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Advanced Spiral Welded Steel Pipe Facility Opens

The American Spiral Weld Pipe Company LLC (ASWP) recently began producing spiral-welded steel pipe in Columbia, SC. The newly opened 289,000 square-foot pipe production facility was constructed to serve utilities that, in many cases, are scrambling to meet the needs of rapidly growing cities. ASWP's pipe products, manufactured in sizes up to 12 feet in diameter, will serve as water transmission and distribution lines; wastewater outfall lines; penstocks for hydroelectric facilities; and cooling water lines for power generation plants. In addition, ASWP will provide structural pipe piling and casing pipe for the construction industry. All ASWP's products meet or exceed AWWA C200 and ASTM A52 requirements.

Kinder Morgan Inks $1 Billion Pipeline Deal

Kinder Morgan Energy Partners has contracted to purchase two refined product pipelines and 12 refined products terminals from GATX for $1.15 billion. The transaction will be handled with cash and through assumed debt.

Among the primary assets included in the transaction are the 550-mile CALNEV refined products pipeline system originating in Colton, CA, and extending to the growing Las Vegas, NV, market. The 195-mile Central Florida Pipeline refined petroleum products system consisting of a 16-inch gasoline pipeline and a 10-inch jet fuel and diesel pipeline transporting product from Tampa to the growing Orlando, FL, market. It transported an average of 85,000 barrels of gasoline, diesel and jet fuel per clay in 1999.

KMP is also acquiring 12 terminals from GATX, which have a storage capacity of 35.6 million barrels for both petroleum products and chemicals. The largest of these are in Houston, New York, Los Angeles and Chicago, with a total capacity of approximately 31.2 million barrels. The other terminals are located in Philadelphia, Portland, OR, San Francisco and Seattle. In addition, KMP is acquiring six other terminals with a capacity of 3.6 million barrels that are part of the CALNEV and CFPL pipeline systems.

Richard D. Kinder, chairman and CEO of KMP said, "These fee-based terminals are ideally situated across the United States and are essential to the distribution of petroleum products and chemicals in the U.S. They are also a good match for our existing assets, as KMP pipelines currently receives petroleum products from or inject them into three of the terminals that we are acquiring on the West Coast."

KMP anticipates closing the deal in the first quarter of the year. Both sales are part of TransCanada's divestiture of noncore businesses. Since last December, the company has sold or has agreements to sell approximately $3.4 billion of noncore assets.

Remaining assets in the process of being sold include: TransGas natural gas pipeline in Colombia; GasPacifico natural gas pipeline extending from Argentina to Chile; Paiton power plant in Indonesia; other minor interests in Latin America; and the Hamattan gas gathering and processing facility in Canada.

Supply Disruptions Minimized In El Paso Accident

A federal report found that the natural gas supply grid in the far West did a very good job of adapting to the supply disruption resulting from the El Paso accident near Carlsbad, NM on Aug. 19. The report from the Energy Information Administration (EIA), which is part of the Energy Department, concluded that although 1.2 Bcf/d out of a total 2 Bcf/d flow was temporarily shut clown, there was a "robust" response by the market that helped avoid "the harshest outcomes."

Three El Paso pipelines which cross the Pecos River in the southeastern corner of New Mexico were temporarily shut down as a result of the accident, in which 12 people died. The 30-inch pipeline which was the source of the leak was still unrepaired two months after the explosion.

In the immediate aftermath of the accident, El Paso supplies to Arizona and California were most dramatically affected. El Paso supplies southern California through deliveries to SoCal Gas Co., PG&E Gas and Mojave Pipeline. There was very little pipeline infrastructure added in the 1990s to serve southern California. So some of the slack resulting from reduced El Paso deliveries from the south was picked up by new deliveries from northern California, from PG&E Transmission and Northwest Pipeline, which did build up their networks from Canada in the 1990s.

The potential disruption in southern California was eased by gas marketers pulling gas out of underground storage areas. There is 4.93 Bcf/d of underground capacity in southern California. PG&E moved some of the gas it stores in northern California to the southern part of the state. Also, El Paso shipped 200 MMcf/d from its southern New Mexico storage facility.

Imaging Technology Holds Promise For Downhole And Pipeline Inspections

Imaging technology used to analyze weather systems from space has been successfully adapted in the U.K. to enable oil and gas industry engineers to literally "see" through oil.

The project is part of a joint UK industry/government initiative that is expected to allow visualization of production flow in horizontal wells, the inspection of flowlines, pipelines and plant/platform pipework without having to drain or flush the oil. It could also provide "eyes" for downhole and pipeline inspections.

Co-sponsored by BE Chevron, Shell and Amerada Hess and UK-based Proneta, the next phase of the project is to build a prototype that provides images of real targets. A subsequent phase would likely be to team with a company that already builds conventional downhole video cameras as well as an oilfield service company. The company reportedly already has offers of test wells from major oil companies when that stage is reached.

Power Plant Upgrade In El Salvador

Duke Energy International (DEI) has completed a $75 million expansion and modernization of its Acajutla power generating facility in El Salvador. The expansion added additional generating capacity, bringing the total capacity of the plant to 300 megawatts. Duke Energy's total generating capacity in El Salvador is now 400 megawatts or approximately 15 percent of the total generation in the country.

The Acajutla power generating facility was acquired in 1999 by Duke as part of a privatization of government-towned electric generation assets.

$3 Billion Alliance Pipeline Begins Service

Although the original in-service date slipped twice, the 1,858-mile Alliance Pipeline began commercial service on December 1, transporting 1.325 Bcf/d of natural gas on behalf of its contracted shippers.

While the $3 billion Alliance Pipeline, owned by the Coastal Corporation, Enbridge Inc., Fort Chicago Energy Partners LP, The Williams Companies Inc. and Westcoast Energy Inc., will carry natural gas from key producing areas in northwestern Alberta to markets around the Chicago hub, it is only capable of transporting 10 percent of Alberta's and British Columbia's total gas production destined for export to either Eastern Canada or the United States.

On the day of start-up, Alliance Chairman, President and CEO Norman Gish said, "Today marks the culmination of over five years of systematic planning and meticulous implementation by thousands of people from around the globe and we salute them."

Gish concludes, "Our new state-of-the-art pipeline system provides Western Canadian natural gas producers the opportunity to expand their markets in both the Midwest United States and Eastern Canada by offering them incremental transportation capacity through a real, competitive choice ..."

Canadian Gas Squeeze Predicted To Worsen Long Term U.S. Supply Problems

Western Canada's reserves are not what they used to be. Moreover, new reserves on the Canadian East Coast and elsewhere are not yet developed enough to make up the shortfall in what U.S. gas users expect, says Len Coad, writing in Natural Gas Industry Analysis (For the Gas Year 2000-2001). Coad is vice president of North American natural gas and electricity for Canadian Energy Research Associates, in Calgary, Alberta.

Coad says: "Most forecasts show Canadian gas consumption rising at a steady 1.5 percent to 3.0 percent a year and show exports of Canadian gas rising from approximately 3 Tcf/yr today to something at or above 4 TCF/yr by 2010. In order to meet these requirements, Canadian gas production would need to increase by 3 Bcf/d over the ten-year period.

"Although not beyond the realm of possibility, recent supply trends suggest that this is clearly a stretch target for supply. This is particularly true when we consider recent trends in well productivity and decline rates. Although the Western Canadian Sedimentary Basin (WCSB) resource base is far from depleted, the challenge of increasing production is more significant than in past years." Such figures bode ill for those who had looked to Canada for major increases.

In support of his conclusions, Coad noted studies by the Canadian Potential Gas Committee, which tracks the amount of gas produced and remaining in Canada. These studies showed that discovered gas was 140.9 Tcf found in 23,000 pools but estimated that the 122 Tcf remaining was spread out among 194,000 pools. Moreover, not only should the pools get smaller but also their rate of production should get lower. He says, "initial productivity of an average new well in Alberta has declined from roughly 1.5 MMcf/d of raw gas for new wells in 1990, to approximately 1 MMcf/d 1998."

He notes that although most of this trend applies primarily to the WCSB, today it remains overwhelmingly the most important source of Canadian gas. He believes that some relief from the rapid decline that these statistics indicate will come from a healthier attitude towards exploration risk in Canada. This will be enabled by the new found availability of pipeline capacity there, which releases producers from fears that their gas will not be transported. Additionally, Eastern Canadian gas (on Sable Island and elsewhere) will help Canada as a gas source. Without better reserves and payout in the WCSB, however, growth will remain moderate.

These issues are discussed in detail, along with details of Canadian pipeline projects and the heavy level of competition their supplies will face, in Natural Gas industry Analysis. It's a 408-page, hardcover book that contains 24 chapters, authored by 34 leading energy experts and edited by Robert E. Willett. For purchasing and cost information, call (977) 520-NGIA or (713) 334-1566.

Scheduled to be in service by June 2002, the pipeline will have an initial capacity of 1.1 Bcf/d.

Kern River Pipeline Expansion Plans

A unit of Williams is holding an open season on its Kern River natural gas pipeline system to solicit commitments for firm year-round transportation to Nevada and/or California and to determine interest in capacity relinquishment from existing firm shippers. New service resulting from this open season would be available May 1, 2003 for a term of 10 or 15 years. This in-service date coincides with the proposed inservice dates of several new electric generating plants.

Williams filed an application with the FERC on Nov. 14 for its first expansion of the Kern River system that would add 124,000 Dth/d of firm transportation service with a proposed in-service date of May 1, 2002.

Shippers interested in firm service or in relinquishing capacity should contact Laurie Brown at (801) 584-6410 or Greg Snow (801) 584-7270. Shippers must complete, execute and return the applicable precedent agreement by 5 p.m. MST on Jan. 31, 2001.

In other news, Duke Energy and Williams jointly announced plans to purchase Coastal's 100 percent interest in Gulfstream. The purchase will mean an end to plans by Duke and Williams to jointly construct the 678-mile Buccaneer Pipeline to transport natural gas from Mobile County, AL, across the Gulf, to markets in Central Florida.

"We have recognized for some time that the market will support only one new pipeline into the State of Florida," said Cuba Wadlington Jr., president and CEO, Williams' gas pipeline group. "The market will now be able to deafly see a single, viable competing pipeline into the state."

"The agreement to sell Gulfstream is a significant step forward in completing the requirements of the Federal Trade Commission for the close of the Coastal/El Paso Energy Corporation merger," said David A. Arledge, chairman and chief executive officer of The Coastal Corporation.

"Until the merger is complete, Coastal will continue to develop and market Gulfstream, will ensure that the project moves forward as scheduled, and will remain fully committed to its many stakeholders in Florida," said Arledge.

Colonial Increases Products Flow To Northeast

Colonial Pipeline has increased the capacity of its 36-inch diameter distillate pipeline that ships petroleum products from Houston to Greensboro, NC. The Line 2 expansion was carried out under separate contracts executed by Benton Construction, L.E. Bell Construction, Radford Brothers and Riverside Contractors. The expansion increased capacity on Line 2 by 144,000 barrels per day and overall system capacity increased to 2.35 million barrels per day.
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Title Annotation:multiple briefs from gas and oil pipeline industry
Comment:NEWSREEL.(multiple briefs from gas and oil pipeline industry)
Publication:Pipeline & Gas Journal
Article Type:Statistical Data Included
Geographic Code:1USA
Date:Jan 1, 2001
Words:2122
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