply to those types of projects.

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Good Practice

Despite a few well-publicized failures, there have been many successful pipeline reversals and conversions, and organizations worldwide are compiling guidelines for safety and best practices. So, what are the lessons learned? What approaches and practices can help ensure the safe completion of such projects? Most successful case studies share a few common elements: n Threat assessment: A valuable way to assess all the risks – and how they would change under the new operating conditions – is to conduct a thorough threat assessment and develop a mitigation strategy. n Documentation review: Gathering documentation sounds relatively easy, but the paperwork for older pipeline often gets lost or destroyed. Material records seem to be the most valuable, as they provide information about pressure rating. If no documentation is available, it’s now possible to conduct in-situ positive material identification (PMI) without expensive laboratory testing. n Inspection: Once threats have been assessed, it is important to determine the criticality of the defects that may exist. Inline inspection is by far the best practice, with technology such as the multiple dataset (MDS) inspection platform able to detect and characterize most anomalies.

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Pipeline & Gas Journal • September 2015

n Communication: Keeping all stakeholders informed becomes an absolute imperative. Enbridge’s Line 9 reversal is a good example of how social media can be used to communicate project benefits and confront issues. n Laterals and Connections: The majority of guidance and case studies relate to the main transmission pipeline. But it’s important to remember the connections that may not suit the new service. In this case, reconnections may be necessary. Hot tapping and bypass can ensure that this can happen without disruption to customer connections.

Preparation is Key

Probably the most important element in pipeline reversals and conversions is proper preparation, including testing and inspections that can help determine whether the

pipeline is fit for the job. There are several inspection and testing methods available; each can help provide a more complete picture of the pipeline. Hydrostatic Testing: Hydrotesting was introduced over 60 years ago. It was developed as a direct response to failures in the 1960s resulting from air- or product-based pressure tests. Though hydrotesting offers some advantages over air or product testing, this method has several drawbacks. While hydrotesting is considered to be the final test for the strength of a pipeline that may be undergoing a reversal or conversion, it is disruptive and does not offer a full picture of potential issues. Hydrotesting really only gives an assurance of integrity on the day testing is conducted. Defects that are close to failure may not be detected during testing, meaning that they will remain unaddressed until they fail at some point in the future.

Figure 4: Multiple dataset Inline Inspection Platform

major finding from a recent incident in the Gulf of Mexico was that the emergencyresponse plan was inadequate and crisismanagement training was lacking. In all cases, ensure that every threat is considered in advance. Do not rely on one barrier to prepare for the worst.

paredness knowledge have all improved in the half-century since many of these lines were installed. But if we continue to make improvements and leverage new and better materials and technology, there is no reason that these pipelines can’t last another 50 years in their converted form. P&GJ

Key to Safe Reversals

Author: Mike Kirkwood, Ph.D., has more than 25 years of experience in the nuclear, power generation, water, and oil and gas industries. He is a SME in all forms of structural integrity, specializing in pressurized pipelines, and is the author of numerous papers on pipeline integrity, risk, inspection, and repair and rehabilitation.

It is not uncommon to find 60-year-old pipelines operating in excellent condition – as long as they have been maintained, inspected and repaired as required. Materials, welding, construction, operations, maintenance and emergency-pre-

Pipeline Services, à la carte Inline Inspection (ILI): This is an extremely valuable tool in proving pipeline integrity. There are many tools available for the assessment of a variety of defects, and as computers, storage, and batteries have improved, these tools have only gotten better. Today, MDS tools (Figure 4) can help operators address multiple threats at one time. Running these tools is becoming common practice for integrity management and is almost a requirement for line reversals or conversions. Positive Material Identification: Paperbased records for older pipelines are often misplaced, lost or destroyed. What may seem disastrous becomes manageable thanks to new methods that use a combination of insitu strength and chemical-composition tests to determine a pipeline’s material properties. These methods can be linked to sensors on ILI tools using a low field magnetic array to determine material changes. Leak Detection: Leak detection becomes more important when pipelines change service, especially when the line is carrying new product. Historically, most leaks have been detected by the general public, but there are now more sophisticated solutions available that use fiber optics or airborne survey equipment to detect leaks before they become public incidents. Until recently, many operators looked at leak detection as a last barrier of defense. After recent failures, though, there has been a push for zero loss, which means moving to safety standards more focused on personal safety and – much more importantly in the oil and gas arena – process safety. Hence, detection and mitigation are preferred. Emergency Preparedness: Though every step can, and should, be taken to mitigate all threats, there are some situations that just cannot be foreseen (so-called “acts of God”). To guard against the unexpected, emergency-response plans and equipment need to be well-thought-out. For example, one

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Natural Gas Infrastructure Intelligence Report

I

n today’s commodity environment, being aware of ongoing decisions by producers and midstream players regarding planned projects is a critical component to understanding the future natural gas infrastructure landscape. Experienced analysts collect and interpret the information to deliver a streamlined approach for understanding and quantifying the influence of planned projects on the market. Up-to-date, reliable insight into these decisions reduces blind spots for traders so they can make more informed, longer-term decisions. Through summer 2015, Genscape is providing critical infrastructure intelligence alerts as they happen, including the tracked progress of processing plant, pipeline, and gathering line projects in the United States.

REX Flow East to West Increases as Seneca IV Likely Comes Online

Transcontinental Gas Pipe Line Company (Transco), a subsidiary of Williams Partners, placed the Rockaway Lateral Project in-service in May. The effort involved constructing a delivery point in New York City by connecting the Lower New York Bay Lateral to the Rockaway Peninsula. That project provided National Grid with about 647 MMcf/d of firm transportation, giving the company the capability to serve more than 1 million customers in the area. Now, Transco is back with another project, the New York Bay Expansion Project, which will provide National Grid with 115 MMcf/d of firm transportation, allowing National Grid enough natural gas to heat about 500,000 additional homes during the 2017 and 2018 winter months. Transco filed with FERC on July 8 for a certificate of public convenience and necessity (CP15-527) for the project, designed to increase horsepower and modify three of Transco’s existing compressor stations, replace 0.25 miles of 42-inch pipeline and uprate pressure of the Lower New York Bay Lateral Pipeline. The changes also include modifications to the Morgan and Narrows meter and regulating (M&R) stations, as well as installation of about 80 feet of 30-inch bypass pipe near the Downingtown M&R station. Construction is expected to begin in the fall of 2016 for an in-service date of Nov. 1, 2017.

service there began July 9. Since then, flow at both compressors has been steady, only filling above usual with a sudden increase that began July 12. Genscape is tentatively attributing this new strength of flow, which comes entirely from reported receipts on the Seneca Lateral, to the in-service of the fourth Seneca train. MarkWest declined to confirm the status of the plant, but suggested that more details regarding Seneca IV will be announced in the near future. The majority of the non-Seneca originating gas appeared to be re-routed from other pipelines or representative of production already accounted for, rather than representing an uptick of new production. Much of the push above 1.3 Bcf/d came from wells behind Rice’s new point at Gunslinger in Monroe County. Genscape’s production forecast takes REX’s staggered phase-in into account, with only a small additional new production bump expected in August as REX’s east-towest and Spectra’s Uniontown to Gas City projects relieve some export constraints in the region.

Transco Files with FERC for New York Bay Expansion Project PA

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In anticipation of the Aug. 1 start date PA for the Rockies Express (REX) east-to-west project approaches, flow on the pipeline ramped up. Fed from a combination of points in and around Clarington, OH as well as the powerhouse processing plant at the end of REX’s Seneca Lateral, flow in July exceeded 1.3 Bcf/d for the first time, and later in the month saw a further jump to above 1.4 Bcf/d. When the full project begins to flow, westward-bound gas will fill the line to 1.8 Bcf/d, only about 400 MMcf/d above current flow. The new flow came just after REX announced that partial east-to-west related service at the improved Chandlersville and Hamilton compressor stations had been approved by FERC and that bidirectional

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natural gas pipeline, directly connecting customers in the South Texas Eagle Ford Shale to customers in Northern Mexico. The 30-inch Nueva Era pipeline will be capable of transporting 600 MMcf/d from HEP’s existing hub in Webb County, TX to Escobedo, Nuevo León, Mexico, and to the Mexican National Pipeline System (Sistema Nacional de Gasoductos) located in Monterrey. HEP accepted non-binding indications of interest for transportation and processing services, which concluded July 17.

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Pipeline & Gas Journal • September 2015

natural gas hub services and export from the Webb County hub to Mexico via the proposed Colombia interconnect. In May, Impulsora Pipeline LLC, a wholly owned subsidiary of HEP, received a presidential permit from FERC authorizing construction plans of 36-inch pipeline to interconnect the Webb County hub with the Comisión Federal de Electricidad’s Colombia-Escobedo project (Colombia interconnect).

Texas Gas Transmission Files for Reversal via Northern Supply Access

On June 5, Texas Gas Transmission submitted an application with FERC for the Northern Supply Access Project (CP15513). The purpose of this project is to provide north-to-south natural gas transportation on Texas Gas’ existing system, while maintaining the current south-to-north flow. This would allow producers in Utica and Marcellus to access to markets in the Gulf Coast and Midwest regions. The $149 million project would include modification of Texas Gas’ existing facilities in Indiana, Ohio, Kentucky, Tennessee and Mississippi as well as construction of a 23,877-hp compressor station in Hamilton County, OH. Construction is expected to begin April 1 for an in-service date of April 1, 2017. Texas Gas Transmission, LLC has executed binding firm transportation agreements with eight companies for the full capacity of about 384 MMBtu/d: EdgeMarc Energy Holdings for 50,000 MMBtu/d; Indiana Gas for 15,000 MMBtu/d and 10,000 MMBtu/d; Jay-Bee Production for 50,000 MMBtu/d; R.E. Gas Development for 30,000 MMBtu/d; Southern Indiana Gas and Electric for 25,000 MMBtu/d; Triad Hunter for 100,000 MMBtu/d; Gulfport Energy for 54,000 MMBtu/d; and Kaiser Marketing Ohio for 50,000 MMBtu/d. P&GJ

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Compression Report Pipeline & Gas Journal’s

Safety Emphasis Wins Exterran NSC Kudo By Jeff Share, Editor

In this interview, justifiably proud Childers discusses safety in all of its essential components and how a successful program should work. P&GJ: What was your reaction to being recognized by the National Safety Council? Childers: I was honored to accept this award for Exterran employees because I know how high the NSC sets the bar for this award and how many companies were in the running. Our employees are the reason we earned this recognition. They are the ones who work safely every day, not just for Exterran, but for their families. And that’s what matters most.

I

Brad Childers

n the oil and gas industry, there is not and never will be a priority higher than the safety of a company’s employees. Go to any industry conference and you’ll see how seriously the topic of safety is taken. It bears repeating: safety is job one. Exterran, a Houston-based compression company, realizes that an effective safety program always starts from the top. Brad Childers, Exterran’s president and CEO, clearly understands that as does the National Safety Council (NSC) which earlier this year singled out Childers as one of just nine CEOs in the United States who do “get it.” “It” in this case refers to recognition for being “dedicated to safety for the long haul and committed to continuous improvement for both their organizations and themselves,” according to Deborah Hersman, president and CEO of the NSC. Childers’ efforts have not gone unnoticed by others. In June he received the EY Entrepreneur Of The Year® 2015 “Transformational CEO” Award for the Gulf Coast Area for demonstrating “excellence and extraordinary success in such areas as innovation, financial performance and personal commitment to their businesses and communities.” Leaders are nominated by external third parties, and Childers was selected by an independent panel of judges.

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P&GJ: How do you (or how have you) prioritize(d) safety among Exterran’s business responsibilities? Childers: Our approach to prioritizing safety is straightforward. For us, safety is not one of a number of business priorities; it’s the most important job we do. We are first and foremost in the job of saving lives, saving limbs and saving families. P&GJ: What does it take to create and then nourish a successful safety program? Must it always start at the top? Childers: Setting boundaries and expectations at the top is required in order for everyone to clearly understand the vision and also the playing field to achieve that vision. Then, it’s important to take stock of the current state of affairs – the priorities of the management and employees; the routines used to run the business; and the

impact of the operation of the total enterprise on safety. Next, you have to build a plan that ensures everyone knows what they need to do to achieve the current focus. We use a planning process for safety that is built in and around our annual business planning process, so that the safety plan becomes part of what we measure, action and review on a regular basis throughout the year. Then comes commitment which we demonstrate by sharing our plans publicly and measuring progress in frequent management routines. This keeps every level of management engaged with our current focus as we continue to strive toward our vision. Finally, I believe you need courage. Courage is needed because so many things in our business can get in the way of our commitment to our core value of safety. We must have the courage to say no to those distractions. Similarly, there are some people who are naysayers or fence-sitters, and we all must have the courage to work to get them aligned or address the problem if we cannot. P&GJ: How does Exterran communicate the need for total safety to its employees, especially those who work outside of the U.S.? Is it through team meetings, email, etc.? Childers: Several years ago, we launched the “XFactor™” platform at Exterran. It’s a means for us to train and communicate about health, safety and environment (HSE) to all levels of our organization around the world. “XFactor for Leaders” provides training

Compression Report Pipeline & Gas Journal’s

and insights for managers mid-level and up so they are prepared to carry the message of HSE to their teams. “XFactor 24/7” provides tools and techniques for our frontline supervisors to lead, communicate and coach all of our employees on safety. “XFactor 3D” conveys key messages and expectations to employees who are engaged in the most challenging and risk-laden aspects of our business. We also have an expectation that every meeting starts with an XFactor moment where someone shares a short message on safety. And our intranet frequently publishes features on our safety performance – stories of stopping a job because of a safety problem, a business unit’s success in working incident-free for a record period or customers recognizing Exterran for safety. All of this is intended to keep our vision and focus fresh and our value of safety alive and well. Most recently, given progress in our performance, we’ve amped up our message in our quest to better save lives, limbs and families, our new goal: Goal Zero. P&GJ: In an equipment and service company such as Exterran, what are some of the challenges that workers face in doing their jobs every day, both in the field and in the office?

Childers: Employees working with hydrocarbons face inherent hazards and risks each and every day. There are ways around it, but these are challenges we can help mitigate. First, it can be a challenge for some workers to overcome a former energyindustry culture that may linger from a time when safety wasn’t prioritized as it should have been. Another challenge we face is the “graying” of the workforce and our ability to pass along the learnings of years of experience to those coming up in the industry. In periods of rapid ramp up, we must get our new employees quickly and effectively trained for their roles, as well as oriented to our safety culture. Additionally, one of the industry’s biggest challenges has been and continues to be our work with rotating equipment. Throughout the energy industry, from exploration to production to transportation to refining, employees work with rotating equipment each and every day, in many cases all day long. Ensuring new people in the workforce understand and can address the hazards of rotating equipment is an absolute must. Likewise, we have to work hard with our experienced workforce to make sure they do not become complacent. Finally, the continued evolution

of technology is something we will always have to deal, which, in essence, is about helping our organizations better deal with and embrace ongoing change, period. P&GJ: Does a successful safety culture include helping employees improve their personal health? Does this also involve taking better care of the environment? Childers: There’s no doubt that safety and employees’ personal health go hand in hand. We strive to address this by having solid benefits programs and we work hard to help our employees better understand and manage their personal health through tools and education. And of course we strive always to be good stewards of the environment. We have been involved with our industry and various agencies to strike that right balance of regulation that helps all of us achieve our goals of protecting the environment while sustaining successful businesses that provide jobs and create shareholder value. P&GJ: When you became CEO of Exterran, did you see a need to improve its safety culture? Childers: When I took the role of CEO in 2011, Exterran was well-prepared to

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Pipeline & Gas Journal • September 2015

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Compression Report Pipeline & Gas Journal’s

make a step change. We had a good cultural foundation, HSE processes were moving forward globally and leaders were looking for the next steps. P&GJ: What were some of the first steps you took, and how were they received by managers, field and office workers, and your board? Childers: Using those insights, we focused most of our attention on culture change. We enhanced our XFactor platform, we improved our safety communications, we retrained leaders, we formalized our HSE management reviews, we put an incident-review process in place that went all the way to my desk, and we added leading indicators. Then we purposely identified and began to formally and frequently recognize frontline leaders who were demonstrating, in often very tough conditions, the leadership and ownership of safety that was the essence of our core value of safety. P&GJ: How do you quantify the results of your safety program? Childers: When I’m in the field, meeting with employees in our manufacturing

plants or service operations, they shake my hand and the first thing they want to talk about is the safety of their operation. That’s a powerful testament to safety being a core value for Exterran. Our vision truly is becoming engrained in our culture, and leadership and personal ownership of HSE is taking hold. Tracking TRIR (Total Recordable Incident Rate) is important, but it’s a number; it’s a numerical expression of what we have done. At the end of the day, it’s that handshake, that look in the eye, that story of courage that quantifies who we are and our real values. P&GJ: As many energy field jobs involve hazardous activities in often hazardous conditions, do you think companies are doing as much as they should to emphasize worker safety? Childers: Our industry has made a lot of progress in the past 25 or so years to improve safety and environmental management throughout. But I don’t think any of us can or should be satisfied with our current performance until we reach a point where no one gets hurt. No injuries, no accidents, no incidents. We’ve rolled out a Goal Zero focus at Exterran this year to help drive us

to the next level of safety excellence. P&GJ: What advice do you have for other companies that are trying to improve their safety culture? Childers: It has to start with culture. If you get your culture right, getting the other things to fall in place is much easier. Next would be to establish that clear vision, understand where your organization is relative to that vision and then find your focus — those few things you must do now to move you closer to your vision. Measure and stay on that focus until it is ingrained, then find a new focus that takes you another step closer to your vision. P&GJ Editor’s note: Exterran Holdings Inc., the parent company of Exterran Corp., last month announced plans to spin off its international services and global fabrication businesses. Exterran Corp. will be a stand-alone, publicly traded company focused on global business opportunities not limited to compression and will have 7,000 employees. Exterran Holdings will be renamed Archrock Inc. and will focus on the U.S. compression market with 2,500 employees. Both companies will be headquartered in Houston with Childers becoming president and CEO of Archrock.

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Compression Report Pipeline & Gas Journal’s

Compression Trade Keeps Sharp Eye on Changing Market

A Pipeline & Gas Journal Staff Report

Mike Paris

It’s a topic the general public doesn’t know much about, but there would be no natural gas pipelines – hence no natural gas – without compressors. Today compression is a main topic of conversation in the industry for many reasons, environment – which includes siting, noise and emissions control – economics, and engineering/construction challenges. As the natural gas industry continues to expand and change direction, more pipelines will be built in the next few years, all dependent on compression. Mike Paris is vice president of the compression

P&GJ: What is your perspective internationally, especially as Mexico opens up to natural gas development? Paris: Mexico’s opening to the private sector will generate numerous opportunities for exploration and production operators, international oil and gas companies, suppliers and investors. The Energy Reform will spur engineering and construction activity across Mexico, offering a whole host of opportunities to the business. Currently, there are a series of changes that will increase the amount of business related to natural gas, especially in the power generation and exploration of natural gas. We are expecting to see a huge boom in shale gas production all along the northern part of Mexico. Many new companies are focusing on self-generated power (using natural gas as fuel) as well as new pipeline projects to satisfy the growing demand in natural gas.

Valerus 18,000-hp compressor station that serves the Marcellus and Utica shales.

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product line at Houston-based Valerus, an industry leader. He began his career in 1985 in Corpus Christi, TX as a project engineer in the packaging division of Energy Industries. He spent two years in Broken Arrow, OK working for Dresser-Rand Compressor Services, then moved on to The Hanover Company where he spent the next 12 years, his most recent position being vice president of engineering. He holds a bachelor’s of science degree in mechanical engineering from Louisiana Tech University and is a registered professional engineer in the state of Texas. In this interview, Paris provides a perspective of today’s compression business, starting with Mexico where the ongoing Energy Reform is expected to be a boon for the U.S. natural gas industry and the compressor manufacturers.

Pipeline projects are a critical part of our business model as they require new compressor stations to be built to redistribute the gas. Valerus has offered a strong market position in Mexico since 2006 and we intend to capitalize on our strengths, partnering with local and international clients to help deliver these projects. For example, Valerus was an integral partner on the team to work with Pemex to provide in excess of 200,000 hp of compression capacity to develop the Magallanes and Santuario blocks in Tabasco State. Foreign expertise in the form of technology, when combined with the local talents of Mexican personnel, will help open new frontiers. P&GJ: What new compression technologies and methodologies is the industry exploring?

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Paris: We are constantly eyeing new technology and practices to better service our customers. Compression technology is rooted in very basic and, as I like to say, “tried and true” methodology. However, we are now seeing more efficiency in compression technology and a shift to a more modular, plug-and-play concept being adopted here in the U.S.

Modularized structures at a well site allow production companies to adjust to shifting production levels as the need arises without overspending on unnecessary components. Modularization eliminates waste while providing scalability that the static structure of a permanent or semi-permanent compression station simply cannot deliver. While the concept of modularization is not

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new, a tidal change in the natural gas industry has taken place in recent years. No longer perceived as temporary or inadequate for fullscale production, modularization combined with the plug-and-play model is becoming an industry standard. The plug-and-play model offers companies limitless customization to provide what they need when they need it. Modules may be quickly and easily added as necessary, or removed to reduce costs on unneeded or unused equipment. Thus, the structure keeps pace with production needs, while efficiently managing structure costs. It makes good economic sense. Shale plays are more popular and populated than ever. However, each shale region has a specific lifecycle and viability. When a site is tapped, remediating and cleaning the area is expensive. But by using modular equipment, companies may reduce the cost and time needed for cleanup. The plug-and-play modular structures allow companies to pull out of these shale plays more quickly and remediate the location without significant cost. The industry has been using modular design internationally for years, and it is exciting to see the concept become more accepted domestically. We have found modular design works very well in remote areas with harsh climates, such as the Northeast in the dead of winter. Prebuilt modular designs can be installed in days instead of weeks, increasing efficiency, saving costs and providing a sound design solution. Pre-fabricated structures are already the norm for offshore construction; the historic build-on-site model is becoming antiquated and is highly dependent on a number of variables. As industry experts know, coming in ontime and on-budget is contingent on controlling variables. Thanks to 3-D modeling and fabrication of modular equipment in a manufacturing facility, the variables of atmosphere, personnel and resources may be overseen and better controlled. Model and testing ensure that a high-quality and functional product is delivered to the site. This process results in the delivery of build stations and piping that are functional, efficient and highly mobile. P&GJ: What are your thoughts on emission issues, specifically, how more strict regulations challenge compression operators and manufacturers? Paris: There can be no denying that reduced emissions should be required from sources where the technology is readily available and economically feasible. However, too often the rules initially proposed are simply too onerous for the industry and impose an unfair burden. They may not even be practical for how equipment is actually operated. Sometimes where controls are available, the economic trade-off for implementation is too great, or creates other consequences not anticipated by regulators.

Pipeline & Gas Journal • September 2015 1/8/2014 12:31:13 PM

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Compression Report Pipeline & Gas Journal’s

This is where industry involvement in the regulatory process is critical: When rules are proposed for a given industry, those affected should comment on the draft rules, whether through the company or industry trade groups. Bringing new facts, economics and operating scenarios to the table with the regulators will often result in some changes before rules become final. For example, the Environmental Protection Agency (EPA) rules through Subpart ZZZZ of its National Emission Standards for Hazardous Air Pollutants (NESHAP) for stationary reciprocating internal combustion engines regulation requires more manpower for recordkeeping, reporting and equipment maintenance. This results in a pretty significant increase in operating costs just by virtue of the sheer number of engines out there. Most would say this hurts the industry. To facilitate compliance, each company’s environmental and operations group must communicate closely to ensure they have an accurate inventory of engines and their locations. Where catalysts are required, it’s also important to talk to vendors to ensure their products are in compliance. Similarly, if an engine is a rental, companies must make sure they do their duediligence to ensure it complies.

The most obvious benefits to these regulations are the reduced emissions from engines that may not otherwise require controls, which in turn preserve or improve local air quality. As I mentioned, challenges include keeping track of all of the testing, recordkeeping and reporting that is required to comply with the new rules. While companies already do this for other equipment, these rules can add another layer of “compliance burden.” Our industry works very hard – both individually and in various work groups – to provide significant input on any new rule that’s pending, and the EPA really listens to many of these comments, and amends the rules accordingly. I think this shows how the regulators and industry can work together successfully for a common cause, and should encourage participation in regulatory negotiations. P&GJ: Are manufacturers able to keep up with increased demand as natural gas usage continues to increase? What are the challenges involved? Paris: Manufacturers are able to keep up with demand providing that our customers are able to help us plan and “level load” our facilities. Where the manufacturing supply chain gets squeezed is when custom-

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ers have to wait until late in a project cycle to place firm orders, thus requiring quick delivery. Often this strains available trained manpower and shop space, as well as sourcing of major components such as engines, exchangers and compressor frames. P&GJ: What new products and services will have an impact on the industry and why? Paris: Speed to market has always been the pivotal driving factor for natural gas compression manufacturers; however, it is of even greater importance in today’s competitive landscape and current market conditions. The industry continues to see more and more manufacturing companies begin to offer predesigned and pre-engineered products to meet customers’ demand for speed and efficiency. Valerus, for example, has developed configurable gas compression packages that are available for delivery in only four weeks, assembled in the industry’s only ISO 9001-certified packaging facility. Customers are seeking solutions to bring their gas stream to market faster, and are demanding products that meet their production needs with configuration flexibility, superior performance and rapid delivery. P&GJ

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Pipeline & Gas Journal • September 2015

t the firstof-its-kind Distribution Contractors

Association/American Gas Association (DCA/AGA) Utility Contractor Workshop in Chicago, presenters and attendees were single-minded in their focus on one goal: to ensure the growing contractor workforce has the requisite knowledge to safely build the nation’s gas distribution infrastruc- The tablet-learning tool makes National ture while expanding the Grid’s procedures available as a quick reference for crews in the field. contractor workforce to meet the needs of utility main replacement and expansion programs. With plans at many utilities to accelerate programs aimed at replacing aging pipeline systems, meeting this goal is more important than ever. Going forward, operators will need to ensure that the increasing number of contractors who work for them are thoroughly trained, as the number of pipeline infrastructure replacement projects continues to grow over the next two decades. Utilities are looking to replace leak-prone pipe and regulators would like to see this happen at a quicker pace – but both have safety as a top priority and understand that training is essential. Regulators across the country, in fact, are paying particular attention to the proficiency and competency of the industry’s contractorsupported workforce and now have higher expectations for operators when it comes to workforce qualifications. Bob Wilson, director, pipeline safety compliance strategy at National Grid, said there has been a paradigm shift of behavior in the industry – from reacting to regulator concerns to proactively training crews in fundamental construction practices and procedures. More and more seasoned workers are retiring, too, adding even greater urgency to the need to transfer knowledge to a new workforce. “It’s a huge challenge for the industry,” Wilson said. “National Grid [the largest distributor of natural gas in the Northeast] is one of the largest players in the U.S. and it’s an enormous challenge for us, especially when you consider the number of people we’ll be looking to replace and the assets we’re looking to enhance.” Because the Northeast states have older pipeline systems than the national average, there is a pressing need in that region for utilities to replace older components. For its part, National Grid, with a distribution system in Massachusetts alone that comprises over 11,000 miles of main, plans to replace over 3,600 miles of pipe in the next 20 years. According to Wilson, regulators in the states in which National Grid operates, while pleased to hear about the utility’s infrastructure replacement plans, have expressed concern about ensuring that

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qualified people would be performing the work, knowing that it takes time to properly train new employees.

Regional Collaborative

Recognizing the expanding need to ensure the qualifications of an emerging workforce, National Grid leveraged its long-term relationship with Gas Technology Institute (GTI) a research, development, and training organization serving natural gas industry stakeholders – to take the first steps in developing a standardized training program for contractors in the Northeast. “We were looking to develop a consistent set of modules covering basic construction principles that we could provide to our contractor workforce,” said Wilson. “GTI is highly skilled and very knowledgeable. I consider them to be the go-to technical resource for the industry.” The background knowledge offered in GTI’s training modules supports the Northeast Gas Association’s (NGA) operator qualification (OQ) program, which is used by the majority of operators in the Northeast, so it made sense for the organizations to work together in developing a contractor version of GTI’s course content. A series of workshops were held to review the core GTI material and to develop a course that would cover basic construction principles applicable to contractors serving operators in the Northeast, and specific enough to address National Grid’s construction practices. Feeney Brothers Excavation, LLC, one of National Grid’s contractors from Boston, played a key role in defining, creating and refining the material, as well as providing critical support in development of a tablet application. Throughout the course development process, the group kept four key objectives in mind: n Course content should be a standardized, consistent presentation of basic construction skills for contractors. n When delivered, the approach should also be consistent, always

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balancing the learning experience by employing both hands-on and classroom training. n Students should have opportunities to learn about operatorspecific procedures which contain company-specific requirements in addition to the basic skills content. n A quality assurance (QA)/quality control (QC) component should be in place to ensure the program is always delivered in the manner in which it was designed. Following the workshops, the group launched a pilot test of the course with participants from Feeney Brothers.

Pilot Course

The 40-hour course that came out of the development process comprised 26 modules covering construction, corrosion control, pipeline installation, pipe joining, pipeline operations and maintenance and emergency preparedness. Developed by a team of industry veterans and reviewed by subject matter experts, the course content is based on the typical work a contractor performs. It is specific enough to ensure safety, quality and efficiency, and covers the fundamental steps of each process including relevant OQ-covered tasks. PowerPoint presentations and videos are combined with hands-on activities and supplemented with knowledge assessments. An innovative feature of the course has proved to be the tablet-learning tool, which is designed to include National Grid’s work methods, specifications and procedures, as well as instructional videos of essential construction procedures such as the fusion of polyethylene pipe. Wilson said the tablet tool is a key component of the program. “Because of the nature of differences in infrastructure, procedures may be different from operator to operator,” he said. “Yet, when contractors are in the field, they must follow company-specific operating procedures or risk regulatory violation. The tabletlearning tool was developed to help students understand where and

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when National Grid’s procedures are more specific than the core principles and to serve as a quick reference for crews in the field.” Vanessa O’Neil, training program manager at GTI, led development of the training modules, guided the design of the learning experience and served as an independent observer during the pilot. She said the tablet proved to be an invaluable tool for integrating company-specific procedures into the classroom sessions. “Instructors used two screens, one for the training module and the other for the tablet,” she said. “That way, students can practice the procedure following National Grid guidelines.” Because crews are often working in areas without cellular connectivity, the tablet offers critical portability and flexibility. The National Grid application is stored locally on the tablet, providing workers immediate, on-the-spot access to procedures and work methods. Feeney Brothers, a utility contractor that has worked with National Grid on many projects, agreed to lead the pilot classes during the first week of April 2014. After completing a “train-thetrainers” program, designed to ensure consistency in program delivery, knowledge, intended use of the program and integration with the field tablet, GTI certified the trainers. Ready-to-use training materials and a leader’s guide with talking points and step-by-step guidelines for activities and discussions were also provided. Following this preparation, several full-time Feeney Brothers instructors led classes at the company’s training center in Dorchester, MA. About 35 students, mostly new hires, attended the pilot sessions. “Our goal was to create a dynamic learning environment,” Wilson said. “Students were continually engaged, moving throughout the facility from hands-on demonstrations of procedures to classroom presentations. It was a good mix of learning activities.” Regulators from the state also sat in for the pilot sessions. NGA’s vision is for all of its member companies to have access to the GTI training program to help prepare contractor employees.

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GTI has served as a resource for the natural gas industry for decades, having trained more than 65,000 participants since opening its doors in 1941. Since 1996, GTI’s Registered Gas Distribution Professional (RGDP) certification program has provided a thorough grounding in the theory and practice of gas distribution engineering, operations and auxiliary systems to hundreds of energy professionals. Upcoming courses for transmission and distribution companies held at classrooms in downtown Chicago include: n Distribution Integrity Management Program, Sept. 21-25 n Transmission Pipeline Design, Construction Practices, Sept. 28-Oct. 2 n Pipeline Safety Regulatory Compliance, Oct. 26-30 n

“Ideally, operators and contractors will conduct classroom training during the winter months when crews are hiring and training and getting everyone ready for spring,” O’Neil said. “In addition to managing their OQ Program, NGA’s new role will be to visit the contractor-training sessions to ensure they’re maintaining high standards – that they’re following the agenda, delivering the content as intended, maintaining a good balance of hands-on and classroom experiences, and engaging students.”

After The Pilot

After a series of workshops held throughout the Northeast in 2014, the new contractor-training program was unveiled to a group of National Grid contractors in December. “We described what worked and the recommendations made by the regulators who had attended the sessions,” Wilson said. “We also put everyone on notice that we were moving toward adopting the program as a standard way of ensuring that National Grid has the highest quality workforce in place.” Since completion of the workshops, Wilson said 30% of its contractors signed up for the program and now have access to the modules and the tablet device. Moving forward, GTI will review and update the field skills training program each year, based on code rule change, technology advances, or a change in industry standard construction practices. The learning tablet will be updated more frequently, based on changes to National Grid’s operating procedures. Since the initial pilot, Wilson and the GTI staff have been on the road, spreading the word about the contractor program at the NGA Contractor Workshop, as well as the DCA/AGA conference. Most recently, at the NGA Spring Operations Conference in Stamford, CT, Wilson told a packed room about the successful partnership of NGA, National Grid and GTI. Judging by the enthusiastic response from the audience, contractors across the country will soon be establishing content-licensing agreements with GTI for the 26 standardized contractor modules.

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Recently, GTI revamped its 77-module Natural Gas Field Skills Training Program, a prepackaged program available for licensing to utilities to prepare internal workforces for safety and regulatory requirements. The 26-module contractor-version of the program, which was used in the April 2014 pilot, is also available for licensing. “Our plan is to work closely with utilities to help them provide their contractors with consistent, formalized procedures that meet their specific objectives,” O’Neil said. For further information, visit gastechnology.org/training or contact Vanessa O’Neil at (847) 768-0560, [email protected]. P&GJ

16/07/2015 23:36

PRCI Welcomes Pipeline Community to Tech Development Center A Pipeline & Gas Journal Staff Report

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esearch development organization Pipeline Research Council International (PRCI) officially opened its new Technology Development Center at a ribbon-cutting ceremony and tour on July 15 in Houston. “We want you to think of this place as yours,” PRCI President Cliff Johnson told attendees, many of whom represented pipeline and service companies. “How would you use this space?” Ground for the 30,000-square-foot facility was broken on July 7, 2014 on a 10-acre campus in northwest Houston with about half of the area earmarked for a state-of-theart pull-test facility. PRCI, which established a pipeline repository in 2012, has built an inventory of over 600 specimens to support technology development through testing at its previous site, also in Houston. Among the new equipment at the facility is a 23,000-pound forklift and a lifting device dubbed “the million dollar wench,” which can pull over 5,000 pounds at a rate of 5 meters per second. PRCI found itself in need of more space in recent years in order to be more responsive to industry needs, Johnson said. The new center includes 20,000 square feet of workshop and test facilities along with 9,000 square feet of office and meeting space. The $10 million center is the result of a major commitment by the oil and gas pipeline industry to provide an independent third-party site to fully understand the capabilities of current tools and to guide the development of the new technologies needed to push toward industry goal, he said. Past-President Eric Amundsen told the gathering that doing research is just part of the job. “If we’re not sharing the research, we’re not doing our job,” he said. “This is the information hub.” P&GJ

Cliff Johnson, PRCI president, along with Eric Amundsen, past president, cuts the ceremonial ribbon.

Guests at the opening look at exhibits.

Some of the pipe available for testing at the facility, located in northwest Houston. www.pgjonline.com

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Building a Career Pipeline: New Generation of Industry Talent Awaits By Richard Nemec, Contributing Editor

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s Mark Miller, a senior oil and natural gas executive with years of experience, was addressing a Baker Hostetler Shale Symposium in Houston in mid2015 he could not resist the opportunity to talk about a favorite subject, “the transfer of knowledge to the next generation of workers” in the industry and an industry-backed program in Houston schools. It involves early energy education for high school students. “It allows young people to learn a career as early as the ninth grade,” Miller told a group of mostly young professionals at the shale symposium. “They’re learning about geosciences, engineering, land applications

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Senior advisors to the Young Pipeline Professionals include, from left, Garry MatochaSpectra Energy; Patrick Vieth-Dynamic Risk USA; Mike McGonagill-Alliance Pipeline; Steve Koetting-ExxonMobil Pipeline, and Chris Yoxall-Rosen.

and geophysics. Think back how much further ahead you would be if you had a chance in ninth grade to be exposed to the careers you’re involved in now.” As president of Louisiana-based Merlin Oil & Gas and vice chairman of the Independent Petroleum Association of America (IPAA), Miller credited IPAA with starting a decade ago to address the now more imminent challenge of ensuring the next generation of engineering and technical talent in the energy industry through what is now called The Petroleum Academy in the Houston schools. “If you’re 15 years old, and that fire is lit inside of you, then you can enter college knowing exactly what you want to do. These kids are starting younger and they’re getting it,” said Miller, calling the effort “an amazing success story” made possible by various companies providing money and site visits. What Miller and other experienced energy industry leaders are saying and reflecting is the profoundly different businesses that oil, gas and pipelines are today, 16 years into the 21st century. A lot of the guesswork and gambling is gone and it’s a lot like 20th century manufacturing. The influences on the developing intelligentsia making the sector go are no longer found in silos embedded in global companies, but in horizontal networking with stakeholders,

This recent group photo is indicative of who will be leading the pipeline business in the future.

operators, regulators and interest groups. The approach in Houston is just one initiative addressing where the talent will come from to replace a graying workforce that is projected to have hundreds of thousands of new jobs by 2030. It is a conundrum facing both the private and public sectors worldwide, particularly in North America. Efforts in California and Canada, as well as Houston, recognize the challenge and are addressing it. A recent Harvard/Boston Consulting Group (BCG) economic treatise found unconventional energy development will be a critical piece of the future U.S. economy,

contributing $430 billion and 2.7 million jobs in 2014. The report called unconventional gas and oil resources [shale and tight oil/gas] “the single largest opportunity to improve the trajectory of the U.S. economy.” “Today, this industry has moved from an environment of exploration/production into one more closely aligned with manufacturing,” said Mike McGonagill, retired COO from Alliance Pipeline, whose father and grandfather worked in oil and gas in New Mexico. “That’s the downhole side. Due to the decades of drilling and mapping they know where the reservoirs are and now it’s pure manufacturing, efficiencies of scale,

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scalability, requiring up-down adjustments as we experience in shale plays today. It is very similar to the supply/demand economics of any commodity.” That, in turn, is changing the pipeline industry as it “repipes” America for this new economic environment, McGonagill said. The Harvard/BCG report, which examined energy broadly, including renewables and efficiency programs, said general public support for the energy sector is lacking, and listed 11 goals for fully developing U.S. potential, including “timely development of new infrastructure” and “delivering a skilled workforce.” This and other analyses envision 25-50% of the workforce leaving by 2020. Globally, the London-based World Energy Council established the Future Energy Leaders Programme as its platform for “engaging the best and brightest of young professionals” with the specific aim of helping create a crucible for shaping the next generation of energy industry leaders. Members of the group share a commitment to shaping the global energy future. McGonagill said it’s been widely recognized that a body of young professionals was needed in the U.S. industry. “To our surprise, young, self-motivated professional groups have sprung up on both sides of the U.S.-Canadian border” with the Young Pipeline Professionals (YPP) growing wings this year in the U.S. and a more mature 3-year-old group, Young Pipeliners Association of Canada (YPAC), he said. YPP has had the double benefit of learning from its peer group at YPAC and from seasoned industry professionals such as McGonagill and Patrick Vieth, Dynamic Risk’s senior executive for technical services. “This effort has been championed through the American Society of Mechanical Engineers [ASME] at a national and international level by Vieth, who is part of ASME’s senior leadership team,” said McGonagill, adding that Vieth’s leadership and encouragement of YPP has been a key. Meanwhile, the public sector is feeling the drumbeat, too. California has recognized a need for a special program aimed at longterm recruitment and retention of oil and gas technical expertise. “We’re looking to call it a ‘career pipeline’ in keeping with our theme of oil/gas regulation,” said a spokesperson in the California Department of Conservation’s Division of Oil, Gas and Geothermal Resources (DOGGR). There has been unprecedented growth with the advent of hydraulic fracturing rules and climate change-driven regulations that are straining the state unit’s ability to keep up with enough skilled staff. Being proactive in professional recruitment and development is a relatively new

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phenomenon for the state agency, said Jason Marshall, the conservation department’s acting director. “We’re talking to trade journals and letting people know in the industry that the state of California is hiring. We want to drive candidates toward us, and if they come, we’ll help them through the process. Now a candidate can take the required state qualifying examination online and see how well he or she scores,” Marshall said. Scoring big time is part of the motivation for the networking and professional development objectives at YPP and YPAC. One of four bullet points in the stated “purposes/ vision” for YPP is identified as “Be awesome!” The other three talk about educating young professionals, creating leadership opportunities and networks for them and the betterment of the industry overall. Lofty sounding … energetic … enthusiastic. This pretty much describes Molly Laughlin, Tara Podnar McMahan, Colin McGonagill and Cassandra Stacey, four of the young professionals in the industry who have helped shape YPP as a budding organization expected to flower by the end of 2015. Using the older YPAC organization in Alberta as a model, the founding YPP members have coalesced with some experienced mentoring senior advisors, such as Vieth, whose Dynamic Risk is one of the leading integrity management providers in North America, and Colin McGonagill’s father, Mike, the retired Alliance Pipeline executive. Emphasizing the need to retain the knowledge and experience of the pipeline industry’s most senior personnel, McMahan, an integrity solutions leader at Det Norske Veritas (USA) and head of YPP, said the successors to today’s pipeline technical experts must be prepared and equipped “to accept the ‘duty of care’ for the pipeline industry, which includes care for the environment, the public, the industry’s assets and care for one another.” The gumbo this has produced includes a new U.S. organization for young professionals in the industry that counted hundreds of prospective members and over a dozen chapters waiting to spring forth after July’s meeting of the Southern Gas Association (SGA) in Nashville. Involving nearly two dozen working groups, the initial YPP board worked for six months “to get all our ducks in a row and avoid getting overwhelmed,” said Laughlin, who is marketing manager for Clock Spring, a Houston-based manufacturer of composite pipeline repair solutions. Reflecting on his 2014 chairmanship of the International Pipeline Conference, Vieth recalled being inspired by a presentation on YPAC which motivated him to help create a similar organization in the U.S. He wants to see YPP develop relation-

ships across the industry with major established groups such as the SGA, ASME, Pipeline Research Council International (PRCI), National Association of Corrosion Engineers (NACE), American Petroleum Institute (API) and Interstate Natural Gas Association of America (INGAA). “It’s my hope that YPP USA meets its mission so that the young pipeliners of today are prepared to accept the transfer of the duty of care for the pipeline industry so that today’s industry leaders can retire with full confidence in their successors that they have the knowledge, confidence and networks to meet any challenge they may face in the future,” said Tara Podnar McMahan. Noting their colleagues at YPAC were instrumental in helping shape YPP, Laughlin said the Canadian young professionals, now a 780-member organization, offered “advice on how they got started and what we needed to do early on. Overall, I think we complement each other very well.” Two of YPAC’s founding members and leaders, Alina Gabdrakhmanova, a Russian/ Australian-educated, Calgary-based engineer with Worley Parsons, and Peter Tanchak, a Canadian-born engineer working with Enbridge Pipelines, were previously coworkers at Worley, and view alliances and networking as keys to their professional and career growth. Like YPP, the Canadian group owes its success to a dedicated group of senior advisors from the industry, and particularly the leadership and vision of Daryl Ronsky, a vice president at The Rosen Group in Canada. “Without his efforts, YPAC might not exist,” said Gabdrakhmanova. This summer Gabdrakhmanova was focused on being a project engineer on a team planning the proposed 560-mile Prince Rupert Gas Transmission Pipeline in northern British Columbia, while Tanchak, who previously had worked on pipeline/ LNG proposals in Alaska, was helping Enbridge analyze how new pipelines could best be integrated in the company’s existing network over the next 10 years. The Canadians see young engineers and other technical professionals moving from one company to another rather easily and frequently in today’s industry. “Companies need to make more efforts to retain their professional employees,” said Gabdrakhmanova. “They need to ensure the young professionals are interested and challenged in their jobs.” While YPAC President Gabdrakhmanova called the impending retirement of technical talent in the industry a “silver tsunami,” Tanchak, YPAC vice president, said not all of the graying engineers are leaving at once, and some individual companies are establishing six-month, post-retirement work assignments for the veterans to return and allow young professionals to “shad-

ow” them for a few months at a time. Tanchak represents YPAC’s efforts with the Canadian Energy Pipeline Association (CEPA) Foundation to establish joint mentoring programs. Cassandra Stacey, YPP’s treasurer and an operations engineer with Hilcorp Energy Co.’s midstream unit, Harvest Pipeline, received a lead for her latest job after golfing in The Woodlands with the president of the company. She was brought into YPP through Vieth, who encouraged her and others such as McMahan to join the new organization’s planning process. “YPP’s main goals relate to networking and training, and bridging the generational gap which Patrick began talking about, and I was completely onboard,” said Stacey, who manages daily operations on privately held Harvest pipelines along the Texas Gulf Coast, including carrying responsibility for integrity management programs. “I really want to develop a tight network, so for things beyond my expertise I can have others to turn to,” she said. “In metallurgy, for example, which isn’t a strong suit of mine, I want to be able to trust that another person can tell me what I need to know.” While the U.S. young professionals spent the first half of 2015 on mostly organizational activities, creating an iden-

tity and structure, senior advisors like Vieth and Mike McGonagill are overjoyed by the YPP theme, which aims to prepare its members to accept the widely recognized “duty of care” for the pipeline industry. That duty is taken seriously throughout the ranks of the American pipeliners at all levels and skill sets. “That is so powerful, it is exactly what they need to do,” said McGonagill, whose son, Colin, is a YPP vice president and an engineer with QStar LLC. “For the industry to thrive and grow there must be a new generation of leaders that will assume that duty of care,” he said, adding that the future industry will be nothing like the one he entered 40 years ago. He equates pipeliners’ obligation of caring to that of the oath of an airline pilot for passengers’ safety. “Within this organization, I can tell you, there are the future John Kiefners of this world,” he said, referring to the well-known pipeline integrity technical expert. “We just don’t know who they are yet. They will nominate themselves in time. At least that’s what we hope for.” YPP’s preamble to its organizing document describes the need for “technical networking with peers and industry leaders,” education through technical presentations and site visits, and the chance to develop

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“professional friendships.” Vieth said time is short for “ensuring that we capitalize on transitioning the knowledge and experience from those leaving the industry to the young professionals.” He notes that “a disproportionately smaller portion” of the pipeline industry expertise is residing with those having 25 or fewer years of experience, many with five or less years. In other words, those approaching retirement may be less than 25% of the workforce, but represent about 75% of collective industry expertise. What YPP, YPAC and other groups highlight is the essential need for “continuous learning and professional development, and also the responsibility that [young professionals] will undertake in progressing through their careers,” Vieth said. “I hope YPP provides an opportunity for the young professionals to develop leadership skills; these are just as important as learning how to manage and learning various technical aspects of our business.” Colin McGonagill, the fourth-generation oil and gas worker whose great-grandfather he calls the original “fracker” because his job as a “shooter” involved placing nitroglycerin down the holes of drilling jobs, came to the YPP planning meeting last March at his father’s urging and ended up

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writing its governance documents. For someone who earned a mechanical engineering degree from Purdue University less than six years ago and has a lifetime commitment to not follow in his father’s footsteps in the oil and gas space, McGonagill has amassed a variety of experiences in geothermal energy, waste heat recovery and with TAS Energy, a global innovator in packaged chilling and waste heat/geothermal energy solutions for utility and nonutility customers. The TAS job brought him to Houston and then to ConocoPhillips as a project manager in the Eagle Ford play but the oil price crash eventually led to a layoff. Since April, he has been with the QStar startup that is busily buying up assets in the Permian, East Texas and New Mexico basins, backed by a $150 million commitment from Dallasbased EnCap Flatrock Midstream. When he was talking to P&GJ, McGonagill was assembling a presentation to his young company’s board. “From a professional development perspective, I love what I am doing now,” he said. “It gives me a lot of exposure to more experiences which is good for me because I like organic experiences; I’ve never been the type who does well in a classroom.” Vieth is confident the industry can attract, develop and retain technical professionals, but warns that it will require “a continued focus and investment.” He doesn’t think past approaches necessarily work anymore. Instead, he sees YPP becoming a cornerstone for developing innovative ways for young professionals to define their own professional development. “One of the biggest differences compared to 25 years ago is the influence from all stakeholders, operators, regulators, special interest groups and the general public,” Vieth said. “While the technical standards and technologies used across the pipeline industry have advanced, there is a growing demand to communicate and defend [to the media and general public] the technical rigor in order to maintain the social license to operate.” Collaboration is the key, said Mike McGonagill, his son, Vieth and others involved in YPP and YPAC. Today’s young professionals believe strongly in horizontal communications among peers. “This is the Facebook stuff where they are communicating sideways all the times,” said the senior McGonagill. “My generation was very linear, up and down; the young professionals today are very horizontal. “The new world that the industry is going into must have a level of collaboration like that. With many major pipelines over 50 years old in an environment of zero incidents, in a period of much closer government oversight, they are going to need each other, and that’s what I hope for.”P&GJ Richard Nemec is P&GJ’s Los Angeles-based contributing editor. He can be reached at: [email protected].

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Southern Company to Acquire AGL Resources for $12 Billion A Pipeline & Gas Journal Staff Report

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outhern Company and AGL Resources announced on Aug. 24 that the boards of directors of both Atlantabased companies have approved a definitive merger agreement to create one of America’s largest U.S. electric and gas utility companies. AGL will become a wholly owned subsidiary of Southern in a transaction valued at $12 billion. “Natural gas will play a greater and greater role in primary energy needs,” Southern’s Chairman, President and CEO Thomas A. Fanning told investors and analysts on a conference call. “Driving this deal are growth opportunities.” AGL distributes natural gas to 4.5 million customers in Georgia, Illinois, Virginia, New Jersey, Florida, Tennessee and Maryland. Southern owns utilities in Georgia, Alabama, Florida and Mississippi and services about 4.4 electric customers. The deal’s significance is that it supports Southern’s shift away from coal. AGL shareholders will receive $66 in cash for each share of AGL common stock, a premium of 36.3%. A joint news release stated that when completed, the combination will better position the companies to provide necessary natural gas infrastructure to meet customers’ growing energy needs, and will create the second-largest utility company in the U.S. by customer base with: n Eleven regulated electric and natural gas distribution companies providing service to nearly 9 million customers with a projected regulated rate base of $50 billion; n Operations of nearly 200,000 miles of electric transmission and distribution lines and over 80,000 miles of gas pipelines; and n Generating capacity of 46,000 megawatts. “We believe the addition of AGL Resources to our business will better position Southern Company to play offense in supporting America’s energy future through additional natural gas infrastructure,” said Fanning. “For some time we have expressed our desire to explore opportunities to participate in natural gas infrastructure development. With AGL Resources’ experienced team operating premier natural gas utilities and their investments in several major infrastructure projects, this is a natural fit for both companies. “We believe this combination will also advance our customer-focused business model. AGL Resources and Southern

Company have long been leading corporate citizens and the combined company will further our support of all of the communities we serve,” Fanning added. “AGL Resources’ management team and board of directors wholeheartedly support this transaction, and we believe it will provide new opportunities and enhanced value for our shareholders, customers and employees. The purchase price is reflective of the strong platform for growth that we have diligently cultivated over the past several years, and accelerates value recognition for these efforts,” said AGL Chairman and CEO John W. Somerhalder, II. Somerhalder also said, “We’ve found a strong partner in Southern Company with its complementary businesses, excellent reputation and shared values. They have committed to continuing our tradition of community and philanthropic support and exceptional service to customers.” n For investors it will create a unique platform well-positioned to compete for growth across the energy value chain; n For customers it will strengthen reliability and improve current and future energy infrastructure development; and n For communities it will provide for expansion of the companies’ customerfocused business models. After closing, AGL will keep its own management team and board of directors, and, as is the case with Southern’s other operating subsidiaries, AGL will retain its own corporate headquarters in Atlanta. Customers will continue to be served by their current gas and electric utility companies. Completion of the transaction is expected in the second half of 2016. The deal makes Southern a major player in the quickly evolving East Coast natural gas market, stretching from Florida to New Jersey. The market for inexpensive and plentiful natural gas continues surging while demand for electricity shows little movement, coal plants are in decline and nuclear power shows little promise. News reports said Southern has struggled in recent years with other energy investments, including coal- and nuclear-powered generation projects. Delays and cost overruns have curtailed its efforts at building new reactors in Georgia, as well as a first-of-its-kind clean-coal power plant in Mississippi. Southern has tried to get regulators to agree to rate hikes in certain areas to help cover soaring costs, but with limited

success, according to Bloomberg. Southern’s bid for AGL expands its roster of customers and bolsters its ability to buy low-cost natural gas to supply its own power plants. The number of coal-fired power plants is widely expected to decline because of tougher air pollution regulations which aim to limit carbon emissions from power plants. Since no new coal plants are likely to be built, and nuclear power has largely fallen out of favor owing to the huge cost of construction, utilities like Southern are increasingly turning to natural-gas-fired power plants to supply energy needs. Southern operates 73 power plants and has retail customers in Georgia, Alabama, Mississippi and Florida. Last year the company’s power-plant portfolio was 40% coalpowered, 40% gas, 16% nuclear and 4% renewable sources, according to its annual report. By 2020, company management hopes as much as 55% of its electricity will be generated from gas if prices stay low, while coal would be reduced to 21%. Southern is expected to use about 1.8 Bcf/d in 2015, an increase of over 20% in the past three years. The combined company’s gas usage will grow to about 4 Bcf/d. In addition to its large base of natural gas customers, AGL serves additional clients through a joint venture called SouthStar Energy Services. AGL also operates several gas storage plants and is developing gas pipeline projects. One project is the Atlantic Coast pipeline, a joint venture with Southern rivals Duke Energy Inc. and Dominion Resources. AGL and Piedmont Natural Gas have joined with Duke and Dominion to build a $5 billion, 550-mile natural gas pipeline that will stretch from West Virginia to Virginia and North Carolina. Dominion and Duke along with NextEra Energy Inc and DTE Energy Co. have also formed joint ventures to build pipelines for natural gas. Adding a growing gas utility business with increasing revenue could help Southern offset problems from two costly projects. Expenses have skyrocketed at Southern’s Georgia Power utility, which is building nuclear power reactors in Waynesboro, GA. In Mississippi, Southern’s Kemper cleancoal project is turning into one of the most expensive fossil fuel plants ever built in the U.S. as the company has had to write down billions of dollars’ worth of charges. Regulators have to decide whether Southern’s shareholders or its customers will have to pay future bills. P&GJ www.pgjonline.com

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A Pragmatic Approach to Understand Indian Natural Gas Market By Priyank Srivastav, Senior Research Analyst, MarketsandMarkets

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istorically, India has relied on coal to generate power, liquid fuels as feedstock and oil for its transport sector. But for environmental reasons India needs to focus on cleaner fuels. Natural gas has emerged as the fuel of choice for many industries in India owing to its environmental benefits and higher economic efficiency. However, India’s natural gas market is seeing a supply deficit due to its low domestic production. The demand and supply gap is increasing, and there is no reason it will stop. MarketsandMarkets expect that the demand for natural gas will reach about 705 MMscm/d by 2029-30, up from about 260 MMscm/d in 2014-15. Demand for natural gas has risen significantly due to demand from the fertilizer and power sector which cumulatively accounted for over 60% of gas consumption in 2014. The demand is also driven by growing usage in the city gas distribution (CGD) sector and industrial sectors such as refining and petrochemicals. Rising concerns on carbon emission have also contributed to the demand for natural gas in the country.

Viability of India’s Gas Pipeline Options

India has been mulling several transnational gas pipelines, onshore or offshore — over the past two decades to meet the rising demand of natural gas, mainly from new power generation projects, fertilizer plants, and industrial users. But, till now none of the projects becomes a reality. Over the years, several routes for gas pipelines have been proposed such as the IranPakistan-India (IPI) Pipeline, Oman-India Deep Sea Pipeline and the most talked about Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline. However, all these projects were limited to the drawing board except for TAPI, which made some progress this year. The 1,735-km pipeline will run from Turkmenistan to India via Afghanistan and Pakistan. The pipeline’s designed capacity is 33 Bcm annually. Investments are estimated at $7 billion. The multibillion-dollar TAPI project could be off to a year-end start, as the legal framework is expected to be in place by September, followed by the announcement of the consortium. However, TAPI pipeline faces an uncertain future with the recent oil price fall, ambiguity regarding

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Pipeline & Gas Journal • September 2015

Sources: Vision 2030, Natural Gas Infrastructure in India and MarketsandMarkets Analysis

transit via Afghanistan, and an increase in the estimated project cost. Although energy companies such as Total, Chevron and ExxonMobiI have shown interest in financing and running the pipeline project and have been shortlisted for the contract, no company or consortium has stepped forward to take the necessary lead to manage the finance, design, construction and operation of the pipeline. Critically, the oil and gas giants with the capacity to support TAPI have told the Turkmenistan government they will need exploration rights in country’s onshore gas fields, mainly Dauletabad, to make the project economically attractive. Turkmenistan so far will only consent to offshore exploration. This bottleneck has made any deal impossible. The IPI pipeline was envisaged to link the South Pars gas field in Iran with India via Pakistan. The total length of the proposed pipeline is 2,700 km, costing $7.5 billion (current cost may be much higher) to transport 20-100 Bcm/y. Initially, this project was planned to link Iran and Pakistan; India later joined as a partner but withdrew, citing geopolitical and security reasons and the U.S. and EU sanctions on Iran. Another project is the Oman-India Deep Sea pipeline which South Asia Gas Enterprise (SAGE) and Fox Petroleum claimed to be the most promising option. The project intends to transport over 200 Bcm to India over 20

years. The pipeline would be 1,300 km, laid at a depth of 3,400 meters below the seabed. It will connect the Middle East compression station near Oman with the receiving terminal near Gujarat. The estimated cost of this project is $4-5 billion and can be executed in about five years. Geographically, the Oman-India Pipeline is

comparatively more feasible because India is close to the sources of natural gas in the Middle East and the undersea distance is less than 1,300 km, if connected to Gujarat coast only. Another reason in favor of this project is the landed cost at Oman Point, which will be lesser by $1.5-2/MMBtu as compared to LNG imports. It should be noted this project will overcome the security issue of IPI and TAPI projects. However, Oman does not have large gas reserves compared to Iran and Turkmenistan. Oman has 0.7 Tcm of gas reserves with reserves to production ratio of

24 years. Hence, it makes no sense to build an infrastructure which will be stranded soon if Iran is not taken into consideration. It is expected Iran will be freed from almost all economic and financial sanctions within the next six months, and India should kick start the IPI pipeline talk that had been in the doldrums. The IPI pipeline faces a serious problem of security as it passes through an area where the Taliban has a stronghold. The TAPI pipeline faces double the risk as it passes through Afghanistan and Pakistan. In Afghanistan, the TAPI pipeline passes through Kandahar, which is considered to be the spiritual home of the Taliban. In a nutshell, the TAPI pipeline traversing Afghanistan and Pakistan is riskier than IPI, which has only to cross Pakistan. TAPI and IPI pipelines are not feasible options due to the aforementioned reasons. The Oman-India Deep Sea pipeline, however, seems a promising alternative, but in reality, it will remain a dream inside a pipe. Since India’s domestic production of natural gas has not been increasing and a crossborder pipeline is not on the cards anytime soon, importing LNG is the only feasible option to meet the rising natural gas demand in the country and an expensive one. With a delivered price of $12.33/MMBtu, it is not easy for the fertilizer and power sectors to absorb such high-priced LNG. We are already in a low-oil price scenario; had it been a high oil price scenario, it would be next to impossible to feed the fertilizer and power sectors with LNG as it is oil-linked. Over the past five years, there has been an increase in LNG imports. India imports about 13.7 million tons of LNG, which accounts for about 33% of the total supply. Future LNG imports will depend on the expansion program of LNG terminals in India and the international

spot price for LNG. If the gray situation of low domestic gas production is allowed to continue, India will have no option but to import more LNG as the fuel source for its fertilizer and gas-based power plants. In view of the prevailing situation of gas production and supply and the price-sensitive nature of the fertilizer and power sectors, the government is promulgating gas-price pooling options to meet the sector’s gas shortage. With the gas pooling mechanism, the price of gas supplied to fertilizer and power plants could settle close to $7.50-9/MMBtu including transportation cost. However, pooling of gas entails multiple risks. With high-priced LNG pooled with low-priced domestic gas, LNG negotiators could enter into unattractive contracts. It would be critical to ensure that this does not become a political issue.

What Does the Future Hold?

The cross-border gas pipelines from Turkmenistan and Iran are essential projects in Pakistan’s energy calculus. In the case of India, the TAPI and IPI pipelines are not realistic alternatives for multiple reasons: Pakistan’s precarious security situation and lack of an agreement that guarantees protection to the supply and alternatives in case of disruption are some of them. Hence, it is not the cross-border pipeline gas but LNG that will play a crucial role in meeting India’s energy demand in the future. Gas pooling to the extent of domestic gas availability would benefit the fertilizer and power sectors and would also result in saving in subsidy outgo. The gas-pooling mechanism seems to be a worthwhile option for reviving India’s ailing fertilizer and gasbased power sector and can be implemented through collaborative efforts from all stake-

holders. Gas pooling can only serve as a short-term solution for today’s concerns. The need is for more proactive government policies that will make every effort to find ways of attracting more public and private players to the sector and increase the country’s gas production. Global natural gas markets have already felt some impact from the slide in oil prices. But those markets will be affected to a much greater degree if oil prices remain in the $50-60/bbl range for an extended period of time, given the interaction that exists between the two fuels. LNG capacity will increase by almost 50% by 2020, due to a huge number of LNG trains coming online in Australia and the United States. LNG prices are expected to remain under pressure, given the increase in supply and decrease in demand. U.S. LNG has an advantage over the other LNG suppliers, since U.S. natural gas prices at $3-4/MMBtu are much lower than gas prices elsewhere. However, transportation cost of U.S. LNG to India is much higher and nullifies some of the advantages. Major LNG suppliers like Qatar and Australia have much lower transportation costs to India. It is a price war but also a waiting game. Oversupply of LNG in the market and lower prices represent a real challenge to the industry, but that doesn’t mean the future is all gloom. What the future holds for India is the sufficient quantity of LNG from different countries, both the hub and oil-indexed. P&GJ Author: Priyank Srivastava works as a senior analyst specializing in oil and gas for MarketsandMarkets, a full-service market research and consulting firm. He has written high-level, strategically analyzed full-length reports on issues impacting the oil and gas industry. www.pgjonline.com

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Orifice and Ultrasonic Meters in Wet Gas Flow Service By Richard Steven and Josh Kinney, CEESI

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atural gas producers regularly have to meter wet gas flow. Separator systems or multiphase wet gas meters are beneficial but the economic reality of many applications is that standard gas meters must be used. Hence, understanding the wet gas performance of gas meters is important. Wet gas flow is a very adverse flow condition. However, operators want the problem solved and manufacturers want to persuade operators that their meter copes with wet gas. A can do attitude pervades. But in truth wet gas flow seriously degrades all gas meter design performance specifications. In this article we look at the known wet gas performance of orifice and ultrasonic meters.

Wet Gas Flow Terminology

Wet gas metering has specific terminology. Each wet gas parameter describes a fundamentally simple concept. The four most commonly used parameters are explained in Table 1. Parameter

Symbol Description

Lockhart Martinelli Parameter

XLM

Non-dimensional measure of the ‘wetness’

Gas to Liquid DR Density Ratio

Non-dimensional measure of pressure

Gas Densiometric Froude No.

Frg

Non-dimensional measure of gas flow rate

OR%

Gas flow prediction error induced by liquid

Over Reading %

Table 1: Wet gas flow parameter simple descriptions.

Orifice Meters, Wet Gas Flow

Figure 1: 8-inch orifice plate with stratified flow.

Years of testing show the orifice meter to have a very reproducible and predictable wet gas flow performance. Concerns

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that the orifice plate may “dam” liquid or cause an unsteady DP signal have proven unfounded. CEESI videos of wet gas flow through orifice meters show that an orifice plate does not dam liquid. Figure 1 shows a still from video of stratified flow of natural gas and light liquid hydrocarbon flowing left to right through an 8-inch, 0.6 beta orifice plate. No damming was evident during the 30-minute tests. Without the plate present, a stratified wet gas flow has a liquid depth. With the plate present, this liquid depth showed no significant change over time. Furthermore, it was evident that rather than damming, the stratified liquid rose up through the orifice (Figure 1). This stratified liquid can leave a “tide mark” on the upstream face of a plate, but this is only an indication that stratified flow (of a given liquid depth) approached the plate; it does not mean the plate dammed the liquid. The CEESI videos showed liquid entrained downstream in the recirculation area. Whereas there has been concern that this could cause DP instability, this has been shown to not be a significant problem. Wet gas increases the DP signal (causing the over-reading) and also increases the DP standard deviation (i.e. fluctuation around the average). However, although wet gas flow DP has a significantly higher standard deviation than the dry gas flow DPs, massed orifice meter wet gas data sets have shown that the average DP is still repeatable and reproducible. Stability of the DP and liquid damming is not a problem for orifice meters in wet gas flow service. ISO TR 115831 and ISO TR 127482 show an orifice meter wet gas flow correction factor. This correction factor effectively says:

Figure 2 reproduces massed industry data obtained over 20 years from multiple laboratories. Table 2 shows the data range. The data is remarkably reproducible and therefore predictable. The orifice meter can over-read the gas flow rate across the wet gas range (XLM ≤ 0.3) by up to 45%. For known “wetness” the ISO correction cor-

rects the gas flow rate prediction to 2% uncertainty at 95% confidence.

Figure 2: Massed 2- to 4-inch orifice meter wet gas data with and without the ISO correlaton. Parameter Range

Practical Comments i.e. applicable for > 100 psi i.e. applicable for > 100 psi i.e. across normal industry velocities

Pressure

6.7 to 78.9 bara

DR

i.e. across normal industry velocities

Frg

0.22 < Frg < 7.25

XLM

0 ≤ XLM < 0.5

i.e. across a very large wetness range

Diameter

1.94'' ≤ D ≤ 4.026''

i.e. limited meter size

Beta

0.341 ≤ ß ≤ 0.683

i.e. wide beta range

Fluids

Gas /Hydrocarbon Liquid/ Water

i.e. across normal industry fluids

Table 2: ISO TR12748 multiphase wet gas flow orifice meter correlation flow range.

This ISO gas meter wet gas correction factor is the most comprehensive yet produced. The Achilles heel, as with all gas meter wet gas correction factors, is the requirement for the liquid flow rate to be found from an external source. This is a real practical problem, but it is the reality of using any gas meter for wet gas service. There are ways of estimating the liquid flow rate, e.g. tracer dilution and test-separator histories, but these methods

are only truly valid at the time of the measurement. Liquid flow can change between checks and therefore gas meter liquid loading monitoring systems are desirable. Prognosis (Lewis3) is a simple and effective proprietary orifice meter diagnostic/ liquid-loading monitoring system. Figure 3 shows the Prognosis setup. Two additional DPs are read, the recovered and permanent pressure loss (PPL). Figure 4 shows sample wet gas data from an 8-inch orifice meter at CEESI. The recovered to PPL DP ratio is sensitive to wet gas. A reduction in this ratio, combined with increasing DP standard deviations, signifies increasing wet gas liquid loading. This technique can identify wet gas at XLM ≥ 0.01.

Figure 3: Sketch of orifice meter with downstream pressure tap for diagnostics.

Figure 4: 8-inch orifice meter wet gas data, liquid loading monitoring.

Ultrasonic Meters, Wet Gas Flow

There are multiple ultrasonic meter (USM) designs. There is sporadically published wet gas research on USMs, although this research is type-dependent. However, the limited published information shows common wet gas traits between different designs. It is therefore generally valid to discuss one USM and treat the results as generally valid for USMs as a group. There is as yet no published USM wet gas correction factor. It is sometimes claimed that USMs work well with wet gas flow. This statement means the meter continues to read a signal. However, this signal is adversely affected by wet gas flow. USMs, like all gas meters, cannot correctly measure the gas flow of a wet gas flow. Figure 5 shows CEESI wet gas data recorded from modern 4- and 8-inch Westinghouse USMs. The USMs have an over-reading that is related to the Lockhart Martinelli parameter (i.e. the wetness). There is a significant amount of scatter. Unlike the orifice meter, this is unrepeatable scatter and not the predictable effects of pressure and gas flow rate. Such results explain in part why no USM wet gas correlation has yet been produced. A wet gas correlation is a statement that industry truly understands

a meter’s wet gas performance to the point that correct performance predictions can be made. If and when a USM is shown to have reproducible wet gas performance, a wet gas correlation can and will be produced.

The USM diagnostic suite will indicate something is wrong by XLM > 0.01, but it is a generic alarm, not wet gas specific. Nevertheless, the USM diagnostics do alert the operator to a problem, and could potentially help monitor wetness. The USM diagnostic suite begins to show a distinct pattern that can indicate wet gas as the specific problem as Path 3’s performance begins to drop at XLM > 0.03.

Conclusions

Figure 5: Combined 4- and 8-inch ultrasonic meter wet gas results.

USMs have a well-established general diagnostic system. Manufacturers have suggested that path performance, path speed of sound (SOS), path turbulence, symmetry and profile factor are the best diagnostics to “see” wet gas flow. Figures 6 through 9 show these diagnostics sensitivity to wet gas flow. These 8-inch USM diagnostic results are from the same wet gas flow conditions as the 8-inch orifice meter diagnostics shown in Figure 6. The performance diagnostics indicates a problem when path 4’s performance drops noticeably at XLM > 0.015. The SOS diagnostics indicates a problem when path 4’s performance drops noticeably at XLM > 0.02, just below the path fails. The turbulence of all paths has no clear relationship with wet gas until path 4 fails at XLM > 0.03. The most obvious (and best) indication of wet gas comes from a symmetry vs. profile factor plot. This shows an abnormal flow condition by about XLM > 0.01. Hence, the USM diagnostic suite indicates something is wrong by a wetness of XLM > 0.01.

Figure 6: 8-inch USM performance % vs. XLM

Wet gas flow has adverse effects on all gas meters. Both orifice meters and USM have degraded performance in wet gas applications. Wet gas causes the orifice meter to significantly over-read the gas flow. However, this over-reading is predictable and for a known liquid flow rate an ISO-published correction factor can correct the gas flow rate prediction to 2% at 95% confidence. Furthermore, an orifice meter liquid monitoring system is available that can specifically identify wet gas flow by XLM ≥ 0.01. Wet gas causes the ultrasonic meter to significantly over-read the gas flow. To date, no ultrasonic meter correction factor has been published. However, the USM diagnostic system is capable of identifying a generic problem exists by a wetness of XLM ≥ 0.01. P&GJ References: 1. ISO TC30 TR 11583, “Measurement of Wet Gas Flow by Means of Pressure Differential Devices Inserted in Circular Cross-Sectional Conduits.” 2. ISO TC193 TR 12748, “Natural Gas – Wet Gas Flow Measurement in Natural Gas Operations.” 3. Lewis K., “The Response of Differential Pressure Meters and their Diagnostic System to Wet Natural Gas Flow,” Canadian School of Hydrocarbon Measurement, Calgary, March 2014.

Figure 7: 8-inch SOS % vs. XLM

Figure 8: 8-inch USM turbulence % vs. XLM Figure 9: 8-inch USM profile factor vs. symmetry. www.pgjonline.com

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Control Room Management Best Practices Providing Adequate Information, Point-to-Point Verification By Lars Larsson and Kelly Doran, Schneider Electric

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he oil and gas industry is constantly changing, no more so than over the past several years with new technology, new production hot beds and new developing markets to deliver product to. These changes have set the stage for new opportunities and challenges for the midstream industry, particularly when it comes to the pressure of transporting commodities from the production fields to market. Pressure to do it faster but also safer. This article concludes a two-part series (June 2015) designed to explain how these trends are driving investments in the midstream industry and what companies need to consider to meet business and regulatory goals. U.S. regulated pipelines are now mandated to meet all the requirements of CFR 49 192.631 & 195.446 for Control Room Management (CRM). The CRM regulations have created many new challenges for pipeline operators when upgrading SCADA systems, as change is the trigger for many of the more onerous requirements of the regulations. Some pipeline operators are reluctant to, or have delayed upgrading their SCADA systems as a result.

Change Triggers for Verification of Adequate Information

“Implement API RP 1165 (incorporated by reference, see §195.3) whenever a SCADA system is added, expanded or replaced, unless the operator demonstrates that certain provisions of API RP 1165 are not practical… Conduct a point-to-point verification between SCADA displays and related field equipment when field equipment is added or moved and when other changes that affect pipeline safety are made to field equipment or SCADA displays;” The CRM regulations are performancebased; meaning pipeline operating companies must provide detailed documentation in their written plans on how they are going to meet the requirements of the regulation. As such, it is up to the operating companies to interpret the regulations, determine how they apply to their operating environments, and ultimately decide what steps they are going to take to be compliant.

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Upgrade Commission Tools and Utilities

Automated tools are commonly used to convert SCADA displays and databases. When properly documented, they can be effectively used to provide the evidence that these conversions have resulted in the new system having the same key settings as the legacy system and ensure that the new information is mapped correctly.

Operation “Listen-only” methods include: Listen-Only Protocol Drivers n For some protocols, “listen only” drivers are available, making listen- only possible with little effort. Port Forwarding n Using hardware configuration, data arriving on a switch/router port is replicated to another port where a listen only connection record processes the incoming data Signal Cloning n Custom Tools” used to clone the data transmission enabling parallel operations The production system must remain unchanged and stable with polling frequency and reliability unaffected.

Database Migration Certification

Point-to-Point Verification Requirement

This article examines some approaches to address these challenges relative to SCADA upgrades, and how improved upgrading tools and migration documentation could significantly reduce the expense and effort required to commission changes and be compliant in the area of “providing adequate information.”

Database conversion from third-party SCADA systems or an upgrade of a legacy SCADA system is to be completed according to a detailed database migration plan. This migration plan identifies all the key fields in each telemetered database that must be verified to ensure information presented to controllers is unchanged. In order to provide evidence of a completely successful conversion, a documented and signed report that clearly indicates the “before” configuration matches the “after” configuration as described in the migration plan must be produced.

Parallel System Operations

Side-by-side operations, whereby the old system and the new system’s Human Machine Interface (HMIs) are run in close proximity with both observed receiving polled data from the field, has long been used as an effective way to confirm the new system is displaying data the same as the original system. What was lacking were screen captures with signoffs as evidence of the commissioning. A variety of tools have been used over the years to create listen-only or duplicate data paths to validate that polled data is accurately processed and presented. No single tool is suitable for all cases based on the version of SCADA software, the type of communication channel and the protocols used. Parallel

When changes that affect pipeline safety are made to SCADA displays, a point-topoint check out is required. Taken literally, this could mean that if a display had a safety point moved slightly for better alignment, it would then need to undergo a full endto-end, point-to-point check out. The time, cost and effort to dispatch field technicians to perform verification on field devices that have not been changed is hard to justify. As such, it is important to define what a “point” is relative to the change made and document it in your control room management plan. Depending on what the specific change is, the end points may be defined as the point on the display to the corresponding point in the database. In other cases where the field device has been touched, the point-topoint would be defined as the point on the display to the end point of the device in the field.

Display Upgrade Commissioning

For software upgrades that do not alter the display presentation, it is still necessary to provide documentation that the display migration has not altered any display elements or point addresses, and also the displays are evaluated for compliance with API RP 1165. Where the displays do not conform to API RP 1165 any deficiencies must be addressed, or rationalization pro-

vided why the displays are inconsistent with the best practice guidelines. To ensure the migration techniques meet regulatory requirements, documentation of the results of display software migrations must be provided. Artifacts would include: n “Before & After Upgrade” Screen Captures – Attached to each display commissioning record n “Before & After Upgrade” Display Migration Report” – Showing point names and database addresses have not been altered for every display migrated.

SCADA Upgrade Scenarios and Verification Considerations

Depending on the architecture of the SCADA system, upgrades may be done in stages. For example, a front end upgrade consists of updating the HMI while leaving the backend (configuration databases) of the real-time server unchanged. For each upgrade scenario the required commissioning and documentation must be part of the upgrade plan.

Summary

The methodology discussed above is the

formalization of the good engineering practices that most pipeline organizations have generally followed with regards to SCADA upgrades, but with a focus on defendable documentation. By following a well-documented upgrade commissioning process including parallel SCADA operations in some cases, the CFR 49 Part 192.631 & Part 195.446 regulation requirement for a host end to field end device testing may be limited to just the new or modified points that affects pipeline safety, significantly reducing the overall cost of a SCADA upgrade. P&GJ

Upgrade

Scope

Commissioning Strategy

HMI Upgrade with no layout or navigational changes. No Field Change

Version Change. No Data Presentation Changes, automated tools used

Documented Confirmation of Translation (coordinate check). Confirmation of behavior

HMI Upgrade version upgrade or patches

Software Change only No additional displays

Standard display check out. Documented Confirmation of Translation (coordinate check) Confirmation of behavior

Display navigation or layout changes (i.e. no point mappings change)

Manual redraws, Data Presentation Changes

Standard Display Check Outs Point-to-Point verification only for display with safety points, Display to Database verification only, if no field changes made.

Database (Backend) (i.e. no point mappings change)

Database port using automated tools No Field Changes

Documented Certificate of Migration Parallel System Operation

New Points (regardless of SCADA version)

Addition of New Points, Modification of Existing Safety Related Points/Displays

Complete End to End verification for new Safety Points. Coordinate check only for additional displays containing the new safety points

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New York/Pennsylvania Based Company Mainline Pipe Construction Hydrostatic Testing

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All Sizes of Horizontal and Directional Drilling Services National Leaders in Safety and Environment www.pgjonline.com

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ROSEN Sponsors Roundtable on Linear Threats

Special to Pipeline & Gas Journal

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he ROSEN Group brought key industry stakeholders together for a roundtable on the topic of “Linear Threats in Pipelines,” on May 28. The event attracted over 100 attendees from throughout North America and Europe who were hosted at the ROSEN facility in Gahanna, OH. The roundtable began with an official welcome by ROSEN Executive Vice President Chris F. Yoxall, who emphasized the importance of “why we are here.” He addressed the goal and set the tone for the day – bringing together all stakeholders to collectively work on common topics of interest. The keynote address from the company president and founder, Hermann Rosen, emphasized the need of being proactive by undertaking preventative measures to mitigate or minimize the effect of consequence management. Recognizing complexity, Rosen compared the human body to a pipeline network, saying Hermann without good integrity Rosen management, failures can occur with unwanted consequence. “Whether we talk about the pipeline network, an aircraft or the human body there are a lot of similarities,” he said. “We are talking about different diameters, flow rates, gravity, pressure, debris, scale, wall thickness, as well as valves and y-pieces, reductions, lifetime. There is a lot in common. If the integrity of such a system fails to due blockage, leakage or rupture, this will cause a disaster, for example, a heart attack.” Rosen recognized three groups of stakeholders, each having accountability – those involved in generating rules, the operators, and those proving technologies or services. In the short-term, these groups are all driven by performance indicators, while in the mid-term there has been more of a direction toward better alignment. In the long-term, there is a need for more alignment driven by cooperation, this is needed to achieve the ultimate no incident industry objective. Rosen concluded by urging more assemblies of this nature. He also suggested “pro-active management and collaboration of [all] stakeholders to avoid consequence management.” Steve Nanney, representing the federal Pipeline and Hazardous Materials Safety Administration (PHMSA), spoke on behalf of the regulatory environment, reflecting on past incidents and the effects on rule-making

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Steve Nanney (PHMSA), Dr. Brian Leis (Consultant), Thomas Beuker (ROSEN Group) and David Chittick (Director TransCanada) (l to r).

and recommendations. His presentation generated questions pertaining to some of the future rules that may be introduced including the Integrity Verification Process, as well as the need for hydrotesting at 1.25 X MAOP. Stuart Saulters, representing the American Petroleum Institute (API), spoke about the institute’s strategic initiatives. He referenced standards that relate to addressing linear threats, API6. RP 117. David Chittick, director of Pipeline Engineering from TransCanada Pipelines (TCPL), offered an operator’s historic overview, keeping a perspective of technology and standards, management systems, and improved culture. Chittick reflected upon all the different efforts undertaken by TCPL over the last three decades, emphasizing the importance of reliable and accurate technology to support the decisions being made by operators. He also recognized that all stakeholders need to be fully committed to achieving the long-term needs. Thomas Beuker, ROSEN corporate marketing director, complemented Chittick’s presentation by discussing the need to understand big data. Beuker provided an overview on the process associated with advanced analytics, keeping the need for dynamic learning, accuracy and confidence and prediction in Thomas Beuker, ROSEN Corporate focus. Data-gathering Marketing Director capabilities are growing exponentially and the importance of being able to manage this accordingly, needs to be understood, he said. Beuker gave an overview of the process and expectations. However, today’s capabilities make more data available offline, allowing for more support in the interpretation process. IT changes outside the ILI tool are also required to support big data.

A wide array of tools were displayed at the meeting.

This includes remote control, which offers scalable storage globally to remotely access data in shorter time frames, allowing for quicker decisions to be made. Rounding out the event, Brian Leis of Battelle Research Center summarized the presentations and provided some final thoughts. His observations included: n Blunt vs. Sharp (planar vs. volumetric) n Quantification of the size? Or the shape? n The failure process and implications of collapse versus fracture control n Understanding the importance of balancing conservatism with accurate models He concluded by recognizing industry gaps and needs, encouraging big picture thinking and emphasizing that cooperation by all stakeholders is a key parameter to the way forward. P&GJ

Alaska LNG Reviews Pipeline Route with Government Agencies By Larry Persily, Kenai Peninsula Borough, Alaska

(Editor’s note: This update, provided by the Kenai Peninsula Borough mayor’s office, is part of an ongoing effort to help keep the public informed about the Alaska LNG project.)

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laska is vast, with a lot of open ground, but it seems like transportation projects in the state — be it roads, railroads or pipelines — can’t help but cross over or under each other while traversing the same natural corridors. Preliminary plans for the proposed 800mile North Slope natural gas pipeline south to Cook Inlet show it would cross the transAlaska oil pipeline 12 times, the Dalton Highway 22 times, the Parks Highway 12 times, Alaska Railroad tracks four times, and the Elliott and Kenai Spur highways one time each. And don’t forget the natural transportation routes. The line would cross the Nenana River in four locations, just once for the Yukon River. All told, the mid-May 2015 version of the proposed pipeline route includes 446 waterbody crossings. Some are rivers, some are creeks, some smaller than that. Some are much larger, such as almost 30 miles across Cook Inlet. Over two dozen Alaska LNG team members and contractors met with 60 federal, state and municipal agency personnel this spring in Anchorage to discuss the project’s latest revisions to the proposed natural gas pipeline route from the North Slope to Nikiski on the Kenai Peninsula.

Adjusting Pipeline Route

The project teams reported they have made multiple adjustments to the pipeline route since filing the first draft route with the Federal Energy Regulatory Commission (FERC) in February. It’s all about finding the best path for the pipeline to move North Slope gas 800 miles across the state to reach the liquefaction plant in Nikiski. The project is undergoing the engineering and design phase, working toward a latesummer 2016 FERC application. The federal agency regulates LNG plant construction and operations and will prepare the project’s environmental impact statement. While seeking feedback from government regulatory agencies at the all-day

session, the Alaska LNG team listed the optimal engineering criteria for pipeline route selection: stable ground, good drainage, and flat or gentle slopes. “We try to stay on the high ground every place we can,” a team leader said. All the while, the team is aiming for the shortest distance between two points while avoiding — as much as possible — fault lines, wetlands, frost-heave soils, power lines, fiber optic cables, visual impacts, cultural sites and private land. The pipeline execution team reported they would like to keep the 42-inch, highpressure gas line at least 200 feet away from the trans-Alaska oil pipeline, particularly to allow gas line construction equipment to maneuver a safe distance from the aboveground oil line. But some pinch points will require closer spacing. “In many cases, the oil line, built in the mid-1970s, picked the best spot, and we have to pick the next best spot,” a team member said. The challenge is to find the preferred route within the constraints of geology, terrain and environmental considerations. Several stretches along the route are still under review with project teams looking for the best way to manage geological, environmental and historic preservation issues.

season, and preserving the scenic views along the highway and at viewpoints that are so important to visitors - and Alaskans. The Alaska LNG pipeline execution team is working with their counterparts at the Alaska Gasline Development Corp. during the route selection, sharing information in an effort to avoid duplication of efforts as the two projects look for the best way past problem areas. The state corporation is designing a smaller-volume pipeline project as a backup for Alaskans to consider if the producer-led Alaska LNG project does not move forward. Alaska LNG teams include staff assigned by all four commercial partners in the effort: North Slope oil and gas producers ExxonMobil, BP and ConocoPhillips, and pipeline partner TransCanada. The state of Alaska would also be an investor in Alaska LNG. Another area still under review by the pipeline team is Atigun Pass, the highest point on the route at 4,739 feet above sea level in the Brooks Range. The pass is about 175 miles south of the start of the pipeline at the gas treatment plant proposed for Prudhoe Bay. The intent is to thread the gas line over the pass while keeping a safe distance from the Dalton Highway, the oil line and steep slopes.

Best Crossing Point

Above vs. Below Ground

One example is the effort to find the best place to cross from the west to the east side of the Nenana River in the area where the Parks Highway, Alaska Railroad and a steep canyon all come together, about 120 highway miles south of Fairbanks near the entrance to Denali National Park and Preserve. This is near where the Moody Bridge crosses 174 feet above the canyon floor. No surprise, the span also is known as “Windy Bridge.” The Alaska LNG team would prefer to stay away from steep, failing slopes, keep outside of the national park, and run the line east of the tourist commercial area known as “Glitter Gulch.” “We’ve got some additional work to do … the answer is still in front of us,” a team member said at the routing workshop. At the same time they’re working to minimize effects on highway traffic during construction, especially during the busy summer

Crossing the Yukon River, about 180 miles south of Atigun Pass, also needs more ground sleuthing, the team reported, particularly geophysical and geotechnical studies to learn every possible detail of ground and subsurface conditions. As of mid-May, the team was assessing the option of directional drilling and pulling the pipe underneath the river, at a point west of the existing oil pipeline bridge and downstream from deep shoreside bluffs. But that could change as the team learns more, and a bridge crossing is an option. Horizontal drilling and pulling pipe also would be used to run the line beneath highway and river crossings along the route, along with possible open cuts and burying the pipe. Although most of the gas line would be buried, several sections of the route would need to be above ground, much like the oil line. Such construction, with the pipewww.pgjonline.com

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Cook Inlet Basin.

line supported on horizontal steel beams between two vertical columns, would allow the line to span fault lines, staying out of harm’s way. The most serious earthquake risk is the Denali Fault, which crosses the Parks Highway near Cantwell, just 35 miles south of where the gas line crosses the Nenana River near Denali National Park. A 7.9-magnitude earthquake in 2002 tested the oil pipeline, which crosses the fault about 130 miles to the east of the gas line route. The oil pipe survived the quake, thanks to its elevated support structure. Other aboveground stretches for the gas

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pipeline would include the 60 miles between the Point Thomson gas field and the gas treatment plant at Prudhoe Bay where gas from both fields would be cleaned of carbon dioxide and other impurities. The first draft routing submitted to FERC in February indicated the line would be buried in this area, but the team reported at the spring workshop that it had decided aboveground construction is a better option to avoid drainage problems of surface and subsurface water flowing north to the Beaufort Sea. Along with Atigun Pass, the Yukon River and Glitter Gulch, another area still under review by the pipeline team is the Deshka River crossing, about 65 miles north of where the line would enter Cook Inlet for its final stretch to Nikiski. Field crews have found multiple cultural sites along the river, with its rich history of subsistence fishing. Historic-use sites along the Deshka are so plentiful the area looks like it “could have been a subdivision,” a pipeline team member said. Alaska LNG is working with its cultural team and the State Historic Preservation Office to find the best river-crossing location.

Cook Inlet Crossing

Another routing question raised in Alaska LNG’s February filing with FERC is where the pipeline should cross Cook Inlet to reach Nikiski. For now, the project is focusing on what it calls the western route, running the pipeline on the west side of Cook Inlet until Milepost 764 from Prudhoe Bay, then going underwater for almost 29 miles, coming up on the east side of the inlet just 7 miles or so to the liquefaction plant site in Nikiski’s industrial area. On its west side approach, the line would stay away from the Beluga power plant, ENSTAR natural gas line, and drilling pads and access roads. A barge landing would be built on the west side to bring in equipment and supplies, just as a barge landing would be built on the east side for the same purpose ­— including delivery of the huge modules that would become the liquefaction plant. On the west side, the team is looking at a couple of sites about a mile apart for the pipeline to enter the water, considering shoreline terrain and how far the buried pipe would have to run before reaching water deep enough (about 30 feet) for pipe-laying barge access. For landfall on the east side of Cook Inlet, the line would likely come up at a location called Boulder Point, though the team is also looking at another spot just a couple of miles farther up the Kenai Peninsula coast, near Seneva Lake, with lower bluffs at tidewater. Just as with the westside location, the shortest distance to deep water is a consideration. An alternate path across Cook Inlet, called the eastern route, is not now under active review, team members said. That

route would have the pipeline veer east after the Deshka River, cross the Susitna River and come to Port MacKenzie across the inlet from Anchorage. From there, the line would run through Upper Cook Inlet to the Kenai Peninsula, several miles northeast of the preferred crossing route. Onshore problems with the eastern route, team members told regulatory agencies, include crossing through an old artillery range with unexploded ordinance and proximity to power lines and tower guy wires. Offshore, the concerns are numerous: submarine cables in the pipeline’s path; sharp turns in the route needed to avoid the dredged channel for Anchorage port traffic; critical feeding habitat of endangered beluga whales; and scouring along the seabed that could undermine the pipeline. In gathering data for the Cook Inlet crossing, the project teams have learned much about the currents and siltation, and will be surveying for obstacles and mapping the seabed this summer as route-selection work continues. The teams reported that currents along the preferred crossing route run 6 knots at the surface and 4 knots on the bottom. Water depth along the route would be 140 feet at the deepest point, generally about half that for most of the rout To cross Cook Inlet, the pipeline would be lowered from barges to the sea floor. Each heavily concrete-coated section of 40-foot-long, 42-inch pipeline would weigh 33 tons — the pipeline’s weight would keep it in place on the bottom

Summer Field Work

Alaska LNG contractors have a busy 2015 summer field season planned of soils testing, borehole drilling, stream surveys, wetlands mapping, geophysical work, cultural resource surveys and other data gathering as the project works toward submitting its next round of draft environmental reports to FERC in the first quarter of 2016. The summer work will include “ground truthing” data obtained by light detection and ranging (LiDAR), which maps out surface data and details with an airborne laser. Teams will walk the ground to verify LiDAR data at over 100 sites along the pipeline route, particularly looking at slope stability and geophysical hazards. Additional Alaska LNG workshops for government agencies are planned for August and September to cover in more detail route selections and construction methods for waterbody crossings, wetlands and Cook Inlet, along with the dredging that would be required to bring in construction barges. P&GJ (Larry Persily can be reached at lpersily@kpb. us. He formerly was the federal coordinator for the Alaska Gasline Project. That office was closed earlier this year.)

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Beyond Compliance: Reducing Major Incidents, Creating Business Value By Katherine Molly, Principal, and Josh Arceneaux, Expert Practitioner, North Highland

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n the five years since the Deepwater Horizon spill in the Gulf of Mexico, operators have undergone progressively tighter regulatory restrictions in both offshore and onshore environments. Along with restructuring the Department of the Interior to include the Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM), more than seventeen reforms have been implemented since the 2010 accident, targeting everything from well-design to maintenance reviews to safety culture. Navigating these developments requires the effective use of a safety management system to maintain compliance and reduce risk. However, as the drop in the price of oil places further pressure on fiscal operations, pipeline safety management systems must evolve to create value for the business, beyond a sole focus on compliance.

Best Practices

In response to pressure for safer pipeline systems from the National Transportation and Safety Board (NTSB), the Pipeline and Hazardous Material Safety Administration (PHMSA), American Petroleum Institute (API), along with industry leaders, together, will soon publish Pipeline Safety Management System (PSMS) Requirements Through API RP 1173. Similar to the BSEE Safety and Environmental Management System (SEMS) II requirements, the goal is to reduce both personal and operational incidents based on industry best practices. The areas of concern include leadership accountability, change management, incident management, continuous improvement, effective information sharing and contractor/vendor management. In many cases, operators are conditioned to meeting regulatory compliance and adherence to best practices as defined by the requirements and elements within SEMS II, API RP 1173, OSHA PSM CFR 1910, and other regulatory statutes. Successful organizations that meet the higher expectation of reducing major releases and incidents while simultaneously improv-

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ing business performance have key characteristics, such as the ability to cultivate a system think culture, align management system components with business functionality and measure leadership accountability for achieving yearly safety and business goals/objectives.

System-Think Culture

System-thinking is a way of viewing an organization as a whole – commercial, engineering, procurement, environmental health and safety (EH&S), operations/maintenance, human resources – to understand how one area affects others. In essence, it focuses on providing capable people with quality information to make better and safer decisions. Typical systemthink organizations focus on holistic view points and approaches to openly understand vulnerabilities and solve problems. Organizations with a system-think culture routinely evaluate what is needed to reach performance targets. These organizations provide evidence of high-value performance and generate transferable lessons for continuous improvement. This supports reducing offshore pipeline construction and operational risk, improving safety and reliability, and delivering maximum value to stakeholders.

Alignment to Business Functions

Aligning management systems with business functions requires a shift in thinking from demonstrating compliance as the primary driver to reducing overall risk of operations and adding value to the business. As opposed to building a compliance system to the regulatory components, the requirements are ingrained within the business functions. For example, the Interior Department’s

recently released well-control rule requires outside audits of equipment, requires that each blowout preventer have a back-up pipecutting shear and mandates real-time monitoring onshore for wells offshore. These rules will require changes in how business functions operate within and with each other. These requirements should be embedded in the existing engineering and design processes to become standard practice as opposed to a specification only referred to as an external EH&S requirement. This shift supports a holistic understanding of business functions and dependencies involved with acquiring oil and gas product from the point of production or storage, transporting these products through the pipeline assets and delivering the products to the customer. This alignment and understanding is magnified for offshore operations where the consequences of incidents increase significantly compared to onshore activities. Alignment provides for a better use of the safety management system to reduce overall risk and add value, which includes: n Preventing major incidents by enabling cross-functional information exchange and communication to create understanding of how areas affect each other n Improving governance and accountability across the organization Beyond Compliance... Continued on page 77

TECHNOTES Product Development

Pipeworx Implements WHMIS 2015 Ahead of Deadline

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PLH Group is a major sponsor of the Warrior Wellness Solutions, a program designed to help injured. One beneficiary is U.S. Marines Cpl. Michael Politowicz, left, receiving an award from Clarissa Kussin, director of operations and Elijah Sacra, executive director of the nonprofit organization. Politowicz was on patrol in Afghanistan when an improvised explosive device (IED) exploded, shattering a forearm and causing a traumatic brain injury.

ast February, Canada promulgated Workplace Hazardous Materials Information System (WHMIS) 2015, the globally harmonized system of classification and labeling of chemicals, and decreed that companies have until Dec. 1, 2018 to fully implement the new system. Pipeworx Ltd. has already nearly completed its WHMIS 2015 implementation, offering free training to all employees. The about 200 Pipeworx employees will have completed their required WHMIS 2015 training by Sept. 1 and as the company gears up for the busy winter season, when it typically peaks at about 500 employees, all new workers will be trained in WHMIS 2015 upon hire. Why rush to WHMIS 2015? “The new system standardizes the classification and labeling of chemicals worldwide,” said Chad Wagner, Pipeworx human resources manager. “This makes it much less confusing and dangerous for workers who need to understand the hazards of a chemical in order to work safely. It’s just a better, safer way of doing things for everyone.”

Special to Pipeline & Gas Journal

In addition, he said, Pipeworx management talked with some of the company’s largest clients and learned that they were eager to implement WHMIS 2015 as soon as possible. “The clients knew they could count on us to join them in early implementation because we have the reputation as the strictest pipeline contractor in the region when it comes to safety,” Wagner said. “So it only made sense for us to jump right in. This way, there will be no problems or confusion when our employees are on their worksites.” Chemicals covered by WHMIS 2015 that Pipeworx employees deal with include lubricants, cutting fluid, antifreeze, paint and printer toner, as well as everyday household products such as WD-40, Windex and Armor All. If it’s a chemical, no matter how common, there are guidelines for safe handling that must be followed, Wagner said. Pipeworx is a subsidiary of PLH Group Inc., a leading provider of construction and maintenance services to the electric power delivery and pipeline industries in North America. For information, visit www.PLHGroupInc.com. P&GJ

Launch of New G2 Integrated Solutions

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oday (July 9) , we are introducing a new corporate brand that brings together our existing business lines under the G2 Integrated Solutions banner,” said Jody Mitchell, president of Houston-based G2 Integrated Solutions. “This new, consolidated brand reflects our focus on developing integrated solutions for the complex challenges facing upstream, midstream and downstream operators in the energy sector. Through acquisitions and organic growth, we have been building a powerful delivery platform capable of providing end-to-end solutions for managing risk, optimizing assets, and ensuring compliance with current and emerging requirements, both operational and regulatory.” The new G2 Integrated Solutions (“G2-IS”) banner consolidates our four lines of business: n G2 Partners – G2 Partners provides costeffective solutions to the integrity management challenges facing pipeline and facility operators across North America,

spanning a host of services from industry-leading approaches for MAOP determination and lifecycle management of integrity-related data, through risk-based prioritization of operations and management (O&M) and capital expenditures. www.g2partnersllc.com n Frontline Energy Services – Frontline provides an extensive set of integrity services to downstream utility and midstream clients, including project management, field inspection, mobile data collection technology deployment, aerial patrol program management, cross-bore program implementation, and integrity management program administration. www.frontline-energy.com n Eagle Information Mapping – Eagle is a leading provider of geographic information system solutions to large-scale oil and gas infrastructure operators, providing a comprehensive suite of geospatial software solutions and services designed

to support operators in improving asset safety and reliability. www.eaglemap.com n NRG Technologies – NRG delivers assurance solutions that provide energy company leadership with answers to the “How do you know?” question regarding asset integrity. Solutions include process assurance systems, services and software for risk identification and risk quantification, and asset reliability and optimization support. www.bpm4energy.com “We have assembled an industry-leading solutions platform,” Mitchell added, “as we continue to expand our service and technology offerings and with the ability to leverage these four companies as one is creating new ways to solve our client’s most challenging problems.” Concurrent with the adoption of the new corporate banner, G2 Integrated Solutions has launched a new web site URL at www. G2-IS.com. P&GJ www.pgjonline.com

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TECHNOTES Product Development

Lyall Looks Forward to Serving New Markets

Special to Pipeline & Gas Journal

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here is much to talk about these days at Lyall. The company that has been supplying gas piping products to natural gas utilities across the United States for the past 45 years continues to expand, bringing its manufacturing expertise to new markets within the oil and gas industry. With the opening of a 95,000-squarefoot plant in New Berlin, WI in 2013,

“Increased demand from our traditional natural gas utility market, combined with new demand from the oil and gas midstream markets for Lyall quality in larger fabricated products, resulted in a need for more space. This facility provided solutions on both fronts.” – Jeff Lyall, Lyall president Lyall began manufacturing larger scale products for customers in the oil and gas midstream and transmission markets. The new facility is equipped with the space, technology and manpower required to produce skid-mounted or stand-alone integrated pipeline assemblies such as pig launchers and receivers, pressure reduction stations, LACT units and gas and water measurement buildings. Six overhead cranes with capacity up to 12½ tons move materials through the manufacturing process run by a team of skilled and qualified welders and assemblers. The in-house coating process runs through state-of-the art blasting and paint booths, resulting in a corrosion-resistant, aesthetically pleasing finish that is difficult to reproduce in the field. As well, 3D modeling and engineering documentation, material test data, quality assurance testing and documentation are included with all products as required. The expansive facility also offers the ability to load trucks indoors, providing shelter from the cold Wisconsin winters. “I am extremely excited about the expansion of our capabilities through this new factory,” said Jeff Lyall, Lyall president. “Increased demand from our traditional natural gas utility market, com-

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Gas meter run facility consists of 167,000 square feet of dedicated manufacturing footprint within two facilities.

Large fabrication services include pig launchers/receivers, pressure regulator stations and vaulted below ground and pipeline farm taps.

bined with new demand from the oil and gas midstream markets for Lyall quality in larger fabricated products, resulted in a need for more space. This facility provided solutions on both fronts.” Continuing its ongoing effort to build a presence in the shale oil market, Lyall recently opened a new Service Center in Dickinson, ND. The 4,000-squarefoot facility, offering service to well pad equipment in the area, officially opened its doors on March 18, with an open house on June 19. The initial start-up operation includes two service technicians, two service trucks (pick-up and craned utility) and will also include a repair shop with

inventoried parts. The Lyall pipeline sales office has also been moved to the new facility, calling on the oil and gas wellhead and midstream market. Bruce Lange, COO states, “The opening of this facility helps Lyall further enhance our commitment, and dedication to, and presence in, the oil and gas wellhead and midstream market in this area of the country.” When asked about the direction of the company, Lyall responded, “Our expansion into these new markets is a natural transition for us. We bring to the table a history of quality and manufacturing expertise that we believe provide tangible benefits to customers in these new markets.” P&GJ

WHAT’SNEW in Products & Services

Pigs Unlimited International, Inc.

Pigs Unlimited International Inc. announced acquisition of the original FlexI-Pig molds from Greene’s Energy Group. The Flex-I-Pig was initially designed to be used for coating, but has proved to be a very effective utility pig. With its superior sealing capabilities and wear characteristics, the Flex-I-Pig can be used for batching, cleaning, coating, and de-watering applications in sizes from 2- to 36-inches. This effective pig design has become a standard in the industry. www.pigsunlimited.com

Pipeline

Equipment Inc.

Pipeline Equipment Inc. (PEI) is offering a new line of pigging solutions. The line includes: Spherical Pigs – inflatable spheres used in automated sphere launch systems for removal of liquids in wet gas systems; Multi-Seal pigs – rebuildable all-urethane pigs that can be configured for displacement, batching or cleaning applications; Tuff Cast Pigs – allurethane disposable multi-cup, multi-disc pigs for displacement, batching or cleaning applications; Conical Flex Pigs – rebuildable metal bodied pigs that can be configured with cups, discs, cleaning brushes or cleaning blades for most pigging applications and will traverse reductions up to 20%; and BIDI Pigs – multi-disc Pigs that can be run bidirectionally for displacement and cleaning applications. www.pipelineequipment.com/pigs

Vermeer

T h e Ve r m e e r D24x40 Navigator® horizontal directional drill (HDD) set the industry standard in 1993, and with the introduction of the D24x40 S3 in 2015, there are even more reasons it’s the choice to meet contractors’ right-size, right-power needs with 28,000 lbs. (124.6 kN) of thrust and pullback and 4,200 ft.-lbs. (5,694.4 Nm) of rotational torque – along with

Case Construction Equipment

CASE Construction Equipment introduced five new plate compactors to its attachments lineup – the SC-30, SC-60, SC-80, SC-110 and SC-220. The plate compactors are ideal for utility work and are primarily used to compact the foundation in shallower trenches and prevent movement/ground upheaval. These plates run on unidirectional hydraulics and are available in a variety of sizes, ranging from 19-by-20 inches to 32-by-42 inches. For soil compaction, the SC series can compact up to 4 feet – more than five times the efficiency of handheld compactors. For slopes, the SC can compact materials on an incline. Each SC series plate compactor is covered under a two-year limited warranty. www.CaseCE.com improved ground speed, carriage speed, rotational speed and rod breakout efficiency – the D24x40 S3 is built to help maximize machine and jobsite productivity. A carriage speed of 240 feet per minute (73.1 m/min) and a rotational speed of 253 rpm - outpacing rival machines – help contractors install more linear feet per day, maximizing jobsite efficiency. The D24x40 S3 is powered by a 125-hp (93 kW), liquid-cooled, turbocharged diesel John Deere 4045 4.5L Tier 4 engine. www.vermeer.com

Ditch Witch

The Ditch Witch organization, a Charles Machine Works Company, has released the industry’s first web-based Horizontal Directional Drilling (HDD) Advisor tool. Customers can use the advisor to quickly determine the right tooling configuration for their Ditch Witch® or Vermeer® directional drill string. Historically, identifying the proper tooling for job sites was time-consuming, cumbersome and paper-intensive. The Advisor gives operators and dealers an intuitive tooling-product roadmap and quickly recommends configurations and solutions based on a few questions. It includes the option to save drill string configurations for future reference and streamline ordering of replacement parts. Operators can share their drill string configurations with their dealer of choice, and print or email summaries from a PC or mobile device. To increase the value for operators, both Ditch Witch and Vermeer drills can be selected within the tool. To see the HDD Advisor in action, visit www. hddadvisor.com. www.ditchwitch.com

Technical Toolboxes

For over 15 years Technical Toolboxes (TTI) has developed the RSTRENG software, which the company says has become the standard in the oil and gas industry. One goal of the RSTRENG+ organizations is to collect RSTRENG data on pipelines worldwide for Big Data analytics and the resulting benefits to all worldwide stakeholders. Using the leverage generated by member resource contributions, RSTRENG+ can provide the Big Data

platform for valuable new ideas, solutions and results to improving the safety, security and life extension of worldwide pipeline assets. The RSTRENG+ organization is being initially funded and supported by Technical Toolboxes. www.technicaltoolboxes.com

McLaughlin

The McLaughlin CBM48 cradleboring machine is designed to help speed the installation of steel casing used in the crosscountry pipeline industry. Powered by a 162 hp aircooled, turbocharged diesel engine, the CBM 48 produces 170,000 ft.-lbs. of auger torque to install steel casings ranging from 10-48 inches in diameter and up to 120 feet in one pass from a single set up. The CBM 48 does not require a construction pit, shoring or the need to set auger boring tracks up on grade; instead, a trench the length of the casing is excavated and the cradle-boring machine, along with the casing, are suspended in the trench using appropriate sized pipe-laying or side-boom equipment. www.mclaughlinunderground.com

Pergam

Pergam is offering the Laser Methan Copter (LMC) sensor. Applications are line, tank and asset inspections, landfill emission monitoring and surveys in difficult to access areas that previously required scaffolding. The LNG and the shale gas industries are other markets with opportunities for leak detection services with the LMC sensor. Designed to fit on a large variety of UAVs/drones, the base for the sensor is Pergam’s Laser Methane miniinstrument. The additional onboard LMC data grabber records the flown track together with the gas concentration in parts per million. Data are available for reporting immediately following the flight and can be easily exported in a comprehensive leak survey report. www. pergamusa.com. P&GJ www.pgjonline.com

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BUSINESS

Association News, Personnel Changes, Mergers & Aquisitions

Association News

The American Gas Association (AGA) was selected as one of The Washington Post’s Top Workplaces for 2015. “It’s an honor to be included,” said Dave McCurdy, president and CEO of AGA. Chris Fowler, global corrosion director of Exova, was recognized by the NACE International Institute with a re-appointment to the board and a first-ever lifetime achievement award by the NACE Middle East area. Fowler, a past president of NACE and currently president of the Institute, was re-elected for a further three years from January 2016. His presidency will run until the end of 2016 when he will continue as past president. Tennessee Gas Association announced its 2015-16 officers and Board of Directors, along with the presentation of the 2015 Silver Flame award to Randy Nipp, Jackson Energy Authority senior vice president of Gas Systems. A posthumous presentation of the Thomas R. Bell Pioneer Award was made to William J. Hatfield, Oak Ridge Utility District. The new officers are Tae Eaton, general manager of Paris-Henry County Public Utility, president; Daniel C. Hicks, vice president of administration for Middle Tennessee Natural Gas Utility District, first vice president; John “Joey” Sauls, account manager for Spectra Energy, second vice president; Rob Neil, president of Powell Clinch Utility District, TGA treasurer; and Jamie Wellman, director of Member Services for the Tennessee Gas Association, secretary.

Personnel Changes

Henkels & McCoy, Inc. named Ron Scott as director of Gas & Industrial Services. Based in the Pomona, CA office, he is responsible for the overall direction, development, profitability, and growth of the natural gas distribution Ron Scott and transmission utility pipeline construction and maintenance operations throughout the company’s west region. Plains All American Pipeline, L.P. and Plains GP Holdings announced several executive changes at PAA. Willie Chiang was appointed executive vice president and COO for PAA’s U.S. operating and commercial activities. John Keffer and Sam Brown were each promoted to senior vice president, and Jeremy Goebel and James Pinchback were promoted to vice president. Executive Vice President John Rutherford is retiring. He will serve as

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an advisor and consultant to the CEO and president. Fine Tubes named Amanda Clark as procurement specialist. Matthew L. Trerotola was named CEO and a director of Colfax Corp., succeeding Steven E. Simms who is retiring. Greene’s Energy Group, LLC’s CEO Robert “Bob” Vilyus is retiring from the company and board of directors. Frank Matthews will be presiFrank Matthews dent and CEO and will be added to the board.

Company News, Mergers & Acquisitions

Shawcor Ltd. announced eight divisions will co-locate in downtown Calgary, AB. The move will see Canusa-CPS, DSGCanusa, Flexpipe Systems, Guardian, Shawcor CSI, Shaw Pipe Protection, Shaw Pipeline Services and ShawFlex form a sales supercenter in the Dome Tower, Suite 2200, 333 7 Avenue S.W. Sempra Energy’s Mexican subsidiary, Infraestructura Energética Nova, S.A.B. de C.V. (IENOVA) and Pemex jointly announced that IEnova will buy Pemex’s 50% equity interest in the Gasoductos de Chihuahua joint venture for $1.325 billion, plus assumption of $170 million in debt. The acquired joint venture assets under long-term contracts include three natural gas pipelines, an ethane pipeline, a liquid petroleum gas (LPG) pipeline and a LPG storage terminal. In addition, IEnova and Pemex maintain a joint venture for the Los Ramones Norte pipeline project. Elgin Equipment Group announced the formation of Elgin Separation Solutions. Elgin Separation Solutions retains the product brands that have long been recognized in the oil and gas drilling and HDD industries. The new division is also responsible for the development, manufacture, sales and service of a number of specialized products. Cross Country Pipeline Supply Co., Inc. has acquired Sideline Specialty Equipment. Through the acquisition of Sideline, Cross Country has entered the Canadian market. H&E Equipment Services, Inc.’s operation in Oklahoma City relocated to its new facility at 10700 NW 4th St., Yukon, OK 73099. HammerHead Trenchless Equipment, a Charles Machine Works company, has formed a strategic alliance with RS Lining

Systems, LLC, provider of RS Technik pipe rehabilitation solutions in the Americas. This will complete the suite of non-intrusive rehabilitation solutions available to HammerHead customers. Fall River, MA-based Apollo Safety Inc. has formed a division specializing in gas detection equipment, maintenance and monitoring serving the oil and gas industry. AMERICAN Steel Pipe, a division of AMERICAN Cast Iron Pipe Co., has completed its 150,000-square-foot steel pipe processing facility in Birmingham, AL. The $70 million plant doubles the company’s annual processing capacity to 700,000 net tons. AMERICAN manufactures electric-resistance-welded (ERW) steel pipe in diameters from 10.75 to 24 inches and in lengths up to 80 feet. NGL Energy Partners LP and Meritage Midstream Services II, LLC are forming a joint venture to develop crude oil gathering and water services infrastructure to serve oil and gas producers in Wyoming’s Powder River Basin. Willbros won a three-year preferred supplier agreement for pipeline integrity services. The contracts, expected to generate C$120-150 million, cover assessment digs and preventative maintenance work on a network of existing pipeline infrastructure across Western Canada. Willbros also won a construction contract for pipeline and off-site fabrication services to support tailings facility requirements at a major oil sands site. The contract is expected to begin shortly and be completed by the end of 2016.

Obituary Baxter Abbott Sparks, Jr. died July 6 at his home in Dallas from complications of cancer. He was 95. Sparks was born to Baxter Abbott and Vivian Sparks on Nov. 11, 1919 in Pauls Valley, OK. After serving in the Navy, he acquired and developed an international publishing company, Petroleum Engineer Publishing Co. (PEPCO), which he later sold to Harcourt Brace Jovanovich. At PEPCO, Sparks published seven magazines and a score of books, guides and engineering aides worldwide. He leaves his wife of 39 years, Vicki; two sons, Braden (Christie) and Ryan; eight grandchildren and 13 great-grandchildren. Sparks was predeceased by his first wife, Jean, and their daughter, Andrea Sparks Underwood. P&GJ

ADVERTISING SALES OFFICES SOUTHWEST & MIDWEST: Jim Donnelly PO Box 851471, Richardson, TX 75085 Ph.: (972) 437-9557, Fax: (972) 437-9558 E-mail: [email protected] NORTHEAST: Denis O’Malley 5 Hillandale Ave, Suite 101, Stamford, Ct. 06902 Ph.: (203) 356-9694, Fax: (203) 356-9695 E-mail: [email protected] _ SOUTHEAST: Doug Fix 590 Hickory Flat Rd. Alpharetta, GA 30004 Ph.: (770) 740-2078 Fax: (770) 740-1889 Cell: (770) 315-9033 E-mail: [email protected] _ WEST COAST: Mike Lance, Kiefer Lance 890 Seamist Place #201, Ventura, CA 93003 Ph.: (805) 620-0586, Cell: (661) 618-4067, E-mail: [email protected] [email protected]

MID CENTRAL: Donna Harbacek 644 Hanging Branch Ridge, Cape Fair, MO 65624 Ph.: (417) 559-3207, Fax: (708) 486-0525 E-mail: [email protected] UK, NETHERLANDS, NORTHERN BELGIUM, SCANDINAVIA: Roger Kingswell 9 Tarragon Road, Maidstone Kent ME16 0UR UK Ph.: +44 (1622) 721222, Fax: +44 (1622) 721333 E-mail: [email protected] FRANCE, GERMANY, SOUTHERN BELGIUM, SPAIN, GREECE, PORTUGAL, NORTH AFRICA, SWITZERLAND, TURKEY, MIDDLE EAST: Catherine Watkins & Jim Watkins 30 rue Paul Vaillant Couturier 78114 Magny-les-Hameaux Ph. +33 1 30 47 92 51, Fax +33 1 30 47 92 40 E-mail: [email protected]

Beyond Compliance... Continued from page 72

n Providing a more direct and measurable approach to improving operational excellence n Creating a capability for real-time or nearly real–time reporting and analysis of cross-functional dependencies n Reducing costs, increasing transparency and improving quality of outcomes by increasing standardization across geographical, organizational, and functional silos.

Measuring Leadership Accountability

Effective business transformations and safe cultures require leadership account-

ability from top executives down to field level management. But it begins at the top and must be demonstrated and communicated across the organization. Top management must establish and maintain policies, goals and objectives of the program following the API recommended practice. Next, leaders at all levels of the organization must commit to making informed decisions and taking actions consistent with safety management system guidelines. One way to share commitment is for all leaders and employees to sign a “safety pledge” that outlines the organization’s safety vision and culture.

ITALY, EASTERN EUROPE: Fabio Potesta Corte Lambruschini - Corso Buenos Aires 8 - 5° piano, interno 9 16129 Genova - Italy Ph.: 0039/010/5704948, Fax: 0039/010/5530088 E-mail. [email protected] www.mediapointsrl.it RUSSIA: Arkady Komarov UI. Molodogvardeyskaya 43/17, kv. 53-54, Moscow 121351 Russia Ph.: 7 (495) 416-0658, Fax: 7 (495) 769-5732 E-mail: [email protected] CHINA: Mike Xu 14/F, Jinjiang Xiangyang Tower 993 Nan Jing Road(W) Jing An District, Shanghai, 200041 Cell: 13902475517 Email: [email protected] It’s only when leaders collaborate and work with front-line employees that a program will be successful. This allows for the effective delegation of authority clearly communicated expectations before each job. By sharing leadership for the safety management process, teams and individuals from the board room to the drilling deck feel supported, ensuring implementation of the safety process. A true safety culture then emerges with the mechanisms in place for continuous improvement to achieve measurable positive results. Effectively measuring leadership’s progress toward API RP 1173 guidelines will help promote alignment across the organization and speed adoption.

Business of Safety

A culture of trust and shared values can produce numerous benefits, including improved achievement of commercial targets, improved asset lifecycle costs, along with cost-savings due to less safety incidents, downtime and unplanned maintenance. A well-implemented pipeline safety management system that incorporates best practices of a system-think culture, alignment to business functions and accountability from the top to the bottom will yield business value beyond those of compliance and reduced risk. Safety is about more than just people and the environment; safety is also just good business. P&GJ www.pgjonline.com

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MEETINGS

Upcoming events 2015

Sept. 15-17, Pipeline Week: GITA’s Oil & Gas Conference and PODS User Conference, The Woodlands, TX. Phone: (918) 831-9701; Fax: (918) 831-9161. Sept. 16-17, Shale Insight 2015, Pennsylvania Convention Center, Pennsylvania, PA. Web: www.shaleinsight.com. Sept. 21-24, 50th American School of Gas Measurement Technology, Marriott Westchase, Houston, TX. www.asgmt.com. Sept. 30-Oct. 2, PetroTrans Summit and Training Program, Marriott O’Hare, Chicago, IL. www.petrotrans2015.com

Oct. 4-7, Gas Machinery Conference 2015, Austin, TX. Phone: (972) 620-4026; Fax: (972) 620-1613. Oct. 5-9, International Pipe Line & Offshore Contractors Association, Fairmont Hotel, Singapore. Phone: +44 22 306 0203; Fax: +44 22 306 0203 39. Oct. 5 – 9, Ageing Pipelines Conference and Training Courses, Andromeda Hotel, Ostend, Belgium. Phone: +44 1494 675139; Fax: +44 1494 670155; Email: [email protected]

Nov. 5-7, 2015 INGAA Foundation Annual Meeting, Ritz-Carlton Key Biscayne, Key Biscayne, FL. Phone: (202) 216-5900; Web: ingaa.org. Nov. 16-18, 2015 Natural Gas STAR Annual Implementation Workshop, Sheraton Pittsburgh Hotel at Station Square, Pittsburgh, PA. www.epa.gov/gasstar/workshops/index.html. Nov. 25-26, European Gas Technology Conference 2015, Park Royal Palace Hotel, Vienna, Austria. Web: www.egatec2015. com P&GJ

EXECUTIVEPROFILE Exclusive

Q&A: Executive Profile...continued from page 96 energy renaissance began in the Barnett Shale a little over a decade ago. Once George Mitchell and his team worked out the bugs in horizontal drilling, it was only a matter of time until it spread to the previously unproductive formations, most of which have been known about for decades. P&GJ: As the pipeline industry moves into somewhat unchartered regions such as Pennsylvania, what are some of the biggest challenges companies face? Bodenhamer: We shouldn’t forget that the first commercially producing oil well in the United States was drilled in western Pennsylvania and pipelines were laid in these areas by our great-greatgrandfathers’ generation. The biggest challenge then and now is the terrain. A hundred years ago the problems were solved by using small-diameter pipe and laying it on top of the ground. Today we are faced with totally burying large-diameter pipe in much more congested circumstances. New technologies such as direct pipe are being used in challenging areas. P&GJ: What do you think the public’s perception of the pipeline industry is today, and what can be done to make it more positive? Bodenhamer: I believe that the pipeline industry is largely “out of sight, out of mind” until something noteworthy comes to their backyard or neighborhood. Education is one method. The average American is unaware of

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the importance of pipelines in their daily lives. They don’t realize that the gasoline to run their cars, the natural gas to heat their homes or businesses, the fresh water to drink, and the sewer that carries away the waste are all provided by pipelines, many of which come directly to their home. I believe that if the public realized how critical pipelines are to their daily lives and how commonplace they are, they would be more receptive to the pipeline industry. P&GJ: What’s your outlook for the pipeline business for the next couple of years, both in terms of new construction and pipeline integrity work? Bodenhamer: I’ve been through several ups and downs of the energy business throughout my career and I’m sure this dry spell will pass, too. We’ve seen continued strength on the gas side and pipeline integrity continues to be immune from the current economic downturn. P&GJ: What achievements are you most proud of? Bodenhamer: One of my proudest achievements was being named a Fellow by the American Society of Mechanical Engineers in 2013 after having served for over 20 years on pipeline standards committees. P&GJ: How does one achieve a PE license in all 50 states, as you’ve done? Bodenhamer: It takes a lot of paperwork and perseverance. Each state has its own rules and requirements for licensure. A person must first graduate from an accredited university, pass an initial eight-hour

exam, work four years under the direction of a professional engineer, and then pass another eight-hour exam. This gets you licensed in one state, which you can then use to get licensed in others. P&GJ: What are your leading priorities as a senior executive, and how do you go about implementing them with your staff? Bodenhamer: My first priority at Willbros is to meet the needs of our clients by delivering to them engineering solutions that are safe, compliant and reliable. To meet these deliverables, I keep my staff current on the latest codes and regulations, new technologies and up to date on the best practices in the industry. We also keep our employees current on safety training and procedures. P&GJ: Are you seeing more young people enter the industry, and what do you advise those who are interested in such a career? Bodenhamer: We have a good number of recent graduates and actively recruit on campus. I believe the energy industry is an exciting career and I encourage those in college to give it serious consideration. The industry needs a vibrant upcoming generation to continue what has been accomplished thus far. P&GJ: What about your family and your activities outside of work? Bodenhamer: I’ve been married to my wonderful wife Mary for 33 years, and we have a married son who has a Ph.D. in computer science. I’m very proud of them both. When work doesn’t get in the way on weekends, I like to upgrade and renovate old homes. P&GJ

P&GJ BUSINESSCARDDIRECTORY Air Logistics Corporation provides a complete line of Aqua Wrap® pre-preg and Power Sleeve® field-preg composite systems for Refinery and Pipeline remediation.

AIR LOGISTICS CORPORATION

925 North Todd Avenue • Azusa, California 91702 USA Ph.: (626) 633-0294 • Fax (626) 633-0791 www.airlog.com • [email protected] An ISO 9001: 2008 certified supplier

The lightweight "Safety Boy" provides the safest, quickest and most economical way to spread pipe flanges, to insert blinds, gaskets and orifices. Models to accommodate 150lb. thru 2500 lb. ASA and Ring Joint Flanges.

WM. L. RIGGS CO., INC.

www.pgjonline.com

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P&GJ BUSINESSCARDDIRECTORY

American Pipe Bending adds a 2nd State-of-the Art Induction Bender Better Lead Times More Aggressive Pricing Automated Precise Compound Bending

Call us for a quote (800)730-2363 • www.americanpipebending.com

PROTECT PIPELINES

&

PREVENT CORROSION

INTERNATIONAL CORROSION CONTROL Leaders in the Cathodic Protection Industry…Since 1972 CORROSION CONTROL PRODUCTS Lewiston, New York, USA Regional Offices: Burlington, Montreal, Calgary

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•Gears & Sprockets •Rollers-Upper & Lower •Shafts-Keyed & Spined •Chain, Bearings & Seals •Conveyor Belts

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Call 866.879.9144 or [email protected]

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Pipeline & Gas Journal • September 2015

P&GJ BUSINESSCARDDIRECTORY Manufacturers Of Valve Lubrication Products

In-Line Inspection of: > Lined pipelines > Low-Flow pipelines

Since 1960

“ Your Source For Valve Lubrication Needs"

> oil > Gas > Water > Waste Water > Slurry

Hydraulic & Air / Hydraulic Guns • Screw Prime Guns Air Operated Equipment • Fittings & Adapters Skid Units • Valve Maintenance Training Valve Cleaners, Lubricants & Sealants 8404 Braniff • Houston, Texas 77061 713-644-1164 • Fax: 713-644-7761 • Toll Free 877-538-2526 or 877-5DUALCO E-mail: [email protected] • www.dualco-inc.com

FLYWHEEL LOCK (Patent Pending): U.S. Patent No. 8,869.650 Engineered to allow setting and locking a flywheel or crankshaft to the exact position desired within its 360 o turning radius. As always, safety was the top priority in the product’s design to ensure the safety of the men and equipment that work inside the engines being serviced or repaired. ReynoldsFrench can adapt the Flywheel Lock to fit ring gear or lug type flywheels. Comes standard with Lockout/Tagout. 12525 E. 60th Street  Tulsa, OK 74146-6921  918.252.7545  Fax: 918.252.7540  [email protected]  www.r-f.com

Pipeline Construction Supplies, Materials and Equipment Meeting the needs of large and small pipeline projects for over 35 years Equipment Sales n Rentals

Pipelayers/Dozers, Trenchers, Excavators, Boring Equipment, Vacuum Lifters, Pipe Bending Machines, Padding Buckets, Internal Clamps, Mandrals

Supplies n Materials n Accessories

Pipe Coatings, Beveling Machines, Clamps, Calipers, Hydraulic Wrenches, Linefinders, Holiday Detectors, Recorders and Deadweight Testers and a full line of Pipeline Construction Supplies

Cross Country Pipeline Supply Co., Inc. 2251 Rifle Street • Aurora (Denver), CO. 80011 303-361-6797 • [email protected]

www.ccpipeline.com

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Located throughout the U.S. Call for office nearest to you. Pipeline & Gas Journal • September 2015

P&GJ BUSINESSCARDDIRECTORY

20,000 Tons In Inventory

Family Owned/Operated 140 acre Facility We Purchase New Surplus and Used Steel Pipe Asbestos Coated Pipe, New Surplus Long & Shorts Classification Change Out Pipe, Loop Line Removals Pipelines in the Ground for Removal Tyler Williams – [email protected]

Culvert, Casing & Piling Needs

10” – 42” New Surplus & Used Pipe for Sale Chris Anderson – [email protected] Dallas Williams – [email protected] Visit us at www.cpipipe.com or call us at 405-350-8555

Directional Drilling: • Pipeline • Telecommunications • U.G. Electric Transmission Utilities • 2”-42” Drills

Drilltech Inc. PO Box 1210 • Clarksville, TX 75426 Phone: (903) 427-0836 • Cell: (903) 715-2735 Fax: (903) 427-1901 Email: [email protected]

8100 E 96th Ave. • Henderson, CO 80640 • Phone: 303-288-3914

www.pgjonline.com

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P&GJ BUSINESSCARDDIRECTORY

Southern Gas Association 3030 LBJ Freeway, Suite 1500 Dallas, TX 75234 972.620.8505 [email protected]

www.southerngas.org

FALL GAS CONFERENCE & EXPO

@SouthernGas

Southern.Gas.Association

Owensboro Convention Center | Owensboro, KY October 27-29, 2015

The Fall Gas Conference and Expo provides nearly 40 workshops that pertain to today’s needs in the natural gas industry. This conference allows gas utility and pipeline companies the chance to obtain relevant industry training, to network, hear from experts, and have open dialogue with peers during roundtable discussions. Attendees can also visit exhibitors to learn about Scan to learn more. the latest in products and services available to the industry. http://bit.ly/fallgas

Mark your calendars NOW and make plans to attend! Pipeline Inspections, Repairs & Maintenance

Stroud Diving & Hydrography One MESCO Plaza 5030 Old Kings Road NW Jacksonville, FL 32254-1184 904-355-1777 www.Mesco-Offshore.com [email protected]

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·Personnel & DOT OQ Plan Compliant· ·Offshore & River Crossings· ·CP & DCVG Surveys, Coating Repairs·

·Pipeline Repairs by Dry Habitat Underwater· ·AutoCAD Drafting - Engineering·

Pipeline & Gas Journal • September 2015

RAISING THE

STANDARDS Manufacturers of Pipeline Equipment Since 1948

sawyermfg.com Phone: 918-834-2550 Fax: 918-834-0318

P&GJ BUSINESSCARDDIRECTORY INTEGRITY SOLUTIONS • PIPELINE & STATION CONSTRUCTION • MAINTENANCE

A LEGAC Y

BUILT ON TRUST.

Miller “EZE Load”

115 Patton Rd. • Great Bend, KS 67530 800-772-6060 • Fax: 620-792-2958 E-mail: [email protected] www.timmillersales.com/

Coil Pipe Layout Trailers Model 1050 Tilt Bed “EZE Load”

Model 2050 “Rolling Tailboard” Winch On

Model 3050 Heavy Duty “EZE Load” Tilt Bed

Model 4050 Vertical 3'' – 6''

For over 60 years, we have been trusted to complete projects both big and small with unmatched quality assurance and on-time performance. We’ve built that trust and confidence by being committed to doing the job right. Safety, productivity and protecting our customer’s assets are our top priorities on every project because we know that’s what matters to you. 2012 ARTHUR T. EVERHAM SAFETY AWARD MEMBER DCA, PLCA, MEA OQ COMPLIANT THROUGH NCCER, VERIFORCE, MEA

SCAN TO LEARN MORE ABOUT OUR CERTIFICATIONS & EXPERIENCE OR VISIT MIDWESTERNCONTRACTORS.COM/LEGACY

O U R T R A D I T I O N I S I N T E G R I T Y. 816 HICKS DRIVE, ELBURN, IL • 630 668 3420

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P&GJ BUSINESSCARDDIRECTORY

Lightweight Design Heavy Duty Protection

PIPELINE ROLLERS FOR DIRECTIONAL DRILLING www.davcorpipelinerollers.com

• Helps Prevent Corrosion

D.C.I. P.O. Box 177 Healdton, OK 73438

• 11mm Thickness • Half the Weight of Competition • Shortest Lead Time Nationwide

Phone: 580-229-1280 Fax: 580-229-1293

• Custom Width / Lengths • Fast & Easy Installation • Does NOT Inhibit Cathodic Protection

Call 225.906.0758 or 800.848.4500 www.rockguard.biz ®

g:

rin eatu

F

Coal Slag Blasting Abrasive Environmentally friendly NO heavy metal <.2% Free silica Consistent, hard angular particles Fast cleaning Flume Pipe New & Used STD & Heavy Wall Pipe Used Railroad Flat Cars & Tank Cars

Get your product where you need it, when you need it! Material delivered to job sites ON TIME in the Continental US & Canada

Blastox blending® available CARB & QPL approved

Grit Sizes:

8-20 Course • 16-40 Medium 20-40 Fine • 40-60 Extra Fine

Call Jim Filipowicz today! (800)334-5964 or (406)761-4848 86

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Steel Etc. • 1408 52nd St. N • Great Falls, MT Pipeline & Gas Journal • September 2015

P&GJ BUSINESSCARDDIRECTORY

Our Torque Anchors Hold More – Cost Less than concrete & auger anchors www.anchorpipe.com [email protected]

9310 Campbell Houston, TX 77080 Ph. - 713-465-8377 Fax - 713-465-8393 See us at www.APLI2.com

PRODUCT QUALITY CONTROL EQUIPMENT

REMOTE IMAGING OF PROVER INTERNALS

Rapid FlashTM (Automated Flash Point Analyzers) Automated Sampling Systems Product Recovery & Reinjection Systems Haze TrackerTM (Pipeline Haze Analyzers) Maintenance Packages PGJ_BC_SEPT.pdf

WWW.METERENGINEERS.COM

1

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Mobile Services

.

FreezePlug.com FreezeDog™ Services / IFT Industrial

OK • TX • ND • TN • CA - 800-221-3332 www.pgjonline.com

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P&GJ BUSINESSCARDDIRECTORY

Acoustic Pig Tracking has come of age.

CCI Pipeline Systems Pipe Protection Products for Oil, Gas, Water & Wastewater

www.ccipipe.com 800.867.2772

S ES EL R I W

N IO CT E NN CO

Mag-Tek Sphere Detector Switches

Liquid Meter Provers

The Cab Control Unit

Patent No. US 6,789,407 B1

Start Up Strainers

Permanent Strainers 2350 Industrial Dr., Sapulpa, Ok 74066 (918) 445-1141 E-mail: [email protected] www.weamco.com

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Pipeline & Gas Journal • September 2015

The remote WIRELESS Sensor

No Wires between Truck and Sensor. Long Range Wireless Connection. Super Sensitivity. Tunable Wind and Rain Filter. Tunable Notch Filter. Drive Off Warning Alarm. Dedicated portable Control Unit. No computer needed. Separate Jack for Headphone and Line-Out. Separate Headphone Volume Control. Connect directly to vehicle’s AUX jack. Rechargeable Battery Operated. Long Battery Life Standard micro-USB charging connector. Very Reasonably Priced. Don’t waste your $$ on outdated mediocre trackers. The Wireless Acoustic Pig Tracker is compact and so easy to use.

WAPT Model C40 with CCU © Copyright 2015 AboveGroundMarker.Com LLC All Rights Reserved. Phone: 832-467-3399

P&GJ BUSINESSCARDDIRECTORY 800-894-2120 Coastalcorrosion.com [email protected]

Materials. Pipeline Integrity. Offshore. Survey. Construction. Engineering. Gas Leak Detection. Right of Way Maintenance. Corporate Office: 10172 Mammoth Ave., Baton Rouge, LA 70814 225.275.6131 office / 225.275.6134 fax Houston Office: 2219 Sawdust Rd., Suite 1803, Spring, TX 77380 832.616.3965 office / 832.616.3967 fax

800-894-2120 Coastalcorrosion.com [email protected]

Materials. Pipeline Integrity. Offshore. Survey. Construction. Engineering. Gas Leak Detection. Right of Way Maintenance. Corporate Office: 10172 Mammoth Ave., Baton Rouge, LA 70814 225.275.6131 office / 225.275.6134 fax Houston Office: 2219 Sawdust Rd., Suite 1803, Spring, TX 77380 832.616.3965 office / 832.616.3967 fax

800-894-2120 Coastalcorrosion.com [email protected]

Materials. Pipeline Integrity. Offshore. Survey. Construction. Engineering. Gas Leak Detection. Right of Way Maintenance. Corporate Office: 10172 Mammoth Ave., Baton Rouge, LA 70814 225.275.6131 office / 225.275.6134 fax Houston Office: 2219 Sawdust Rd., Suite 1803, Spring, TX 77380 832.616.3965 office / 832.616.3967 fax

Pipeline Testing 800-894-2120

Everything You Need Coastalcorrosion.com From One Source On One Truck [email protected] Materials. Pipeline Integrity. Offshore. Survey. Construction. Engineering. Gas Leak Detection. Right of Way Maintenance.

FABRICATION EXTRUSION MACHINE COATING

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Corporate Office: 10172 Mammoth Ave., Baton Rouge, LA 70814 225.275.6131 office / 225.275.6134 fax

Low & High Head Pumps, Strainer, Flow Meters, one package.

Houston Office: 2219 Sawdust Rd., Suite 1803, Spring, TX 77380 Pressure Pump and 832.616.3965 office / 832.616.3967 fax Accessories in

Sales or Rental 800-894-2120 CONTACT US TODAY!

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Materials. Pipeline Integrity. Offshore. Survey. Construction. Engineering. Gas Leak Detection. Right of Way Maintenance. Corporate Office: 10172 Mammoth Ave., Baton Rouge, LA 70814 225.275.6131 office / 225.275.6134 fax Houston Office: 2219 Sawdust Rd., Suite 1803, Spring, TX 77380 832.616.3965 office / 832.616.3967 fax

www.pgjonline.com

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P&GJ BUSINESSCARDDIRECTORY

Epoxy Resists Harsh Chemicals Epoxy Compound EP41S-1HT

“ROB’N FINES TO PAD YOUR LINES” MECHANICAL AND NON-MECHANICAL OUTLAW’S PADDING BUCKET FOR RENT

Designed to Meet Specific Application Requirements • Fuel, alcohol & solvent resistant • Serviceable from -60°F to +400°F

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623-465-5643 FOR QUOTES

INDUSTRY FIRST. Redefining pipeline transportation with safety in mind, Pe Ben USA is always first in line. Call 281.452.4204 or visit pebenusa.com for more information.

OUR SERVICES INCLUDE: • Logistics coordination • Offloading • Railcar logistics • Stockpiling • Stringing • Transportation

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CV-72

CV-Series valves have a quarter-turn handle for fast operation. Safety locking handle option available.

KIENE CV AND KN SERIES INDICATOR VALVES    

FOR MAXIMUM ACCURACY, BOTH OFFER . . . Compact design. Fits tight locations. Designed specifically for compressors. 90-degree and 316 stainless steel versions available. Short, straight-through flow path minimizes channel resonance, maximizes accuracy.

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Website: www.kienediesel.com · e-mail: [email protected]

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Pipeline & Gas Journal • September 2015

KN-22-90

KN-Series valves offer pressures to 4,000 PSI, temperatures to 400° F. Telephone: 1-800-264-5950 · Fax: 630-543-5953

P&GJ BUSINESSCARDDIRECTORY

Project Management GPS Surveys

Engineering

Stray Current & Interference Analyses

Materials

ILI Digs

SSCDA ECDA ICDA DCVG

OILFIELD WINDSOCKS

AC Mitigation

Remediation Bellhole Excavations & Inspections

Casings

Construction

VpCI Technical Design/Build

Test Stations Anode Manufacturing

Groundbeds J Boxes

CP Solutions

Maintenance

Installation

Tanks & Terminals

we do it all. 1.888.800.MESA(6372) mesaproducts.com

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Immediate shipment worldwide CUSTOM SCREEN PRINTING WINDSOCKS & FRAMES WINDSOCK POLES 952-890-9214 WINDMETERS

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7/13/2015 9:52:35 AM

Nitrogen services Flare stacks Equipment rentals http://priorityenergyllc.com/

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DEDICATED DRIVEN DEPENDABLE INDUCTION BENDS COLD BENDS STRUCTURAL BENDS

COATINGS & INSULATION COMMERCIAL CLEANING CNC MARCHING

BENDING THE POSSIBILITITES CALGARY, AB, CANADA T-1-800-952-2944 [email protected] WWW.PIPEBENDING.COM

NOISE Environmental Sound Surveys Noise Modeling / Predictions Regulatory Compliance Noise Control Mitigation Acoustical Building Design

US: 888.789.9400 Canada: 888.259.3600 www.slrconsulting.com [email protected]

Compressor Stations Pump Stations Gas Plants HDD Pipelines www.pgjonline.com

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P&GJ BUSINESSCARDDIRECTORY

DMI PIPELINE

EQUIPMENT S A L E S • S E R V I C E • R E N TA L

CLAMPS

CRADLES PIPE BENDERS

MANDRELS

Jim Dixon 405-833-0534

DMI Office 918-438-2213 • [email protected] • dmiinternational.com

The original GENIE® Membrane Technology™ has been safeguarding analyzers across the globe for over 25 years. Contact your local distributor or contact A+ Corporation at: 225-644-5255 or geniefilters.com

A+ Corporation I 41041 Black Bayou Road, Gonzales, LA 70737 USA

AC-3449-2 Feb Pipeline & Gas Journal FINAL.indd 1

Field Services, Inc.

Project Coordination • Multicraft Inspection • Field Office Management Providing Pipeline Inspection for Over 35 Years

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www.wilcrest.com

281-200-0210

Pipeline & Gas Journal • September 2015

2/24/14 8:20 PM

P&GJ BUSINESSCARDDIRECTORY

[email protected]

Heaman Pipe Bending Inc. Edmonton,AB, Canada • Tel. (780) 440-1955 • Fax. (780) 468-6117 www.heaman.com • [email protected] Pipe benders for bare, foam coated & concrete coated pipe.

6''-20'' Hydraulic Side-Load

2''-8'' Spring Shoe

WOLFE MAN 8000 EXTREME DUTY • • • • • • • • • • • • •

8’ deep & 34” wide 1½” rims & buckets Large hoist cylinders Cat Engine, 450 hp Heavy duty lift slides & cables Wide drive sprockets & wheel segments Heavy duty large diameter lower wheel rollers with heavy duty bearing Heavy heat-treated buckets Kennametal tooth holders. Can adapt to a flat digging tooth or carbide bullet Auxiliary hydraulic cooler & engine radiator Independent hydrostatically-driven Cat track systems Air conditioned/heated cab Center pivot for turning

www.PlowAndTrencher.com 800-736-3413 • 507-345-3252

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800-563-5885 [email protected] www.pgjonline.com

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ADVERTISER’S INDEX

Index provided as a courtesy to readers. While every effort is made to compile accurate listings, publisher assumes no responsibility for errors. A & E Construction Supply, www.a-econstsupply.com....................................93

Midwestern Contractors, www.midwesterncontractors.com............................85

A+ Corporation................................................................................................92

Midwestern Manufacturing Co., www.sidebooms.com....................................31

Above Ground Markers.com LLC, www.abovegroundmarker.com..................88

MPG Pipeline Contractors, www.mpg-plc.com................................................25

AECOM, www.aecom.com..............................................................................42

NDT Global GmbH & Co. KG, www.ndt-global.com........................................27

AGS.................................................................................................................85

Oilfield Manufacturers Warehouse, www.timmillersales.com..........................85

Air Logistics, www.airlog.com..........................................................................79

Online Pipeline Solutions, www.online-electronics.com..................................86

Airport Windsock Corp.....................................................................................91

Otis Eastern Service LLC................................................................................19

American Cast Iron Pipe Company...................................................................9

Outlaw Padding Company...............................................................................90

American Pipe Bending, www.apb-bend.com.................................................80

Pe Ben USA, www.pebenusa.com..................................................................90

Anchor Pipe International, www.anchorpipe.com............................................87

Pergam Technical Services.............................................................................89

ArborMetrics Solutions, Inc., www.arbormetricssolutions.com........................36

Philadelphia Gear Corporation........................................................................43

AUMA Riester GmbH & Co., KG.....................................................................22

Pigs Unlimited International, Inc., www.pigsunlimited.com.............................19

Bishop Lifting Products, www.lifting.com.........................................................93

Pipeline Equipment Inc., www.pipelineequipment.com...................................89

BKW, www.bkwinc.com.......................................................................80, 85, 92

Pipeline Opportunities Conference, www.pipelineandgasjournal.com............23

Bredero Shaw, www.brederoshaw.com.............................................................7

Pipeline Pigging Products, Inc., www.pipepigs.com........................................89

Burns & McDonnell, www.burnsmcd.com.......................................................15

Polyguard Products, Inc., www.polyguardproducts.com.................................49

Carhartt, Inc..................................................................................................... 29 CCI Pipeline Services, www.ccipipe.com........................................................88 Challenger Services, www.challengerservices.com........................................92 Cicor Energy Products....................................................................................40 Coastal Corrosion Control Inc, www.coastalcorrosion.com............................89 Colonial Pipeline Company, www.colpipe.com................................................60 Commercial Resins Company, www.commercialresins.com...........................83 CPI Pipe & Steel, www.cpipipe.com................................................................83 CRC-Evans Pipeline International, www.crc-evans.com.................................24 Cross Country Supply, www.ccpipeline.com...................................................82 D.C.I., www.davcorpipelinerollers.com............................................................86 Denso North America, www.densona.com.....................................................45 DMI International, www.dmiinternational.com...........................................81, 92 Drilltech, Inc..................................................................................................... 83 Drinkwater Products, www.drinkwaterproducts.com.......................................33 Dualco, www.dualco-inc.com...........................................................................82 E-Z Line Pipe Support Co., Inc., www.ezline.com........................................IBC EagleView Technologies/Payables, www.eagleview.com................................41 Enduro Pipeline Services, www.enduropls.com.............................................BC Essentra Components, www.essentracomponents.com...................................0 Geo Corr, www.geocorr.com...........................................................................87 Gulf Interstate Field Services, www.gie.com...................................................86 Harding Directional Drilling, www.hardingdrilling.com.....................................87 Harsco-Air-X-Changers/Randy Benson, www.harscoaxc.com..........................5

Power Associates International, www.paiinc.com...........................................89 PPSA, www.piggingassnppsa.com.................................................................54 Price Gregory International, Inc., www.pricegregory.com...............................52 Priority Energy Services LLC, www.priorityenergyllc.com..............................91 Project Consulting Services, www.projectconsulting.com...............................37 Proline Pipe Equipment, www.prolinepipeequipment.com..............................84 R-Value Foam, www.rvaluefoam.com.............................................................59 Revco Industries..............................................................................................91 Reynolds French and Company, www.r-f.com.................................................82 Rock Guard.....................................................................................................86 Rosen Swiss AG, www.roseninspection.net.............................................. IFC, 3 Russell NDE Systems, Inc., www.russelltech.com..........................................82 Sawyer Manufacturing Co., www.sawyermfg.com..........................................84 ShawCor..........................................................................................................21 SLR Consulting (Canada) Ltd., www.slrconsulting.com..................................91 Smart Pipe Company Inc................................................................................47 Southern Gas Association, www.southerngas.org..........................................84 Steel Etc..........................................................................................................86 Step-Ko Products, www.stepko.com................................................................80 Stopaq BV.......................................................................................................17 Stroud Diving & Hydrography, www.mesco-offshore.com...............................84 TDW c/o Mediaassociates, Inc........................................................................13 TMK IPSCO, www.tmk-ipsco.com...................................................................51

Heaman Pipe Bending, Inc., www.heaman.com.............................................93

Triple D Bending, www.pipebending.com........................................................91

Heath Consultants, Inc., www.heathus.com....................................................91

Troy Construction, Inc., www.troyconstruction.com.........................................88

Henkels & McCoy attn: P. Freind, www.henkels.com......................................35

U.S. Pipeline, Inc., www.uspipeline.com..........................................................46

Hold Tight Solutions, www.holdtight.com........................................................93

U.S. Trencher & Supply, Inc.............................................................................80

IFT Industrial Service Freeze Plug..................................................................87

UCT, www.uctonline........................................................................................39

Illinois Truck & Equipment/Rolf Helland...........................................................83

ULC Robotics, www.ulcrobotics.com...............................................................53

International Corrosion Control, www.rustrol.com...........................................80

United Piping Inc., www.unitedpiping.us.........................................................59

Kidd Pipeline & Specialties.............................................................................32

Universal HDD, www.robbins-hdd.com............................................................56

Kiene Diesel....................................................................................................90

Universal Vortex, Inc., www.universal-vortex.com...........................................61

KS Energy Services, Inc., www.ksenergyservices.com..................................84

VACO, Inc., www.vaco.com.............................................................................93

Lane Trailer Manufacturing Co., www.lanetrailers.com....................................82

VACUWORX, www.vacuworx.com..................................................................87

Laney Directional Drilling, www.laneydrilling.com...........................................48

Weamco/Metric, www.weamco.com................................................................88

Master Bond, Inc., www.masterbond.com.......................................................90

Weldbend Corporation, www.weldbend.com...................................................10

Mears HDD......................................................................................................28

Wilcrest Field Services, Inc., www.wilcrest.com..............................................92

Meridien Energy, LLC, www.meridienenergy.com...........................................67

William Riggs Inc., www.flangespreader.com.................................................79

Mesa, www.mesaproducts.com.......................................................................91

Wood Group Mustang/Accts Payable, www.mustangeng.com........................57

Meter Engineers Inc., www.meterengineers.com............................................87

Zeeco, Inc........................................................................................................30

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Pipeline & Gas Journal • September 2015

Pipeline & Gas Journal

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EXECUTIVEPROFILE Exclusive

Kevin Bodenhamer Sets Lofty Standard for Engineers

W

hat more can you say about Kevin Bodenhamer other than he has had a career that most people in the pipeline business can only dream of having. His professional accomplishments can fill a whole page so let’s start with his resume: n 1979-1993, engineer, supervising manager for Cities Service/ Occidental Petroleum/Trident NGL. n 1993-1998, manager, Mid-America Pipeline Co. n 1998-2002, director, Williams Cos. n 2002-2013, vice president, senior vice president, Enterprise Products. n 2013-2015, vice president, chief engineer, Willbros Engineers Inc. Bodenhamer was responsible for two significant pipeline construction projects in the 1900s, the Rio Grande Pipeline, which was the first LPG pipeline built between the U.S. and Mexico, and the Discovery offshore 30-inch gas gathering system. P&GJ: Where are you from and what were your interests growing up? Bodenhamer: I grew up a poor farm boy in the hills of southwest Missouri. My dad had a great mechanical and “hands-on” aptitude. He built every building on the farm and several pieces of farm equipment. He taught me to use all types of hand tools and equipment, so overhauling an engine or adding on a room to a house was all part of my formative years. When it came time to graduate from high school, I knew that I wanted to get a degree where I would be building or making something, so engineering was a natural fit. I worked (during school and summers) my way through the University of Missouri-Rolla and received my BS in civil engineering in four years with no debt or student loans. P&GJ: How and why did you get into the energy business, in particular pipelines? Did you ever have any second thoughts about your decision? Bodenhamer: When I was attending college I thought that I would go into building or highway construction, but when it came time to interview on campus in my senior year, all of the major oil companies were there recruiting (it was the middle of the late ’70s/early ’80s oil boom) for their engineering departments. I ended up taking lots of energy company recruiting trips and after discovering that I could design and build pipelines for a better salary than building buildings or roads, the choice was clear, I was going into the energy business.

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Pipeline & Gas Journal • September 2015

By Jeff Share, Editor

Add to those accomplishments that he is one of just a handful of professional engineers licensed in all 50 states, and that in 2013 he was named American Society of Mechanical Engineers Fellow. Now you get a sense of one of the premiere engineers in the pipeline business, and one who has worked on both the contract and operations side of the business. Bodenhamer has a story worth telling, especially beginning with his humble roots in rural Missouri. It’s indicative of the type of person any company would want on its payroll; in this case, it’s the pipeline business that won out. His answers in this interview are direct and focused, just what you would expect from a trained engineer.

I started my career with Cities Service Company in Tulsa designing and building gas-gathering systems and compressor stations. The energy business has been a great career and if I had it to do all over again, I wouldn’t change a thing. P&GJ: In what ways has the energy and pipeline business changed since you began your career? Bodenhamer: I’m glad to say that I have seen (and glad to have been a part of) many changes in the business, all for the good. Pipeline hydraulic modeling programs used to take hours to run on the mainframe while today much more complex models run in a matter of seconds on your tablet. Materials and equipment have gotten stronger, better and more reliable. Information and communication have moved from paper to the cloud, and anyone around the world can have instant access. While the time and effort to permit projects has grown exponentially, the number and volume of spills and releases continue to decline. However, the most important improvement is that the industry is much safer, both for the public and for the people who build and operate the systems as incidents and accidents continue to decline. P&GJ: What are your responsibilities with Willbros, and why did you decide to join the service sector at this point in your career? Bodenhamer: As vice president and chief engineer, I’m responsible for the engi-

neering, design, mapping, and GIS information for the pipeline portion of our clients’ projects. After spending 35 years in the engineering, operations, compliance, regulatory and EHS (environmental, health and safety) areas of various operating companies with the last decade of that in Houston, my wife and I wanted to go back to Tulsa. After talking to several operating and engineering firms in Tulsa, I saw a unique opportunity at Willbros where I could work with a broad base of clients and projects while being able to mentor some of the next generation of individuals who will be taking the energy industry forward. P&GJ: How have you witnessed the relationship between operating companies and service providers change? Bodenhamer: Over my career, I have seen virtually all of the energy companies outsource the majority of their engineering, design and construction work to firms such as Willbros. This transition has made it critical that suppliers and operators have very close relationships and stay in close communication throughout all phases of a project. P&GJ: When did you have your first inkling that an energy renaissance in North America was looming? Bodenhamer: I’ve seen several “booms and busts” in the energy industry over my career, but I believe the current Q&A: Executive Profile...continued on page 78

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