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Managing Pressure, Minimising Risk Minimising Pressure, Managing STATS GROUP STATS Volume 18 Number 1 - January 2018 18 Number Volume Front Cover STATS Group Pinghu.indd 1

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ContentsVOLUME 18 | NUMBER 01 | JANUARY 2018 WORLD PIPELINES |

03. Editor's comment PIPELINE INTEGRITY MANAGEMENT A winter's tale. 50. New challenges for analysis? 05. Pipeline news Thomas Dessein, C-FER, Canada. Kicking off the New Year with news on major pipeline projects, such as 56. Next generation pipelines KXL, the Forties pipeline and Trans Alaska; federal agency updates; and Dr. Arunkumar Ranganathan, Infosys, India. announcements made detailing contract extensions and confirmations.

arendra Modi could not have asked for a In his report on India, better start when he took over as India’s 14th Prime Minister in May 2014. Oil prices & Ng Weng Hoong asks: India must began collapsing after years at record high will rising energy prices Nlevels, giving the country’s hard pressed economy an Pigging unexpectedly huge boost. The Brent crude price plunged threaten Modi’s run of from an average US$108/bbl in 2013 to US$43/bbl in 2016, helping to slash India’s oil import bill from US$155.4 billion reform and luck in 2018? to US$73.9 billion. regenerate 63. World Pipelines' annual Pigging Q&A, featuring Coastal Chemical/N-SPEC Pipeline Services, Entegra LLP and Inline Services Inc.

PAG E COATINGS & LININGS 12 13 12 67. Vacuum packed pipelines Paul Glister, Abfad Limited, UK.

REGIONAL REPORT CORROSION PROTECTION 12. India must reform and regenerate 71. A careful balance of AC and CP In his report on India, Ng Weng Hoong asks: will rising energy prices Lars Vendelbo Nielsen and Andreas Junker (MetriCorr, USA), with Casey threaten Modi’s run of luck in 2018? Heinrich (Dominion Energy, USA). COVER STORY 75. Tackling pipeline corrosion 20. Under the sea Julie Holmquist, Cortec Corporation, USA. Mark D. Gault, BA (Hons) MSc, STATS Group, UK. 79. Old before their time Cal Chapman, P. E., Chapman Engineering, Inc., USA. TUBE & PIPE MANUFACTURE 25. Tests and trials for heavy walls WELDING Philippe Darcis and Stefano Crippa, Tenaris, Italy. 83. Arc welding improvements 33. Exceeding the standard Christina Nielsen and Jesper L. Skovfo, Migatronic, Denmark. Wenle He, Daniel Svedberg, Katarina Persson, Magnus Olaison and Per Olsson-Artberger, Sandvik Materials Technology, Sweden. PIPELINE MACHINERY REVIEW 87. Pipeline machinery focus TRENCHLESS TECHNOLOGY World Pipelines' quarterly pipeline machinery focus, featuring 38. Runway and river crossings Mattracks. Cheryl Kohn-Marks, Mears Group, Inc., USA.

AUGER BORING 43. The advantages of auger boring Dr.-Ing. Gregor Nieder (Bohrtec GmbH, Germany) and Dipl.-Ing. Michael

Lubberger (Herrenknecht AG, Germany). WORLD ® PIPELINES

Volume 18 Number 1 - January 2018 JANUARY 2018

ON THIS MONTH'S COVER Reader enquiries [www.worldpipelines.com]

STATS Group’s patented subsea BISEP® isolation tool being deployed to provide leak-tight double block and bleed isolation of a pressurised gas pipeline. Two DNV GL type approved BISEPs were installed to create a midline isolation, allowing a 250 m section of the pipeline to be safely replaced without depressurising the entire pipeline. Although conducted in shallow 7390 water (30 m), subsea conditions were challenging as visibility was extremely limited and a strong current limited dive activity. www.statsgroup.com ISSN 1472- www.worldpipelines.com STATS GROUP Managing Pressure, Minimising Risk Member of ABC Audit Bureau of Circulations Copyright© Palladian Publications Ltd 2018. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form statsgroup.com or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. All views expressed in this journal are those of the respective contributors and are not necessarily the opinions of the publisher, neither do the publishers endorse any of the claims made in OFC_WP_JAN_2018Front Cover STATS GroupPROOF.indd Pinghu.indd 1 1 01/12/201704/01/2018 16:02:33 14:59 the articles or the advertisements. Printed in the UK. When the pressure is on, we deliver. As the only portable two-in-one Hydrostatic Testing Units in the pipeline industry, Midwestern’s HTU-350/500 automatically fill and test pipelines in one step. These units offer the fastest fill rate based on horsepower input with automatic switchover for filling pipe, pushing pigs and pressure testing. That’s how Midwestern stands up to the pressure.

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id December 2017 saw what was facility – the UK’s largest gas storage termed by many in the oil and terminal – off the coast of Yorkshire. EDITOR gas industry as ‘a perfect storm’. In the last few days of December, Elizabeth Corner Firstly, Ineos closed the Forties Russian press reported that the first ever [email protected] Mpipeline, which transports almost 40% of shipment of Russian LNG had landed in UK North Sea oil and gas production, the UK. Delivered in late December to following the detection of a crack and storage facilities at the Isle of Grain MANAGING EDITOR James Little suspected leak. The Forties shutdown terminal by a Russian icebreaker ship [email protected] lasted about four weeks and precipitated a coming from the Yamal development in loss of 400 000 bpd, costing an estimated the Arctic, the gas would soon be keeping ASSISTANT EDITOR Stephanie Roker £20 million/d according to some reports. British homes warm, said Russian news. [email protected] A total of 85 fields in the North Sea were This did not turn out to be the case, as the forced to curtail production and, as the LNG was reloaded onto a tanker heading ADVERTISEMENT DIRECTOR Rod Hardy North Sea Brent benchmark is underpinned to Asia, where it will find a better price. [email protected] by supply from these fields, the Brent Looking at the statistics, in 2017 the UK crude price rose to US$65.56/bbl received 38% of its gas from the North ADVERTISEMENT MANAGER Chris Lethbridge following the outage (at the time of Sea, 42% from Norway and 10% from [email protected] writing, Brent crude is surging even higher, pipelines crossing continental Europe. A to US$67.62, reflecting the effects of further 4% came from LNG (mainly from ADVERTISEMENT SALES EXECUTIVE Qatar) and the remaining 6% was made up Will Pownall co-ordinated OPEC cuts and concerns over [email protected] political unrest in of gas taken from Iran). The Forties storage sites. The PRODUCTION UK’s reliance on Bethany Rees Matcham pipeline is now up THE UK’S RELIANCE [email protected] and running at full ON IMPORTED GAS imported gas capacity after some increased by a DIGITAL EDITORIAL ASSISTANT INCREASED BY A Nicholas Woodroof assessment and repair quarter from the [email protected] work, but its closure QUARTER FROM previous year: did constitute quite a where North Sea SUBSCRIPTIONS THE PREVIOUS YEAR Laura White serious supply gas once provided [email protected] disruption. domestic security Days after the Forties shutdown, a fatal and a strong export revenue stream, the ADMINISTRATION explosion at Austria’s Baumgarten gas hub UK now increasingly relies on imports. Nicola Fuller led Italy to declare force majeure over Gas pipeline imports to Europe from [email protected] energy supply concerns. The explosion and Norway are at an all time high: in 2017 they WEBSITE MANAGER subsequent fire at the natural gas facility were up on the previous year by 7%, Tom Fullerton near the border with Slovakia left one reaching 116 billion m3, which comprises [email protected] person dead and 18 injured. The about a quarter of European demand. Baumgarten plant is a key distribution hub However, the demise of the North Sea for gas with about 10% of Europe’s gas affects Norway too: its longstanding fields Palladian Publications Ltd, needs passing through the station, are moving closer to depletion and 15 South Street, Farnham, Surrey, GU9 7QU, ENGLAND including deliveries from Russia, Europe’s opportunities on the continental shelf Tel: +44 (0) 1252 718 999 biggest gas supplier. The operator of the seem to be in short supply, with the fields’ Fax: +44 (0) 1252 718 992 plant, Gas Connect, could not guarantee best days behind them. Website: www.worldpipelines.com deliveries to destinations outside of Norway hopes to exploit untapped Email: [email protected] Austria following the blast and, as such, reserves currently residing in the Barents Italy declared a state of emergency over Sea, beyond the Arctic Circle, of which it energy supply. owns an estimated 9 billion bbls of Annual subscription £60 UK including postage/£75 overseas (postage airmail). Special two year Finally, Europe was experiencing a cold undiscovered oil (half of the country’s discounted rate: £96 UK including postage/£120 snap during December, with snow falling, undiscovered oil and gas). But a recent overseas (postage airmail). Claims for non receipt of issues must be made within three months of temperatures dipping and demand rising. bidding round for new blocks in the field publication of the issue or they will not be honoured This compounded the effects of both generated only 11 applications, with many without charge. incidents and made clear that Europe’s of the big players refraining from Applicable only to USA & Canada: World Pipelines (ISSN No: 1472-7390, countries are vulnerable to price jumps in participation. Operations to reach oil and USPS No: 020-988) is published monthly by the wake of unforeseen events. gas are likely to become more difficult, Palladian Publications Ltd, GBR and distributed in the USA by Asendia USA, 17B S Middlesex Ave, Storage facilities traditionally help smaller scale and less productive in terms Monroe NJ 08831. Periodicals postage paid New ease potential price spikes, providing a of profit margins; but scares like those in Brunswick, NJ and additional mailing offices. POSTMASTER: send address changes to World buffer in times of need. In the UK, December demonstrate the necessity of Pipelines, 701C Ashland Ave, Folcroft PA 19032 however, storage capacity is shrinking, with maintaining efforts to stabilise and secure the impending closure of Centrica’s Rough future supply and storage capacity. With the power of the PipeWIZARD® system, STANLEY Inspection provides customers around the world with today’s fastest and most accurate AUT girth weld inspection services. Under any conditions.

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Poland-Slovakia pipeline deal signed Trans Alaska oil volume increases for second year in a row The EU’s Innovation and Networks Executive Agency The amount of oil transported through the Trans Alaska pipeline system (INEA), Polish operator Gaz-System and Slovak operator (TAPS) increased for the second straight year in 2017, the Alyeska Pipeline Eustream have signed an agreement to construct a new Service Co. reported on 2 January 2018. gas pipeline. With a daily average of 527 323 bbls, the pipeline moved almost The new 165 km pipeline will help bring 192.5 million bbls in 2017, a 1.5% increase over 2016’s 189.5 million bbls. The diversification to the CEE region’s gas sources, as it year-over-year increase from 2015 to 2016 was slightly larger, at 2.1%. completes a missing link between the Polish and 2017 was also the 40th anniversary of pipeline operations, with more than Slovakian gas transmission systems. 17.6 billion bbls being transported through the 800 mile, 4 ft wide pipe. The new pipeline forms part of efforts to create a Prior to 2016, the amount of oil running through the pipeline had declined new north-south gas corridor and help diversify gas for 13 straight years. supplies. “More oil flowing through TAPS means a safer, more efficient and more The EU will provide €107.7 million to finance the sustainable pipeline system,” Alyeska President Tom Barrett said. “Increased project. throughput also signals a stronger economy for Alaska and more Poland and Slovakia will now each gain direct access opportunities for Alaskans.” to a variety of gas supply sources in the north and in When flow declines, oil moves slower, creating the potential for cooling the south, including the proposed Eastring pipeline temperatures, ice formation in the line and accumulation of water and wax. linking the Balkans. A friendly business and regulatory environment supporting North Slope “With the completion of the Baltic Pipe project – in development is allowing operators to leverage efficiencies and technology to 2022 – Poland will gain new import opportunities,” said increase production and discover new oilfields, resulting in the increase of oil Piotr Naimski, the Polish government’s delegate for throughput, according to Barrett. strategic energy. “This is an important element in Alyeska was formed in 1970 to design, build and operate the pipeline strengthening the energy security of our country and system. It is a consortium of the major oil companies that own the pipeline. the whole of central and eastern Europe.” “When we see two years in a row of increase, it gives us lots of optimism “The financial support received via CEF funding for the state of Alaska and also for pipeline operations going forward,” underlines the important role the Poland-Slovakia Gas Michelle Egan, a Spokesperson for Alyeska, stated. Interconnection has in fulfilling the EU’s energy policy In mid December, Alaska oil companies settled a dispute over Trans Alaska objectives,” said Tomasz Stepien, President of the pipeline tariff charges, which concerned transportation tariffs charged by the Management Board at Gaz-System. pipeline owners between 2009 and 2015. The proposed Polish-Slovak gas pipeline project Alaska claimed that the Alyeska owner companies overstated the tariffs comprises a gas pipeline of which approximately 59 km and improperly devalued the oil delivered by the pipeline, thus reducing state will be located in Poland and 106 km in Slovakia. income.

Pennsylvania halts construction of Sunoco pipeline Pennsylvania state environmental officials have ordered Sunoco to In its order, DEP told Sunoco to “fully explain the failures that halt construction of a natural gas pipeline across southern led to the violations” and come up with a plan to fix them. The Pennsylvania, citing a series of spills and other “egregious and wilful company also has to restore or replace the water supply of two violations” of state law that have plagued the US$2.5 billion project. homeowners in a township west of Harrisburg who complained The Department of Environmental Protection (DEP) said it last month about “cloudy water” resulting from pipeline ordered work on the Mariner East 2 pipeline to stop until Sunoco construction. complies with the terms of its permit. DEP has issued dozens of Pennsylvania’s DEP suspended all construction on Sunoco’s environmental violations to Sunoco since May, contending the Mariner East 2 pipeline, saying it has violated the conditions of company has demonstrated a “lack of ability or intention” to two kinds of permits. comply with the state’s clean streams law and other “Sunoco must cease all construction activity on the pipeline environmental regulations. project, except for maintenance of erosion controls and limited “Until Sunoco can demonstrate that the permit conditions maintenance of horizontal directional drilling equipment,” the can and will be followed, DEP has no alternative but to suspend DEP said. the permits,” stated DEP Secretary Patrick McDonnell. “We are Sunoco has 30 days to submit information to DEP in order living up to our promise to hold this project accountable to the for the agency to review whether to allow continued strong protections in the permits.” construction of the Mariner East 2. Spokesman Jeff Shields The 350 mile long pipeline will carry propane, butane and stated: “We intend to expeditiously submit these reports and ethane from the Marcellus Shale natural gas formation in western we are confident that we will be reauthorised to commence Pennsylvania to an export terminal near Philadelphia. Sunoco has work on this project promptly. said construction on the 20 in. pipeline is scheduled to be “We also reiterate our commitment to the highest levels of complete in the 2Q18, with a companion 16 in. pipeline to be construction expertise and our dedication to preserving and placed into service later this year. protecting the environment in which we conduct our work.”

JANUARY 2018 / World Pipelines 5 World News IN BRIEF

Nigeria Forties pipeline now fully operational following shutdown The Escravos-Lagos pipeline, owned Operator Ineos has confirmed that the Forties the UK’s liquids production and more than 80 by the Nigerian National Petroleum pipeline has returned to full working capacity. fields feed into the pipeline. Corp. in the southern Edo state, The company said: “All restrictions on the “Ineos confirms the Forties pipeline system is required a shutdown after a recent flow of oil and gas from platforms feeding into fully operational,” operator Ineos AG noted in a fire. The pipeline supplies gas to the the pipeline system have been lifted, and virtually statement. “All restrictions on the flow of oil and 1320 MW Egbin power plant, the all platforms are now online.” gas from platforms feeding into the pipeline nation’s biggest, and five others. The Ineos shut the pipeline on 11 December 2017 system have been lifted and virtually all platforms interruption tripped the national after discovering a hairline crack in the pipe just are now online.” transmission grid on 2 January 2018. south of Aberdeen (UK). Following the controlled The completion of repair work and the shutdown, Brent prices spiked not only because reopening of the system means the network can Canada the pipeline carries some 450 000 bpd, but also now resume normal operations. The Kinneil The National Energy Board because Ineos said that the repair would take processing plant linked to the pipeline has now recommended NOVA Gas “weeks rather than days.” restarted and all products are in specification, Transmission Ltd. be granted a The Forties pipeline carries some 40 - 45% of Ineos said. certificate of public convenience and necessity to continue operating KXL route change request denied by Nebraska PSC the 179 km long Albersun pipeline in northeastern Alberta. In late December 2017, Nebraska regulators denied TransCanada Corp.’s request to amend its route application for the proposed Keystone XL oil pipeline through the US state, a potential setback for the Russia company as it seeks to head off legal challenges. Transneft Diascan has commissioned The Nebraska Public Service Commission (PSC) issued an approval for the line in November, removing a software package, developed by what appeared to be the last big regulatory obstacle for the delayed project. However, Nebraska PSC’s the company, to automate the approval was not for the route TransCanada had singled out in its application. Instead, it approved an processes of planning, metering and alternative route, which positions it closer to an existing pipeline right-of-way down the state’s eastern side. analysis of testing facility equipment In response, TransCanada filed a motion with the commission, seeking permission to retrospectively with natural and artificial defects. amend the route application. The commission voted 5-0 against the motion. TransCanada stated that it would review the decision to determine the next steps for Keystone XL, USA but added that it believed the project remained economically viable. The recent extreme cold is driving On 19 December 2017, the Nebraska PSC said TransCanada could not amend its application to formally increased demand for natural gas in request an alternative route for the pipeline through the state. New Jersey, and new pricing data TransCanada could appeal the commission’s ruling, but that may take several months. If the company shows New Jerseyans are paying as were to lose the appeal, it would have to begin anew its application for the alternative route approved by much as 31 times more for natural the commission in December. gas than they would for supplies that will be accessed by the Americans trust US federal agencies more than White House on energy issues PennEast pipeline. A new national survey and report by Makovsky, a leading integrated communications consultancy, found Australia that Americans believe US federal agencies are the most credible source for energy information, more so UTEC, a global survey company in than the media and significantly more trustworthy than the White House or Congress. subsea services group Acteon, has The report, ‘Trust, Credibility and America’s Energy Future’, offers an instructive look into what US been awarded a contract by consumers think about energy issues in the end of a tumultuous year, which saw the Trump Technip Oceania Pty Ltd to provide Administration take over national energy policy, the US withdrawal from the Paris Climate Accords, the survey and positioning services on repeal of the Obama Administration’s Clean Power Plan and ongoing energy issues surrounding fracking the Greater Enfield project, and the Keystone pipeline. offshore Western Australia. On credibility, US government agencies and TV news channels and/or their websites were seen as the USA most credible information sources (22% and 20%, respectively), while the White House came in at 13% and Congress at 8%. TransCanada Corporation’s Leach Millennials gave the highest credibility scores to federal agencies and TV news channels (33% and 24%, XPress project was put in-service on respectively). In fact, Millennials appear more trusting of information sources, giving notably higher 1 January 2018. The Federal Energy credibility scores compared to other generations surveyed. Regulatory Commission also issued a When asked if the US is on the “right path towards energy independence,” 65% said it was, while 43% certificate of public convenience disagreed. When broken down by political affiliation, 80% of Republicans agreed, compared to 43% of and necessity for the company’s Democrats and 38% of Independents. A majority of respondents (61%) also agreed that domestic energy Mountaineer XPress and Gulf XPress sources should be prioritised over foreign energy solutions. projects on 29 December 2017. All Opinions are almost evenly split on whether market forces or the government should determine the three projects provide vital links best energy source for America. Just over half (55%) say market forces should be responsible, whereas 45% between Appalachian gas supply and believe government should make the decision. Republicans (58%), ages 45 - 54 (62%), ages 55 - 64 (66%), growing US markets. incomes of US$75 000 - 100 000 (62%) and over US$100 000 (61%), are most likely to support market forces, whereas Democrats (53%), age 18 - 34 (54%), incomes less than US$35 000 (53%) lean toward government. 6 World Pipelines / JANUARY 2018 Pipeline Valves and Enhanced Cleaning Assessment Programs & Tools to Keep Your Pipeline Safe & Reliable

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29 - 30 January 2018 Glass Mountain sale finalised Operations begin for second European Gas Conference Vienna, Austria SemGroup has recently completed the sale Russia-China pipeline https://www.europeangas-conference.com/ of its 50% interest in Glass Mountain Pipeline, On 1 January 2018, the second line of the LLC to a fund managed jointly by BlackRock Russia-China pipeline began operation. Real Assets and Navigator Energy Services for The pipeline is approximately 932 km 29 January - 1 February 2018 US$300 million. in length and carries crude oil from the PPIM 2018 “We are extremely pleased with the East Siberia-Pacific Ocean (EPSO) system. It Texas, USA valuation of the Glass Mountain sale, which travels from Mohe, located near the http://clarion.org/ppim/ppim18/index.php represents a significant step in our capital Russian border, to Daqing. raise plan to fund the final payment for the This new line is set to double China’s acquisition of Houston Fuel Oil Terminal annual imports, from 15 million t to 13 February 2018 Company,” said Carlin Conner, SemGroup 30 million t. Chinese National Petroleum 2018 North America Natural Gas & President and CEO. Company stated that the pipeline will fill NGL Forum “We continue to pursue additional northeast China’s crude supply gap. It is Texas, USA options for completing the remainder of the also considered to be a major project for https://adi-analytics.com/events/adi-forum/ payment and for pre-funding our strategic developing energy co-operation between growth on the Gulf Coast, mid continent and the two countries. in Canada.” This second pipeline has made Russia 13 - 17 February 2018 Rose Rock Midstream, a subsidiary of the largest exporter of crude oil to China, Pipe Line Contractors Association SemGroup, will remain the pipeline operator beating Saudi Arabia in 2017 as the Annual Convention for a period of time following closure. country’s primary supplier. Koloa, Hawaii Additionally, Chief Information Officer http://www.plca.org/ FERC to review 1999 pipeline policy of China Energy Net Consulting Han Xiaoping stated: “Apart from the two The Federal Energy Regulatory Commission pipelines, China also imports a large 27 February - 1 March 2018 (FERC) will review its policies on certification amount of crude oil through freight trains Offshore Pipeline Technology of natural gas pipelines, Chairman Kevin J. from Russia.” Conference 2018 McIntyre revealed. The policy governs how By December 2019, Russia also intends Amsterdam, the Netherlands FERC evaluates natural gas pipeline proposals to begin selling natural gas to Far East Asia https://energy.knect365.com/offshore- that come before it. through its Power of Siberia pipeline. pipeline-technology/ McIntyre said the Commission will examine the Policy Statement on Certification of New Interstate Natural Gas 12 - 14 March 2018 Pipeline Facilities, issued in 1999, as part of a 13th Pipeline Technology Conference pledge he made during his Senate News Highlights Berlin, Germany confirmation to take a fresh look at all https://www.pipeline-conference.com/ aspects of the agency’s work. McIntyre said: “I believe we in the government should constantly be examining 25 - 29 March 2018 our various processes and procedures to see NASTT’s 2018 No-Dig Show if we can do anything better. Much has Palm Springs, USA changed in the energy world since 1999, and http://nodigshow.com/future-no-digs/ it is incumbent upon us to take another look at the way in which we assess the value and the viability of our pipeline applications.” ➤ EVX 16 - 20 April 2018 The next steps will be announced soon, ➤ signs agreement for TUBE Düsseldorf and the format and scope of the review are new crude gathering system Düsseldorf, Germany being discussed. This type of review will be https://www.tube-tradefair.com/ thorough, and FERC will invite the views of ➤➤ Dominion Energy and SCANA all stakeholders to ensure that it accurately announce merger and efficiently assesses the pipeline ➤➤ Spoolable pipe market likely to 17 - 19 April 2018 applications it receives. reach US$1 billion MOC 2018 McIntyre concluded: “I am approaching ➤➤ Department of Interior’s new Alexandria, Egypt this topic with an open mind and want the leasing programme “unlocks the http://www.moc-egypt.com/ staff and Commission to take a fresh look at vast potential of US energy” all aspects of the issue.”

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CATS confirms purchase of UK North Sea Corinth to manufacture pipes for Balticconnector project pipeline Cenergy Holdings announced that, on 4 January 2018, Baltic Connector and CATS Management Limited – an Antin Infrastructure Elering signed an agreement with its subsidiary Corinth Pipeworks Pipe Partners portfolio company – has agreed to acquire a Industry SA to manufacture and supply the steel pipes for the 65% interest in the Esmond Transportation System (ETS), Balticconnector offshore pipeline project. a key piece of established UK southern North Sea The agreement, covering the pipe material for the 77 km offshore midstream infrastructure. pipeline from Finland to Estonia, is one of the biggest within the Andy Hessell, Managing Director of CATS Balticconnector project. The pipes for the offshore pipeline will be commented: “We are delighted to have reached manufactured in 2018 in Corinth Pipeworks’ factory in Greece, and its agreement on ETS. Growing our business in the southern installation work will commence according to schedule in 2019. North Sea allows us to diversify our asset portfolio Baltic Connector Oy is a state-owned company set up in 2015 to through exposure to an entirely new catchment area with implement the Finnish part of the Balticconnector gas pipeline to be built different business dynamics, and to acquire infrastructure between Finland and Estonia. When completed, Balticconnector will connect that has the characteristics we value. Investment in both the gas networks of Finland and the Baltic countries and will enable the established and new infrastructure is key to maximising opening of the gas market in Finland. The EU has granted funding to cover 75% economic recovery and realising the considerable of the project, and the project is due to be completed by 2020. potential of the UK Continental Shelf.” Mark Crosbie, Managing Partner at Antin, added: Subsea 7 wins offshore pipeline contract “Antin entered the North Sea over three years ago with our first CATS acquisition. Since we completed our Subsea 7 S.A. has announced the award of a substantial contract by Statoil second CATS acquisition, taking our interest to 99% with for the Snorre expansion project, located in the Tampen area, 150 km west operatorship, we have seen the central North Sea deliver of Florø in Norway. excellent business results. These two new opportunities The engineering, procurement, construction and installation (EPCI) in the southern North Sea will complement and build contract includes Subsea 7’s cost-effective Pipeline Bundle technology, on the success of CATS.” which contains all flowlines and control umbilicals necessary for operation. ETS comprises a 165 km pipeline that transports gas The project features three Pipeline Bundles: west, east and north. from fields in the southern North Sea to the Bacton gas Production of the Pipeline Bundle system will take place at Subsea 7’s terminal on the North Sea coast in north Norfolk. The fabrication facilities at Wick, Scotland. Project management and engineering pipeline is currently operated by Perenco, as operator of will commence immediately at Subsea 7’s offices in Stavanger, Norway and the Trent and Tyne fields. Aberdeen, Scotland. Offshore operations will take place in 2019 and 2020. CML has entered into three sale and purchase Phil Simons, Subsea 7’s Vice President North Sea and Canada, said: agreements with Premier Oil plc (30%), Centrica plc “Subsea 7 looks forward to working closely with Statoil to safely and (25%) and Perenco UK Limited (10%). successfully deliver our workscope on the Snorre project. This award On completion of the acquisitions, CML will demonstrates the versatility and economic benefit Subsea 7 can offer become the operator of ETS and will maintain the through its unique Pipeline Bundle technology, where all service lines are existing arrangement, whereby Perenco operates the integrated in a single product and installed using our controlled depth tow pipeline on its behalf in its capacity as operator of the method. It also recognises our proven track record, with over 80 Bundles Trent platform. installed in the North Sea.”

Tallgrass announces Continental Resources contract extension Tallgrass Energy Partners, LP (TEP) has announced that Continental Resources, Inc. exercised its contractual right to extend its throughput and deficiency agreements (TDAs) to ship crude oil with Belle Fourche Pipeline Company and with TEP’s subsidiary, Tallgrass Pony Express Pipeline, LLC, through 31 October 2024. The TDAs were previously scheduled to expire on 31 October 2019. “This is a unique, mutually beneficial opportunity in the current environment to extend Pony Express’s relationship with its largest customer, secure highly desired Bakken crude oil volumes well past our existing contract maturities, and help provide cash flow certainty for Pony Express,” said David G. Dehaemers Jr., President and CEO of Tallgrass Energy. “Pony Express is capable of transporting approximately 400 000 bpd, and has just over 300 000 bpd currently contracted. This extension fills a portion of the pipeline’s available capacity from the Bakken and for a term of five years beyond the initial contract term, solidifying Pony Express’s long-term position in the crude oil transportation market.” On 1 January 2018, new uncommitted rates on the joint tariff of BFPL, Pony Express and Bridger Pipeline, LLC were established. This caused certain committed rates on the joint tariff to be adjusted on the same date. These joint tariff committed rates will initially be US$3.75/bbl for Williston basin origin points and US$2.86/bbl for Guernsey (Wyoming) origin points on Pony Express. “We are pleased to extend our long standing transportation relationship with Pony Express and Belle Fourche,” said Harold Hamm, Chairman and CEO of Continental Resources. “It provides a premier takeaway solution for our Bakken production when considering operational reliability, access to significant refining markets and, of course, access to storage and pipeline connectivity at Cushing. In addition, the extension will facilitate further improvements in the economics of our operations in the Bakken, the nation’s premier onshore oil play.”

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12 arendra Modi could not have asked for a In his report on India, better start when he took over as India’s 14th Prime Minister in May 2014. Oil prices Ng Weng Hoong asks: began collapsing after years at record high will rising energy prices Nlevels, giving the country’s hard pressed economy an unexpectedly huge boost. The Brent crude price plunged threaten Modi’s run of from an average US$108/bbl in 2013 to US$43/bbl in 2016, helping to slash India’s oil import bill from US$155.4 billion luck in 2018? to US$73.9 billion.

13 That set the stage for the Indian economy to become by 2035, said consultant Wood Mackenzie in a report in the world’s fastest growing among major countries, April 2016. The UK firm said India will have to focus on outpacing even China’s. Not surprisingly, Modi has boosting production from existing fields if it is serious claimed full credit for its performance. about reducing import dependence over the next five On the political front, India has found itself eagerly years. The government must step up now to attract courted by countries competing for influence: the US, much-needed foreign expertise to tap the country’s Russia, Japan, China, Saudi Arabia, Iran and Israel. India’s mostly ageing and marginal fields. CEO Neal Anderson international stock is at an all time high. Modi’s domestic told Bloomberg that India will not meet its production popularity has soared to a recent record high on a near goals solely by opening up exploration to foreign 90% approval rating according to US-based Pew Global investment, because of the long lead time needed to Research. But the prospect of higher energy prices could develop any new finds. soon test the Prime Minister’s management skills and the Indian oil companies have one of the industry’s resilience of the Indian economy. lowest recovery rates in tapping producing fields, with The oil markets have been staging a quiet recovery state owned ONGC leading with 27%. Using enhanced oil since bottoming out in 2016, said the US Energy recovery technology, US firms claim to be able to boost Information Administration (EIA). Brent crude is expected production from ageing fields by between 30% and 60%. to rise nearly US$10/bbl, or 23%, to average US$53/bbl in The Center for Strategic and International Studies 2017, and to climb further to exceed US$55/bbl in 2018. (CSIS) has been just as negative, stating that the Modi India’s oil import bill has risen 9.3% to US$80.8 billion government’s new policy moves to liberalise exploration in the last fiscal year to March 2017, according to the opportunities will “only have a small impact” on India’s Petroleum Ministry. It is on course to top US$90 billion in oil and gas supply and demand balance. The Washington- the current fiscal year to March 2018, with Brent surging based think tank questioned if the limited reforms will be past US$60/bbl in recent weeks. sufficient to attract investments amid the “fierce” global Crucially, Modi has yet to deliver on his high profile competition for capital and budget cuts by companies in promises to reform India’s inefficient energy sector. The the face of the recent tenuous oil price recovery. “India’s country continues to suffer from power brownouts, and upstream oil and gas E&P policy has been subject to remains highly dependent on fuel imports. criticism, with protectionism and government red tape There is renewed concern about possible oil and being blamed for lacklustre development of oil and gas gas supply disruptions from the Middle East that will upstream,” it said. threaten India’s energy supply security. Saudi Arabia is Since 1 July 2017, international companies have been rocked by domestic political power struggles at the same allowed to bid for access to explore for oil and gas time that it is gearing up for direct military conflict with in 2.8 km2 of sedimentary basins under the liberalised Iran. Crude oil prices could quickly surge back to the Hydrocarbon Exploration and Licensing Policy (HELP) US$100/bbl level if these two energy giants go to war programme. The petroleum ministry will review the bids with each other. and decide if it will make any awards before launching the next round of bidding from 1 January 2018. Experts sceptical of government’s oil and gas plan Crude oil import bill to rise 29% Energy experts have cast doubts on the Indian With the price of Brent crude recently touching a government’s plan to boost domestic oil and gas two year high, India is bracing for a sharp rise in its oil production over the next five years, never mind the expenditure in the current fiscal year. According to ICRA, long-term. India relies on imports to meet over 80% a ratings agency owned by Moody’s Investor Service, of its domestic oil demand and half its natural gas India’s oil import bill could rise by 29% to reach a four consumption, both of which are growing at rapid rates to year high of US$90 billion. Brent crude surged above fuel its economy. US$64/bbl in the first week of November 2017. The government has set a target to reduce oil imports The increased energy cost will have a negative by 10% from current levels by 31 March 2022. For the year impact on the economy, with the Indian government ending 31 March 2017, India imported 213.9 million t of forced to slash the basic excise duty on gasoline and crude and 36.3 million t of refined products. diesel by two rupees per litre from October 2017 By liberalising the country’s upstream sector to (US$1 = 65 rupees). The move could cost the state as foreign and private capital, the government wants to much as 130 billion rupees in forgone revenue over reduce the national dependence on imports. the second half of fiscal 2017, said ICRA. The Indian The Ministry of Petroleum and Natural Gas has government decided on the duty reduction out of projected India’s oil consumption to rise by an annual fear that increased fuel prices could slow down the rate of just under 4.5% from 197 million t in 2017 to country’s economic growth as well as stoke popular 245 million t in 2022. The country’s natural gas demand anger. However, it now faces an increased budget deficit will grow by an annual rate of 5% over the next 20 as its fuel subsidy expenses will rise from an estimated years to make India the world’s largest LNG importer 160 - 200 billion rupees to 220 - 250 billion rupees.

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www.ndt-global.com Australia | Canada | Germany | Ireland | Mexico | Spain | UAE | UK | USA According to ICRA, every US$1/bbl increase in the Indian demand slowed for almost every fuel, and was crude oil price will raise the country’s fuel subsidy cost by dragged down by declines in kerosene, naphtha and fuel 13 billion rupees, and the net import bill by US$1.2 billion. oil use. India’s trade deficit rose to a near three year high of “After total oil demand growth slowed to just more than US$14 billion in October 2017. Consumers are 60 000 bpd in 2017, consumption should accelerate to starting to feel the impact of rising inflation. 200 000 bpd in 2018 as the economy recovers from multiple disruptions this year,” said ESAI Analyst Amrit Domestic oil demand continues to surge Naresh. “Only kerosene use will decline again next year India’s domestic oil consumption is surging, helped amid a government push to switch households that use in part by recent economic reforms, including the kerosene for cooking to LPG.” introduction of the national goods and services tax (GST), Economic reforms slowed down energy consumption according to two energy consultants. growth in 2017. “Demonetisation removed 86% of the Consultant Wood Mackenzie said the surge in vehicle country’s currency from circulation at the end of last purchases before the GST came into effect in October year, and nationwide tax reforms were implemented in 2017 will underpin strong fuel demand growth in the the middle of 2017. These reforms disrupted industries coming year. Further encouraging fuel consumption, the and businesses across the economy,” said Naresh. GST will not apply to gasoline, diesel, crude oil and Economic conditions should improve in 2018, fostering natural gas. industrial activity and allowing oil demand growth to India’s gasoline demand rose 9% in 3Q17, thanks to the strengthen. explosive 27% jump in the sales of utility vehicles and the 9% rise in demand for regular passenger cars. “The India receives first US crude oil shipment strong growth [in vehicle ownership] was also supported As part of its programme to diversify its supply sources, by increased agricultural output leading to higher India has begun importing crude oil from the US. rural disposable income and discounts offered during State-owned Indian Oil Corp said it took delivery of a the Diwali festive season,” said Aman Verma, Wood 1.6 million bbl cargo at Paradip port in the northeastern Mackenzie’s Asia Refining Research Analyst. These recent state of Odisha on 2 October. The delivery was stimuli for fuel consumption growth add to the larger celebrated at a special ceremony attended by Indian and trends of India’s expanding middle class and increasing US government officials. car population. Sunjay Sudhir, a Senior Official in India’s Ministry of For 2018, Verma expects India’s gasoline demand to Petroleum and Natural Gas, hailed it as “a new chapter” grow by 7% to 670 000 bpd and diesel consumption to in the history of bilateral ties between the two countries. increase by 60 000 bpd. In 2016, India consumed about He said the inclusion of the US as a source for crude oil 1.09 million for transportation. “The Indian government for India’s largest refiner will contribute to his country’s plans to invest around US$31 billion to build multi- energy security. modal logistics parks across the country. As logistics The US was expected to ship another 3.95 million bbls operators consolidate their warehouse infrastructure of crude to India before the end of 2017. Bharat and operations, goods will be moved longer distances Petroleum was to take delivery of 2.95 million bbls at across states leading to greater demand for high its Kochi refinery in southwestern Kerala state, while tonnage, long haul trucks. This is likely to increase Hindustan Petroleum was to receive 1 million bbls at its diesel demand in the freight sector in the long-term,” he Visakhapatnam refinery in eastern Andhra Pradesh state. said. The three state owned companies have signed up to In a separate report, US ratings agency Moody’s import a total of 7.85 million bbls from the US. Investor Service has forecast India’s oil demand to grow Gas India Limited (GAIL) has also contracted to buy by 6% in 2018, making it the fastest growing in Asia. nine million t of LNG per year from the US. The first India will also outpace China in both oil demand and cargo is expected to arrive in January 2018. Following economic growth for the third consecutive year. On the their meeting in June 2017, US President Donald Trump back of a rapidly expanding economy, India’s real GDP and India’s Modi pledged to expand bilateral economic will grow by 7.5% in 2018 compared with China’s 6.4%. ties, with oil and gas leading the way. The US embassy “Driven by China and India’s appetite for petroleum in New Delhi said US crude oil exports to India could products and continued capacity rationalisation, we add US$2 billion to their annual bilateral trade. “We look believe refining margins will remain firm, thereby forward to working together on further sales of US crude supporting earnings growth,” said Moody’s Analyst Rachel and opportunities to expand the role of natural gas in Chua. India,” said MaryKay Carlson, the US Chargé d’Affaires in New Delhi. Oil demand growth to accelerate Another consultant, ESAI Energy, said it expects India’s oil Energy reforms and infrastructure products consumption to “accelerate” in 2018 after this India must speed up the expansion of its oil and gas year’s “unusually slow growth” from a faltering economy. infrastructure as well as the pace of energy reforms

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WWW.MAATS.COM to sustain the country’s recent rapid rate of economic Domestic production growth. The Indian government must free up the marketing India’s natural gas consumption is expected to grow and pricing of domestically produced gas if it wants by 7% annually to 2025 while its rising oil appetite will to encourage investment in the country’s upstream oil require a significant boost to its existing 4.6 million bpd and gas sector, said Wood Mackenzie’s Senior Upstream of refining capacity, currently the second largest in Asia. Analyst Alay Patel. Terence Ang, Wood Mackenzie’s Senior Asia Gas and He hailed the government’s introduction of HELP Power Analyst, has forecast India’s import of LNG to early this year for simplifying the country’s notoriously increase from 14.4 million t in 2014 to 19.6 million t in 2017. complicated licensing system for oil and gas explorers. New infrastructure to handle imports and distribution “Policy initiatives ranging from gas pricing incentives to combined with rising domestic production will boost contractual extension clarity will help boost domestic India’s use of natural gas. supply,” he said. Amid the global supply glut, India’s state-owned The government of Prime Minister Modi has set a Petronet has successfully negotiated for price reductions target to reduce India’s oil import dependence from in its term contracts for LNG imports from Qatar’s 80% today to 70% by 2022. It plans to achieve this by RasGas and ExxonMobil, said Ang. boosting domestic oil and gas production. Patel said the India can further boost domestic gas consumption government will have to free up marketing and pricing by encouraging power companies to diversify from using controls over domestically produced natural gas so that coal as a feedstock. private and foreign companies will be incentivised to While gas use may not rise much in the short-term, invest in India’s frontier hydrocarbon reserves. Ang said any increase would “support the viability of major pipeline infrastructure, which in turn allow smaller New Delhi’s growing influence users in the vicinity to gain access to gas.” For now, India’s growing importance to the global energy markets natural gas is not competitive as it is more costly than was underlined by the attendance of senior officials of fuel oil and petroleum coke. international firms and organisations – including Saudi “The government has allowed pricing freedom for Aramco’s President and CEO Amin H. Nasser – at an domestic gas produced from the HELP blocks. This, energy forum in New Delhi in October 2016. together with the revised domestic gas allocation order, CERA’S Indian Energy Forum was also attended by will force industrial, commercial and power users to pay senior executives from OPEC, the IEA, World Bank, market prices for gas,” he said. Rosneft, BP, Reliance, ExxonMobil, Royal Dutch Shell, Vedanta, Wood MacKenzie, IHS Markit, Schlumberger, Oil refining capacity shortfall Halliburton, Xcoal, ONGC, IndianOil, GAIL, Petronet Wood Mackenzie expects India to add to its 21 refineries LNG, Oil India, HPCL, Delonex Energy, NIPFP and the which have a total capacity of 4.6 million bpd and are International Gas Union. barely keeping pace with the country’s growing fuels Prime Minister Modi underscored the event’s political demand. significance by thanking Russia and Saudi Arabia for their India’s oil consumption surged by 7.8% to support of his country’s search for energy security. 4.489 million bpd in 2016, according to BP. While He called out Russian President Vladimir Putin by consumption is expected to grow at a slower rate for name as well as mentioned energy giant Rosneft “for the rest of this decade, India will likely still be adding at their commitments and support to the energy sector in least 200 000 bpd of new demand each year. “Demand India.” has been surprisingly strong over the last two years but While he did not mention King Salman, Modi said we expect rising retail fuel prices and a slowdown in rural he holds “warm memories” of his recent visit to Saudi economic growth to curb momentum,” Wood Mackenzie Arabia, and “looked forward to opportunities for said. “Our base-case outlook has India’s oil demand rising co-operation” between the two countries. by 200 000 bpd in 2017 – significantly lower than the In his address, Petroleum and Natural Gas Minister 290 000 bpd increase in 2016.” Dharmendra Pradhan said the Indian government has The company’s research director for Asia refining, taken “measures to completely overhaul the licensing Sushant Gupta, said Saudi Aramco is interested to regime” governing the country’s upstream segment participate in the investment of a new 1.2 million bpd through its HELP policy. He said the government has also refinery in the west coast state of Maharashtra. launched the National Data Repository (NDR) to provide Construction could start by end 2019, with completion investors with full access to geological information. expected four years later. Igor Yusufov, a former Russian Energy Minister, said he Gupta observed that India’s state-owned companies, expects energy deals to become increasingly critical to which own 60% of the country’s refining capacity, “have the bilateral ties between the two countries. He cited the traditionally been slow in adding refining capacity,” foundation laid out in recent deals involving Rosneft and implying the country will continue to be a major Indian giants ONGC, Oil India Limited, Indian Oil Corp, importer of fuels. Bharat PetroResources and Essar Oil Limited (EOL).

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