(Reuters) — The U.S. Federal Energy Regulatory Commission (FERC) on Thursday approved the construction of four proposed liquefied natural gas (LNG) export facilities in Texas totaling about 6.2 billion cubic feet per day (bcfd) of capacity.
The projects are NextDecade Corp’s (NEXT.O) 3.6-bcfd Rio Grande, Cheniere Energy Inc’s (LNG.A) 1.5-bcfd Corpus Christi Midscale, Exelon Corp’s (EXC.O) 0.8-bcfd Annova LNG Brownsville and Texas LNG’s 0.3-bcfd Brownsville.
One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.
“The Commission has now completed its work on applications for 11 LNG export projects in the past nine months, helping the United States expand the availability of natural gas for our global allies who need access to an efficient, affordable and environmentally friendly fuel for power generation,” FERC Chairman Neil Chatterjee said in a release.
The three Brownsville proposals (Rio Grande is a Brownsville plant) are to build greenfield projects along the Brownsville Ship Channel to receive gas from the nearby Permian and Eagle Ford shale basins and have faced concerns from environment and safety advocates.
To gain approval, the Brownsville projects have taken steps like pledging land for the preservation of endangered big cats – jaguarundis and ocelots – that live in the South Texas area.
All four of the projects approved Thursday have applications pending before the U.S. Department of Energy seeking authorization to export gas to countries without free trade agreements with the United States, FERC said.
They are just four of more than four dozen LNG export projects under development in the United States, Canada and Mexico.
Including the projects under construction, U.S. LNG export capacity is expected to rise to 6.9 bcfd by the end of 2019 and 9.6 bcfd by the end of 2020 from 6.8 bcfd now.
That keeps the United States on track to become the third biggest LNG exporter in the world in 2019, behind Qatar and Australia, and the biggest supplier of the fuel in 2024.
So far this year, FERC has approved projects proposed by Venture Global Calcasieu Pass LLC; Driftwood LNG LLC; Port Arthur LNG LLC; Gulf LNG; Eagle LNG Partners Jacksonville LLC; Venture Global Plaquemines LNG LLC; and Freeport LNG’s Train 4 Expansion Project.
In addition, FERC said four projects are now pending before the
MACKINAW CITY, Mich. (AP) — Enbridge Inc. said Monday that it retrieved a 45-foot steel rod that was resting against an underwater oil pipeline where lakes Michigan and Huron converge.
The debris had been at the bottom of the Straits of Mackinac since September, when aborehole collapsedduring geotechnical work in advance of the construction of a tunnel to surround the Line 5 pipes. Enbridge deployed a remote-operated vehicle to remove the rod on Saturday night, said spokesman Ryan Duffy.
“Favorable weather conditions at the Straits in recent weeks prevented the water from icing over, providing Enbridge a window of opportunity to complete this work,” he said.
The rod had moved from its original position near the pipeline and was found resting on the west leg. It never posed a safety or environmental risk to Line 5, the water or ship traffic, Duffy said.
Enbridge Energy had been collecting rock and soil samples, which it finished Sept. 12 thePetosky News-Reviewreported. But the company did not report the incident to Michigan Department of Environment, Great Lakes and Energy until Nov. 19, according to documents obtained by the newspaper.
The collapse also caused a long piece of drill rod to become lodged beneath the lake bed, and a piece of the equipment to fall on top of the lake bed.
The tunnel would enclose the Straits of Mackinac’s portion of the 66-year-old pipeline, which is also known as Enbridge Line 5. It runs from Superior, Wisconsin to Sarnia, Ontario.
Ryan Duffy, Enbridge spokesman, said the two-months span between the date of the incident and the report were spent determining the best way forward.
PIPELINE PROJECT SPOTLIGHT
Phillips 66, Bridger Pipeline
Project includes construction of an oil pipeline from the Bakken and Rockies production areas to Corpus Christi, TX
The Associated Press has learned that the FBI has opened an investigation into the process by which Pennsylvania Governor Tom Wolf’s administration issued construction permits for the Mariner East Pipeline project.
All three spoke on condition of anonymity because they said they could not speak publicly about the investigation.
The focus of the agents’ questions involves the permitting of the pipeline, whether Wolf and his administration pressured environmental protection staff to approve construction permits and whether Wolf or his administration received anything in return, those people say.
The Mariner East pipelines are owned by Texas-based Energy Transfer LP and the construction is estimated to cost $3 billion. Energy Transfer says it is the largest investment of private money in Pennsylvania history.
Wolf’s administration declined comment on the investigation Tuesday. In the past, Wolf and his administration have said the permits contained strong environmental protections and that the Department of Environmental Protection wasn’t forced to issue the permits.
An Energy Transfer spokeswoman said the company had not been contacted by the FBI about the Mariner East.
The chief federal prosecutor in Harrisburg, PA, U.S. Attorney David Freed, declined comment.
Wolf has said that the pipeline’s economic benefits would outweigh the potential environmental harm, and that the Mariner East would be part of a distribution system that the industry needed.
The state’s building trades unions have seen a huge influx of work on the Mariner East pipelines and Marcus Hook. Exploration firms drilling in the booming Marcellus Shale and Utica Shale fields shipping natural gas liquids through Mariner East pipelines and Marcus Hook have helped the U.S. become the world’s leading ethane exporter.
The roughly 300-mile (480-kilometer) Mariner East 1 was originally built in the 1930s to transport gasoline westward from Marcus Hook. It was renovated and, in 2014, began carrying natural gas liquids eastward to the refinery from southwestern Pennsylvania’s drilling fields.
Construction permit applications were submitted in 2015 for two wider pipelines, the 350-mile-long (563-kilometer) Mariner East 2 and 2x, designed for the same purpose, but stretching farther, through West Virginia’s northern panhandle and into Ohio.
Both were projected to be open in 2017. But Mariner East 2 began operating in late December, and Mariner East 2X could be complete in 2020.
Residents of neighborhoods near the planned route have expressed safety concerns about the pipeline.
County and state prosecutors are also investigating the pipeline.
Chester County’s district attorney, Tom Hogan, opened an investigation last December. In March, Pennsylvania’s attorney general, Josh Shapiro, said his office had opened an investigation on a referral from Delaware County’s district attorney.
At the time the permits were issued, Wolf denied applying pressure to approve the pipeline permits. Rather, he said he had simply insisted the department stick to its own timeline to consider them and that he believed the department had done its due diligence.
Requests from environmental opposition groups to halt construction was denied, but they did win additional protective steps in a settlement.
In depositions and internal documents that became exhibits in the appeal, department employees said the schedule to consider the applications had been sped up, but none said they had been forced to approve permits over their objections.
NEW YORK (Reuters) — BP Midstream Partners LP is considering expanding its Mars crude oil pipeline to accommodate new volumes from offshore oil fields, Chief Financial Officer Craig Coburn said on Tuesday.
The Mars pipeline, which has a mainline capacity of about 400,000 bpd, would potentially be expanded to ship increased crude volumes from Gulf of Mexico fields such as Vito and Power Nap, Coburn told analysts and investors on the company’s third quarter earnings call.
More details about any plans will be given early next year, Coburn said. BPMP owns a 28.5% interest in Mars, according to its website.
BP Midstream’s total third quarter pipeline gross throughput was more than 1.6 million barrels of oil equivalent per day, slightly lower than the previous quarter, Coburn said.
The decline was due, in part, to disruptions in service caused by Hurricane Barry in July.
Caesar, a crude oil pipeline, Cleopatra, which carries natural gas, and the Ursa oil pipeline all reported lower throughput for the quarter due to the hurricane and maintenance activity by offshore producers, Coburn said.
The gross throughput impact of Barry was approximately 100,000 barrels per day of oil equivalent, he added.
Offsetting the disruptions was record throughput on the BP 2 pipeline, Coburn said. He said throughput on the pipeline during the third quarter was a record 316,000 barrels per day, the highest achieved on BP 2 since its initial public offering.
“We expect pipeline gross throughput in the fourth quarter to be higher than first quarter,” Coburn said.
(Reuters) — Enbridge Inc, said on Friday it plans to seek the Canada Energy Regulator’s approval to auction off rights to ship crude on its Mainline system, more than a month after the watchdog said the company will not be allowed to offer contracted space on the pipeline to shippers.
In a highly unusual move, the regulator halted the auction after major producers in the country protested Enbridge’s plans to switch to longer-term contracts from monthly allocation.
Enbridge, which also reported better-than-expected third quarter profit on Friday, said it expects to place the Canadian portion of the Line 3 replacement into service on Dec.1 after delays due to tribal and environmental challenges.
Line 3 is part of Enbridge’s Mainline network that transports western Canadian oil to Midwest refineries and the replacement project would double capacity to 760,000 barrels per day, providing much-needed relief from congestion on existing Canadian pipelines.
The company had earlier reached a deal with crude shippers for an additional charge till the U.S. portion of the Line 3 oil pipeline is completed.
The company also said on Friday it expects several of its growth projects to be operational in 2019, including the $700-million Gray Oak pipeline – the biggest of three new pipelines connecting the U.S. Permian basin to the Texas Gulf Coast.
Canada’s oil producers are desperate for new export pipelines as rising production and tight capacity on existing pipelines and rail have led to the Alberta government curtailing output.
The company’s adjusted profit of 56 Canadian cents per share in the third quarter, beat analysts estimate of 52 Canadian cents as it moved 5% more crude on its Mainline system.
Net income attributable to common shareholders was C$949 million ($719.43 million), or 47 Canadian cents per share, in the three months ended Sept. 30, compared with a loss of C$90 million, or 5 Canadian cents per share, a year earlier.
The year-ago quarter included some charges, including a non-cash expense of C$1.02 billion.
(Reuters) — U.S. oil export terminal operator Moda Midstream LLC said on Thursday it has begun to enhance its Moda Ingleside Energy Center (MIEC) in Ingleside, Texas, to allow the docking of larger-sized vessels and is considering a new pipeline as well.
Moda has begun structural enhancements and dredging to Berth 5 and improvements to Berth 4, which will allow for the docking of Suezmax class vessels and Very Large Crude Carriers (VLCCs), respectively, the company said in a statement.
The company said it was evaluating construction of an additional pipeline called the Moda Ingleside Express Pipeline, which would be bi-directional and run between MIEC and Moda Taft Terminal, located in Taft, Texas.
MIEC receives crude from the Cactus Pipeline, the Cactus II Pipeline and the EPIC Crude Oil Pipeline, while the Taft Terminal is connected to the EPIC Crude Oil Pipeline and Moda’s 20-inch pipeline between the Inner Harbor and MIEC, the statement said.
BROOMFIELD, Colo. (CBS4)– It has been a tough year for the oil and gas industry as presidential candidates call for a ban on fracking and the state legislature overhauls regulations. But one Colorado operator is leading the way in the new world.
Extraction Oil and Gas company began implementing cutting-edge mitigation techniques long before the new law which prioritizes health and safety.
“We have to really bring it,” said Brian Cain with Extraction. “As oil and gas companies we have to step-up.”
Cain said Extraction has the most at stake as a Colorado-only operator. The company was one of the first to switch from diesel power to electric.
“It’s a step change for our industry. It runs basically like a Tesla,” said Cain.
The change eliminates the smell and noise associated with diesel generators, but the company didn’t stop there. It erected sound walls and a berm around its drilling pad and began using a special synthetic drilling mud to eliminate the odor of oil and gas.
“Part of what we wanted to do is make our operations as little impact as possible.”
Which is why the company does extensive air monitoring and water testing as well.
“Here in Broomfield, we actually agreed to water testing that is above and beyond the law.”
Cain said they also signed a contract with Broomfield to do 24-7 air monitoring, measuring 50-60 chemicals at a time.
“As part of our operator agreement, we give money to the City and County of Broomfield and let them do their own air monitoring and that way we’re maximizing the credibility. They have an independent third party air consulting firm conducting it. They’re experts. Everything we’ve seen is well below any levels of concern, well below. So we’re very excited about that and we think that’s a game changer for Colorado. It’s important to be adaptable and that’s what you have to be in the new world here.”
Despite all the best practices Extraction has in place, Broomfield City Councilwoman Guyleen Castriotta says they still get complaints about odor, construction noise and health concerns. For her, like many opponents of oil and gas, no level of mitigation is enough. She said her goal is to ban drilling in residential areas.
But the director of the Colorado Oil and Gas Conservation Commission, which is charged with implementing the new law, says his goal is to mitigate the impacts to the extent possible while allowing drilling to continue.
Medallion proposes through the open season to construct an operational loop of its existing Howard Lateral and an expansion of its Midkiff Lateral from Garden City Station to the Midkiff Station, adding crude oil delivery capacity to downstream pipelines and markets.
The existing Medallion pipeline system includes 800 miles of 6-inch and larger-diameter crude oil pipeline spanning some of the most prolific crude oil producing counties in the Permian Basin: Crane, Glasscock, Howard, Irion, Martin, Midland, Mitchell, Reagan, Scurry and Upton.
Its eight segments serve as an intra-basin header system that provides diversified market access to 10 downstream pipelines that interconnect at Medallion’s Crane, Midland and Colorado City hubs. Medallion’s system also includes facilities that are smaller than 6 inches in diameter, typically to connect the system to individual tank batteries in the field.
The open season, which ends at 4 p.m. CDT on Oct. 18, is an opportunity for interested shippers to acquire long-term firm capacity under binding transportation services agreements, as a committed firm shipper on one or both expansion segments.
Medallion said existing committed firm shippers will have the option to participate in the open season to 1) amend an existing transportation services agreement for transportation on the Howard Lateral to obtain the lower expansion rates offered on the Howard expansion in return for an extension of the primary term of the existing transportation services agreement, and 2) add the Midkiff Station as a destination point to an existing transportation services agreement for committed firm transportation on the Midkiff Lateral.
Canada’s second-largestoilproducer, Suncor Energy, believes the political situation in the United States has increased the risks to companies counting on construction of TC Energy Corp’s proposed Keystone XLoilpipeline, its chief executive said on Wednesday.
A legal fight between TC, previously known as TransCanada, and environmental activists has delayed the Canada-to-Texas pipeline for a decade. A court in Nebraska last month affirmed an alternative route through the state, raising hopes the project might proceed and provide badly needed transport capacity for Alberta’s crude.
U.S. President Donald Trump, a supporter of Keystone XL, faces an election in 2020 and candidates for the Democratic nomination are critics of the fossil fuel industry who favor government support for renewable energy and other steps to fight climate change.
“Keystone XL is a massive investment and the political situation in the U.S. is I think increasing the risk associated with that,” Suncor CEO Mark Little said at a Barclays investor conference in New York. “That’s one that a lot of people are doing soul-searching about right now because it’s also a very substantial investment. Now we still believe it will go ahead. But time will tell.”
A Suncor spokeswoman could not be immediately reached to clarify Little’s comments.
“We are committed to Keystone XL and will continue to carefully obtain the regulatory and legal approvals necessary before we consider advancing this commercially secure project to construction,” TC Energy spokesman Matthew John said.
Little said he believes plans to expand the Canadian government-owned Trans Mountain pipeline are “in pretty good shape,” and noted there is still ongoing work by Enbridge Inc to replace its Line 3 in Minnesota.
Congestion on export pipelines prompted the government of Alberta, Canada’s main oil-producing province, to impose crude production curtailments this year to help drain a glut of oil in storage and support prices.
Last month the Alberta government said it would extend curtailments into 2020 because of delays getting new pipelines built.
Government-mandated production quotas have weighed on investor sentiment toward Canadian energy stocks, but Husky Energy’s chief executive, also speaking at the Barclays investor conference, said curtailments would likely ease.
“I think quotas will become less of an issue going forward as we see incremental pipeline and rail capacity coming on. I don’t think they’ll bite as hard,” Husky CEO Rob Peabody said.
Canadian crude-by-rail volumes have increased this year as companies look for alternatives to congested pipelines, even though it is a more expensive way of transporting crude.
CALGARY/WINNIPEG (Reuters) – An indigenous-led group plans to offer to buy a majority stake in the Trans Mountain oil pipeline from the Canadian government this week or next, a deal that could help Prime Minister Justin Trudeau mitigate election-year criticism from environmentalists.
The group, called Project Reconciliation, aims to submit the $5.26 billion offer as early as Friday, managing director Stephen Mason told Reuters, and start negotiations with Ottawa two weeks later.
Project Reconciliation said the investment will alleviate First Nations poverty, a watershed for indigenous people who have historically watched Canada’s resources enrich others.
The expansion would triple the capacity of the pipeline carrying crude from Alberta to British Columbia’s coast, helping resuscitate an industry depressed by low prices and congested pipelines.
Trudeau’s government, which bought the pipeline last year after its owner, Kinder Morgan Canada, gave up on trying to get the expansion approved, has already been touting First Nations participation. A deal ahead of an October election could ease criticism from voters who have complained of broken promises on the environment and aboriginal rights.
Still, not all First Nations groups are on board. Some in British Columbia have pledged to keep fighting expansion of Trans Mountain, even with blockades and protests, saying ownership makes no difference to the risk of oil leaks.
“The greatest hope the government can have is they neutralize this topic. Imagine if a multinational gets ownership of the pipeline, or an indigenous consortium. The indigenous (option) is way less provocative,” said Ken Coates, professor of public policy at University of Saskatchewan.
When Trudeauapproved the pipelinein June, he said his government would immediately consult indigenous communities on how they can benefit, including potentially buying the pipeline.
Mason declined to say how many communities support Project Reconciliation.
“There is a vocal minority (against the project). The majority are in favor especially if they have material ownership and a place at the table that allows them to be involved with environmental aspects,” Mason said. “If we own it, chances are we can quiet down the opposition.”
Project Reconciliation hopes to buy 51% of the pipeline this year for $1.75 billion and roughly half the expansion project for $3.5 billion. It would finance the deal through bank loans underwritten by commitments from oil shippers. The government would retain 49%.
Once expansion is complete, it intends to invest $150 million of annual proceeds into an indigenous sovereign wealth fund.
“We have conversations about climate change. But tell me at what level climate change is a discussion when we have a lot of our people who are starving,” Delbert Wapass, Project Reconciliation’s executive chairman told a packed crowd at Calgary’s Petroleum Club.
FOR AND AGAINST
Indigenous people who support buying Trans Mountain say it offers a rare opportunity to own money-making oil infrastructure.
Before Chief Tony Alexis was born, Trans Mountain was built underground on Alexis Nakota Sioux Nation traditional land near Edmonton, Alberta, where the pipeline starts.
In the 66 years since, the community has received no benefits, Chief Alexis said, only risk. Now it could cash in.
“Our people have been ready to be in business for a long time,” Alexis said. “If we do this right, this is going to be a template for the future.”
Alexis is part of Iron Coalition, another indigenous group seeking to buy between half and 100% of the pipeline once it is built in 2022. It is discussing options with banks and plans to direct future profits to Alberta indigenous groups that join.
At the other end of the pipeline 715 miles away, British Columbia indigenous communities are digging in for a fight.
“Our sacred obligation is that we are stewards of this land, this water and our people,” said Chief Leah George-Wilson of Tsleil-Waututh First Nation, based along Burrard Inlet opposite Westridge Marine Terminal where Trans Mountain ends.
Tsleil-Waututh plans to appeal Trudeau’s approval of Trans Mountain’s expansion over concerns about spills and tanker traffic, George-Wilson said.
Coates, the University of Saskatchewan professor, said indigenous participation in the pipeline could allow Trudeau’s Liberals to retain more urban votes that will be critical to the election’s outcome.
The government is already promoting Trans Mountain as a means to improve aboriginal lives.
“Meaningful economic participation by indigenous peoples is an important way to respect … people who are actually impacted along the line,” Finance Minister Bill Morneau said last month.
Conservatives have not decided how they would sell the pipeline if they win the election, said MP Shannon Stubbs of Alberta who has criticized the government over natural resources issues.
The Alberta provincial government said it welcomed interest from indigenous communities in becoming partners in the energy sector. British Columbia opposes the pipeline expansion, however, and Environment Minister George Heyman said indigenous ownership would not change its concerns about spills.
Opponents are planning litigation, blockades and protests, said Grand Chief Stewart Phillip of the Union of BC Indian Chiefs.
“Who owns the pipeline is not the issue. It’s what goes through the pipeline,” he said.