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ISSUE 13 SEPTEMBER 2012

A guide to IPC

Pipeline coatingsThe Langeled Pipeline

Piping to

capacity

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2 PiPelines international | sePtember 2012

issue 13 | sePtember 2012

The publishers welcome editorial contributions from interested

parties. However, the publishers do not accept responsibility

for the content of these contributions and the views contained

therein which will not necessarily be the views of the publish-

ers. The publishers do not accept responsibility for any claims

made by advertisers.

Unless explicitly stated otherwise in writing, by providing edito-

rial material to Great Southern Press (GSP), including text and

images you are providing permission for that material to be sub-

sequently used by GSP, whole or in part, edited or un changed,

alone or in combination with other material in any publication

or format in print or online or howsoever distributed, whether

produced by GSP and its agents and associates or another party

to whom GSP has provided permission.

[email protected]

www.pipelinesinternational.com

REGULARS

6 From the Editor

14 World wrap

16 Project briefs

71 Event calendar

72 Advertisers index

72 Coming in future issues

AROUND THE WORLD

8 New subsidiary to manage pipelines inColombia

10 Keystone XL still set for 2013 decision

11 Signed agreements bring TAPI one stepcloser

12 Gas ows west from Shah Deniz

13 Oil pipeline commissioned in AbuDhabi

13 Tanzanian pipeline constructioninaugurated

NORTH AmERicA

17 Fuelling the economy: North Americaspipelines

21 Top 5 tips for your IPCE conferenceexperience

23 Future industry prospects: a marketoutlook on the oil and gas sector

mEET THE cOmPANY

25 Dependable across the continent: anin-depth look at TransCanada

PROjEcTS

27 Heading upstate: NY getsConstitutional

TERRAiN REviEW

30 Pipelines in the mighty jungle

cOATiNGS

32 Industry need for mobile pipe coatingtechnologies

36 Coatings come alive: rst sprays in alive LNG plant

REHAbiLiTATiON AND REPAiR

38 Get your pipe x in Berlin

39 Developing an eective in-servicewelding programme

42 Barking up the right tree with aninnovative pipeline leak detection

method

iNDUSTRY NEWS

45 Spotlight on the SSV

46 The Nixon solution: providing longline communications from beginning

to end

48 Can the onshore pipeline industrybenet from new design approaches?

50 Overcoming oshore inspectionchallenges

51 Isolation and weld joint testing ofpipelines

RiSk mANAGEmENT

52 Pipeline risk assessment: controllingthe bias

54 Bringing Synergi to integritymanagement

55 A step-by-step approach to pipeline

integrity management

HiSTORY

60 The Langeled Pipeline

EvENTS

64 The world unites for CO 2 pipelines

69 Solving the unpiggable puzzle

70 WGC2012: sustaining future globalgrowth

25 3230

contents

UNiTED kiNGDOm

(Editorial and Technical)PO Box 21Beaconseld, Bucks HP9 1NS UKTel: +44 1494 675139 | Fax: +44 1494 670155

TORONTO

(Editorial)Tel: +1 416 551 9113

UNiTED STATES

(Sales)16360 Park Ten Place, Suite 109,Houston, TX 77084United States of AmericaTel: +1 832 314 2694

AUSTRALiA

(Sales and Subscriptions)GPO Box 4967Melbourne, Victoria 3001 AustraliaTel: +61 3 9248 5100 | Fax: +61 3 9602 2708

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This is where The name

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2012 Vermeer Corporation. All Rights Reserved.6 PiPelines international | sePtember 2012

Many will be familiar with Emmental

cheese: the cheese from Switzerland

with holes. Fewer will be familiar

with the fact that the Swiss cheese model is

an instructive way of looking at how accidents

and disasters occur, and how they can be

prevented. The idea of slices of Emmental

being lined up and, when the apparently

random distribution of holes align, an

accident can occur, was rst presented in

2000 by James Reason writing in theBritish

Medical Journal, and has since been widely

adopted. The holes in the cheese in the

model can be seen as representing both

active failures such as operating errors

and latent failures, or weaknesses in the

system that do not in themselves cause an

accident, although they fail to prevent one

when the active failure calls them into play at

a moment in time. Problems arise when latentfailures accumulate: maintenance is not

undertaken, records are lost, and audits are

incomplete. The consequence of a small active

failure can then be catastrophic as the

protective systems fail to function as expected

when the holes line up.

What has this got to do with pipelines?

Regrettably, quite a lot. In the previous (June)

and current (September) issues of theJournal

of Pipeline Engineering our sister publication

two important papers were published

explaining in articulate and disturbing detail

how failures occur and how, in the former

paper, steps can be taken to prevent them.

Writing in the June issue from a pipeline-

engineering viewpoint, Penspen Integrity

Director Dr Phil Hopkins emphasises that

learning from failures can help reduce future

failures. He points out that failures occur due

to a complex mix of problems, which in

particular includes deterioration with time

and changing conditions, but also includes

other factors such as human error. The paper

illustrates well-known threats to pipeline

systems, but notes that threats such as

management failures and the absence of asafety culture also need to be considered, and

the paper devotes more time to these

lesser-known threats. The paper also considers

how adopting best practice can help to

reduce failures, but best practice extends

beyond best engineering practices: it also

includes best sta, best management

practices, etc., both in the operators

company and in its contractors companies.

Dr Jan Hayes and Professor Andrew

Hopkins (no relation) examine in the

September issue the Deepwater Horizon

incident, and the lessons that can be learned

from this by the pipeline industry. Both

authors are from the Australian National

University School of Sociology, and they

therefore are able to examine the problem with

a refreshing and interesting perspective. As

does Dr Hopkins, the authors highlight the

Swiss cheese model as a useful way of

introducing the concept of what others might

call Murphys Law, paraphrased as if things

can go wrong, they will. Dr Hayes and

Professor Hopkins point out that social science

research shows that high-performing

organisations seek opportunities to learn from

failures, and Deepwater Horizon provides

such an opportunity for the pipeline industry.

Whilst the technical details of well-control

systems may not be directly relevant, there are

broader organisational factors that can

provide signicant lessons to any organisation

that designs, maintains, and/or operates

complex and potentially hazardous

technology. Accident investigations, including

Deepwater Horizon, continue to highlightcommon organisational failures that can have

catastrophic consequences, and it is these

lessons that are the subject of this paper. The

key question is why accidents continue to

occur despite the level of engineering and

management system controls that are

apparently in place.

The authors quote some of the

considerable volume of published material

available regarding the causes of the

Deepwater Horizon blowout, and their paper

is based on analysis of that material to

emphasise lessons that are relevant to

management of pipeline companies,

including: managing the cost vs. safety

trade-o, the down side of good news, and

understanding the dierence between

personal safety and system integrity. The

paper makes some very important points but

also asks some far-reaching questions of those

responsible for pipeline systems and

networks, and is worthy of study by all with

responsibilities for operating pipelines.

Welcome to IPCEThe International Pipeline Conference and

the accompanying exhibition are being held in

Calgary from 2428 September.Pipelines

Internationalis at Stand 1301, near the

exhibition registration desk. If youre in

Calgary during this event, we look forward

with pleasure to seeing you at our stand. The

stand is shared with Clarion Technical

Conferences of Houston, and the Professional

Institute of Pipeline Engineers, and there will

be plenty to talk about with all our visitors.

John Tiratsoo

Editor-in-Chief

from the editor

ISSUE 13 SEPTEMBER2012

Aguide to IPC

Pipelinecoatings

The LangeledPipeline

Piping tocapacity

Construction of natural

gas gathering pipelines

in the Piceance Basin in

northwestern Colorado,

US. Photo by Miller

Photography. Courtesy of

Williams

Editor-in-Chief: John Tiratsoo

ManagingEditor: Lyndsie Mewett

AssociateEditor: Sarah Paul

AssistantEditor: Stephanie ChanJournalists: Alex York

Angus Nice

SalesManager: Tim Thompson

SeniorAccountManager: David Marsh

SalesRepresentative: David Entringer

CreativeDirector: Michelle Cross

ActingDesignManager: Bianca Botter

SeniorDesigners: Susie Monte

Katrina Rolfe

Designers: Venysia Kurniawan

Benjamin Lazaro

USAManager: Luke Rowohlt

Publicationsand

EventsCo-ordinator: Elizabeth Foster

Publisher: Zelda Tupico

ISSN:1837-1167

Remember to email your news, viewsand article ideas [email protected]

@

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The purpose of the new company is to

serve the strategic transportation and

logistic needs of the countrys oil

industry resulting from the increase in

hydrocarbon production and higher sales of

crudes and rened products, both in

Colombia as well as in international markets.Furthermore, it will strengthen and

expand the network with high standards of

industrial safety and reliability, and

contribute to environmental preservation,

all of which is expected to signicantly

reduce the damage on roads from truck

transportation of hydrocarbons.

Ecopetrol said that this decision is a step

forward in the growth of the industry, by

separating Ecopetrols role as owner,

planner, operator and user of transport

systems. Cenit will operate with an open

model in which all the interested parties will

have the possibility of accessing the

transport infrastructure.

Cenit will be incorporated with all of

Ecopetrols transportation assets, including

the interests held in the Ocensa, Los Llanos,

Bicentenario, and Colombian pipelines.

Ecopetrols current transportation

contracts will be transferred to the new

company, maintaining the conditions agreedupon between the parties. Cenit will guarantee

Ecopetrol the capacity for transportation and

handling of its hydrocarbons.

After the transfer of the assets, which will

be completed shortly, the contractual and

commercial relationships will be established

between Cenit and its customers. Furthermore,

the commercial conditions of the new contracts

or projects for infrastructure expansion will be

determined by the new company in accordance

with applicable legislation.

Ecopetrol will continue to undertake

operation and maintenance of the existing

transportation infrastructure, for which it will

sign the respective contracts with Cenit.


Colombian company Ecopetrol S.A. has incorporated Cenit S.A.S., a wholly owned subsidiarycompany specialised in hydrocarbon transport and logistics in Colombia, in order to managepipelines in the country.

New subsidiary to managepipelines in Colombia

around the world

Ecopetrol said that this

decision is a step forward

in the growth of the

industry, by separating

Ecopetrols role as owner,planner, operator and user

of transport systems.

The new NDT

NDT Systems & Services GmbH & Co. KGFriedrich-List-Str. 1D-76297 StutenseeGermany

Phone: +49 (0)72 44 7415-0Fax: +49 (0)72 44 7415-97www.ndt-global.com

NDT Systems & Services LLC2835 Holmes RoadHouston, Texas 77051USA

Phone: +1 713 799 5430Fax: +1 713 799 5406www.ndt-global.com

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10 PiPelines international | sePtember 2012 PiPelines international | sePtember 2012 11

around the world

The decision comes following TransCanadas resubmission of a

Presidential Permit application to the United States

Department of State (US DoS) for the pipeline section running

from the US-Canada border in Montana to Steele City, Nebraska.

TransCanada will supplement that application with an alternative

route in Nebraska as soon as that route is selected.In acknowledging receipt of the new application, the US DoS said

that its responsibility, under Executive Order 13337, is to determine if

granting a permit for the proposed pipeline is in the national interest.

TransCanada President and Chief Executive Russ Girling said

The fact the US DoS has rearmed its timeline for making a decision

on a Presidential Permit for Keystone XL early next year is an

important development and we look forward to the detailed schedule

of the steps needed to meet that rst quarter 2013 timeframe.

It is important to recognise that by the time a nal decision on

this critical piece of North American energy infrastructure is made,

Keystone XL will be well into its fth year of exhaustive and detailed

studies, the most extensive review for a cross-border pipeline ever.

The nal review should focus solely on the re-aligned route that

avoids the Nebraska Sandhills. The rest of the Keystone XL route

remains the same. The geology of the route remains the same. The

environmental conditions remain the same. Nothing else has changed

since the nal environmental impact statement was approved.

The proposed Keystone XL Pipeline involves a crude oil pipeline

stretching from Hardisty, Alberta, and running southeast through

Saskatchewan, Montana, South Dakota and Nebraska. It will link up

with a portion of the Keystone Pipeline that will be built through

Kansas to Cushing, Oklahoma. The pipeline will then continue on

through Oklahoma to a delivery point near existing terminals in

Nederland, Texas, to serve the Port Arthur marketplace.

Supporters of the proposed pipeline point out that its

construction, along with the 26 pump stations required, would

provide upwards of 7,000 new jobs in a country where unemployment

hovers around 910 per cent.

The Canadian portion of the Keystone XL Pipeline received

approval from Canadas National Energy Board in March 2010.

Quintana Capital Group wants to build a 483 km pipeline system from

western North Dakota to eastern Montana, where it would meet

TransCanadas proposed Keystone XL Pipeline.

TransCanada has selected MPS Constructors consisting of three

pipeline construction companies: Michels Corporation, Price Gregory

Services and Sheehan Pipeline Construction Company to build

approximately 1,897 km of the proposed 2,673 km pipeline and related

infrastructure from Hardisty, Alberta, to Steele City, Nebraska.

TransCanada expects to begin construction of Keystone XL in

the rst quarter of 2013, with completion scheduled for late 2014 or

early 2015.

The United States Department of State has reiterated that it expects to make a decision on TransCanadasproposed 2,673 km long, 36 inch Keystone XL crude oil pipeline by the first quarter of 2013.

Keystone XL still set for 2013decision

around the world

A map of the Keystone Pipeline and proposed pipeline expansion routes.

Afghanistan also signed a memorandum of understanding for a

long-term gas co-operation agreement with Turkmenistan.

Addressing attendees of the 3rd Turkmenistan Gas

Congress and Exhibition in Awaza, where the gas sales and purchase

agreement (GSPA) was signed, Indian Minister of Petroleum and

Natural Gas Shri S. Jaipal Reddy said that the presence of a strong

Indian delegation underlined Indias appreciation of the growing role

that natural gas will play in the country.

Without a doubt, the economic benets of the Turkmenistan

Afghanistan Pakistan India (TAPI) Gas Pipeline will be immense

for our energy-starved economies, said Mr Reddy. The ow of

natural gas will bring in its wake industrial and economic

development in our countries.

The TAPI Pipeline project would transport gas from

Turkmenistans gas elds through Afghanistan to Multan in Pakistan,

and on to the Indian township of Fazilka.

The TAPI Pipeline is expected to transport up to 90 MMcm/d of

natural gas, linking one of central Asias largest energy suppliers with

south Asian markets.

This is a truly historic moment of unparalleled regional

co-operation, said Director General of the Central and West Asia

Department at the Asian Development Bank (ADB) Klaus

Gerhaeusser, who has acted as the TAPI Secretariat since 2002.

ADB has played a leading role in co-ordinating and facilitating

the TAPI negotiation process over the past ten years.

The bulk of exported gas will help meet surging energy demand

in India and Pakistan where energy needs are set to double by

2030 while the remainder will alleviate chronic power shortages

in Afghanistan.

With the TAPI Pipeline in place, Turkmenistans gas will reach a

greater range of overland markets, diversifying from its existing

markets in Russia, Iran, and China.A GSPA between Afghanistan and Turkmenistan is expected to be

nalised shortly.

The next step is for the four TAPI nations to attract commercial

partners to build, nance, and operate the pipeline, estimated in

2008 to cost at least $US7.6 billion.

BackgroundIn April 2012, Turkmenistan and Pakistan signed GSPAs for the

proposed TAPI pipeline during a state visit to Pakistan by the

Turkmenistan President.

The GSPAs were initialled by Turkmen President Gurbanguly

Berdimuhamedov and Pakistani Federal Minister for Petroleum

and Natural Resources Dr Asim Hussain in Islamabad. Under the

agreement, Turkmenistan will provide 3.2 Bcf/d of natural gas

from the South Yolotan/Osman and adjacent gas elds through

the pipeline.

While the initial feasibility study of the TAPI Pipeline was conducted

in 2004, momentum on project negotiations increased in mid-2010, and

by the end of 2010 an intergovernmental agreement, gas pipeline

framework agreement and Heads of Agreement were signed in

Turkmenistan. Several rounds of bilateral negotiations were held

between Turkmenistan and Pakistan on the TAPI gas price, which ended

in October 2011.

Mr Reddy said that India is currently focused on building LNG

infrastructure and expanding gas pipelines across the country, with

its natural gas sector projected to grow at a compound annual rate of

1.5 per cent in the ve years ahead.

Our current gas pipeline network is around 13,000 km long with

a capacity of 334 MMcm/d, he said. It is projected to grow by more

than double to 31,757 km by 2017 with a capacity of 876 MMcm/d.

After more than 20 years of negotiations, Indias GAIL and Pakistans Inter State Gas System havesigned gas sales and purchase agreements with Turkmenistan, bringing the proposed 1,800 kmTurkmenistan Afghanistan Pakistan India natural gas pipeline closer to reality.

Signed agreements bring TAPI onestep closer

International Pipeline Management Services Ltd

IPMS is a UK based independent oil and gas engineering andmanagement consultancy providing project engineering and

management support as well as specialist training courses tothe global oil and gas industry.

At IPMS, we are pleased to offer and deliver the followingengineering and specialist training services

Onshore and subsea pipelines engineering Materials and corrosion engineering Process engineering Risk and reliability (FTA,ETA, FMECA)

Specialist training courses

Pipeline integrity management Onshore and subsea pipelines engineering Risk and reliability Bolted and anged joint integrity

We look forward to receiving your valued enquiry, please

contact us for our extensive range of services and courses

Professor David Newman

International Pipeline Management Services Ltd

Telephone: +44 (0) 208 371 6962

Telefax: +44 (0) 208 346 9184

Mobile: +44 (0) 7584 747 560

Email: [email protected]

Web: www.globalpetroleumgroup.com

The fact the US DoS has reaffirmed

its timeline for making a decision on a

Presidential Permit for Keystone XL early

next year is an important development and

we look forward to the detailed schedule

of the steps needed to meet that first

quarter 2013 timeframe.

- TransCanada President and Chief Executive, Russ Girling

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The Shah Deniz Stage 2 project will

bring gas from the Caspian Sea to

markets in Turkey and Europe,

opening up the Southern Gas Corridor.

The Nabucco West proposal involves a

1,300 km, 48 inch diameter gas pipeline that

will transport gas from the vicinity of the

Turkish-Bulgarian border through Bulgaria,

Romania and Hungary to Austria with otake

stations in each transit country.

Nabucco West will follow the sameprinciples as the original Nabucco concept.

This means that the pipeline will be

designed to be a scalable and multisource

natural gas transmission infrastructure.

Capacity could be scaled up from 10 Bcm/a

to 23 Bcm/a to respond to demand.

BP said that the decision was made on

the basis of the publicly communicated

selection criteria announced in 2011.

In particular, the greater maturity of

Nabucco West gave the consortium

condence that this project could be

developed and delivered on the same

timeline as [Shah Deniz] Stage 2, said BP.

The consortium will now co-operate with

the Nabucco West project to optimise its

scope, its technical studies and itscommercial oer.

Based on the same criteria, in

February 2012, the consortium selected

the Trans-Adriatic Pipeline (TAP) as the

potential route for export of Stage 2 gas to

Italy. Since that decision, the Shah Deniz

consortium has worked closely with TAP,

recently concluding a co-operation

agreement with this project.

The Shah Deniz consortium will

continue to work with the owners of the two

selected pipeline options. Shah Deniz will

make a nal decision between these

projects, and will conclude related gas sales

agreements ahead of the Shah Deniz nal

investment decision planned for mid-2013.

BP said that development of the SouthEast Europe Pipeline project, which had

been assembled by Shah Deniz partners in

collaboration with Bulgaria, Romania and

Hungary, will cease.

First gas exports are expected at the end

of 2017.

The proposed Nabucco West Pipeline has been selected by the Shah Deniz consortium, led by BP, asthe projects delivery route through central Europe.

The approximately 424 km, 48 inch diameter Abu Dhabi Crude Oil Pipeline, located in the United ArabEmirates, has been commissioned and is now operational.

The project includes both on- and

oshore components, and is capable of

transporting 75 MMt/a of crude oil.

The pipeline extends from the Habshan

Oil Field to the Fujairah Port, bypassing the

congested Hormuz Strait, and has a 405 km

onshore section and a 19 km oshore section,

including a 13 km subsea section. The

pipelines design rated delivery capacity is

1.5 MMbbl/d, which will be loaded through

marine single point moorings.

The International Petroleum Investment

Company, which was tasked by the Government

of Abu Dhabi with the execution of the project,

said The scale of the project is immense and

encompasses the construction of pumping

stations, a main oil terminal and oshore

loading facilities at Fujairah, in addition to the

installation of the main pipeline.

In 2008, China National Petroleum

Corporation (CNPC) was contracted to provide

engineering, procurement and construction

services on the project, a contract worth

$US3.29 billion. China Petroleum Engineering

and Construction Corporation (CPECC)

awarded Penspen the contract for carrying

out the detailed engineering.

CNPC said that during construction,

the project registered a local best record

with no fatality, no environmental, medical

and transportation accidents for 50 million

man hours.

The rst shipment of exported crude oil

was loaded on 5 July 2012, and the pipelines

commissioning ceremony was held on 15 July

at the pipelines land terminal station at the

Fujairah Port.

Oil pipeline commissionedin Abu Dhabi

Gas flows west from Shah Deniz

around the world around the world

The project involves approximately

532 km of gas pipeline from Mnazi Bay

in the Mtwara region and Songo Songo

in the Kilwa District, to Dar es Salaam, with a

36 inch main line and one 24 inch spur line.

The pipeline will have a capacity of784 MMcf/d of gas, to be used for the

production of 3,900 MW of electricity. On

completion, the project will allow the Mnazi

Bay Concession partners and others to

transport natural gas to large-scale electricity

producers, and other industrial users and

major population centres in Tanzania.

The start of construction comes after the

Tanzanian Finance Minister Dr William

Mgimwa outlined funding plans for the

Mtwara to Dar es Salaam pipeline in his

presentation to the National Assembly on

the 201213 budget in June 2012.

Dr Mgimwa said that the Government

expects to borrow $US746 million worth of

external non-concessional loans, which will

be used to nance various development

projects, including the pipeline.

Specically, Dr Mgimwa said that the

Government will implement the

construction of the pipeline using a

$US1,225.3 million loan from the Export-Import Bank of China, which will be

managed by the Tanzania Petroleum

Development Corporation.

Pipeline proponent Wentworth

Resources Limited, an independent oil and

gas company with gas production and a

committed exploration programme in the

Rovuma Basin of southern Tanzania and

northern Mozambique, said that, on

completion, the project will allow the Mnazi

Bay concession partners and others to

transport natural gas to large-scale

electricity producers, other industrial users,

and major population centres in Tanzania.

Since the discovery of the Mnazi Bay

gas field in 1982, the substantial gas

resources in this concession have been

effectively stranded, said the company,

adding that gaining access to the greater

markets of Tanzania is expected to allow

full production from Wentworths existing

and future gas wells.The company said that currently three of

four existing wells are being worked over to

maximise their long-term productivity.

The outcome of this work will provide a

basis for concluding an immediate Gas

Sales Agreement to supply the pipeline

and for future development of the Mnazi

Bay and Msimbati gas fields.

Wentworth Executive Chairman

Bob McBean said [The project] is the

beginning of Tanzanias future as a

significant gas producing country and

we are proud to be a partner in this

endeavour.

Construction began immediately and is

expected to take 1214 months to complete.

The Government of the United Republic of Tanzania officially inaugurated the construction of theapproximately 532 km long Mnazi Bay to Dar es Salaam Gas Pipeline Project in July 2012.

Tanzanian pipeline constructioninaugurated

The proposed route of the Nabucco West Pipeline from the Turkish-Bulgarian border to Austria.

Abu Dhabi

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world wraPworld wraP

14 PiPelines international | sePtember 2012To stay informed on this news and more, subscribe to the Pipelines International Update

PNGRB approves construction of Indian gas pipelineIndias Petroleum and Natural Gas Regulatory Board has given GAIL

approval to construct a 1,104 km, 430 inch diameter gas pipeline

extending from Kochi to Mangalore. The Kochi Kootanad

Bangalore Mangalore gas pipeline, which will have a design

capacity of 16 MMcm/d of gas, will be constructed in two phases;

the rst phase will involve approximately 44 km of pipeline, and the

second phase will involve completion of the remaining 1,060 km.

The pipeline is expected to be commissioned by March 2013.

Isolating contract awardedQatargas awarded pipeline engineering company

STATS Group a ten-year contract to provide remote

pipeline isolation equipment. STATS will design,

manufacture, test and supply a new range of

high-integrity Remote Tecno Plugs for 32, 34 and

38 inch pipelines which will become part of

Qatargas emergency pipeline repair system for

production facilities in the Persian Gulfs North

Field, where gas and condensate is transferred by

pipelines to Ras Laan City for export.

Jetting through the pipelineHorizon Terminals, the wholly-owned

subsidiary of Emirates National Oil

Company focused on terminal

operations, has secured partial funds

for a proposed 60 km jet fuel pipeline in

Dubai. Horizon Terminals has signed a

ten-year Islamic term nancing facility

of $US100 million with Standard

Chartered Bank, Emirates NBD and

Noor Islamic Bank which partly

nances the construction of a second

jet fuel pipeline from the new bulkliquid petroleum terminal in the Jebel

Ali Free Zone to the Dubai International

Airport, and its associated storage tank

farm with 141,000 cubic metres of

capacity. The transaction has a dual

tranche of United States dollars and

United Arab Emirates dirham.

North Sea inspection completeT.D. Williamson (TDW) has successfully completed the in-line

inspection of a key North Sea gas pipeline on behalf of Perenco UK. The

operation was carried out on the 24 inch diameter gas pipeline that

links the Trent Platform with the Bacton Terminal pipeline. TDW

conducted this intelligent inspection and associated pipeline service

operation as part of Perencos strategic programme to ensure the

integrity of its pipelines and assets.

Turkey and Azerbaijan sign agreement for TANAPTurkish Prime Minister Recep Tayyip Erdogan and Azeri President Ilham

Aliyev signed the intergovernmental agreement ocially launching the

Trans Anatolian Pipeline project (TANAP), accompanied by the energy

ministers of both countries. The $US7 billion project will deliver natural

gas from Azerbaijans Shah Deniz 2 gas eld to Turkey and beyond via a2,000 km pipeline. TANAP will carry approximately 16 Bcm/a of gas,

6 Bcm/a of which will be used for Turkeys domestic market, while the

rest will continue on to Europe. The construction of the pipeline is

scheduled to commence in 2013, with the rst phase planned to be

commissioned in 2016.

Proposed Mexican pipeline nds new stakeholderEnags has reached an agreement with Elecnor to be part of

the subsidiary that was awarded the Morelos Gas Pipeline

construction and operation contract in Mexico. Under the

agreement, Enags and Elecnor will each hold 50 per cent

of the company owning the 160 km long gas pipeline and

will jointly carry out all engineering, construction, and

operating functions. Total investment in construction,

including nance costs, is estimated at $US270 million.

Hydrogen pipeline starts constructionWillbros Group was awarded a contract by

Praxair Inc. to construct an 84 km, 12 inch

diameter hydrogen pipeline in Louisiana. The

hydrogen pipeline will originate at Praxairs

plant in Geismar, Louisiana, and will terminate

at Valeros renery in Norco, Louisiana.

Construction on the project is underway and is

scheduled to be completed in September 2012.

South American pipeline companies sign co-operation agreementsEP Petroecuador and OCP Ecuador S.A. have signed two co-operation agreements,

including one that sees the interconnection of the companies pipelines. The rst

agreement relates to the interconnection of the SOTE Pipeline and the OCP Pipeline

in Lago Agrio to allow for the pumping of oil in each direction in case of emergency.

The second agreement aims to establish mutual mechanisms for the support of

sta, facilities and equipment owned by OCP Ecuador S.A. and EP Petroecuador in

both normal operations and emergency situations.

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PiPelines international | sePt ember 2012 17

Cross-border oil pipelinesEnbridge Energy Partners, through its

subsidiary Enbridge Pipelines (Bakken) LLC

is currently constructing the Bakken

PipelineProject , which crosses throughparts of Montana, North Dakota, United

States and Saskatchewan, Canada.

The company is proposing to extend an

existing pipeline (running from Berthold,

North Dakota, to Steelman, Saskatchewan)

by constructing a 124 km, 16 inch diameter

pipeline from a new terminal near Steelman,

Saskatchewan, to the Enbridge Pipelines Inc.

mainline Terminal near Cromer, Manitoba.

The proposed project scope includes the

installation of new pumps and associated

equipment, and utility upgrades at the

Steelman Terminal.

Enbridge will also expand the US portionof Line 26 by constructing two new pumping

stations and replacing a 17.7 km segment of

the existing 12 inch diameter pipeline

between Kenaston and Lignite, North Dakota.

The proposed replacement section will

be re-routed around the town of Lignite to

the east and northeast, generally following

an existing railroad right-of-way. The new

pump stations will be constructed in

Kenaston and Lignite. In addition, the

project also calls for an expansion at

Enbridges existing terminal and station in

Berthold, North Dakota.

The timing for completion of the BakkenPipeline Project is early 2013.

TransCanadas GulfCoastProject is an

approximately 780 km, 36 inch diameter crude

oil pipeline beginning in Cushing, Oklahoma,

and extending south to Nederland, Texas.

Proposed in early 2012, construction of

the Gulf Coast Project is expected to begin in

Stretching across approximately 4.8 per cent of the earths surface, North America is home to someof the largest pipeline projects in the world. Here, Pipelines International takes a look at some of thecurrent proposed pipeline projects on the continent. Read on for the opportunities that these projectsmay present for your company.

Third West East Gas Pipeline

PRMER: China National Petroleum Corporation (CNPC) 6,

Liupukang Jie, Xicheng Dist., Beijing, 100724 China

Tel.: +86 10 6209 4114 Fax: +86 10 6209 4806

PRJECSCPE: CNPCs proposed Third West East Gas

Pipeline, consisting of one trunk, ve branch trunks and three

branches, will have a total length of over 5,000 km and adesign capacity of 30 Bcm/d. The pipeline, which will be

supplied with gas from central Asia, will originate at Horgon

in Xinjiang and terminate at Fuzhou in Fujian. The pipelinewill run in parallel with the Second West East Pipeline as

far as Zhongwei in the northern Ningxia region, with the

possibility to extend.

PRJECUPDAE:CNPC has signed a joint stock and

co-operation framework agreement on the proposed ThirdWest East Gas Pipeline in Beijing, securing funding for the

project. The agreement was signed with the National Council

for Social Security Fund, Urban Infrastructure ConstructionInvestment Fund, Baosteel, and the Industrial and Commercial

Bank of China (ICBC).

PPEEEG: 5,000 km

PPEECAPACy: 30 Bcm/a

Access project details, owner and contractor information of over 10,000

planned, under construction and existing pipeline projects online.

Locate your next business opportunity with thefully searchable Pipelines International Projects database.

Sign up for a free 14-day trial atwww.pipelinesinternational.com/projects

Gas Interconnection Poland Lithuania

PRMER: AB Lietuvos Dujos, Poppy g. 24, LT-03212 Vilnius, Lithuania. Tel: +370 8 5 236 0209. Gaz-System, st. Mszczonowska 4 02-337,

Warszawa, Poland. Tel: +48 22 220 18 00.

PRJECSCPE: The 562 km long Gas Interconnection Poland Lithuania Pipeline would integrate the Baltic States into the European Unions

gas market, and would provide access to the global LNG market via the Swinoujuscie LNG terminal. Construction costs are estimated to beapproximately $US621.6 million, with 73 per cent of investment to be based in Poland.

PRJECUPDAE: ILF Consulting Engineers Polska has been contracted to conduct a feasibility study for a gas pipeline between Poland andLithuania. The business case analysis and feasibility study on the pipeline are being co-nanced by the European Commission within the

TransEuropean Energy Network Programme. The feasibility study is expected to be available by the rst quarter of 2013.

PPEEEG: 562 km

PRJECCAPACy:3.2 Bcm/a


Fuelling the economy:North Americas pipelinesby Sarah Paul, Associate Editor

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Coastal GasLink

PRMER: TransCanada Corporation, 450 - 1 Street SWCalgary, Alberta, Canada, T2P 5H1. Tel: +1 403 920 2000

PRJECSCPE: The estimated $US4 billion pipeline will

transport in excess of 1.7 Bcf/d of natural gas from theMontney gas-producing region near Dawson Creek, British

Columbia (BC), to the recently announced LNG Canada

export facility near Kitimat, BC. The pipeline is expected tocreate 2,0002,500 direct construction jobs over a two- to

three-year construction period, and is anticipated to be in

service toward the end of the decade, subject to regulatoryand corporate approvals. The LNG Canada project is a joint

venture led by Shell, with partners Korea Gas Corporation,

Mistubishi Corporation and PetroChina. Shell andTransCanada are currently working toward the execution of

denitive agreements on the Coastal GasLink Project.

PRJECUPDAE: TransCanada has been selected by Shell

Canada and its partners to design, build, own and operate

the project.

PPEEEG: 700 km

PRJECCAPACy:1.7 Bcf/d

Pre-salt subsea pipelines project

PRMER: Petrobras, Av. Republica do Chile 65, Centro, Rio de Janeiro, Rio de Janeiro 20031-912, Brazil.

PRJECSCPE: Petrobras has awarded French oil service company Technip and Brazil company Odebrecht Oil and Gas the contract for thecharter and operation of two pipelay vessels. Characterised by their high pipelay tension capacity of 550 tonnes, the twin vessels to be used will be

employed principally to install umbilical and exible owlines and risers to connect subsea wells to oating production units in waters up to over

2,500 m deep oshore Brazil, including in the pre-salt area. The two identical vessels will be delivered in 2014.

PRJECUPDAE:Power and automation technology group ABB has been awarded an order from Daewoo to supply energy ecient propulsion

and electrical power systems for two new deep sea pipeline installation vessels that will build the oil transport infrastructure. South Koreanshipyard Daewoo Shipbuilding and Marine Engineering will build the vessels. ABB will supply drives, motors and generators, medium voltage

switchgear, transformers and softstarters that will provide energy ecient propulsion and a reliable power distribution system on board. In

addition, ABB will take full project responsibility and do complete engineering for its own scope of supply.

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In addition, Enterprise and Enbridge are

currently constructing the 804 km, 30 inch

diameter SeawawinningPipeline,

which is expected to more than double the

Seaway Pipelines capacity to 850,000 bbl/d

by mid-2014. An additional 137 km lateral is

planned as part of the twinning project.

US NGL pipelinesIn April 2012, Enterprise Products Partners,

Anadarko Petroleum Corporation and DCP

Midstream agreed to design and construct the

700 km FrontRangePipeline a natural gas

liquids (NGL) pipeline from the Denver-

Julesburg Basin in Colorado to Skellytown,

Texas. The pipeline is expected to begin service

in the fourth quarter of 2013.

Depending on shipper interest to the

binding open commitment period, initialcapacity is expected to be approximately

150,000 bbl/d, which can be readily

expanded to approximately 230,000 bbl/d.

Each party will hold a one-third interest

in the pipeline that will connect with both

the Mid-AmericaPipelinesstemand the

proposed Texas Express Pipeline.

The 933 km exasExpressPipeline is

planned to originate at Skellytown, Texas,

and extend to NGL fractionation and storage

facilities in Mont Belvieu, Texas. The

pipeline will have an initial capacity of

approximately 280,000 bbl/d and will be

readily expandable to approximately

400,000 bbl/d. The project is currently in the

design and procurement stage.

In addition, the Crosstex Energy

Partnership received sucient long-term

supply commitments to proceed with the

construction of its 209 km, 12 inch diameter

Cajun-SibonGPipeline in Texas.

The pipeline will extend the

partnerships existing 708 km Cajun-Sibon

GSstem and connect Crosstexs NGL

fractionation facilities in south central

Louisiana to Mont Belvieu supply pipelinesin east Texas. The new pipeline is expected

to begin operations at or near its initial

capacity of 70,000 bbl/d of NGL.

The new pipeline and facilities are

expected to be operational in the rst half

of 2013.

US natural gas pipelinesTransCanada and ExxonMobil began

working together in 2009 to develop the

AlaskaPipelineProject(APP) .

In March 2012, APP and the major Alaska

North Slope gas producers (ExxonMobil,

ConocoPhillips and BP) agreed to work

together on the next generation of resource

development in Alaska. The four companies

are evaluating options for a large-scale LNG

export facility from south-central Alaska as

an alternative to a natural gas pipeline

through Alberta.

TransCanada and ExxonMobil are

considering two design options for the

project. The rst option involves construction

of a 2,737 km pipeline from Alaskas the

North Slope to Alberta, Canada, where gas

would enter existing pipeline systems

supplying North American market. The

second option involves the transportation of

gas 1,287 km from North Slope to Valdez,

Alaska, where it would be converted into

LNG and be delivered by ship to North

American and international markets.

Williams Energy and Cabot Oil and Gas, a

North American independent natural gas

producer, are working together to develop the

approximately 194 km, 30 inch diameter

ConstitutionPipeline to connect abundant

Appalachian natural gas supplies in northern

Pennsylvania with major north-eastern

markets by 2015.

The proposed project route will stretch

from Susquehanna County, Pennsylvania, into

mid-2012, pending the necessary permits for

specic construction activities, with an

anticipated in-service date of mid to late

2013. The pipeline will have the initial

capacity to transport 700,000 bbl/d and

can be further expanded to transport

830,000 bbl/day to Gulf Coast reneries.

In addition, TransCanada is also

discussing the route for the 76 km ouston

ateralProject an additional project under

development to transport oil to reneries in

the Houston area.

The proposed route of the pipeline would

pass through the counties of Liberty, Chambers

and Harris to Houstons rening centre.

The proposed facilities would double the

US Gulf Coast rening market capacity

directly accessible from the Kestone

PipelineSstemto over 4 MMbbl/d of oil.Associated facilities include the necessary

receipt, delivery, pipeline, pumping,

monitoring, control and ancillary facilities

required to increase capacity.

Current plans are for construction

activities to begin in the rst quarter of

2013 and commercial operation of the

Houston Lateral to commence in the rst

quarter of 2014.

Upon completion, the Gulf Coast and

Houston Lateral projects will become

integrated components of the Keystone

Pipeline System.

TransCanada is fully committed to the

construction of the 1,897 km KestoneX

Pipeline from Hardisty, Alberta, to Steele

City, Nebraska. The project is an extension of

the 3,460 km Keystone Pipeline System that

currently transports crude oil from Hardisty,

Alberta, to markets in the American Midwest

at Wood River and Patoka, Illinois, and at

Cushing, Oklahoma.

Following TransCanadas re-application

for a Presidential Permit for the project in

June 2012, the US Department of State

reiterated that it expects to make a decisionon the pipeline by the rst quarter of 2013.

TransCanada anticipates approval of the

Presidential Permit application which is

required as the pipeline will cross the

Canada/US border in the rst quarter of

2013, after which construction will quickly

begin. The project has an expected in-service

date of 2015.

US oil pipelinesIn April 2012, ONEOK Partners announced

plans to invest $US1.51.8 billion between 2012

and 2015 to build the 2,092 km BakkenCrude

ExpressPipelinewith the capacity to

transport 200,000 bbl/d of crude oil from the

Bakken Shale to Cushing, Oklahoma.

The pipeline would transport light, sweet

crude oil from the Bakken Shale in the

Williston Basin in North Dakota to the

Cushing crude oil market hub. Additionally,

the proposed pipeline route would be well

positioned to transport crude oil production

from the Niobrara Shale. The proposed route

is expected to parallel more than 80 per cent

of ONEOKs existing and planned natural gas

liquids pipelines.

Following receipt of all necessary

permits and compliance with customary

regulatory requirements, construction is

expected to begin in late 2013 or early 2014,

and be completed by early 2015.

In May 2012, SemGroup Corporation,

Chesapeake Energy Corporation, and

Gavilon LLC formed GlassMountain

PipelineC to build a 338 km crude oil

pipeline in Oklahoma.

The proposed pipeline, which will be

constructed by SemGroup, will consist of two

laterals. One lateral will originate near the

town of Alva in Woods County. The second

lateral will originate near the town of Arnettin Ellis County.

The new pipeline will have an initial

capacity of approximately 140,000 bbl/d and

440,000 bbl/d of intermediate storage.

Construction of the pipeline is expected

to begin this year and be commissioned in

the second half of 2013. Upon completion,

SemGroups master limited partnership

Rose Rock Midstream will serve as the

pipeline operator.

Enbridge is currently in the design and

procurement stage of its 950 km Flanagan

SouthPipelineProject a 36 inch diameter

interstate crude oil pipeline that will

originate in Flanagan, Illinois, and terminate

in Cushing, Oklahoma, crossing Illinois,

Missouri, Kansas and Oklahoma. The

majority of the pipeline will parallel

Enbridges existing Spearhead crude oil

pipeline. Enbridge has also proposed to

install seven pump stations, including one at

the Flanagan terminal and six along the

pipeline route. Initial capacity will be

585,000 bbl/d of oil.

In February 2012, Plains All American

Pipeline (PAA) announced plans to construct

a new 274 km pipeline to service the

increasing Mississippian Lime crude oil

production in northern Oklahoma and

southern Kansas.

This pipeline in conjunction with the

MedfordtoCushingPipeline conversion

is designed to provide approximately

175,000 bbl/d of crude oil transportation

capacity to the Cushing market and is

expected to be completed in mid-2013.

Originating in Alfalfa County near Alva,

Oklahoma, and terminating at PAAs crude

oil storage facility in Cushing, the new

pipeline will share approximately 129 km of

right-of-way with PAAs Medford to CushingPipeline. PAA plans to extend the pipeline

from Alva northward into Kansas as

demand warrants.

The reversal of the 805 km, 20 inch

diameter Seawacrudeoilpipelinewas

completed in May 2012, allowing it to

transport crude oil from Cushing, Oklahoma,

to the Gulf Coast. The pipeline is owned by

Seaway Crude Pipeline Company, a 50-50

joint venture owned by aliates of

Enterprise Products Partners and Enbridge.

The reversal will initially provide

150,000 bbl/d of capacity, which is expected to

increase to more than 400,000 bbl/d in the rst

quarter of 2013 with additional modications

and increased pumping capabilities.

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Construction on a pipeline project in the Piceance Basin. Miller Photography courtesy of Williams.

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Broome County, New York, Chenango County,

and Delaware County, before terminating in

Schoharie County.

Pending environmental approvals, the

pipeline is proposed to commence construction

in April 2014 with a target in-service date of

March 2015.

In early June, Williams Energy received

approval from Federal Energy Regulatory

Commission to enter into the pre-ling

process for the proposed approximately

359 km PacicConnectorGasPipeline

Project(PCGP). The PCGP will provide a link

with existing pipeline systems that converge

at Malin, Oregon, and the west coast of Coos

Bay, Oregon. The project is being proposed to

connect this natural gas supply hub, whereenergy is competitively traded on a daily

basis, to a proposed LNG terminal.

The PCGP has the potential to give

regional natural gas customers in Pacic

Northwest market areas better access to

domestic Rocky Mountain and Canadian

supply basins.

Gas will be transported 370 km from

interconnects near Malin, Oregon, west and

north to the Jordan Cove LNG terminal in

Coos Bay, Oregon, where the natural gas will

be liqueed for transport via ocean-going

tanker to markets on the Pacic Rim. The

proposed pipeline route does not need to be

changed to accommodate the new east-to-

west ow direction.

Construction is currently planned to

commence in the fourth quarter of 2015, with

an in-service date scheduled in the fourth

quarter of 2017.

At the end of March 2012, NET

Midstream announced that EagleFord

Midstream will build an approximately

169 km, 2430 inch diameter extension of

its existing gas pipeline that will be

anchored by a long-term gas transportationagreement with an aliate of Anadarko

Petroleum Corporation.

The extended pipeline will transport

residue gas from Western Gas Partners

Brasada natural gas processing plant located

in LaSalle County, Texas, to interstate and

intrastate pipelines at the Agua Dulce Hub in

Nueces County, Texas.

The rst phase of the expansion will be

brought into service in December 2012, with

completion by April 2013.

The Eagle Ford Midstream system

currently consists of 88.5 km of 16 inch

diameter pipeline anchored by long-term

commitments from producers in the LaSalle

and McMullen counties, and delivers

pipeline-quality gas to NETs LaSalle

Pipeline and Transco Pipeline located near

Tilden, Texas.

Canadian oil pipelinesEnbridge is currently constructing the

AthabascaCapacitExpansionon the existing

540 km line that runs from Fort McMurray to

Hardisty, Alberta. This is expected to be in

service by the rst quarter of 2013. In addition to

this, Enbridge is also in the planning stage of

twinning the Athabasca pipeline, which would

consist of a 345 km pipeline. This is expected to

be in service in 2015.

In addition, Suncor Energy Oil Sands Ltd

Partnership has asked Enbridge Athabasca

to progress regulatory approval for a new

pipeline between Enbridge Athabascas

existing Athabasca and Cheecham terminals

to accommodate Suncors increased

production rates.

The WoodBualo(ine18Extension)

PipelineProject which is currently under

construction includes an approximately

95 km, 30 inch diameter pipeline that willtransport a diluted bitumen/synthetic heavy

crude oil blend from the Athabasca Terminal

to the Cheecham Terminal. From Cheecham,

it will directly connect with the existing ine

18(WaupisooPipeline), which extends

from the Cheecham Terminal to the

Edmonton Terminal.

The project is set to be in service in 2012.

Also under construction is Enbridges

138 km WoodlandPipelineExtension

Project which will run from the existing

Enbridge Athabasca Cheecham Terminal to

the Edmonton Terminal, eectively

extending the WoodlandPipeline, which is

currently in development with a planned

in-service date of September 2012.

In June 2012, TransCanada was selected

by Shell Canada Ltd and its GCanada

Project joint venture partners to develop an

approximately 700 km natural gas pipeline

from the Montney gas-producing region, near

Dawson Creek, British Columbia (BC), to LNG

Canadas proposed LNG facility near Kitimat.

As it is early in the project planning

process, a specic route has not yet been

selected. Before a route can be dened,

TransCanada will engage with Aboriginal

and local communities near the conceptual

route and continue with the stakeholder

engagement throughout the life cycle of

the project.

The company plans to le a project

description with the BC Environmental

Assessment Oce in the second half of 2012

and le the environmental assessment

application in early 2014. Pending all

required regulatory and project approvals,

construction of the proposed pipeline is

expected to begin in the summer of 2015 with

pipeline operations beginning in time to

meet the in-service requirements of theproposed LNG Canada facility.

Mexicos natural gas pipelinesIn February 2012, TransCanada announced

plans to build the 235 km amazunchale

Pipeline in east-central Mexico to connect the

facilities of Mexicos state-owned petroleum

company to natural gas power-generation

plants near Tamazunchale, Mexico.

TransCanada expects to invest

approximately $US500 million in the

pipeline and anticipates an in-service date in

the rst quarter of 2014. The project will have

a contracted capacity of 630 MMcf/d and use

a combination of 30 and 36 inch diameter

pipe with 37 MW of installed compression.

The major industry event is held every two years in Calgary,

Alberta, and as a not-for-prot conference its proceeds support

educational initiatives and research in the pipeline industry.

Held from 2428 September at the Hyatt Regency Hotel and the

TELUS Convention Centre, the International Pipeline Conference and

Exposition (IPCE) attracts major pipeline industry representatives

from all over the world.

The conference is managed by the International Pipeline

Conference Foundation on behalf of the American Society of

Mechanical Engineers (ASME) Pipeline Systems Division and is

designed to inform, enlighten and motivate all those that attend.

The exposition is organised by dmg::events and will showcase

some of the industrys most recognised brands as well as the latest

pipeline technologies, products and services.

Know the layoutWith the events and activities being held in two

locations the Hyatt and TELUS Convention Centre it is a

good idea to familiarise yourself with the layout when you register so

you can make sure you dont get lost and miss one of your many

planned activities. With the conference sessions held at the Hyatt and

the exposition located at the TELUS Convention Centre, a test run isthe best way to nd out how long it takes to move between the two so

you can time your sessions and exposition time accordingly.

Maps of the conference and exposition layout will be provided

when you register, and there will be volunteers on site if you have any

other questions so dont be afraid to ask for help.

Plan sessions in advanceAttracting some of the most experienced and

respected members in the pipeline community, the

International Pipeline Conference will have many papers for you to

choose from.

Kicking o on Monday 24 September, conference registration will

open at 9:00am and 14 tutorials will run. The streamed technical

sessions will begin on Tuesday 25 September after the plenary

With 13 technical tracks, 19 tutorials and anexposition with an anticipated 150 leading brandnames in the industry, it is best to make sureyou have a plan for the 9 th International PipelineConference and Exposition. As the official mediapartner of the event, Pipelines International helps

break down your five-day plan of attack withsome suggestions to ensure you get the most outof the event.

Top5 tips for yourIPCE conferenceexperience

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ALLU Pipeline Padders

Strong power transmission and robustframe makes the ALLU Screener Crusher atrustworthy partner on the pipelines.

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For Pipeliners Tough Demands

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Construction on the Athabasca Pipeline.

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Associate Editor Sarah Paul caught up

with Mr Sweet after his recent keynote

presentation at the Bank of Montreal

(BMO) Capital Markets North American

Pipelines & Utilities Conference on 27 June

2012, where he addressed investors on globaleconomic prospects and risks.

Mr Sweet has more than 25 years

experience applying economics to the

business planning and strategy development

processes at large nancial institutions.

Looking at the current state of the

industry, Mr Sweet speaks about the rapid

development of oil from tight formations,

such as those found in the Bakken Shale

in North Dakota. He outlined that a major

issue for mainly Canadian producers,

and some United States (US) producers,

is that there is currently not enough

pipeline capacity to meet the increased

oil production.

This is causing a midcontinent glut ofoil, with inventories bottlenecked at

Cushing, Oklahoma, where West Texas

Intermediate (WTI) is priced on the New

York Mercantile Exchange (NYMEX),

says Mr Sweet.

Piping for extra capacityThere have been eorts made to help

relieve the build up of oil, one of which being

the reversal of the Seaway Pipeline.

It is no secret that since the global financial crisis, areas of the world have been working diligentlyto increase growth and strengthen economies. Pipelines International secured an exclusive interviewwith Bank of Montreal Managing Director of Economic Research Earl Sweet to discuss the futureoutlook on North Americas position in the industry and where it can aid in economic growth.

Future industry prospects: a marketoutlook on the oil and gas sector

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sessions, and run through to Friday 28 September. The 13 technical

sessions will cover a wide range of topics, allowing you to learn from

some of the top industry professionals and participate in discussions

and lessons learned.

Exploring the expositionWith over 150 exhibitors in the exposition hall you

will want to make sure you leave enough time to visit all the

exhibitors relevant to your business. The International Pipeline

Exposition showcases some of the leading companies and their new

developments, products and services. Leave time between activities

to fully explore the exposition oor, meet some new faces and get a

hands-on experience with some new technology.

The 2012 exposition will open at noon on Tuesday 25 September

and close on Friday 28 September, providing the opportunity for an

unmatched overview of the latest developments in the oil and gas

pipeline industry, as well as associated sectors.

While learning about some of the latest developments, the

exposition oor is also a great way to catch up with friends and

colleagues as well as network with some new clients. Companies from

around the world will be exhibiting including:

C-FER Technologies

Clock Spring Company

Direct Horizontal Drilling

DNV Energy

Enduro Pipeline Services

IBP Brazilian Petroleum Gas and Biofuels Institute

Keymay Industrie s

Michels Canada

NDT Systems & Services (Canada Inc.)

Pigging Products & Services Association

Stats Group International Inc.

T.D. Williamson Inc.

Vermeer

And many more!

Great networking opportunitiesPlanning out your sessions and time in the

exposition is important, but make sure to leave time for some

of the great networking opportunities.

There are an expected 3,500 members of the pipeline industry and

community attending which provides an unparallel opportunity to

expand your business network. A number of networking events are

taking place during the ve-day conference such as:

A Monday evening Conference Ice Breaker Reception sponsored

by ASME Pipeline Systems Division and the Canadian Energy

Pipeline Association

On Tuesday there will be both an Industry Reception and the

ASME Members Award dinner

On Wednesday there will be the International Pipeline Exposition

Cocktail Reception as well as the IPC Networking Reception

supported by IPE at Mavericks in the Glenbow Museum.

Be sure to check your programme for all the details on

these events.

Take advantage of having so many industry professionals under

one roof and say hello to someone new new business is just around

the corner.

Drop by the Pipelines International standAs the ocial media partner of IPCE,Pipelines

International is back again to bring you the latest on the conference

and exposition as it happens in the daily event newsletter, the 2012

IPCE Update, and your event photographs.

Make sure you drop by stand 1301 and say hello to John Tiratsoo,

Lyndsie Mewett, Sarah Paul and David Entringer who take pride in

bringing you all the latest in industry news. Pick up your copy of

Pipelines International and declare your love for the industry with an

I love Pipelines sticker. We look forward to seeing you there!

Attracting some of the most experienced

and respected members in the pipeline

community, the nternational Pipeline

Conference will have many papers for you

to choose from.

Bank of Montreal Managing Director of EconomicResearch Earl Sweet.

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24 PiPelines international | sePtember 2012 PiPelines international | sePt ember 2012 25

TransCanada plays a vital role in

connecting energy supplies to key

North American markets with

operations in Canada, the United States

and Mexico. Operating one of the largest

natural gas transmission networks in

North America with 68,500 km ofpipelines, the company is tapping into

virtually every major gas supply basin in

North America.

The company delivers 20 per cent of the

natural gas consumed in North America

each day. TransCanada is also one of the

continents largest providers of natural gas

storage and related services with

approximately 380 Bcf of storage capacity.

President and CEO of TransCanada

Russ Girling says the companys mission is

to provide reliable supplies of energy

across the continent, both safely and

responsibly, and we are proud that millions

of North Americans can depend on us for

the energy they need.

From the beginningTransCanada was borne out of the

development of the TransCanada pipeline,

the massive natural gas line that opened in

1958 to connect Albertas natural gas

supplies with the high-population markets

in Ontario and Quebec.

Now known as the Canadian Mainline,

this 14,101 km pipeline remains a critical

piece of North American natural gas

infrastructure, and is the largest gas

transportation system on the continent,

Mr Girling says.

The company has grown steadily

through new development and acquisitions

of natural gas pipeline infrastructure,

eventually merging with NOVA Corp in

1998. This merger brought together NOVAs

extensive Alberta natural gas gathering

system with TransCanadas long-distance

Mainline, making TransCanada the major

transporter of Canadian natural gas within

the Western Canadian Sedimentary Basin

and across the continent.

Not just about gasIn the summer of 2010, TransCanada

broadened its asset base to include a highly

signicant entrance into the oil

transportation business with the start of

commercial operations of the 3,467 km

Keystone Oil Pipeline from Alberta toreneries in the United States in July 2010.

Mr Girling says This area of our

business is expected to grow substantially

with the development of our proposed

Keystone XL and Gulf Coast Project

pipelines that will enhance North

Americas energy security by providing a

safe and reliable source of crude oil for

American renery markets.

The planned expansion of our

Keystone system will make us a leader in

transporting Canadian and US growing oil

production in the coming decades. Our

expanded Keystone system is expected to

move approximately one-third of total

Canadian oil exported to the US, or

10 per cent of total US imports, by 2025.

In addition to its oil and gas business,

TransCanada owns or has interests in

approximately 10,900 megawatts (MW)

of power (electricity) generation from

20 facilities in Canada and US through

its energy business. This equates to

enough power to meet the needs of nearly

11 million homes. The company is Canadas

largest private sector power generator and

approximately one-third of the power

generated comes from alternative and

renewable sources (nuclear, wind, hydro

and solar).

Continually improving businessTransCanada continually looks for

ways to improve its business and reduce its

environmental impact.

Mr Girling says In our power business,

for example, we use highly ecient

cogeneration technology whenever possible,

and strive to reduce energy consumption. In

2010 we spent more than $CDN6 million

(approximately $US5.9 million) on

technological research and development to

reduce environmental impacts.

One programme involves the testing of

a supersonic injector that captures

methane emissions from dry gas seals. This

captured gas is used to power turbines that

drive gas through the pipeline. This buildson previous dry gas seal technology

pioneered by TransCanada that improved

the eciency of the seal, reducing gas

leaks and eliminating oil and grease spills.

We have been recognised for these

eorts. For the tenth year in a row,

TransCanada was named to the Dow Jones

Sustainability Index, a global index that

tracks the performance of the leading

sustainability driven companies. We are

also listed among Canadas 50 best

corporate citizens by Corporate Knights

magazine, Mr Girling says.

TransCanadas success is a reection of

its exceptional team of over 4,400 employees

across North America who bring skill,

experience, energy and knowledge to the

work they do every day.

TransCanadas people are the heart of

our competitive advantage. Our path forward

lies in committed and motivated people who

demonstrate our values of integrity,

collaboration, responsibility and innovation.

Our Matching Gifts Programme

matches the fundraising eorts of our

employees who are involved in community

volunteer eorts. We also support a wide

range of professional development

opportunities and leadership development

and have been named one of Canadas Top

100 Employers, Mr Girling says.

Keeping integrity in safetyWith one of the best pipeline safety and

operating records in the industry,

TransCanada monitors its oil pipeline

system through a centralised high-tech

Operations Control Centre 24 hours a day,

365 days a year. Using satellite technology

For more than 60 years, leading energy infrastructure company TransCanada has safely and reliablyoperated pipelines across North America. Continuing to do so today, Pipelines International speakswith President and CEO Russ Girling about the companys operations and future growth.

The reversal of Seaway will help

alleviate the glut of oil building up at

Cushing, although this year it will only bring

an additional 150,000 bbl/d to the Gulf

Coast, while incremental production in

Alberta and North Dakota is in the vicinity of

500,000 bbl/d, says Mr Sweet.

Mr Sweet notes of Enbridges eorts to

invest in pumping stations to raise the capacity

of Seaway to 400,000 bbl/d next year.

This increase will help, but there will be

even more growth in Alberta and North Dakota

and so there needs to be additional pipeline

capacity from Cushing to the Gulf Coast. There

are plans to increase the pipelines capacity

even further to 850,000 bbl/d in 2014.

Mr Sweet says that the proposedKeystone XL Pipeline would also aid in the

throughput of oil, and help with the double

discount of oil prices i.e., reducing the

discount of WTI from Brent and the discount

of Canadian oil from WTI.

While there is a strong need for additional

pipeline projects south, it is also important for

Canadian producers that pipelines be

developed to the west or east coasts to ensure

market diversication and bring Canadian

prices up to the global benchmarks.

Mr Sweet notes that US oil production is

now rising again after two decades of

decline. This has led to a reversal of a

20-year trend of a rising requirement for net

imports. Production gains in tight formations

in Texas have been even stronger than North

Dakota and may eventually compete with

southbound oil.This reinforces the need in

Canada for westward market diversication.

There has also been discussion around oil

going east in Canada from Alberta to eastern

Canada using TransCanadas 14,101 km

Canadian Mainline Pipeline. The Mainline is

currently in limited use due to a decline in

natural gas production.

Current state of natural gasWhile natural gas is on a decline in

Canada, the US has seen a boom in its natural

gas resources, especially in the eastern states

where more unconventional gas is being found.

Natural gas has bucked the trend for most

commodities recently, given its continental

rather than global nature, and the fact that

prices cant go much lower on a sustained

basis. Very low prices, however, are increasing

demand and will eventually lead to slower

production growth.

Mr Sweet discusses how the demand is

being increased in two ways. The rst being

that given the nature of the demand curve, as

prices fall, demand rises as users substitute

more expensive alternatives with natural gas or

natural gas products.

More important, Mr Sweet says, is the

impressive increase in the reliability of the

resource base and its wider distribution across

the continent, which has actually lead to a

positive shift in the whole demand curve as gas

is used in new ways.

For instance, base-load power generation

has become more popular and chemical and

petrochemical companies are bringing

mothballed plants back into production.

Mr Sweet says that while it will take time

for the demand and supply adjustments to deal

with the current glut, on an annual basis 2012

is expected to see the bottom of the price curve.

Current challenges for the industrySpeaking on the current challenges andconcerns for oil and gas companies, Mr Sweet

outlines the sharp decline in prices.

One of the biggest risks to oil, Mr Sweet

says, is that European policies does not take

sucient steps to hold the Eurozone together.

Another concern for the industry is the

slowing growth in China. While the authorities

there are already taking steps to stimulate their

economy there is still concern about a hard

landing and how that would negatively impact

a wide range of commodities, especially oil.

The all-in cost of bringing the most

expensive oil to market runs in the $US80-

$US90 range, says Mr Sweet.

In addition, as discussed above with the

current natural gas state, Canada has been late

to the game in unconventional natural gas.

Output peaked approximately a decade ago

and has been on a decline since 2008.

The current challenge or concern with

this is that given the reduced US

requirements for net imports of natural gas,

Canadian exports also have been dropping

since 2008, Mr Sweet explains.

One of the reasons for a decline this yearis due to unusually large US inventories

resulting from the warm winter and continued

steep production growth. There is a concern

that by August inventories in the US and

Canada will be close to full capacity, which

could lead to shut-ins and increased recycling.

This could see prices weaken notably at

that time, albeit temporarily. However, with

the blazing hot summer and ramped-up

demand for power for air conditioning and

increased use of natural gas for power

generation, the supply/demand picture is

gradually improving.

While this will be the lowest year for

average prices, they are not likely to rise

quickly. Mr Sweet says that there are many

proposals for LNG projects in 201516 that

could help reconnect North American gas

prices with much higher international gas

prices, although this wont likely be a major

driver of prices until after mid-decade.

Clearly, a ref ocusing on unconventional

gas will have to go hand-in-hand with the

development of LNG export facilities and

related pipelines.

This is something that is essential for

Canadian producers diversifying their

markets by opening up exports to Asia.

Pipelines to help economyWith the current state of oil build-up in

North America and the need for more capacity,

pipelines could be a lifeline for the economy.

When asked what the economic benets

are of constructing pipelines, Mr Sweet saysThe real benet is that it provides high-quality

construction jobs at a time in which it is not

easy to generate new jobs. There has been a lot

of disappointment at the pace of job creation in

the US recently, with businesses being more

cautious in the hiring process.

The pipeline construction industry has

also provided good quality jobs in supplying

industries such as steel manufacturers,

welders and materials that come with the

construction of a pipeline.

Keeping investors in the loopMr Sweet says that there has been much

structural change in the energy production

industry, particularly with regard to

technological changes, and an awareness of

this is important.

The technological advances have really

changed the whole paradigm in the US and

Canada, requiring changes in energy

transportation.

The prolic natural gas elds in eastern

US have important implications for west-to-

east pipelines. Signicant changes in

technology and the location of production ofnatural gas will require substantial

adjustments to pipeline infrastructure to

manage the new production paradigm.

Investors are able to gain insight by

attending conferences both on the economy

and the current standing of some of the

major companies involved in keeping the

industry moving. With these insights they

are able to invest and help keep the pipeline

industry moving.

Dependable across the continent:an in-depth look at TransCanada

meet the comPany

For more information on BMO CapitalMarkets and BMO-run events visitwww.bmocm.com

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data are sent every ve seconds from

thousands of data points to its monitoring

centre in Calgary.

TransCanadas safety programme begins

before construction with the selection of

high-quality materials and pipelines are built

using industry best practices. Pipe is

inspected and pressure-tested for integrity

before it ever goes into service. TransCanadas

ongoing integrity management programme

includes regular maintenance, monitoring by

trained operators 24 hours a day, routine

aerial patrol, ground surveys, cathodic

protection against corrosion and internal

inspections using devices like smart pigs.

Strategising for the futureOur strategic vision is to become the

leading energy infrastructure company inNorth America. In pursuing this goal, we

strive to deliver strong nancial performance,

execute on our large portfolio of attractive,

low-risk projects and continue to create and

cultivate a high-quality portfolio of future

growth opportunities, Mr Girling says.

TransCanadas nancial performance

continues to build on its strong track record

of delivering strong and sustainable earnings

and cash ow. Over the past ten years,

TransCanada has made signicant

investments in high quality energy

infrastructure assets, which have allowed

the company to move forward in achieving

its vision.

We are in the advanced stages of a

$CDN23 billion (approximately $US23.1 billion)

growth programme that has seen $CDN10

billion (approximately $US9.85 million) in new

pipeline and power projects placed into

service since 2010. These new operating assets

are critical North American infrastructure and

have become an important part of our growing

asset base, Mr Girling says.

The company has key projects under

development, including the Keystone XL andGulf Coast Project. Once complete, the

expanded Keystone system will have the

capacity to move 1.4 million bbl/d of crude

oil from Canada and northern US to renery

markets on the Gulf Coast and Illinois.

Mr Girling says We are also exploring

the opportunity of converting some of the

Canadian Mainline to crude oil

transportation from Alberta to Eastern

Canada. This could help Canadian reneries

in Ontario and Quebec reduce their reliance

in more expensive oil imported from

overseas and also allow for increased market

diversication through access to

international markets, including India,

China, and Europe. This would allow

Canadian producers to receive a better price

for the countrys resources, something all

Canadians would benet from in terms of

jobs and taxation revenues from royalties.TransCanada is also involved in the

emerging LNG market after the company was

selected by Shell Canada Limited and its

joint venture partners in the LNG Canada

project to develop an approximately 700 km

pipeline to transport gas across northern

British Columbia (BC) to LNG Canadas

proposed export terminal near Kitimat, BC.

Earning community supportThe energy sector is under an enormous

amount of scrutiny these days, and pipelines

in particular have become targets for

environmental activists and others whose

goal is to shut down fossil fuel development,

Mr Girling says.

Like many forms of necessary

infrastructure, TransCanada has noticed

that pipeline construction has become

more challenging due to less willingnessof the public to accept the possible impacts

of development.

Pipeline companies have to focus more

time and resources on building their social

licence to operate, and earning the support

necessary to operate across vast distances

and through communities, Mr Girling says.

We have to be very proactive with

communicating our intentions and the

benets of our projects, while also being

committed to listening and working with

communities to address their concerns.

The approximately 195 km, 30 inch

proposed Constitution Pipeline is

planned to extend from Susquehanna

County, Pennsylvania (Pa), to the Iroquois

Gas Transmission and Tennessee Gas

Pipeline systems in Schoharie County, New

York (NY).The proposed project route generally

follows the Interstate 88 highway,

stretching from Susquehanna County, into

Broome County, NY, Chenango County, NY,

Delaware County, NY, and terminati

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