April 2017 LOOKING AHEAD

Volume 17 Number 4 - April 2017 LOOKING AHEAD.

We plan for the future. More than one-third of ROSEN employ ees work in research and development, creating innovative products needed by the industry. An invest ment we are proud of.

www.rosen-group.com 25 60 93 Contents WORLD PIPELINES | VOLUME 17 | NUMBER 04 | APRIL 2017 37 Featuring CDI, ClampOn, CRC-Evans Offshore Ltd, 03. Comment Hydratight, Jan De Nul What's on the horizon for offshore oil and gas? Group, NRI, Quest Integrity, ROSEN Group, Seal For Life 05. Pipeline news OFFSHORE Industries, Shawcor and Van Positive decisions have been made on Keystone XL and Dakota Access; Technology Review Oord Offshore. onshore and offshore contracts are underway, with new ones on the horizon; safety and pipeline integrity are considered by Enbridge and Hilcorp; and more.

SUBSEA OPERATIONS 60. Subsea services in the Gulf of Thailand Mark D. Gault, STATS Group, UK.

OFFSHORE COATINGS 67. Specifying pipeline coatings Ged Twidale (UK) and Richard Cowl (UAE), Jotun Powder Coatings A/S.

A PRECOMMISSIONING

ity the Gulf of Mexico. For decades, it was the The Gulf of dominant player in US oil and gas production, filling the refineries that ring its coastal waters. Rigs were 72. Automation advancements in pipeline Mexico faces P deployed throughout the shallow waters and onshore, employing thousands of workers and reaping billions of dollars major challenges, for exploration companies. How the tides have shifted. The technological revolutions in explains Gordon horizontal drilling and hydraulic fracturing diverted CAPEX into lucrative, low risk resource plays, such as the Barnett Shale and precommissioning Cope. the Permian Basin. The BP Macondo tragedy led to a year long Steve Thornton (UK) and Andy Barden (USA), Baker Hughes. PAG E 12 13 12 PIG LOCATION & TRACKING 78. Like a needle in a hay stack Paul Westwood, InPipe Solutions LTD, UK. REGIONAL REPORT 85. A strong bond 12. A huge Gulf Jason A. Farqué, CDI, USA. The Gulf of Mexico faces major challenges, explains Gordon Cope. PIPELINE CONSTRUCTION PIPELAYING VESSELS 89. Ensuring a smooth operation 18. Flexible operations David Bash (Burns and McDonnell, USA) and Doug Sauer Wouter Slob, Huisman, the Netherlands. (Phillips 66, USA). 93. Paying attention to pipelayers OFFSHORE PIPELINE WELDING Paul Rebello, Caterpillar Inc., USA. 25. A new direction Jonathan Bowers, Saipem S.p.A, Italy. HDD 31. Tough enough? 98. Reclaiming control Nathan Mettlach, Exova, USA. Taylor Nunnikhoven, Vermeer Corporation, USA.

Volume 17 Number 4 - April 2017

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

Shawcor is the world leader in pipeline coatings, subsea insulation solutions and ﬁ eld-applied coatings. The company's innovative solutions and proven track record of more than 400 000 miles of installed pipelines provides assurance of pipeline reliability in the most extreme environments and unique applications. Shawcor delivers complete end-to-end solutions to protect the integrity of pipelines. ISSN 1472-7390

Member of ABC Audit Bureau of Circulations Copyright© Palladian Publications Ltd 2017. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form 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 the articles or the advertisements. Printed in the UK. Pulling Together for over 50 years

From our first attachment on a John Deere 1010 dozer in 1960, to the latest 1050K platform, Midwestern has been designing and manufacturing sideboom attachments, for John Deere Construction Equipment, for over 50 years. The new M170C (170,000 lb) and M220C (220,000 lb) attachments are the latest additions. Our new attachments have been designed specifically for the new John Deere 1050K platforms. These fully integrated sidebooms have a low compact design that provides balanced weight distribution for optimum lifting, operating control, and excellent visibility. The two sidebooms offer maximum stability and low ground pressure. Accept No Imitations.

We carry weight in the industry

Sidebooms.com I MidwesternPipeline.com I 011-918-858-4234 Comment WHAT’S ON THE HORIZON FOR OFFSHORE OIL AND GAS?

he Gulf of Mexico has significant oil Construction first began on Nord Stream and gas reserves, found both in April 2010. The offshore pipeline travels onshore and offshore. However, beneath the Baltic Sea to transport natural despite being a major hub for energy gas from Russia to Europe. The line is ASSISTANT EDITOR T reserves, over the last few years, crude prices currently active and operating at a capacity Stephanie Roker have fallen, regulations have tightened and of 16 billion m3/y. [email protected] offshore operators have come face to face Akin to the Nord Stream pipeline, Nord with a variety of technical challenges. As a Stream 2 will also transport natural gas from MANAGING EDITOR result, this has stifled investment and, Russia to Europe via the Baltic Sea. The James Little consequently, reduced production. project is of particular importance, especially [email protected] Due to the current low oil production, now, as Europe is faced with a decline in operators have been venturing into deeper domestic oil and gas production at a time EDITORIAL ASSISTANT waters. Typically, offshore projects require a when Europe’s gas demand is on the up. Nord Anna Nicklin [email protected] sizeable investment in advance, along with a Stream 2 is predicted to be in-service by 2019. larger breakeven price, and with deeper and Recently, following an international ADVERTISEMENT DIRECTOR more challenging waters, comes new tender process in late February, Allseas was Rod Hardy [email protected] technology and awarded a contract for Nord additional financial Stream 2’s offshore pipelay ADVERTISEMENT MANAGER pressures. Thus, WWHILEHILE works, pushing the project Chris Lethbridge reluctance and CCAUTIOUSLYAUTIOUSLY forward. [email protected] uncertainty can be OOPTIMISTIC,PTIMISTIC, ITIT Unlike the previous two ADVERTISEMENT SALES EXECUTIVE deemed a primary projects, TurkStream is both Will Pownall reason for the lack of SSEEMSEEMS THATTHAT THETHE an onshore and offshore [email protected] offshore investments. OOFFSHOREFFSHORE OILOIL pipeline. It runs over 900 km PRODUCTION MANAGER This is a recurring AANDND GASGAS beneath the Black Sea from Stephen North theme throughout Russia to Turkey, where its [email protected] the Gulf of Mexico. IINDUSTRYNDUSTRY ISIS NOWNOW onshore string will transport SUBSCRIPTIONS In order to adapt to OONN TRACKTRACK FORFOR A natural gas to Turkey and Laura White these challenges, SSLOWLOW INCLINEINCLINE onto European customers. [email protected] operators are having Similarly to Nord to continuously push Stream 2, in December 2016, ADMINISTRATION the boundaries as a means of further Allseas and South Stream Transport B.V. Nicola Fuller [email protected] developing deepwater oil and gas. signed a contract to construct the first and While the offshore industry has recently second string of TurkStream. For the project, WEBSITE MANAGER been experiencing some lows, all is not lost. Allseas will implement its Pioneering Spirit Tom Fullerton [email protected] The industry has already made headway since vessel to lay more than 900 km of pipes 2016 and, on 6 March, the Trump across the seabed. The company will begin DIGITAL ASSISTANT EDITOR administration announced that 73 million building the pipeline’s first string in 2H17. Angharad Lock acres of federal water in the Gulf will be sold Venturing back to the Gulf of Mexico, [email protected] for oil and gas exploration and development. the Sur de Texas-Tuxpan pipeline is Ryan Zinke, US Secretary of the Interior, progressing at a steady pace; a joint venture Palladian Publications Ltd, stated: “Opening more federal lands and between TransCanada and IEnova that was 15 South Street, Farnham, Surrey, waters to oil and gas drilling is a pillar of announced in June 2016. This 700 km subsea GU9 7QU, ENGLAND President Trump’s plan to make the US energy natural gas pipeline will interconnect with Tel: +44 (0) 1252 718 999 independent. The Gulf is a vital part of that the Nueces-Brownsville and Tuxpan-Tula Fax: +44 (0) 1252 718 992 strategy to spur economic opportunities for lines, and has an in-service date of late 2018. Website: www.worldpipelines.com Email: [email protected] industry, states and local communities, to Recently, a number of companies have been create jobs and home grown energy and to contracted for operational work on the reduce our dependence on foreign oil.” project, such as Shawcor Ltd., Allseas and Annual subscription £60 UK including postage/£75 overseas (postage airmail). Special two year While cautiously optimistic, it seems that First Subsea, to name a few. discounted rate: £96 UK including postage/£120 the offshore oil and gas industry is now on These projects tie in nicely with this overseas (postage airmail). Claims for non receipt of issues must be made within three months of track for a slow incline. In particular, one area month’s issue of World Pipelines. Each year, publication of the issue or they will not be honoured of the industry has been seemingly the April issue includes updates from oil and without charge. prosperous; pipelines. Though more global gas pipeline companies working offshore Applicable only to USA & Canada: World Pipelines (ISSN No: 1472-7390, offshore projects are on hold for the around the world. In addition to its general USPS No: 020-988) is published monthly by abovementioned reasons, a number of subsea offshore focus, to coincide with the Offshore Palladian Publications Ltd, GBR and distributed in the USA by Asendia USA, 17B S Middlesex Ave, pipelines have been constructed during this Technology Conference, the issue features a Monroe NJ 08831. Periodicals postage paid New turbulent market, while others are underway special Offshore Technology Review, which Brunswick, NJ and additional mailing offices. POSTMASTER: send address changes to World and on track for startup. offers insights into global offshore pipeline Pipelines, 701C Ashland Ave, Folcroft PA 19032 Some of the most recognised offshore activities. If you’re in attendance, feel free to pipelines are Nord Stream, Nord Stream 2 drop by the World Pipelines booth #2776. We and TurkStream. hope to see you there! 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.

All STANLEY Inspection PipeWIZARD operators are UT-certiﬁ ed Level II or higher.

A Division of Stanley Oil & Gas I STANLEYInspection.com World News

Keystone XL receives presidential permit Enbridge confirms the condition of its Line 5 pipeline The US Department of State has signed and issued a On 13 March, Enbridge presented and defended the safety of its Line 5 presidential permit for the construction of the US$8 billion, pipeline to the Michigan Pipeline Safety Advisory Board. 1700 mile Keystone XL pipeline (KXL). The 64 year old Line 5 pipeline runs along the bed of Lake KXL is set to carry approximately 800 000 bpd of oil from Michigan, near the Mackinac Bridge. It splits into two 20 in. lines as it Alberta (Canada) to refineries along the Gulf Coast (USA). runs beneath waterways connecting Lake Huron and Lake Michigan. According to the pipeline’s operator, TransCanada, KXL is an Enbridge has stated that despite recent reports indicating coating important piece of the company’s comprehensive US growth failures and other potential problems, the pipeline is structurally safe, portfolio, driving an investment of more than US$15 billion in with just an outer layer of coating being worn away in some places. liquids and natural gas projects. This will create thousands of A document sent to the Environmental Protection Agency by well-paying jobs and generate substantial economic benefits in Enbridge in September explained that visual surveys and biotic sample the US. collection found so-called “holidays,” which the company described as “This is a significant milestone for the KXL project,” said “limited numbers of areas of the pipeline where there is a loss of Russ Girling, TransCanada’s President and CEO. “We greatly coating around the pipe.” appreciate President Trump’s administration for reviewing and The presentation came after Michigan Attorney General, Bill approving this important initiative, and we look forward to Schuette, Department of Natural Resources Director, Keith Creagh, and working with them as we continue to invest in and strengthen Department of Environmental Quality Director, Heidi Grether, ordered North America’s energy infrastructure.” Enbridge to explain its description of ‘holidays’ in the external coating The company will continue to engage key stakeholders and of the underwater steel pipelines. neighbours across Nebraska, Montana and South Dakota in Brad Shamla, Vice President of US Operations for Liquid Pipelines order to obtain the necessary permits and approvals to at Enbridge, told reporters before the presentation: “If there was ever a advance this project to construction. time when we were not 100% confident in its fitness, we would not be Welspun Global Trade LLC has already completed its operating the pipeline.” manufacturing obligations to supply line pipes for KXL. According to Shamla, the document submitted by Enbridge in However, the company has stated that it is fully geared to September 2016 identified areas of deterioration in an outer fibre wrap meet any additional requirements for pipes as the project that was used during installation of a coal tar enamel coating and inner moves ahead. fibre wrap. He said that the company is not aware of any areas where Rusty Fisher, Senior Vice President of Welspun Global the enamel coating has failed, but is aware of some areas where the Trade LLC, commented: “We welcome President Trump’s outer wrap has come loose. ratification of KXL. The decision to revive the pipeline project Kurt Baraniecki, Director for Integrity Programs with Enbridge, told will result in creating thousands of American jobs and will the Board: “This pipeline is in as good a condition as it was the day it fulfill energy needs of the nation in addition to having a was installed. Our corrosion prevention system is doing its job. Our multiplier effect on the US economy.” monitoring efforts are effective.” President and CEO of the American Petroleum Institute, While the company has no immediate plans to repair the wrap, Jack Gerard, has welcomed the State Department’s approval of Enbridge will hydrostatically test the pipelines in June. the permit. He commented: “Approval of this project is an important step to recognising the benefits that come from US Oil set to be pumped through DAPL energy infrastructure. According to a recent study, private investment in our nation’s energy infrastructure is a US$1 trillion According to a federal court filing submitted by Energy Transfer proposition that could create over one million new jobs for Partners (ETP), oil has been placed in the Dakota Access pipeline America’s safest, most highly trained and productive workers. (DAPL). ETP – the company behind the pipeline – is currently making Moving forward, we strongly urge the individual states, which the final preparations to begin moving the oil, thus, putting the stand to benefit from KXL, to approve this important project.” pipeline into service. Similarly, the Association of Oil Pipe Lines (AOPL) also “Oil has been placed in DAPL underneath Lake Oahe. DAPL is hailed the permit’s approval. “The Trump administration is currently commissioning the full pipeline and is preparing to place the keeping its promise to bring new jobs and benefits from energy pipeline into service,” the company said. infrastructure to the American people by building pipelines,” With extensive protests since April 2016, the pipeline is months said Andrew Black, President and CEO of AOPL. behind schedule. Therefore, this development is a significant milestone The benefits of KXL will continue long after construction is for ETP. complete. Communities along its route will gain property tax The company did not reveal exactly when it expects to start revenue, which can fund school budgets, police and fire making deliveries through the 30 in. 1172 mile (1886 km) line. However, departments, as well as local government needs. Rural once it is fully operational, the pipeline is expected to transport over communities near KXL with small budgets will also benefit 400 000 bpd of crude oil from the Bakken oilfields (northwestern from this new influx of revenues. North Dakota) to Patoka (Illinois).

APRIL 2017 / World Pipelines 5 World News IN BRIEF

Italy Myanmar-China oil pipeline TANAP studies taking place delayed Trans Adriatic Pipeline AG has recently Partly funded by the Innovation and Networks delivered an insightful Q&A, discussing A key pipeline that would allow overseas Executive Agency (INEA), engineering studies Italy’s olive tree removal, land parcels, crude oil to be imported to China for TANAP’s supervisory control and data political and environmental rights, through Myanmar is expected to see acquisition (SCADA) system and crossings project delays, and pros and cons of further delays due to final import licenses under the Dardanelle Strait and Evros River are the pipeline. being denied amidst last minute currently underway. negotiating tensions. The scope of the SCADA system funding USA Taking almost 10 years to develop, the includes all compressor stations, metering A 6 in. pipeline that is owned by US$1.5 billion, 480 mile (770 km) oil stations, block valve stations and the central Chevron Pipe Line Company recently pipeline was set for startup very soon. control station. Meanwhile, the detailed spilt approximately 4800 gal. (over However, PetroChina and Myanmar’s engineering of the Dardanelle Strait crossing 100 bbls) of crude oil on Bureau of government have not yet agreed a deal includes engineering designs of the two Land Management land in Rio Blanco for the pipeline, and the company is yet pipelines and fibre optic cables, which will County (Colorado). The company is to obtain permission from Myanmar’s cross the Dardanelle Strait within the Sea of currently undertaking a cleanup Navy for oil tankers to enter the country’s Marmara. Detailed engineering for the Evros operation while it looks into the ports. River crossing includes the crossing design of cause of the leak alongside While the project was said to be the Evros River, which is located at the border authorities. nearing imminent launch, since the above between Turkey and Greece. Nigeria are required, there is now no exact startup Key documentation for SCADA system date for the pipeline. Once operational, designs has been completed, and factory The Group Managing Director of the the pipeline – running from Kyaukphyu acceptance tests for the equipment are Nigerian National Petroleum Corp., (Myanmar) – is expected to supply currently underway. Dr. Maikanti Baru, has stated that the 260 000 bpd of oil to a refinery in China’s Designs for the Dardanelle Strait crossing 650 km Ajaokuta-Abuja-Kaduna-Kano Yunnan province. It will have an eventual are progressing well. The project’s engineering, gas pipeline is currently on tender. capacity of 400 000 bpd; approximately procurement and construction contractor is Baru also appealed to militants in the 5% of China’s daily import demand. getting the required permits for the crossing Niger Delta to stop attacks on the A Myanmar government source and the current plan is to commence region’s oil facilities, allowing for reportedly stated that PetroChina was construction work by summer 2017. industry growth that would benefit “trying to push to get the permission from Ground investigation work is currently Nigerians. the navy to enter Myanmar water.” being undertaken for the Evros River crossing Russia The Myanmar-China pipeline is of designs. The plan for this is to complete all of the engineering studies before the end of 2017. During a meeting with the head of great importance to China, as it would A second year report that will outline the BASF (Kurt Bock), Russian President, allow its landlocked southern provinces progress and successes of the engineering Vladimir Putin, stated that the Nord that neighbour Myanmar to have an studies for TANAP will be presented to the Stream 2 gas pipeline is “purely alternative supply route to imports from INEA by 31 March. economic and not directed against the Middle East and Europe. other countries.” He added: “We are ready to maintain ties with all our North Dakota oil spill larger than first thought partners, including Ukraine as a transit An oil spill that was discovered by a local claimed that over 80% of the cleanup country.” landowner in Belfield (North Dakota) is now operation is complete, with the company Canada believed to be approximately three times collecting approximately 3900 bbls of oil Canadian Minister of Natural larger than originally estimated. from the Ash Coulee Creek via skimming Resources, Jim Carr, recently made a The Belle Fourche pipeline (North and vacuuming thus far. speech at the Assembly of First Dakota) is reported to have spilt While the leak is reported to have Nations’ 2017 National Energy Forum, approximately 12 615 bbls of oil (around occurred due to ground movement, where he discussed a shift in energy 530 000 gal.), according to a spokesperson monitoring equipment on the pipeline sources, oil and gas demand, and the of the pipeline’s owner – True Companies. failed to detect the leak. The spill has importance of pipelines. The company’s early estimate, which was prompted US pipeline regulators to order released just after the leak in True Companies to improve its leak Libya December 2016, was 4200 bbls. detection systems and other actions. No Oil prices have recently climbed, in Reportedly, this news makes the Belle decision has been made with regards to part, due to falling crude output in Fourche pipeline spill “the largest crude fines against the company. Libya, which has eased crude leak to affect water in the state in over a While the 6 in. Belle Fourche line oversupply in the US. decade.” currently remains closed for repair, it has The True Companies spokesperson the capacity to move 24 000 bpd.

6 World Pipelines / APRIL 2017 More productive energy transport starts with safer pipelines.

GET SEAMLESS SAFETY AND PERFORMANCE IN ANY ENVIRONMENT WITH INTELLICOAT™.

Long-term pipeline integrity is essential for long-term profi tability—and is directly affected by the quality of the coating application. Ensure proper installation every time with Canusa-CPS IntelliCOAT, the world’s fi rst fully automated system to control the application of heat-shrinkable sleeves. IntelliCOAT delivers a step-change enhancement in the quality, consistency and productivity of fi eld-applied coatings in a simple-to-use format. Combine the system with our industry-leading sleeves for a seamless coating along the entire length of pipe—with zero compromise at the fi eld joints.

For more information on how our patent-protected IntelliCOAT can deliver factory-grade results in the field, please see canusacps.com/intellicoat or call +1 416 743 7111. World News Events DIARY Senators challenge PennEast Crew on standby to repair pipeline 20 - 22 April 2017 pipeline’s EIS A Hilcorp Alaska LLC (Hilcorp) natural gas India Oil and Gas Pipeline US Senators, Cory Booker and Robert pipeline has been leaking approximately Conference (IOGPC) Menendez, have sent a letter to the 193 000 - 215 000 ft3/d of gas into Alaska’s Cook Mumbai, India Federal Energy Regulatory Commission Inlet. Hilcorp has agreed to temporarily shut http://www.asme.org/events/iogpc/ (FERC), urging the agency to address the down oil production at two platforms in order many well-documented deficiencies to begin repair work on the leaking pipeline. The company will reduce the gas line’s 1 - 4 May 2017 within its draft Environmental Impact pressure by half, but will maintain the minimum OTC 2017 Statement (EIS) for the proposed PennEast pipeline. pressure needed to prevent water from entering Houston, USA The senators outlined their concerns the line. http://2017.otcnet.org/ that the environmental impacts of the A Hilcorp statement explained: “Shutting in proposed pipeline are not yet fully oil production allows the gas pipeline to operate at 65 psi, the minimum positive 2 - 4 May 2017 understood. In the letter, Booker and Menendez pressure. Minimum positive pressure is necessary 12th Pipeline Technology to prevent water from entering the line and a Conference highlight that “residents, municipalities potential washout of the residual crude oil that Berlin, Germany and public entities have raised a number of significant concerns with [PennEast’s] remains in the pipeline. [This] allows the http://www.pipeline-conference.com draft EIS.” They point to the platforms to run essential equipment and safety environmental dangers that PennEast systems.” 9 - 12 May 2017 brings, including threats to drinking water, Hilcorp believes that the leak has not Pipeline Simulation Interest public health and endangered species. caused any significant environmental issues, and Group 48th Annual Conference The senators reminded FERC of the samples demonstrate that the current water Atlanta, USA “significant” concerns raised in recent quality does not pose a threat to wildlife. http://www.psig.org/ months by the Environmental Protection Though weather conditions have prevented Agency, Fish & Wildlife Service, and US the line from being repaired sooner, Hilcorp expects to begin repairs within the next two 13 - 15 June 2017 Department of the Interior regarding the impact of PennEast on public health and weeks. It has until 1 May to stop the leak. Global Petroleum Show the environment. The issues range from The company has stated that crew and Calgary, Canada impacts to endangered species, to equipment are on standby to do the repairs “as https://globalpetroleumshow.com/ identifying the pipeline’s lack of plans for soon as it can be done safely.” preventing methane (a potent greenhouse 10 - 11 August 2017 gas) from leaking out of its pipe. The 2nd IndoAIM 2017 In particular, Booker and Menendez Jakarta, Indonesia express their “serious concern” that News Highlights PennEast could create harmful levels of http://indoaim.com/ arsenic in drinking water. ReThink Energy NJ has applauded the 5 - 8 September 2017 letter. Tom Gilbert, Campaign Director of SPE Offshore Europe ReThink Energy NJ and New Jersey Aberdeen, Scotland Conservation Foundation, commented: http://www.offshore-europe.co.uk/ “Senators Booker and Menendez have rightly pointed out that FERC has yet to fully address a host of critical concerns 17 - 19 September 2017 raised by public agencies and independent Pipeline-Pipe-Sewer Technology scientists regarding the risks that PennEast Conference and Exhibition (PPST) poses to our health, safety and ➤ TransCanada Cairo, Egypt environment. [...] The question is whether seeks to move https://www.pipelinepipesewer.com/ FERC will pay attention, or will they move forward with its North Montney ahead with a flawed EIS that fails to pipeline 25 - 29 September 2017 evaluate potential contamination of our ➤ First Nations against Energy East IPLOCA 2017 Convention drinking water, increases in harmful pipeline emissions, damage to threatened and Mexico City, Mexico endangered species, and other significant ➤ EU faces Nord Stream 2 hurdle http://www.iploca.com environmental impacts.” ➤ Azerbaijan pipeline loans at risk? FERC is scheduled to release its final EIS on 7 April.

8 World Pipelines / APRIL 2017 To read more about the articles go to www.worldpipelines.com Denso, Protal, SeaShield and Archco-Rigidon products are available from subsidiary companies located in the following countries

Since 1883 - Over 134 Years Service to Industry

134Winn & Coales International Ltd. 134 Contract News

AMID makes DAPL connection agreement Feruka-Harare contract awarded to Penspen American Midstream Partners, LP (AMID) has entered into a Penspen has been awarded a contract by Petrozim Line (Pvt) connection agreement with the Dakota Access pipeline project Ltd for the provision of engineering and procurement (DAPL); a 1172 mile, 30 in. pipeline that extends from AMID’s services, as well as the construction and commissioning Bakken formation production area (North Dakota) to Patoka supervision for the latest phase of capacity expansion of the (Illinois). Feruka-Harare pipeline. The new DAPL interconnect will tie into AMID’s Bakken After successfully completing a study on the project over crude oil gathering system, which consists of interstate the last six years, Penspen will now provide its services at pipelines that transport up to approximately 40 000 bpd of three sites – Feruka, Wilton and Harare. crude oil. In addition, AMID’s Bakken crude gathering system The existing network includes the Companhia Do Pipeline has crude oil trucking capabilities located near Watford City Mozambique-Zimbabwe Limitada (CPMZ) pipeline, which runs that provides greater producer access to market alternatives from Beira (Mozambique) to tanks in Feruka (Zimbabwe). From and offtake capabilities. the company recently added hydrogen Feruka, products are pumped via the Petrozim 295 km Feruka- sulfide treating to its Bakken system allowing customers to Harare multiproduct pipeline to the Msasa terminal (Harare). meet pipeline specifications for crude oil delivery thereby This pipeline was designed and installed by Penspen in the expanding customer service offerings and the competitive early 1990s. The company also constructed a 61 000 m3 footprint of the system. Leveraging off the recent additions to storage depot, in addition to an automated road and rail its system and the new connection to DAPL, AMID will be able loading facility. to deliver an incremental 20 000 bpd to market. To expand the capacity of the Feruka-Harare pipeline and “This new interconnect with DAPL is a continuation of our to meet increasing demand, Penspen will establish a series strategy to optimise the long term value of our assets by pumping operation in Feruka. The existing lines will be used providing producers a suite of services that include gathering as a single pipeline, with Feruka acting as an inline booster and processing with strong market connectivity via multiple pump station. pipeline takeaway points,” said Lynn L. Bourdon, AMID’s As well as this project, Penspen was awarded a contract President and Chief Executive Officer. “Through the expansion by CMPZ in December 2016 to work on series pumping on of our services and our ability to increase the value of our the Mozambique side of the pipeline system, to enable the gathering infrastructure, AMID has been able to capitalise on a same process to proceed for Petrozim on the Feruka to strategic asset that increases optionality and additional Harare side. The two projects are interrelated as Petrozim is takeaway points for our customers.” dependent on CPMZ to increase the flow. Penspen’s Executive Vice President for Europe and Africa, Neale Carter, said: “We are pleased to continue our Ineos and BP in talks over Forties pipeline involvement with Pvt Ltd. We have a 25 year relationship with After looking for a buyer for over a year, BP Plc is currently in the company, dating back to the early 1990s and are talks with Ineos AG to sell its Forties oil pipeline. This is the delighted to work on the pipeline we originally installed North Sea’s oldest and largest oil pipeline and, arguably, one of again. We started with a scoping study for the project in 2011 the most strategically important pieces of infrastructure in the followed by front end engineering and design for series region. pumping and capacity expansion studies.” While the companies have confirmed that discussions have taken place, both declined to give details of the value or Gas supply MoU signed by Gazprom and Eni timescale of the acquisition. The 100 mile Forties pipeline system transports Alexey Miller (Chairman of the Gazprom Management approximately 450 000 bpd of oil from 80 oilfields. It has been Committee) and Claudio Descalzi (Chief Executive Officer of reported that the line “transports oil from the unmanned Eni) signed a Memorandum of Understanding at the Gazprom offshore Unity platform in the North Sea to an onshore headquarters on 21 March. terminal at Cruden Bay, near Aberdeen. From here, 130 miles of The document reflects the parties’ interest in analysing onshore pipes carry the oil to the Kinneil terminal near Ineos’ prospects for co-operation by developing the Southern Gas Grangemouth oil refinery.” Corridor for Russian gas supplies to European countries, The pipeline system was originally built to transport oil including Italy, as well as updating the contracts for Russian from the Forties field to the Grangemouth refinery, which BP gas deliveries to Italy. also owned at the time. The company sold the Forties field to Eni is a global energy company operating in the oil, gas, Apache Corp. and the refinery to Ineos last decade but petrochemical and engineering industries, producing and retained control of the pipeline system. selling electricity, and providing oilfield services. The The sale of the pipeline system would complete BP’s company is also Gazprom’s major partner within the Blue withdrawal from its older assets in the North Sea. Stream project.

10 World Pipelines / APRIL 2017 Partnership you can trust.

For nearly 100 years, companies around the world have trusted

SmartPlug® Tetherless Isolation Technology TDW’s unwavering commitment to pipeline performance. So can you.

HOT TAPPING & PLUGGING SERVICES

STOPPLE® PLUS FITTINGS

INLINE INSPECTION SERVICES

STOPPLE® Train Plugging Technology PIGGING PRODUCTS, SERVICES & SYSTEMS

TURNKEY SOLUTIONS & PROJECT MANAGEMENT

North & South America: +1 918 447 5400 Europe/Africa/Middle East: +32 67 28 3611 Asia Pacific: +65 6364 8520 Offshore Services: +1 832 448 7200

SpirALL® Magnetic Flux Leakage (SMFL) Technologyooggy www.tdwilliamson.com

D-2000 Quick Opening Closure

®Registered trademark of T.D. Williamson, Inc. in the United States and other countries. TM Trademark of T.D. Williamson, Inc. in the United States and other countries. © 2017 T.D. Williamson, Inc. A The Gulf of Mexico faces major challenges, explains Gordon Cope.

12 or decades, the Gulf of Mexico was the dominant player in US oil and gas production, filling the refineries that ring its coastal waters. Rigs were deployed throughout F the shallow waters and onshore, employing thousands of workers and reaping billions of dollars for exploration companies. How the tides have shifted. The technological revolutions in horizontal drilling and hydraulic fracturing diverted CAPEX into lucrative, low risk resource plays, such as the Barnett Shale and the Permian Basin. The BP Macondo tragedy led to a year long

13 moratorium in offshore drilling and the collapse in oil In early 2017, Total’s strategic partner Cobalt International prices in 2014 made mega ventures uneconomic. The Energy announced that its North Platte No. 4 appraisal offshore region now produces 1.65 million bpd (17% of well encountered 650 ft of net oil pay, exceeding the national output) and 3.3 billion ft3/d of natural gas (5%). 550 ft of net pay found in the No. 3 appraisal well, drilled in 2015. Not dead yet However, sceptics should not be prepared to write Mexico’s Gulf the Gulf off any time soon. In September 2016, Shell’s The action is no longer limited to US waters; Mexico, Stones field came onstream. It is the world’s deepest which has long been off limits to international oil and gas project, operating in 9500 ft of water. The exploration, has recently reversed its constitutional ban floating production, storage and offloading (FPSO) unit on foreign ownership and is inviting international firms is designed to produce 55 000 bpd from eight wells. The to participate in its energy future. The US Geological project took three years to complete. Survey estimates that the Mexican portion of the Gulf of Late in 2016, BP made the decision to greenlight Mexico could hold up to 15 billion bbls of undiscovered, Mad Dog Phase 2. This US$9 billion project consists of recoverable reserves. a floating production platform that will be anchored In December 2016, Mexico’s National Hydrocarbon 10 km away from the original Mad Dog platform. It is Commission (CNH) successfully held an auction of 10 expected to produce up to 140 000 bpd, starting in deepwater Gulf of Mexico blocks. The blocks, which are late 2021. “Some people say that deepwater is finished,” adjacent to the prolific Perdido trend on the US side said Bernard Looney, BP’s Chief Executive of Upstream. of the border, were snapped up by China’s CNOOC, as “Well, as you can see from this, we have a very different well as ExxonMobil, Total and Mexico-based Sierra Oil. view. Based on our current calculations, Mad Dog will In addition, Pemex announced a joint venture (JV) with breakeven around the US$40/bbl mark.” Australian-based BHP to develop the Trion discovery; the In April 2016, ExxonMobil was pleased to announce US$11 billion project is expected to produce 125 000 bpd that production at its Julia oilfield had started under by the mid 2020s. CNH estimates that, once production budget and ahead of schedule. Located southwest of is well underway in the next decade, it could add up to New Orleans, the field is close to Chevron’s 1 million bpd of Mexican output. Jack/St. Malo production platform. The first phase Other Mexican oil regions also offer tremendous of operation will see 34 000 bpd pumped to the opportunities. Over the last year, Schlumberger subsidiary, Jack/St. Malo platform through tie-backs. WesternGeco, shot 80 000 km2 of high image, wide In January 2016, BP announced that its Thunder Horse azimuth (WAZ) seismic over the Bay of Campeche in the South expansion project had also been completed southern Gulf of Mexico, near where the giant Cantarell under budget and ahead of schedule. The project sits field is located. Petronas is one of several clients who approximately 3 km south of the existing Thunder Horse have licensed the data. “The WAZ seismic will help unravel platform. It is estimated to add 50 000 boe/d; in all, the hydrocarbon potential in the complex and under the Thunder Horse platform is equipped to handle explored Mexican deepwater basins,” said Emeliana Rice- 250 000 bpd and 200 million ft3/d. Oxley, Vice President of Exploration, Petronas. Several recent mergers and acquisitions have had an New discoveries impact on the offshore pipelines in the Gulf of Mexico: In July 2016, Shell discovered hydrocarbons while drilling ) In September 2016, Anadarko paid Freeport McMoRan its Fort Sumter prospect in the Mississippi Canyon Oil & Gas US$2 billion to buy deepwater assets. The region. Initial recoverable resources are estimated at sale included Freeport’s ownership portion in the 125 million boe, but the company said that further Lucius field, which includes subsea gathering pipeline. exploration drilling could “considerably increase” recoverable resources. ) American Midstream Partners purchased JP Energy Late in 2015, Chevron encountered at least 1800 ft Partners in a share swap to create a US$2 billion pipeline network located in Texas and the Gulf of of hydrocarbons in the Anchor prospect, located in the Mexico. American Midstream also acquired a 66.7% Green Canyon region near its Jack/St. Malo production interest in the 160 km Okeanos pipeline, which can platform. “The positive results of our appraisal work at gather up to 1 billion ft3/d from platforms in the Anchor indicate a significant discovery of potentially hub Mississippi Canyon region. class scale,” said Jay Johnson, Chevron’s Executive Vice President, Upstream. ) Enven Energy Corporation purchased all of Shell’s Exploration in the Garden Banks Block keeps interest in its Brutus/Glider assets, located in the advancing the potential development of the North Platte Green Canyon region for US$425 million. The assets prospect. When first discovered in 2012, Total estimated include a production platform and associated oil and that it may have several hundred million barrels of oil. gas lateral pipelines.

14 World Pipelines / APRIL 2017 A NEW LEVEL OF ACCURACY FOR GEOMETRY INSPECTION

EVO SERIES 1.0 ATLAS UG + Combined geometry and corrosion/crack inspection + Fully aligned inspection data + Highest performance specification YOUR BENEFITS + Multiple datasets obtained from a single inspection run which lowers costs + Enhanced identification and classification of defects, especially associated with dents + Direct measurement with depth resolution down to 0.1 mm (0.004 in)

www.ndt-global.com Australia | Canada | Germany | Ireland | Mexico | Spain | UAE | UK | USA Onshore Gulf pipelines The 2016 hurricane season was Although many recent offshore pipeline additions consist of gathering remarkably calm, with very few systems for new fields, IMG – a JV between TransCanada and Sempra weather-related disruptions compared – announced a new major offshore system. The company will build to previous calamitous years, including the Sur de Texas-Tuxpan project; a 42 in., 497 mile gas pipeline that 2005 (Hurricane Katrina) and 2008 will run from Brownville (Texas) to the Gulf state of Veracruz (Mexico), (Hurricane Gustav). The last five and be supplied by Sempra’s Valley Crossing pipeline. The project years have seen little in the way of (which involves a 25 year transportation service contract to deliver curtailed production; when Tropical 2.6 billion ft3/d to CFE, Mexico’s state-owned power company) is Depression No. 9 approached in late expected to enter service in late 2018. August, only 10 out of 750 production The major proportion of the Gulf of Mexico’s pipeline action, platforms were evacuated in the Gulf however, is taking place onshore. For decades, the Gulf Coast was a and approximately 20% of output was major landing point for crude from the Middle East, Africa and Latin curtailed. The storm quickly passed America. Gulf Coast refineries then created fuels that were shipped to and production was promptly resumed. the midwest and eastern seaboard. Although this still holds true, major Although predictions for the 2017 new midstream investments are being made to move Canadian and US hurricane season have yet to be issued, crude to the region, and to gather and process new sources in Texas and Hurricane preparedness continues Louisiana. on an ongoing basis, with upgraded Although the Keystone XL pipeline (which was designed to deliver design standards for platforms and rigs, heavy crude from Alberta to Texas directly) was stalled by protesters stronger moorings, and the burying and the Obama administration, other indirect routes are now reaching of pipelines and rerouting away from completion. Enbridge and EPP’s Seaway twin pipeline entered service in mudslide-prone regions. late 2014. The 450 mile pipeline carries up to 450 000 bpd of crude from Cushing (Oklahoma) to Freeport (Texas). The twinning more than doubles Problems the capacity of the Seaway system to 850 000 bpd. The line is replacing Gulf lease sales have slowed to a faltering Venezuelan and Mexican deliveries with Canadian heavy crude. crawl. In August 2016, the US Bureau The growth in unconventional production in the Gulf region has of Ocean Energy Management led to a raft of new networks. Rangeland recently completed the Rio (BOEM) held Western Gulf Lease Sale pipeline; a 109 mile, 12 in. line that is designed to carry crude and 248. The sale offered 4399 tracts condensate from the Delaware Basin to terminals in Midland (Texas). The covering 23.8 million acres, located pipeline has a capacity exceeding 125 000 bpd. 9 - 250 nautical miles offshore in up to Medallion Midstream is constructing 45 miles of 16 in. pipeline and 3340 m of water. Just three companies 25 miles of smaller gathering pipelines on behalf of Parsley Energy, filed 24 bids totalling US$18 million, to deliver the latter’s output in Pecos and Reeves counties (Texas) to the lowest take in the western Gulf market. The system will have an initial capacity of 100 000 bpd and will region since regional auctions began in come onstream in mid 2017. 1983 (in contrast, the previous 10 sales Howard Midstream is building the Dos Aguilas project; a 287 mile, in the 2012 - 2017 oil and gas leasing 12 in. pipeline that will carry refined products from Corpus Christi (Texas) programme netted US$3 billion). to Nuevo Laredo (Tamaulipas) and Monterrey (northern Mexico). The As an explanation for the low project, which is expected to be in service by mid 2018, will include response, BOEM management cited 1.2 million bbls of storage. current market conditions. Separately, Medallion is finalising plans for its fifth major expansion of its Randall Luthi, President of the National existing crude oil pipeline system in the Gulf Coast. The plans consist of Ocean Industries Association (NOIA), 380 miles of new line that will allow greater flexibility to deliver crude noted other factors: “With the recent to market. The plans also include the Martin Lateral, which can move changes in Mexican law, our neighbour 25 000 bpd from Martin County, and the Midland Lateral, which can to the south is eager to attract US transport 25 000 bpd to Medallion’s Wolfcamp Connector mainline. companies into their portion of ONEOK completed phase one of its Roadrunner gas transmission the Gulf of Mexico. The continuing project. The 200 mile line connects its existing pipeline system in west onslaught of ever-changing US Texas with the Mexican border crossing in San Elizario (Texas). The line, regulatory policies may tilt companies which delivers 170 million ft3/d, is being expanded to 570 million ft3/d in towards investing more in Mexican 2017 and 640 million ft3/d in 2019. waters, and thus dampen interest in Enterprise Products Partners completed the Aegis ethane pipeline this sale.” system, from Mont Belvieu (Texas) to Napoleonville (Louisiana). The Regardless of the reasons, the 270 mile, 20 in. line can transport up to 400 000 bpd of feedstock to recent spate of low drawing sales more than 20 petrochemical facilities along its route. (Western Gulf Lease Sale 246, held in

16 World Pipelines / APRIL 2017 August 2015, drew 33 bids and US$22.7 million) points industry is facing a barrage of 145 regulations that to trouble in the next decade. Success in the Gulf would unnecessarily destroy jobs and add costs to is dependent on the continual exploration of new consumers. Pruitt has a track record of dispelling the land in order to place promising prospects into the false idea that energy development and environmental exploration and development pipeline; when land stewardship cannot go hand in hand. Moving forward, sales taper off, so do subsequent drilling programmes. we must have smart, common sense regulations that Regulatory costs are also increasing. In July 2016, protect the environment and do not raise prices on BOEM announced that it will be updating financial Americans.” assurance and risk management requirements Trump nominated Congressman Ryan Zinke as to protect the public from having to pay for the next US Secretary of the Department of the decommissioning and removing offshore production Interior. Randall Ruth, President of the National facilities. BOEM estimates that current routine Ocean Industries Association, explained: “A strong decommissioning liabilities on the federal outer offshore energy programme is fundamental to our continental shelf (OCS) are US$40 billion. nation’s energy, economic and national security. We Several industry organisations were critical of are confident that Zinke will lead the department in the move, including the Independent Petroleum a manner that will recognise America’s true energy Association of America. Daniel T. Naatz, Senior Vice potential. And NOIA’s members stand ready to work President for Government Relations and Political with him in a manner that supports a well-balanced Affairs, stated: “It’s widely known that offshore energy policy that promotes increased access to oil, development is an economically challenging business. gas and wind energy on the OCS.” [BOEM’s] new mandatory financial requirements will On inauguration day in January 2017, the White force each lease owner to fully insure upfront all of House released the America First Energy plan. It said: its exploration wells, despite the fact that these wells “For too long, we’ve been held back by burdensome may never be drilled.” regulations on our energy industry. President Trump Perhaps the biggest challenge is the fact that is committed to eliminating harmful and unnecessary the most promising prospects in the Gulf – massive policies such as the Climate Action Plan and the subsalt deposits in the deepwater regions – take up Waters of the US rule. Lifting these restrictions will to 10 years and several billions of dollars to develop. greatly help American workers, increasing wages by For even the largest oil companies, committing to more than US$30 billion over the next seven years.” a major prospect is increasingly difficult to justify The plan intends to leverage the US$50 trillion economically. “When you look at the continental worth of hydrocarbons on federal land to help pay for shelf and deepwaters in the Gulf of Mexico, that’s not infrastructure. where the money is going to go in the future; I don’t see a big rebound in new builds in offshore rigs,” says The future a Gulf oil and gas veteran. “Oil companies are more In addition to the Mexican portion of the Gulf of interested in shale oil, as it takes less money to make Mexico opening up to international exploration, a new money, and they can throttle it up and down quickly region adjacent to Cuba is slated to enter the picture. in response to market conditions.” In early 2017, the outgoing Obama administration concluded a trilateral agreement with the island nation Positives and Mexico to determine ownership in the eastern gap The oil and gas industry was generally pleased by of the Gulf of Mexico, where overlapping territorial the surprise outcome of the 2016 federal election. claims had created what was known as the ‘doughnut “Voters want a congress and administration that works hole’. The deal will now allow each country to develop for their interests,” said President of the American any oil and gas deposits in their respective domains. Petroleum Institute, Jack Gerard. “And just as there is In conclusion, although the Gulf of Mexico is facing bipartisan voter support for energy priorities, there significant challenges, the region holds great promise is an opportunity for Republicans and Democrats in for world class discoveries and increased production. congress to work toward pro-development policies In addition to BP’s final investment decision on Mad that provide economic growth, job creation and Dog Phase 2, other companies, including Anadarko energy security.” and Cobalt International Energy, have platforms under The industry also applauded changes to review in the Gulf. government agency leadership, including the “At the end of the day, these large companies need appointment of former Oklahoma Attorney General, large projects, and deepwater is going to be where they Scott Pruitt, to serve as the next administrator are going to find these large projects to move their of the Environmental Protection Agency. Gerard needle,” said Imran Khan, Research Manager at Wood noted: “Under the current administration, our Mackenzie.

APRIL 2017 / World Pipelines 17 THAT WAS A SAMPLE OF

APRIL ISSUE

DON’T WANT TO MISS OUT? You will need to be a subscriber to read the full edition. Please log in to www.worldpipelines.com or alternatively click here to subscribe.

For more information about the comprehensive World Pipelines subscription package, please contact us: www.worldpipelines.com E: [email protected] T: +44 (0)1252 718999