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www.pgjonline.com | 1

20 | Strategy Report Points to Improved Safety, Smart Pigs Even though use of oil pipe-lines is increasing, the number of incidents continues to decline, thanks to integrity management.

26 | Pipeline Reversals and Conversions: Case Studies and Best Practices It’s the new trend in pipelines these days, and is a crucial element of the continued suc-cess of the energy boom.

34 | Natural Gas Infrastructure Intelligence Report Genscape offers an in-depth look at the future natural gas infra-structure landscape.

ContentsTABLE OFPipeline &

Gas JournalSeptember 2015 • Vol. 242 • No. 9 Since 1859, the worldwide authority in pipeline operations.

Scan with your smartphone and directly connect to pgjonline.com. Download FREE scanning app from your smartphone's app store today!

www.pgjonline.com

Honeywell Process Solutions is involved in a project to improve operations for China’s long-distance Guangxi natural gas high-pressure pipeline which will play a critical role in optimizing China’s energy structure and meeting the demand for nat-ural gas. The project will use HPS gas measurement and equipment and software to measure the flow and pressure in the pipeline, which should be completed later this year. It will have a capacity of 8 Bcm/y of LNG and a total length exceeding 1,300 miles as part of a network that transports natural gas and LNG from as far away as Kazakhstan to China. Photo shows a similar LNG facility in northern Europe.

On The Cover

55

50 | Ensuring Contractor Workforce Through Standardized Training GTI is helping the energy industry move for-ward in ensuring that contractors work-ing on natural gas distribution projects are as knowledgeable as possible.

38 | Safety Emphasis Wins Exterran NSC Kudo The Houston-based compression com-pany’s focus on safety has not gone unnoticed.

44 | Compression Trade Keeps Sharp Eye on Changing Market An execu-tive with compression giant Valerus discusses the fast-changing business its future challenges.

2 | Editor’s Notebook 4 | In The News 8 | Government 12 | Projects 16 | World News 75 | What’s New 76 | Business 77 | Sales Representatives 78 | Meetings 79 | Business Card Directory 94 | Advertiser’s Index 96 | Q&A: Executive Profile

Departments

18

Compression reportPipeline & Gas Journal’s

26

55 | PRCI Welcomes Pipeline Community to Tech Development Center The research organization opens a new center in Houston.

56 | Building a Career Pipeline: New Generation of Industry Talent Awaits The future of the pipeline business will be in good hands, thanks to groups like Young Pipeline Professionals.

61 | Southern Company to Acquire AGL Resources for $12 Billion

62 | A Pragmatic Approach to Understand Indian Natural Gas Market India is gradually making a difficult shift to increase natural gas usage, with cross-border pipelines and LNG fig-uring prominently in the mix.

64 | Orifice and Ultrasonic Meters in Wet Gas Flow Service The economic reality of many applications is that standard gas meters must be used so understand-ing the wet gas performance of gas meters is essential.

66 | Control Room Management Best Practices A key responsibility for the oil and gas industry is ensuring that their control rooms are equipped to handle any challenges that come along.

50

68 | ROSEN Sponsors Roundtable on Linear Threats The ROSEN Group gath-ered key industry stakeholders to their new center in Ohio for a forum to discuss ways to solve “Linear Threats in Pipelines.”

69 | Alaska LNG Reviews Pipeline Route with Government Agencies

72 | Beyond Compliance: Reducing Major Incidents, Creating Business Value

October’s P&GJ focuses on pipeline integrity projects and includes reports from Southern California Gas Co., an outlook on the compression business as well as an interview with Gary Gapinski, president of Snelson Companies.

Next Month

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Size does matter. ROSEN maintains the industry’s most com ­pre hensive technology portfolio, from hardware to soft­ ware, as well as the largest tool fleet. Meaning more flexibility for you.

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Pipeline & Gas Journal

OK, I’m a sucker for natural gas. Maybe I’ve learned something these past 25 years that George Mitchell tried to explain: natu-ral gas is the fuel of the future and can revi-talize America. After I read this story off the Reuters news wire, can you blame me?

“There’s some good news for workers in Ohio: for the first time ever, Ford will shift medium-duty truck production to the Buckeye State, out of Mexico. Ford Motor Co (F.N) will start building its medium-duty F-650 and F-750 commercial trucks at a Cleveland-area plant, moving production out of Mexico for the first time. The shift to the 41-year-old plant in Avon Lake means that about 1,000 workers represented by the United Auto Workers union will keep their jobs, Jimmy Settles, UAW vice president, said in a statement issued by Ford.

Now I’m not saying the shale boom was the reason for this decision, but read on and you’ll see that it certainly wasn’t a negative factor.

Ohio and Pennsyvania, along with all of their Rust Belt neighbors, have long suffered

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2 | Pipeline & Gas Journal • September 2015

from a never-ending loss of manufacturing jobs, zero population growth, diminishing tax base and steady economic decline. And there was little reason for hope. If you were young and wanted to earn a real living, you left, as many young people did, never to look back.

West Virginia was always an economic disaster due to its terrain that inhibits any type of development except mining. But with growing environmental resistance to coal and a desire for a life outside of the mines, West Virginia is now well-positioned in the enor-mously productive Marcellus and Utica shale plays, as are Ohio and Pennsylvania.

Western Pennsylvania is undergoing an economic renaissance that some opti-mists expect to outmatch the steel industry. Companies assured of cheap, long-term fuel costs are moving in, expanding or staying put. The few problems that do emerge tend to be resolved quickly. An op-ed piece by Bud Weinstein, associate director of SMU’s Maguire Energy Institute, was published in the Cleveland Plain Dealer on Aug. 12. It sums up rather nicely what the fracking boom has done for America.

“Until a few years ago, prevailing con-ventional wisdom viewed America’s manu-facturing sector in secular decline, unable to compete with lower-cost production plat-forms in Mexico and China. The data seemed to bear this out. From 2000-10, the number of manufacturing jobs in the U.S. dropped by a third, a decline of over 5.8 million.

“But since 2010, manufacturing com-panies have added over 1 million work-ers. Similarly, the value of production from America’s factories has jumped from $1.7 trillion in 2010 to $2.1 trillion last year and now accounts for 12% of our gross domestic

product (GDP). There are several explana-tions for this rebound. Labor costs have been rising rapidly in Mexico and China, as well as other export-oriented Asian economies, while American companies have boosted productiv-ity faster than their competitors abroad.

“The most important factor in America’s industrial renaissance has been cheap and abundant energy, a result of the “fracking boom” that started about six years ago and has boosted America’s oil and natural gas output by 70%. Consequently, the average cost to manufacture goods in the U.S. is now only about 5% higher than in China and 10-20% lower than in major European economies. The Boston Consulting Group says by 2018 production costs in America will be 3% cheaper than in China.

“Natural gas, diesel and gasoline prices have dropped dramatically in recent years, significantly lowering energy costs for house-holds and businesses. But most beneficial to manufacturers has been the falling cost of electricity, much of it now generated by natu-ral gas turbines. Energy-intensive industries like steel, aluminum, paper, and petrochemi-cals are now enjoying power costs 30-50% lower than their foreign counterparts.

“Steel mills in places like Wheeling, WV and Youngstown have sprung back to life making pipe and other products for use in the Marcellus and Utica plays.

“Cheap energy is helping the auto indus-try rebound with the result that Michigan has recovered 40% of the manufacturing jobs it lost during the Great Recession while Detroit has added over 89,000 industrial jobs since 2009, an increase of 31%.”

You know the Chinese are well-aware of this. Just like the Saudis.

EDITOR’SNOTEBOOK

Jeff ShareEditor

Think big.

Size does matter. ROSEN maintains the industry’s most com ­pre hensive technology portfolio, from hardware to soft­ ware, as well as the largest tool fleet. Meaning more flexibility for you.

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4 | Pipeline & Gas Journal • September 2015

Crude Oil Prices Poised to Drop Further

Since the oil price collapse, global oil production has risen, not fallen. Since the fateful Nov. 27, 2014 OPEC meeting, aggregate production from the U.S., Saudi Arabia, and Iraq is up 2 MMbop/d – far more than demand.

November is also when the U.S. inad-vertently became the swing oil producer. Prices have not yet fallen far enough or for long enough for an appreciable U.S. supply adjustment to occur. It may not be far off, especially if oil prices fall further with new Iranian supplies, says a study from IHS Energy that notes: n Oil prices will be under downward

pressure until there is evidence the glut is shrinking. This won’t happen quickly unless prices fall even further from recent levels.

n For a decline in U.S. output to appre-ciably erode the global surplus, prices would need to range in the low $40s or less for several months. In 2014, pro-duction from wells with a break-even cost of around $60 for WTI produced enough oil to offset declines from pre-2014 wells and keep U.S. production flat with 2013. The rest of last year’s incredible growth came from higher-cost wells. But costs are lower this year by about 20%. A break-even cost of $60 in 2014 is now in the upper $40s per barrel for WTI. This is why only lower prices will catalyze a faster sup-ply adjustment.

n With lower prices, U.S. production in the second half of 2015 would record its first significant decline in seven years. A severe drop in prices, lasting several months, would increase the likelihood of a significant price increase in 2016-17. Production growth from elsewhere, including Saudi Arabia and Iraq, is unlike-ly to keep pace with demand growth if U.S. production falls appreciably.

Natural Gas No. 1 for Power Generation, at Least for Now

Natural gas overtook coal as the top source of U.S. electric power generation for the first time ever earlier this spring, a milestone that has been years in the making as the price of gas slides and new regulations make coal more risky for power generators. About 31% of power genera-tion in April came from gas and 30% from coal, according to research company SNL Energy, based on data from the Energy Information Administration. Nuclear power

was third at 20%.As the shale boom drives the price of

natural gas sharply lower to levels about a third of what they were 10 years ago, power companies have been installing more gas turbines as their plants become more flex-ible and retire some older coal-fired facili-ties. They have long switched between natu-ral gas and coal, depending on commodity prices. However, new regulations that aim to restrict the emission of greenhouse gases, and the risk that more are on the way, have added pressure to make the switch.

Federal data shows that in April, the amount of electricity generated with natural gas climbed 21% compared to April 2014, while the amount generated with coal fell 19%. In April 2010, 44% of electric power generation came from coal and 22% from gas. The EIA said in a May report that it expects the level of coal-generated elec-tricity to rebound as gas prices rise later this year and coal-fired plants return from spring maintenance.

Overall, the EIA expects about 36% of total U.S. electricity generation to come from coal in 2015 and 31% to come from gas. Federal analysts predict that this year the amount of electricity from natural gas will increase 3% compared to last year while the power from coal will go down 10%.

Meanwhile, the Energy Department reported that heat-trapping pollution from U.S. power plants hit a 27-year low in April. Economist Allen McFarland said a big fac-tor was the long-term shift from coal to cleaner and cheaper natural gas. Outside experts also credit more renewable fuel use and energy efficiency.

Electric power plants spewed 141 million tons of carbon dioxide in April, the lowest for any month since April 1988. The power plants are responsible for about one-third of the country’s heat-trapping emissions.

Marathon to Buy MarkWest for $15.6 Billion

Refiner Marathon Petroleum Corp will expand into natural gas processing with its $15.6 billion acquisition of MarkWest Energy Partners LP. Marathon Petroleum is buying MarkWest through its pipeline unit, MPLX LP. The cash-and-stock deal will create the fourth-largest master limited partnership valued at $21 billion.

MarkWest, the second-largest U.S. natu-ral gas processor, has plants across the country, including the Marcellus and Utica shales. It has over 4,000 miles of pipelines, mostly natural gas and gas liquids, and one crude oil pipeline.

“Strategically, this brings MPC/MPLX a major Northeast natural gas gathering and processing footprint, which comple-ments MPC’s nearby refining footprint,” said Raymond James analyst Cory Garcia.

The deal enables Marathon Petroleum to add condensate storage and stabiliza-tion plants in anticipation of the export of processed condensate after relaxation of the crude export ban. MPLX operates crude oil and refined product pipelines in the Midwest and Gulf Coast and is building a condensate pipeline in Ohio to move output from the Utica Shale. MarkWest will oper-ate as a unit of MPLX after the deal closes.

Black Hills Corp. Acquiring Source Gas Holdings

South Dakota-based Black Hills Corp. will acquire SourceGas Holdings LLC from investment funds managed by Alinda Capital Partners and GE Energy Financial Services for $1.89 billion. SourceGas oper-ates four regulated natural gas utilities serving 425,000 customers in Arkansas, Colorado, Nebraska and Wyoming and a 512-mile regulated intrastate natural gas transmission pipeline in Colorado.

The combined entity will serve over 1.2 million electric and natural gas utility cus-tomers in 790 communities in eight Rocky Mountain and Midcontinent states. Black Hills Corp. will operate the acquired com-pany under the name Black Hills Energy.

Enterprise Sells Offshore Business to Genesis Energy

Enterprise Products Partners L.P. is sell-ing its offshore Gulf of Mexico pipelines and services business, which primarily con-sists of its Offshore Pipelines & Services business segment to Genesis Energy, L.P. for $1.5 billion. Enterprise’s offshore assets include ownership interest in nine crude oil pipeline systems with over 1,100 miles of pipeline, nine natural gas pipeline systems with 1,200 miles of pipeline and interest in six offshore hub platforms.

“Earnings from our offshore business represented only 3% of Enterprise’s gross operating margin, and our offshore assets do not effectively integrate with our down-stream crude oil and natural gas pipeline systems,” said Michael A. Creel, CEO for Enterprise’s general partner. “We plan to redeploy proceeds from this sale into attrac-tive growth opportunities that would extend and expand our integrated midstream sys-tem and should generate higher risk-adjust-ed returns on capital, such as acquisitions and organic projects in the Eagle Ford and Permian shale plays.”

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6 | Pipeline & Gas Journal • September 2015

Scientists Study Effect of Oil Spill in Relation to Human Well-Being

Some of the greatest impacts of the 2010 Deepwater Horizon oil spill occurred deep below the water’s surface, hidden from the eyes and minds of people who live on the coast. A project by Dr. Paul Montagna, chair for Ecosystems and Modeling with the Harte Research Institute (HRI) for Gulf of Mexico Studies at Texas A&M University-Corpus Christi, is designed to determine if there are links between environmental dam-age done offshore in the Gulf and the overall well-being of coastal residents.

The project is among the first funded by the National Academies of Sciences’ (NAS) Gulf Research Program. After the oil spill, the federal government asked the NAS to establish a program to fund research to enhance oil system safety, human health, and environmental resources in the Gulf of Mexico. The program has $500 million in funding over a 30-year period. Montagna was awarded $118,000.

The study will look at three categories of ecosystem services from the Gulf: n Provisioning, which is the ability for

the Gulf to sustain a food web that benefits human activities like fishing

n Recreational activities like birding and swimming

n Cultural heritage benefits, like the satisfaction and joy people get from visiting the ocean.

n Deepwater production already accounts for over 80% of oil and 45% of natural gas extracted in the Gulf.

Utica Shale Much Richer than First Thought

The Utica Shale and associated hydro-carbon-rich rock zones hold significantly more potentially recoverable natural gas than early estimates predicted, according to new research, which suggests it could hold technically recoverable volumes of 782 Tcf of natural gas and nearly 2 Bbbls of oil.

The estimates from a research partner-ship organized by West Virginia University represent the average of a wider range of possibly recoverable amounts of oil and gas in the Utica, which includes parts of Ohio, West Virginia, Pennsylvania and other states and includes neighboring oil- and gas-bearing geologic layers.

UIL Holdings Investing in Northeast Energy Direct

UIL Holdings Corp. will invest in a natural gas transmission pipeline project designed to alleviate capacity constraints

in the system that serves New England and the Northeast. Kinder Morgan’s proposed Northeast Energy Direct (NED) project would extend 188 miles of transmission pipeline from New York state through Massachusetts and New Hampshire. The new pipeline is expected to begin commer-cial operation in 2018.

UIL has acquired a 2.5% interest ($80 million) in Northeast Expansion LLC. UIL will have additional options — under lim-ited circumstances — to increase its equity participation. Northeast Expansion is the joint venture responsible for development, construction and ownership of the pipeline, which will be part of Kinder Morgan’s Tennessee Gas Pipeline system.

Earlier this year, regional transmission pipeline constraints led a UIL subsidiary, The Berkshire Gas Company, to impose a moratorium on new natural gas customers in its eastern region. The company acknowl-edged the moratorium would be lifted as a result of this project’s commercial opera-tion. Public reports have identified natural gas transmission pipeline constraints as a key factor behind wintertime spikes in the price of electricity generated at natural gas power plants.

Keystone Pipeline Delivers Billionth Barrel of Oil to U.S.

TransCanada reported July 30 it has safely delivered the 1 billionth barrel of Canadian and U.S. crude oil on the Keystone Pipeline System, generating nearly US$200 million in property taxes, schools, roads, hospitals and over 14,000 construction jobs for the 11 states and provinces it crosses.

The system is one of the most exten-sive crude oil pipeline systems in North America, delivering to refineries at Wood River and Patoka, IL, Cushing, OK and Port Arthur, TX.

Russ Girling, TransCanada’s president and CEO, said, “To put this achievement in perspective, it would take approximately 1.7 million train cars or 3.3 million trucks to transport 1 billion barrels of crude oil.”

Low Natural Gas Prices Drive Demand Growth at U.S. Industrial Users

Reversing a decline that lasted over a decade, U.S. industrial natural gas consump-tion has risen steadily since 2009 as low prices have supported use of natural gas as a feedstock for the production of bulk chemi-cals. Industrial facilities, including methanol plants and ammonia- or urea-based fertilizer plants, consumed an average of 21Bcf/d in 2014, a 24% increase from 2009.

Several new industrial facilities began service this year, with additional projects scheduled to come online through 2018, the Energy Information Administration (EIA) said. The EIA forecasts that new projects will help drive growth in industrial natural gas demand through the end of 2016, climb-ing to 22.5 Bcf/d. In 2016, three methanol plants are expected to come online in the Gulf of Mexico area, and a large nitrogen fertilizer plant is under construction on Louisiana’s Gulf Coast.

Ammonia- or urea-based fertilizer plants are planned in agricultural areas outside of the Gulf Coast to take advantage of higher domestic gas production. A large fertilizer/urea plant in Iowa is set to come online and two fertilizer plants are planned for towns in southern Indiana. Each of the two plants would use 100 MMcf/d.

EIA Releases Short-Term Outlook

The U.S. Energy Information Administration forecasts that Brent crude oil prices will average $54/b in 2015 and $59/b in 2016, $6/b and $8/b lower than its July estimate, respectively. Forecast West Texas Intermediate (WTI) crude oil prices in both 2015 and 2016 average $5/b less than the Brent price. The current values of futures and options contracts for November 2015 delivery suggest the market expects WTI prices to range from $34/b-64/b (at the 95% confidence interval) in November 2015.

If the nuclear arms agreement with Iran is implemented and sanctions relief occurs in 2016, it will contribute to an annual aver-age increase in Iranian crude oil production of 0.3 million b/d from 2015 to 2016, with most of the increase coming in the second half of 2016, EIA suggests.

U.S. regular gasoline monthly average retail prices averaged $2.79/gal in July, a decrease of 1 cent/gal from June and 82 cents/gal lower than in July 2014. EIA expects monthly average gasoline prices to decline from their July level to an average of $2.11/gal during the fourth quarter of 2015. EIA forecasts U.S. regular gasoline retail prices to average $2.41/gal for all of 2015.

EIA estimates total U.S. crude oil pro-duction declined by 100,000 bpd in July compared with June. Production is expect-ed to continue decreasing through mid-2016 before growth resumes late in 2016. Projected U.S. crude oil production aver-ages 9.4 million bpd in 2015 and 9 million bpd in 2016, 0.1 million b/d and 0.4 mil-lion b/d lower, respectively, than in July’s estimate. P&GJ

IN THE NEWS

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8 | Pipeline & Gas Journal • September 2015

PHMSA Sets Standards for State Excavation Policies

House members of both parties drubbed the latest top PHMSA official to appear before Congress to answer questions about lagging pipeline safety rule implementa-tion.

Stacy Cummings, the interim executive director and apparently top official at the Pipeline and Hazardous Materials Safety Administration (PHMSA), was calm and vague at a hearing July 17 in the House Energy and Commerce Committee. She defended the agency by pointing to one new rule on state excavation programs and one proposed rule on excess flow valves which had been issued in the past month. She said other final and proposed rules required under the 2011 Pipeline Safety Act (PSA) would be out by the end of 2015.

At the last congressional hearing in April before the House Transportation Committee, PHMSA was represented by acting Administrator Timothy Butters, who left June 8 to take a senior position at the Federal Aviation Administration. The Obama administration nominated Maria Therese Dominquez to be administrator and on Aug. 5 she was finally confirmed by the Senate.

The agency has only finalized one-third of the 42 mandates in the 2011 law. Cummings cited the July-published final rule on state excavation damage programs and a same-month proposed rule on excess flow valves as an indication the agency was on the job. The excavation damage rule was required by the 2006 PIPES Act. Excess flow valves were one of the 42 PSA mandates.

The final rule on state excavation pro-grams establishes nine requirements for state programs. If a state’s law doesn’t meet all nine, PHMSA can take civil action against excavators in those states. All states have damage prevention programs, many with one-call responsibilities accruing to excavators, but no two are the same. Many are actually stronger than what is required by this final rule. Even in the absence of this final rule, PHMSA has periodically checked the states and rated them on the nine requirements.

Probably half to two-thirds of all states are rated as meeting all nine requirements. Most of the remaining states have met at least seven of the nine. However, the final rule provides additional details about what a state has to do to qualify as having met a particular requirement.

For example, enforcement is one of the nine state program requirements. In the final rule PHMSA said it will judge state adequacy on issues such as whether the state is assessing civil penalties and other appropriate sanctions for violations at suf-ficient levels and whether the enforcement authority has a reliable mechanism (such as mandatory reporting, complaint-driven reporting) for learning about excavation damage to underground facilities.

Scott Berry, director of Utility Infrastructure Division, Environment and Trade, Associated General Contractors, said his group is glad the final rule has been finally published. He believes that even states rated as meeting all nine requirements may be encouraged to upgrade some of their programs. PHMSA will survey each state annually, and if it finds that no enforcement is happening, that state could be moved from the “in compliance” to the “out of compliance” category.

There were a number of issues which cropped up during PHMSA’s rulemaking process. The National Utility Contractors Association (NUCA) suggested PHMSA include in the final rule a provision requir-ing pipelines to reimburse excavators for costs associated with any accident caused by a failure on the part of the pipeline or its contractors to accurately mark a pipe-line. NUCA stated this should include any damages to the excavator’s equipment or property and any downtime incurred by the excavator while the true location of the pipeline is determined.

In the final rule, PHMSA answered, “It would be an inappropriate use of federal regulations to entitle any specific group to downtime compensation.”

Gas Distribution Groups Take Issue with Aspects of EFV Proposal

The gas distribution industry apparently has no problem with the objectives of the PHMSA-proposed rule on excess flow valves, but they have decided problems with how some objectives may be implemented.

Christina Sames, vice president, Operations and Engineering for the American Gas Association (AGA), says, “The AGA and its members support expand-ing the use of excess flow valves in new and fully replaced service lines to applications other than single-family residences where operating conditions allow their use.”

But Sames did not give the proposal a blanket endorsement, noting concerns about elements that are beyond the expan-

sion of EFVs. AGA will provide comments and will suggest modifications that will make the proposal “reasonable, feasible and practical.”

John Erickson, P.E., vice presi-dent, Operations, American Public Gas Association, is more specific. “APGA sup-ports the EFV installation portion of the rule proposed by PHMSA. We have major concerns with the proposal that operators notify all customers about EFVs and install an EFV on an existing service if the cus-tomer requests one.”

PHMSA has not addressed how opera-tors will handle multiple customers on a single service line. Erickson states PHMSA leaves cost recovery up to the “appropri-ate state regulatory agency” apparently not understanding that only about 25% of the distribution operators PHMSA regulates are under state PUC jurisdiction for rates. Few of APGA’s 729 members have PUCs approve their rates.

Installing an EFV with a new service line is relatively inexpensive ($20 or less), retrofitting an EFV on an existing line will be expensive ($500 to over $1,000). It could easily exceed the customer’s entire annual gas bill, Erickson said. If a significant number of customers request retrofitting an EFV on their service lines in the initial noti-fication, it could divert a large portion of the utility’s construction crews from more important main replacement projects.

The proposed rule says curb valves should be accessible to first responders as well as distribution company personnel. A buried curb valve looks no different at ground level than a buried mainline valve, so Erickson worries firefighters could inad-vertently close the wrong valve and shut off gas to hundreds or thousands of customers. Worse yet, they could open a valve that should remain closed. Suggesting these valves be accessible to first responders other than utility personnel “is a terrible idea,” he says.

There has been a push for over a decade to expand the use of EFVs. The National Transportation Safety Board (NTSB) has been a leading advocate based on investiga-tions and recommendations it has issued going back to a 1998 incident in South Riding, Virginia. The NTSB has investi-gated an additional eight incidents. P&GJ

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12 | Pipeline & Gas Journal • September 2015

JV Constructing Texas-to-Louisiana Crude Line

Phillips 66, Energy Transfer Partners and Sunoco Logistics Partners have formed a joint venture to build the Bayou Bridge pipeline that will deliver crude oil from the Phillips 66 and Sunoco Logistics terminals in Nederland, TX to Lake Charles, LA.

The venture will also launch an expan-sion open season for service to the market hub in St. James, LA. Phillips 66 holds a 40% interest in the joint venture and Energy Transfer and Sunoco Logistics each hold a 30% interest. Sunoco Logistics will be the operator of the system.

Construction is underway on the Nederland-to-Lake Charles segment of the 30-inch pipe-line, which will begin commercial operations early next year. The companies will also launch a binding expansion open season to assess additional shipper interest for service with connectivity to existing terminal infra-structure and refineries near the St. James area. The open season, which will begin shortly, will determine the size of the pipeline to St. James, which has a forecasted in-service date of the second half of 2017.

Bechtel Building First U.S.-Based Floating LNG Vessel

Bechtel was selected by Delfin LNG, a wholly owned subsidiary of Fairwood Peninsula Energy Corp., to perform front-end engineering and design for the first U.S.-based floating liquefied natural gas vessel (FLNGV) to go into service at Port Delfin.

Port Delfin is a proposed deepwater port and floating LNG facility that will be locat-ed about 50 miles off the coast of Cameron Parish, LA. Upon the final investment deci-sion, Bechtel is expected to design, build and commission the FLNGV. Plans call for Port Delfin to receive natural gas from the Delfin Offshore Pipeline. Once in service, the FLNGV will be able to disconnect from the port facility and move to protected waters in case of a hurricane.

ETP CRUDE Holds Open Season for Texas-New Mexico Crude Line

Energy Transfer Partners’ affiliate ETP Crude LLC, closed a binding open season Sept. 15 for a new pipeline, the Delaware Basin Crude Gathering Pipeline. The pipeline will have capacity of 120,000 bpd of crude oil from receipt points in Reeves County, TX and Lea County, NM for delivery in Loving County, TX and Lea County, NM.

The project will include three gathering systems with an aggregate of 130 miles of

pipe. The gathering systems will deliver crude oil into the Sunoco Logistics Partners L.P. Delaware Basin Extension. The pipe-line is expected in service early next year.

Kinder Morgan Gives Green Light to TGP’s NED Project

Kinder Morgan authorized Tennessee Gas Pipeline (TGP) to proceed with the Northeast Energy Direct (NED) project’s “market path” segment from Wright, NY to Dracut, MA. NED will be an extension off of Kinder Morgan’s existing TGP pipeline, which has delivered natural gas to New England since the 1950s.

The 30-inch pipeline’s capacity will be 1.3 Bcf/d and will serve commitments from New England LDCs and electric companies to New England’s residential and industrial consumers. NED is expected in service in November 2018.

North America’s First LNG Powered Ferry Commissioned

Gaz Métro celebrated the commissioning of the NM F.-A.-Gauthier, the first ferry to run on LNG in North America. It is also the first ship of any kind to run on LNG in Canada. The use of LNG makes it possible to reduce greenhouse gas emissions by up to 25%, compared to marine diesel. It almost completely eliminates fine particle emis-sions and other air pollutants.

Pre-Existing Defect Caused TransCanada Pipeline Rupture

The Transportation Safety Board of Canada’s investigation into the Jan. 25, 2014 rupture of a TransCanada PipeLines Limited pipeline attributed the incident to a pre-

existing defect. The 30-inch natural gas pipe-line, Line 400-1, ruptured and ignited at the site of Mainline Valve 402 near Otterburne, Manitoba.

It was determined Line 400-1 failed from a fracture at a pre-existing crack that had remained stable for over 50 years prior to

the occurrence. The crack had formed at the time of the pipeline’s construction likely due to an inadequate welding procedure and poor welding quality, investigators said. There was no requirement for inspections of every weld by radiography at the time of construction.

The National Energy Board required TransCanada to perform several engineering assessments along Line 400-1. TransCanada performed numerous excavations, inspec-tions and repairs along the line before returning it to service. TransCanada also did inline inspections to rule out other threats to the pipeline’s integrity.

BLM Approves Route for Nevada Pipeline Expansion

The Bureau of Land Management

PROJECTS

The solid red line shows the path that Paiute Pipeline Co.’s natural gas pipeline will follow to connect the Ruby Pipeline (dotted line running across the top of the map) to Elko.

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14 | Pipeline & Gas Journal • September 2015

approved the route of a natural gas pipeline that will be built by Paiute Pipeline Co. to connect Elko, NV with El Paso’s Ruby Pipeline, north of town. The project will expand available capacity of gas delivered to Elko by installing 35 miles of 8-inch pipeline from the city to Ruby Pipeline LLC’s Wieland Flat Compressor Station.

According to the BLM, the project would address growing demands for natural gas, including increased residential and business load, and the greater energy needs of min-ing operations in the Elko area. The pipeline requires a 75-foot temporary right-of-way during construction and a 50-foot permanent right-of-way after construction is complete.

El Paso Corp.’s Ruby Pipeline, which stretches 680 miles from Wyoming to Oregon and crosses through Elko County, was completed in 2011. Paiute Pipeline Co. is a subsidiary of Southwest Gas Corp.

Sempra Wins Gas Transportation Contract in Mexico

Sempra Energy’s Mexican unit Infraestructura Energética Nova, S.A.B. de C.V. (IEnova), through its subsidiary Gasoducto de Aguaprieta S. de R. L. de C.V., has been awarded a natural gas trans-portation contract in Chihuahua by the Comisión Federal de Electricidad (CFE).

The project includes a header facility with a capacity of 3 Bcfd of natural gas and a 14-mile pipeline with a capacity of 1,135 MMcf/d. The pipeline will provide gas to the Norte III Combined Cycle Power Generation Plant and will interconnect with Gasoductos de Chihuahua, Tarahumara and Samalayuca-Sásabe pipelines.

The estimated $108 million project is expected to begin operations in early 2017. The project is contracted by CFE under a 25-year capacity contract in U.S. dollars.

2H Offshore Awarded Contracts for Stampede Development in Gulf

2H Offshore, an Acteon company, was awarded two separate contracts, one by Hess Corp. and a second by Enbridge Energy Co., to verify the design, fabrication and installation phases of the Steel Catenary Risers (SCRs) for the Stampede field development in the Gulf of Mexico. The field is operated by Hess.

Enbridge plans to build, own and operate the 18-inch, 16-mile export pipeline from the Stampede tension leg platform (TLP). The pipeline will originate in Green Canyon Block 468, 220 miles southwest of New Orleans. The $130 million pipeline could be operational by 2018. 2H’s Houston office

will be responsible for the contract and the execution of the work.

Williams’ Transco Seeks Approval for NYC Pipeline Expansion

Williams’ Transco applied with the Federal Energy Regulatory Commission for its New York Bay expansion project to deliver addi-tional natural gas to New York City in time for the 2017-18 heating season. Earlier this year, Williams’ Transco placed two major New York City natural gas pipeline projects in service, the Rockaway Delivery Lateral and the Northeast Connector. They serve 1.8 million National Grid customers in Brooklyn, Queens, Staten Island and Long Island.

The New York Bay expansion would deliver an additional 115,000 Dth/d of gas into National Grid’s distribution system through the Rockaway Delivery Lateral and the Narrows meter station, enough to meet the needs of 500,000 homes and sup-ply National Grid’s immediate and growing needs for the 2017-18 winter.

The project, estimated at $130 million, includes installation of additional horsepower at three Transco compressor facilities in addi-tion to uprating Transco’s Lower New York Bay Lateral and replacing 0.25 miles of 42-inch pipe in Middlesex County, NJ. The project includes modifications to meter and regula-tor stations in Middlesex County, NJ, Chester County, PA and Richmond County, NY.

Enterprise Products to Expand Petrochemical Pipeline Network

Enterprise Products Partners announced a series of projects to convert and expand segments of its petrochemicals pipeline network to increase throughput capac-ity for polymer grade propylene (PGP) and enhance system flexibility and reliability.

These include the North Dean pipeline conversion and expansion that would convert a 149-mile pipeline from refinery grade pro-pylene (RGP) service to PGP service. The conversion is scheduled for completion in January 2017.

Originating at Enterprise’s Mont Belvieu, TX complex, the converted pipeline will serve petrochemical facilities as far south as Seadrift, TX in Calhoun County. Construction of a 33-mile lateral pipe-line, new metering stations and additional pumping capacity will accommodate the additional volumes and increase total PGP delivery capacity to over 150,000 bpd.

The Lou-Tex propylene pipeline project involves a 263-mile, bidirectional pipeline that transports chemical grade propylene (CGP)

PROJECTSbetween Sorrento, LA and Mont Belvieu which will be converted to PGP service. The conver-sion is scheduled for completion in 2020.

ONEOK Partners Plans Permian Expansion to Serve Mexico

ONEOK Partners plans to invest $70-100 million to expand its ONEOK WesTex Transmission intrastate natural gas pipeline system by increasing its throughput capac-ity by 260 MMcf/d by early 2017.

The ONEOK WesTex expansion proj-ect, located in the Texas Panhandle and the Permian Basin in West Texas, includes construction of new compressor stations and upgrades or expansions to three com-pressor stations. Ninety percent of this total available capacity was subscribed with firm take-or-pay agreements through an open season process in February.

The Comision Federal de Electricidad (CFE), Mexico’s national electric utility, has agreed to be the anchor shipper and has sub-scribed to firm capacity (take-or-pay) for a 25-year term. CFE generates, distributes and markets electric power for almost 35.3 million customers in Mexico.

The first phase of capacity is 100 MMcf/d and will be available early next year. Second phase of capacity is 400 MMcf/d, available in first quarter 2017.

The Roadrunner Gas Transmission pipeline project is a 50-50 joint venture with a subsid-iary of Fermaca Infrastructure B.V. (Fermaca), a Mexico City-based natural gas infrastructure company that will transport gas from the Permian Basin in West Texas to Mexico.

It includes 200 miles of 30-inch pipeline for transporting up to 640 MMcf/d of gas – 570 MMcf/d to Mexico’s growing markets. The pipeline will extend from ONEOK WesTex’s system at Coyanosa, TX west to a new inter-national border-crossing connection at the U.S.-Mexico border near San Elizario, TX.

TransCameron Plans Pipeline in Louisiana

TransCameron Pipeline held a binding open season last month for firm commitments on a natural gas pipeline to link the Calcasieu Pass LNG project with intrastate and interstate interconnections in Cameron Parish, LA.

Facilities will include 42 miles of pipeline: 24 miles of 42-inch pipeline extending to Grand Chenier, LA and 18.3 miles of 42-inch pipeline extending to Johnson’s Bayou, LA. The facilities will be designed to deliver 2 MMDth/d with a maximum allowable operating pressure of 1,200 psi. The targeted in-service date is late 2019. P&GJ

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16 | Pipeline & Gas Journal • September 2015

WORLDNEWS

Algeria Reforms Laws to Attract Foreign Investment

A Today in Energy brief from the U.S. Energy Information Administration said Algeria is reforming its laws to attract for-eign investment in hydrocarbons. Algeria is the third-largest oil producer in Africa, after Nigeria and Angola, and the largest natural gas producer in Africa. However, produc-tion of both oil and natural gas has declined over the past decade.

Laws on foreign investment and technol-ogy improvements in hydrocarbons were altered to attract the investors. In 2014, national oil and gas company Sonatrach offered 33 blocks, located in four sedimen-tary basins, with high shale gas and oil potential. The auction led to contracts with Repsol, Shell, Statoil and Dragon Oil-Enel. By law, Sonatrach takes a mandatory major-ity share of any resulting projects.

POGC Starts Pipelay for Phases 20-21 in South Pars

Pars Oil and Gas Company (POGC) has begun underwater pipe-laying operations for phases 20-21 of the South Pars gas field. Once completed the 105-km pipelines will deliver sour gas to onshore refining facilities in Assaluyeh, south of Iran. So far, 40 km of Phase 21 subsea pipes have been laid while a record has been set for laying 171 in a day. Platforms for the two phases, due to be com-pleted by mid-September, will be installed once the pipelay operations are over.

$700 Million Approved for Ghana’s Energy Program

The World Bank approved a record investment of $700 million in guarantees for Ghana’s Sankofa Gas project designed to help address energy shortages by develop-ing new sources of natural gas for domestic power generation. The guarantees could mobilize $7.9 billion in private investment for offshore natural gas, representing the biggest foreign direct investment in Ghana’s history.

Developing the Sankofa Gas Project, located 60 km offshore, should bring large benefits for Ghana by fueling up to 1,000

MW of power generation to replace oil-burning electricity. Once the field produces gas in 2018, Ghana hopes to reduce its oil imports by 12 MMbbls a year and cut car-bon emissions by 1.6 mmta of CO2.

Edvard Grieg Field Nears Completion

Lundin Norway, a subsidiary of Lundin Petroleum AB, recently completed the installation of the topside modules on the Edvard Grieg field, off Norway. The topside

installation consisted of lifting four mod-ules onto the pre-installed jacket: the main deck frame, the utility and living quarters module, the processing module and the flare boom at weight of 22,000 tons.

The lift operation was carried out by Heerema’s heavy lift vessel Thialf. The final offshore hookup and commissioning of these modules is underway with production starting in the fourth quarter. The Edvard Grieg platform is designed as a field center and will receive and process hydrocarbons from other nearby discoveries.

A dedicated pipeline was laid from the Edvard Grieg platform to the existing Grane oil pipeline for export to the Sture oil ter-minal. Similarly, a dedicated gas pipeline was laid to the SAGE transport system on the U.K. shelf for export of rich gas to St. Fergus in Scotland.

European Nations Join Forces on Integrated Gas Network

Fifteen EU and Energy Community countries in central eastern Europe and south east European regions have signed a memorandum of understanding (MOU) to quicken the building of missing gas infra-structure links and to tackle the remaining technical and regulatory issues which ham-per security of supply and the development of a fully integrated and competitive energy market in the region.

EU Commission Vice President for Energy Union Maroš Šefčovič said, “The improvement of infrastructure through real-istic and feasible projects is crucial to diver-sify energy resources and strengthen the region’s resilience to supply shocks.”

The joint work will not only focus on building new gas pipelines, but also on making the best use of existing infra-

structure for example by allowing reverse flow. Several projects – such as the Trans-Adriatic Pipeline (TAP), are identified as top priorities in the action plan. Ultimately, each member state in the region should have access to at least three different sources of gas.

The MOU and action plan were signed by Šefčovič, EU Commissioner Miguel Arias Cañete, the energy ministers, along with representatives from Austria, Bulgaria, Croatia, Greece, Hungary, Italy, Romania, Slovakia, Slovenia, Albania, Former Yugoslav Republic of Macedonia, Serbia and Ukraine. Bosnia and Herzegovina and the Republic of Moldova will sign at a later date.

Petrofac to Build Gathering System in Kuwait

Petrofac has received a $780 million con-tract to construct a gathering system for the Kuwait Oil Company’s (KOC).

Three gathering centers, which form part of the overall project, are under construction with Petrofac executing the EPC contract for one of the centers. Due for comple-tion in 2017, the gathering system will provide feedstock to each of the centers via three independent networks of intermediate manifolds and pipelines. Each center will be capable of producing 100,000 bpd of oil together with associated water and gas.

Eni: Important Gas Discovery in Egyptian Nile Delta

Eni made an important gas discovery in the Nooro exploration prospect, located in the Abu Madi West license in the Nile Delta, 120 km northeast of Alexandria, Egypt. Preliminary estimates indicate the potential of 15 Bcm of gas in place, plus associated condensates. The new discovery will be put into production in two months through a tie-in to the existing Abu Madi gas treatment plant, located 250 km to the southeast.

Tallow Oil Looks for Production 10 Project in Ghana by 2016

Tallow Oil’s half-year results indicate the TEN project in Ghana is 65% complete and the field development is on budget and on schedule for first oil by mid-2016. Conversion work on the TEN FPSO con-tinues at the Jurong Shipyard in Singapore with all major modules now installed and integration works under way. The FPSO is due to sail to Ghanaian waters at the end of the year.P&GJ

Source: U.S. Energy Information Administration, International Energy Statistics

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18 | Pipeline & Gas Journal • September 2015

Goodbye to a Colleague and Friendwant to tell you something,” he said to me on many occasions during the quarter-century of our relationship. “As long as I’ve been in this business, I’m still learning because there’s still so much I don’t know.”

That was Carol Freedenthal, one of the smartest men I’ve ever known. So smart, in fact, that he was always the first to admit he still had so much to learn about a changing busi-ness in an even faster chang-ing world. For someone like me, who

would never know a tenth as much about the business as he did, those words taught me a lifelong lesson.

It’s with a heavy heart and a tear in my eye that I take the liberty of writing this last From The Burnertip column, for as you may know by now, Carol, our longtime con-tributing editor and devoted colleague, died July 16 at a Houston hospital after a short illness. He was 80.

Carol was so much more than just a col-league and contributing editor during the 20 years he wrote for Pipeline & Gas Journal. He was a close personal friend, simply irreplace-able. Carol was from Georgia, attended George Tech and was a chemical engineer. He worked as a manager of several large companies and was an expert witness in litigation trials.

Our paths first crossed about 25 years ago when I embarked on a project that I hoped would launch a new career. I worked on the business desk of the now-defunct Houston Post and decided I would write a book on the petroleum industry that would discuss the key issues facing the business from an executive’s perspec-tive. I often saw Carol’s name in the paper as he was the principal of a thriving con-sulting company, named Jofree, and was a foremost expert on natural gas, so much so that his annual price forecasts were closely followed by the industry.

Carol was among the first I contacted for an interview to which he quickly agreed.

We met in his office in a high-rise tower in downtown Houston. The room was a bit disheveled, which I could appreciate, the antithesis of his brilliant and uncluttered engineering mind. We did two interviews for the book, The Oil Makers, Insiders Look At The Petroleum Industry, the first that day and the second in February 1995, shortly before the book was published.

In between, we became friends. I’m not exactly sure why or how it happened. I never asked him. Perhaps he saw an inquisi-tive fellow determined to break into his industry and wanted to help. Maybe he liked talking about business and life in general to someone he could relate to, as there aren’t a lot of Jewish people in the energy business.

We frequently met for lunch or breakfast. He suggested a number of names for me to reach out to for The Oil Makers, explaining their significance to the industry, what they could add to the book, and often paving the way for me by contacting them personally. At one point in 1995, he, a well-known PR executive and I discussed starting our own PR business. We each had something to bring to the table.

Shortly afterwards, Carol suffered a heart attack and underwent open-heart surgery. His recovery was slow and arduous. In fact, he never fully recovered his health, and his consultancy slowly began to suffer the consequences. If you’re not there and can’t satisfy your clients at a moment’s notice, business has a tendency to go elsewhere. There went the PR shop, which disappoint-ed me because I was living off of freelance work after the Post closed in April 1995, as I waited for my book to get published, which Rice University Press did later that year.

I was hired as editor of P&GJ in December 1995. Carol and I chatted on the phone and still met occasionally for lunch. One day I approached him with the possibility of writ-ing a column for our journal. With his exper-tise and knowledge of the issues and players, this would be a win-win for us while giving him additional exposure. It was my first con-tribution to the success of our magazine and as it turned out, one of my most important.

During the 20 years he wrote his semi-monthly From The Burnertip column, Carol covered every conceivable issue involving natural gas, crude oil and liquids products. He wrote about the Keystone Pipeline, both the one already in service and the one still waiting

presidential approval; the perceived need at one time for LNG imports, then later the switch to LNG exports. He wrote about the shale boom as it was happening, picked out the most likely targets for development and explained why. He discussed pending legislation in Congress and on the president’s desk, and what the implica-tions were for the industry.

Carol also knew his way around statistics, much like a baseball fan can relate to qualitative analysis, except he explained what those num-bers meant so that even a neophyte understood them. He continued to delve into natural gas and oil pricing, again with uncanny accuracy. He would call me a few times a month to discuss future columns, so what he came up with was often an amalgamation of our thoughts. Between his contacts and mine, we were always certain to produce an informative piece.

That doesn’t mean there weren’t a few com-plications involved in the process. Like many truly brilliant people, Carol had so much he wanted to say in a limited amount of space and when his columns reached my desk, usu-ally right on deadline, they required every bit of editing skill I had. But the end result was something that he and I and our readers could live with. Carol’s column developed quite a following through the years, both in terms of reader feedback and our third-party surveys.

During these years, Carol’s consulting busi-ness grew smaller, though he still retained several clients. I feel honored that P&GJ helped keep him active in the business until the very end. As his business slowed, some-thing much more important began to consume Carol: the grandchildren being raised by his three daughters, Robin in Dallas, Shelly in Los Angeles and Stacey in Denver, and their husbands. Carol was enchanted by each of his grandchildren, remarking how bright and savvy they were, even as infants.

His love and adoration for them just contin-ued to grow, and more often than not, Carol called me from one of their homes about his next column. I have never known anyone who was so dedicated to his family. He and his wife of 54 years, Beverly, could not miss any of those grandchildren’s important events, be it a bar of bat mitzvah, graduation or a birth-day. Last summer, Carol’s son-in-law in Los Angeles died suddenly, leaving a widow and three teenagers. Carol and Beverly became much more than just grandparents in helping to ease that family’s grief.

By Jeff Share, EditorFROM THE BURNER TIP

“

I

Carol Freedenthal 1935-2015

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He was also an instrumental part of our annual Pipeline Opportunities Conference from its inception in 2005. He helped me assemble the agenda every year, moderated sessions, interviewed speakers, and eloquently summarized the conference at the beginning and end of the day. This past year he brought in our keynote speaker, EIA Administrator Adam Sieminski. Carol was also like an official greeter, speaking to as many people as possible and making sure that each of them felt welcome. He helped our confer-ence become a premiere event for the North American pipeline industry.

Carol wasn’t feeling well at our last confer-ence on March 25. He was looking forward to celebrating his 80th birthday May 5 when the daughters would come to Houston for the cel-ebration; then he and Beverly had a few more graduations on their agenda. I never saw Carol again, nor did he make those trips. He called me in May and June, apologizing for being unable to do his column. Then one morning in July, Stacey called at Carol’s request to tell me he wasn’t going to be able to do his column that week. A few days later, he passed away.

It’s impossible to sum up a man’s life, much less a friendship, with just words but it’s been cathartic for me to finish Carol’s work. Let’s end with those first two words that Carol would say every time he met someone. It’s how I choose to remember him.

“Good day!” P&GJ

P.O. BOX 330

2971 ROUTE 417 EAST

WELLSVILLE, NY 14895

PHONE: (585) 593-4760

20 | Pipeline & Gas Journal • September 2015

ith liquids pipeline incidents down by half since 1999, even as their use to transport crude oil pipeline has increased, there is little doubt among experts about what has led to this success on the safety front – preventive maintenance and integrity management programs.

“The ILI inspections using smart pigs are finding early signs of corrosion and other issues, which allows for repair before the situ-ation becomes a problem,” said Andrew Black, president and CEO

of the Association of Oil Pipe Lines (AOPL). “Preventive maintenance and the advances in technology are the big reasons for these results.”

The American Pipeline Institute (API) recently surveyed its members and found that $2.1 billion was spent on integrity manage-ment since 2013. Still, even with crude oil and petroleum products reaching their destinations safely a stunning 99.999% of the time, accord-ing to the API-AOPL Annual Liquids Pipeline Safety Performance Report & Strategic Plan,

Black said the industry is committed to doing better. This is all the more impressive when considering U.S. transmis-

sion pipelines delivered over 14.94 billion bbls of crude oil and petrochemical products in 2013, an increase of 6.2% over the previ-ous year. The impressive array of statistics found in the performance report doesn’t end there: n In all, crude oil and petroleum products delivered by U.S.

transmission liquids pipeline rose 6.2% from 2012 to 2013. Of that, operators delivered 8.3 billion bbls of crude oil by U.S. transmission pipeline in 2013, an increase of 11.3% over the previous year.

n Over the last five years, crude oil barrels delivered by U.S. transmission pipeline rose 1.351 billion bbls or 19.4% as crude pipeline mileage grew to 192,396 miles, a 15.4% increase over the last 10 years.

n According to the U.S. Energy Information Administration (EIA), U.S. crude oil production has grown by 3 MMbbl/d since January 2011 and is projected to grow 3.1 MMbbl/d to reach 9.6 MMbbl/d in 2019, near the nation’s historical high in 1970. Total production of crude oil and other petroleum liquids is expected to grow from 11.1 MMbbl/d in 2012 to 14.6 MMbbl/d in 2019.

Goal: Zero Incidents“Zero pipeline incidents is the statistical goal,” Black said.

“Even with the reduction of incidents, we are undertaking efforts to improve performance. We are working to improve technology to find and diagnose potential problems.”

With the advancement of inspection technology and the ability to find early signs of corrosion there have been 76% fewer corrosion-related incidents in the last 15 years, according to the performance report. In 2013, liquids pipeline operators inspected 47,089 miles of pipelines with “smart pig” inline inspection tools.

“The ILI inspections using smart pigs are finding early signs of corrosion and other issues, which allows for repair before the situa-tion becomes a problem,” Black said.

Development of smart pigs using ultrasonic sound waves to find potential cracks in pipes has been a game changer. These tools that

can find subtle, microscopic, hairline features in a pipe often hidden in welding seams are the current research effort.

“We are hoping in the next 15 years that one of the great techno-logical innovations is further improvement in finding hairline crack features,” Black said.

According to the performance report improvement in smart pig technology that led to the “steep drop in the number of corrosion-caused incidents is apparent.” Other incident causes, such as opera-tor error and flawed seams and welds are “relatively flat over time,” the data showed.

Two big factors beyond inspections have contributed to the success in the war on corrosion, Black said. One is the ongoing improvement to enhanced coatings, which continues to get better. The other is cathodic protection, which has helped the industry in minimizing external corrosion.

“Successful cathodic protection programs have gone on longer than that [15 years], but they are very important,” he said. “When the liquids pipeline industry looks at where to address strategic planning efforts, we’re finding satisfaction comparatively on corro-sion-related incidents.”

While the performance report revealed other good news in that third-party damages resulting in incidents have declined by 78% since 1999, operator error-related incidents have increased slightly over the past several years.

“We do see an uptick in pipeline operator errors,” Black said. “This is the smallest category of barrels released per incident [38 barrels], and it’s only 2% of the total release volume. An industry team has been reviewing operator incidents and hasn’t found a single specific trend, but we continue to dig deeper.”

Strategy Report Points to Improved Safety, Smart Pigs By Michael Reed, Managing Editor

WBarrels of Crude Oil & Petroleum Products Delivered by U. S. Transmission Pipeline

Liquids Pipeline Incidents Are Down 50% Since 1999

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Incidents caused by third-party excavation are down over time as well, the performance report said, “reflective of efforts to increase public awareness and 811 call-before-you-dig programs.”

In 2013, about two-thirds of liquids pipeline incidents occurred within operator facilities, often at pump stations, located every 35 to 50 miles along a pipeline, or at storage locations, primarily located at the beginning, junction point and end of pipelines, according to the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Incidents at facilities are generally smaller, involving pump leaks or seepages from valves and other equipment. Incidents reported to PHMSA can be as small as five gallons. Because of their size and remote location, operator-facility incidents are unlikely to affect public safety.

Safety Principles Cut Across the BoardThese safety principles reflect the shared commitment of

pipeline operators to safety. They represent not only aspirational goals all operators strive toward, such as zero incidents, but also everyday ways of doing business that promote continuous improvement and excellent safety performance:

Zero Incidents — Only with a goal of zero safety incidents can we minimize accidents. Pipeline operators believe that every incident is preventable and work to that high standard.

Organization Commitment — Not only do senior leaders of pipeline companies value safety, but safety is emphasized at every level of the organization from employees who accept personal responsibility for safety to front-line managers who are vital to reinforcing a safety culture and implementing continu-ous improvement.

Culture of Safety — Pipeline operators embrace the need to provide a workplace culture where safety is an enduring value that all employees share, act upon, learn from, are rewarded for and judged upon.

Continuous Improvement — Pipeline operators believe that no matter how safe they already are, they can always improve safety. Vision, commitment, culture, and systems are necessary to improve safety continuously.

Learn From Experience — Pipeline operators learn how they can improve safety from their own experiences and by sharing lessons learned with and from other pipeline operators.

Systems for Success — Safety management systems dem-onstrate that safety efforts are succeeding by measuring perfor-mance, tracking changes and confirming improvements.

Employ Technology — From in-line inspections with diag-nostic robots traveling inside pipelines called “smart pigs” to innovative ways to interpret integrity data, operators constantly research and develop new ways to maximize safety.

Communicate with Stakeholders — Operators know com-municating with the public and stakeholders who value safety is vital to improving safety. n

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In fact, analysis of 397 pipeline incidents reported to PHMSA in 2013 showed 35% were smaller than one barrel while 20% exceeded 500 barrels. By focusing on rights-of-way, this allows operators to develop strategies to decrease these types of incidents, Black said.

Better DiagnosticsIn order to improve technology, Black said, the industry is working

at getting better in diagnosing potential problems before they happen. He pointed to research and development underway on inline crack detection tools as well as efforts to better identify and respond to threats through regulating practice on crack detection and management.

“There is so much information now that we think operators could benefit from some guidance on integrating data and proper guidance on the use of video tests,” he said. “We know hydrotests have an important role in commissioning new pipelines, but we also need to do more critical thinking about the use of hydrotesting on existing pipelines.”

Pipeline operators have been boosting local emergency response capabilities, too, with the addition of free online training programs.

“This is one of the most active efforts we’ve had over the last couple of years,” Black said. “We’ve heard there are resource con-straints on first-responders and time constraints. We’re bringing the free online training portal to them.”

The operators have worked with the National Association of State Fire Marshals in presenting the training program and with the Emergency Response Advisory Board, which meets twice a year. The completion rates for the program have increased in each state since the program’s inception.

The upshot of all this, according to Black, is that “Pipelines are the safest way to transport large volumes of crude oil and petroleum products. The Department of Transportation confirms that and the State Department confirmed that in the study on Keystone XL.” P&GJ

For further information or to read the report in its entirety, visit aopl.org.

Teamwork Counts When it Comes to SafetyIndustrywide safety groups pursued pipeline performance

improvement goals:Pipeline Safety Excellence (PSE) Steering Committee: This

group of pipeline executives focuses on ensuring progress on industrywide safety performance improvement initiatives.

Each executive serves as a “champion” on one of the industry’s strategic initiatives supporting work on that initiative, facilitat-ing additional resources if appropriate, keeping the PSE Steering Committee informed on initiative progress, and raising issues needing resolution with the broader group.

In 2014, the PSE Steering Committee oversaw API-AOPL strategic initiatives to improve inspection technologies, enhance pipeline threat identification and response, expand safety culture and management practices, and boost response capabilities. The PSE Steering Committee is continuing this executive leadership and oversight role in 2015.

Performance Excellence Team (PET): The PET brings togeth-er senior managers from across industry to exchange the latest information on pipeline safety.

PET members also engage in three standing sub-teams focus-ing on pipeline performance data management, pipeline damage prevention and safety culture. In 2014, PET led the pipeline indus-try’s annual industry-wide pipeline safety performance strategic planning process.

This year, in addition to its strategic planning process role, PET is leading strategic initiatives to implement new API recom-mended practice on pipeline safety management systems and

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foster pipeline safety culture with an industrywide sharing, learning and improvement program.

Pipeline Integrity Work Group (PIWG): PIWG is an API-led group of industry managers with responsibility for ensuring the integrity of the pipelines at their companies.

The managers oversee programs to evaluate, inspect and perform maintenance on their systems. As part of PIWG, they share learn-ings and best practices to improve pipeline integrity. PIWG recently completed an update to the industrywide standard for managing integrity of pipelines.

PIWG led two 2014 strategic initiatives to develop an API-recommended practice on crack detection, analysis and response with an emphasis on seam-related cracks, as well as one to develop industrywide guidance on implementing threat data integration programs and activities.

In 2015, PIWG will complete its development activities from 2014, and then lead three strategic initiatives: implementation of new API-recommended practice on crack detection, analysis and response; implementation of industrywide guidance on integrating pipeline threat data; and development of industrywide guidance on the appropriate use of hydrotesting.

Operations and Technical Group (OTG): The OTG is an API-led group of industry managers with responsibility for pipeline operations and engineering. They meet regularly to share operating experiences and best practices.

Each year, OTG hosts an industrywide pipeline information exchange to share information on incidents or near misses that

yielded learnings and improvements in pipeline safety. OTG also facilitates the consideration and adoption of industrywide opera-tions and safety standards.

Cybernetics Work Group: Cybernetics is an API-led group of operations managers responsible for leak-detection technology and control room systems.

In 2014, the group began developing an API-recommended prac-tice for leak-detection program management. The group is complet-ing development of an API 1149 technical report and will undertake the 2015 strategic initiative to implement API recommended prac-tice for pipeline leak-detection program management.

Public Awareness Group (PAG): PAG is an API-led group of com-munity outreach managers working to improve programs to raise public awareness of local pipelines and “call-before-you-dig” programs.

Operator Qualification Work Group (OQ): OQ is an API-led group that ensures operator qualification practices meet regulatory requirements that contribute to safe operations and a safe operating culture.

Environment, Health and Safety Group (EH&SG): EH&SG is an API-led group that promotes environment, health and personal safety issues within pipeline operators.

Pipeline safety leadership teams: In 2011, the executive leader-ship of the liquids pipeline industry launched several industrywide teams to address specific safety performance issues.

In 2012, the leadership created an additional team to address emergency response. The groups take on special projects that are time-sensitive or meet a specific program need. n

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26 | Pipeline & Gas Journal • September 2015

he boom in U.S. shale plays and Canadian oil sands has provided North America with a huge new source of petrochemical and ener-gy-generation feedstock. For the

most part, the results of this “shale boom” have been quite positive.

But the sudden abundance of oil and natural gas is putting pressure on North America’s existing pipeline infrastructure, which simply cannot cope with this addi-tional demand. This pressure is compound-ed by the fact that most of this new oil and gas production is happening in regions not currently served by the existing pipeline infrastructure (Figure 1).

Before the Marcellus boom, for exam-ple, Pennsylvania and West Virginia relied largely on natural gas from the western and southwestern U.S. In recent years, however, increased local production has resulted in a supply of gas that is more than sufficient to meet current local demand, with plenty left over to ship to other U.S. states and to Canada. Similarly, the recent oil boom in Canada has resulted in the need to ship large amounts of Canadian oil south to the vast refinery complexes along the Gulf Coast.

As a result of the increase in demand for North American oil and gas shipping, once-uncommon flow reversals and the reuse of existing pipeline assets have become fairly routine for operators, with large incentives being quoted, such as $10-15 million in additional earnings for just one pipeline reversal – Tesoro Logistics LP.

In recent years, for example, gas capacity shipped in pipelines has risen significantly along with the growth in shale production (Figure 2).

Minimizing FailureOne of the most important aspects of pipe-

line reversals is risk assessment. Many of the pipelines undergoing reversals are older and were manufactured using outdated process-es, materials or design elements that aren’t acceptable by today’s standards. Operators need to perform thorough assessments to determine how risks can change when an older pipeline is reversed or repurposed.

Due to a couple of well-publicized rever-

Pipeline Reversals and Conversions: Case Studies and Best PracticesBy Mike Kirkwood, Director of Transmission Market Development, T.D. Williamson, Tulsa, OK

T

Figure 1: Areas of Oil Abundance vs Areas of Demand

sal failures, the public is all too aware of what can potentially go wrong with a pipeline reversal. In March 2013, a pipe-line leaked about 200,000 barrels of oil near Mayflower, AR. In September 2013, a 20-year-old pipeline spilled over 800,000 gallons of oil in Tioga, ND.

These failures often overshadow the many successful pipeline reversal over the years. Unfortunately, success stories rarely make headlines. But the truth is that, when completed carefully and after a thorough risk assessment, pipeline reversals can be safe and effective.

Longhorn Reversal, 2001The original Longhorn Pipeline System –

comprised of 18-inch and 20-inch pipelines

– was built to ship crude oil from Crane to Baytown, TX in 1949 and 1950. In 1998, the line was converted to refined products service with the addition of pumps, terminals and new pipeline segments to transport prod-uct from Houston to Odessa and El Paso.

To manage and reduce risks, Longhorn Partners Pipeline went above and beyond the requirements at the time and followed indus-try best practices for conversion. In 2001, Longhorn Partners (later Magellan Pipeline Company) began a project to again reverse the flow of the Longhorn Pipeline, from Crane to Houston, to transport crude oil.

Looking again to best practices, Longhorn produced the Longhorn Mitigation Plan, with 40 mitigation commitments covering management programs, risk-management processes and integrity issues.

Figure 2: Shale Gas Growth vs Pipeline Capacity Growth

www.pgjonline.com | 27

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28 | Pipeline & Gas Journal • September 2015

Centennial Conversion, 2001This huge project involved converting

700 miles of 50-year-old, large-diameter pipeline running from South Texas to the Midwest. The pipeline was built to transport natural gas, but when demand for natural gas declined and demand for petroleum products increased, the joint owners of the pipeline – CMS Energy, Marathon Ashland and TEPPCO – began a conversion project.

The project began with major reviews of

the pipeline’s condition and history, including: n Laterals and connections n Piggability and line cleanliness n Right-of-way conditions n Existing threats, such as corrosion or

mechanical damage n Potential threats, such as fatigue n Equipment required for conversion n Inline inspection (ILI) and hydrotesting

As a result of this thorough planning, the Centennial Pipeline owners completed the

conversion while ensuring maximum pipe-line integrity and performance, and minimal customer interruption.

Enbridge Line 9 Reversal, 2014Enbridge, Canada is planning to reverse

an existing oil line, Line 9, between North Westover, Ontario and Montreal, Quebec. The plan is similar to the Longhorn reversal as this will not be the first time this line has been reversed: Line 9 was originally built

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Figure 3: Pipeline Reversals and Conversions

in 1976 to supply Quebec refineries with western Canada crude oil.

In 1998, the line was reversed to take imported oil from the United Kingdom, West Africa and the Middle East. Now that western Canadian oil is cheaper than the imports, Line 9 will be reversed again.

What’s also interesting about this reversal is the amount of public communication involved in the project that Enbridge made information available to the general public. Available infor-mation includes a website (http://www.enbridge.

U.S., the Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued guidance on pipeline flow reversals, product changes and conversion, alerting U.S.-based operators of the potential impacts.

Though the new guidance is not prescrip-tive, except when the cost to make these changes exceeds $10 million, PHMSA strong-ly encouraged operators to submit a com-prehensive written plan before beginning a conversion or reversal. PHMSA also advised operators to review their existing integrity plans and be prepared to demonstrate how any additional or increased risks are mitigated.

In addition to issuing new guidance, PHMSA suggested some pipelines are sim-ply not candidates for reversal or conver-sion, including: n Grandfathered pipelines with incom-

plete test or historical data. n Low-frequency electric-resistance-

welded (ERW), lap-welded and unknown seam-welded pipelines.

n Pipelines with a history of failures. n Pipelines with a design factor of greater

than 72% specified minimum yield strength (SMYS).

n Conversions involving volatile liquids.The recent PHMSA guidance provides

valuable recommendations for reversing or repurposing a pipeline.

Canada’s National Energy Board (NEB) doesn’t have regulations pertaining to rever-sals or conversions, but there is a thorough review process that considers all stakehold-ers, garners their objections, and allows the operator to demonstrate compliance through publicized mitigation strategies.

The main issue appears to be that the reversal calls into question the original need and current design of the pipeline. This is largely a political/economic argument, but it has recently generated media attention.

In the United Kingdom, for the revalidation or uprating of a pipeline under the Pipeline Safety Regulations, the operator must provide technical and safety justifications to the UK Health and Safety Executive (HSE) to demon-strate that the pipeline and associated facilities are “fit for purpose.” Though not a reversal or re-utilization regulation, the HSE clearly spells out the considerations that would also apply to those types of projects.

com/line9), as well as a brochure detailing the how, when and why of the reversal.

Of course, these are just a few examples of recent projects. Figure 3 shows the reversed and repurposed pipeline has been steadily increasing since the late 1990s.

What Do Regulators Think?In an effort to establish best practices and

safeguard against failures on reversed and repurposed pipelines, regulatory organiza-tions worldwide are beginning to release standards and recommendations. In the

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32 | Pipeline & Gas Journal • September 2015

Good PracticeDespite a few well-publicized failures,

there have been many successful pipeline reversals and conversions, and organiza-tions worldwide are compiling guidelines for safety and best practices. So, what are the lessons learned? What approaches and practices can help ensure the safe comple-tion of such projects?

Most successful case studies share a few common elements: n Threat assessment: A valuable way to assess

all the risks – and how they would change under the new operating conditions – is to conduct a thorough threat assessment and develop a mitigation strategy.

n Documentation review: Gathering doc-umentation sounds relatively easy, but the paperwork for older pipeline often gets lost or destroyed. Material records seem to be the most valuable, as they provide information about pressure rat-ing. If no documentation is available, it’s now possible to conduct in-situ positive material identification (PMI) without expensive laboratory testing.

n Inspection: Once threats have been assessed, it is important to determine the criticality of the defects that may exist. Inline inspection is by far the best prac-tice, with technology such as the multiple dataset (MDS) inspection platform able to detect and characterize most anomalies. Figure 4: Multiple dataset Inline Inspection Platform

n Communication: Keeping all stake-holders informed becomes an absolute imperative. Enbridge’s Line 9 reversal is a good example of how social media can be used to communicate project benefits and confront issues.

n Laterals and Connections: The major-ity of guidance and case studies relate to the main transmission pipeline. But it’s important to remember the connec-tions that may not suit the new service. In this case, reconnections may be necessary. Hot tapping and bypass can ensure that this can happen without disruption to customer connections.

Preparation is KeyProbably the most important element in

pipeline reversals and conversions is proper preparation, including testing and inspec-tions that can help determine whether the

pipeline is fit for the job. There are several inspection and testing methods available; each can help provide a more complete pic-ture of the pipeline.

Hydrostatic Testing: Hydrotesting was introduced over 60 years ago. It was devel-oped as a direct response to failures in the 1960s resulting from air- or product-based pressure tests. Though hydrotesting offers some advantages over air or product testing, this method has several drawbacks.

While hydrotesting is considered to be the final test for the strength of a pipeline that may be undergoing a reversal or conversion, it is disruptive and does not offer a full picture of potential issues. Hydrotesting really only gives an assurance of integrity on the day testing is conducted. Defects that are close to failure may not be detected during testing, meaning that they will remain unaddressed until they fail at some point in the future.

www.pgjonline.com | 33

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Pipeline Services, à la carteInline Inspection (ILI): This is an

extremely valuable tool in proving pipeline integrity. There are many tools available for the assessment of a variety of defects, and as computers, storage, and batteries have improved, these tools have only gotten better.

Today, MDS tools (Figure 4) can help operators address multiple threats at one time. Running these tools is becoming com-mon practice for integrity management and is almost a requirement for line reversals or conversions.

Positive Material Identification: Paper-based records for older pipelines are often misplaced, lost or destroyed. What may seem disastrous becomes manageable thanks to new methods that use a combination of in-situ strength and chemical-composition tests to determine a pipeline’s material properties. These methods can be linked to sensors on ILI tools using a low field magnetic array to determine material changes.

Leak Detection: Leak detection becomes more important when pipelines change ser-vice, especially when the line is carrying new product. Historically, most leaks have been detected by the general public, but there are now more sophisticated solutions available that use fiber optics or airborne survey equipment to detect leaks before they become public incidents.

Until recently, many operators looked at leak detection as a last barrier of defense. After recent failures, though, there has been a push for zero loss, which means moving to safety standards more focused on personal safety and – much more importantly in the oil and gas arena – process safety. Hence, detection and mitigation are preferred.

Emergency Preparedness: Though every step can, and should, be taken to miti-gate all threats, there are some situations that just cannot be foreseen (so-called “acts of God”).

To guard against the unexpected, emer-gency-response plans and equipment need to be well-thought-out. For example, one

major finding from a recent incident in the Gulf of Mexico was that the emergency-response plan was inadequate and crisis-management training was lacking. In all cases, ensure that every threat is considered in advance. Do not rely on one barrier to prepare for the worst.

Key to Safe Reversals It is not uncommon to find 60-year-old

pipelines operating in excellent condition – as long as they have been maintained, inspected and repaired as required.

Materials, welding, construction, opera-tions, maintenance and emergency-pre-

paredness knowledge have all improved in the half-century since many of these lines were installed. But if we continue to make improvements and leverage new and better materials and technology, there is no reason that these pipelines can’t last another 50 years in their converted form. P&GJ

Author: Mike Kirkwood, Ph.D., has more than 25 years of experience in the nuclear, power generation, water, and oil and gas industries. He is a SME in all forms of structural integrity, specializing in pressur-ized pipelines, and is the author of numerous papers on pipeline integrity, risk, inspection, and repair and rehabilitation.

34 | Pipeline & Gas Journal • September 2015

n today’s commodity environment, being aware of ongoing decisions by produc-ers and midstream players regarding planned projects is a critical component to understanding the future natural gas

infrastructure landscape.Experienced analysts collect and inter-

pret the information to deliver a streamlined approach for understanding and quantifying the influence of planned projects on the market. Up-to-date, reliable insight into these decisions reduces blind spots for traders so they can make more informed, longer-term decisions.

Through summer 2015, Genscape is pro-viding critical infrastructure intelligence alerts as they happen, including the tracked progress of processing plant, pipeline, and gathering line projects in the United States.

REX Flow East to West Increases as Seneca IV Likely Comes Online

In anticipation of the Aug. 1 start date for the Rockies Express (REX) east-to-west project approaches, flow on the pipeline ramped up. Fed from a combination of points in and around Clarington, OH as well as the powerhouse processing plant at the end of REX’s Seneca Lateral, flow in July exceeded 1.3 Bcf/d for the first time, and later in the month saw a further jump to above 1.4 Bcf/d.

When the full project begins to flow, west-ward-bound gas will fill the line to 1.8 Bcf/d, only about 400 MMcf/d above current flow.

The new flow came just after REX announced that partial east-to-west related service at the improved Chandlersville and Hamilton compressor stations had been approved by FERC and that bidirectional

service there began July 9. Since then, flow at both compressors

has been steady, only filling above usual with a sudden increase that began July 12. Genscape is tentatively attributing this new strength of flow, which comes entirely from reported receipts on the Seneca Lateral, to the in-service of the fourth Seneca train.

MarkWest declined to confirm the status of the plant, but suggested that more details regarding Seneca IV will be announced in the near future.

The majority of the non-Seneca originating gas appeared to be re-routed from other pipe-lines or representative of production already accounted for, rather than representing an uptick of new production. Much of the push above 1.3 Bcf/d came from wells behind Rice’s new point at Gunslinger in Monroe County.

Genscape’s production forecast takes REX’s staggered phase-in into account, with only a small additional new production bump

expected in August as REX’s east-to-west and Spectra’s Uniontown to Gas City proj-ects relieve some export constraints in the region.

Transco Files with FERC for New York Bay Expansion Project

Transcontinental Gas Pipe Line Company (Transco), a subsidiary of Williams Partners, placed the Rockaway Lateral Project in-ser-vice in May. The effort involved constructing a delivery point in New York City by con-necting the Lower New York Bay Lateral to the Rockaway Peninsula. That project pro-vided National Grid with about 647 MMcf/d of firm transportation, giving the company the capability to serve more than 1 million customers in the area.

Now, Transco is back with another proj-ect, the New York Bay Expansion Project, which will provide National Grid with 115 MMcf/d of firm transportation, allowing National Grid enough natural gas to heat about 500,000 additional homes during the 2017 and 2018 winter months.

Transco filed with FERC on July 8 for a certificate of public convenience and neces-sity (CP15-527) for the project, designed to increase horsepower and modify three of Transco’s existing compressor stations, replace 0.25 miles of 42-inch pipeline and uprate pressure of the Lower New York Bay Lateral Pipeline.

The changes also include modifications to the Morgan and Narrows meter and regulat-ing (M&R) stations, as well as installation of about 80 feet of 30-inch bypass pipe near the Downingtown M&R station. Construction is expected to begin in the fall of 2016 for an in-service date of Nov. 1, 2017.

Howard Energy Partners’ Nueva Era Pipeline Announced

Howard Energy Partners (HEP) announced plans to construct a 200-mile

Natural Gas Infrastructure Intelligence Report By Colette Breshears, Aziza Dawaher and

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natural gas pipeline, directly connecting customers in the South Texas Eagle Ford Shale to customers in Northern Mexico.

The 30-inch Nueva Era pipeline will be capable of transporting 600 MMcf/d from HEP’s existing hub in Webb County, TX to Escobedo, Nuevo León, Mexico, and to the Mexican National Pipeline System (Sistema Nacional de Gasoductos) located in Monterrey.

HEP accepted non-binding indications of interest for transportation and process-ing services, which concluded July 17.

HEP anticipates transportation rates from the U.S.-Mexico border to Escobedo to range from $0.13-0.20 per thousand cubic feet, subject to shippers’ specifications and Mexican legal requirements, including a Comisión Reguladora de Energía transpor-tation permit. HEP expects the project to be in service July 2017.

The proposed project is in response to high customer demand to a previously announced solicitation of interest period held from May 21-June 12, 2015 for access to 1.2 Bcf/d of

natural gas hub services and export from the Webb County hub to Mexico via the pro-posed Colombia interconnect.

In May, Impulsora Pipeline LLC, a wholly owned subsidiary of HEP, received a presiden-tial permit from FERC authorizing construc-tion plans of 36-inch pipeline to interconnect the Webb County hub with the Comisión Federal de Electricidad’s Colombia-Escobedo project (Colombia interconnect).

Texas Gas Transmission Files for Reversal via Northern Supply Access

On June 5, Texas Gas Transmission sub-mitted an application with FERC for the Northern Supply Access Project (CP15-513). The purpose of this project is to provide north-to-south natural gas transpor-tation on Texas Gas’ existing system, while maintaining the current south-to-north flow. This would allow producers in Utica and Marcellus to access to markets in the Gulf Coast and Midwest regions.

The $149 million project would include modification of Texas Gas’ existing facili-ties in Indiana, Ohio, Kentucky, Tennessee and Mississippi as well as construction of a 23,877-hp compressor station in Hamilton County, OH. Construction is expected to begin April 1 for an in-service date of April 1, 2017.

Texas Gas Transmission, LLC has execut-ed binding firm transportation agreements with eight companies for the full capacity of about 384 MMBtu/d: EdgeMarc Energy Holdings for 50,000 MMBtu/d; Indiana Gas for 15,000 MMBtu/d and 10,000 MMBtu/d; Jay-Bee Production for 50,000 MMBtu/d; R.E. Gas Development for 30,000 MMBtu/d; Southern Indiana Gas and Electric for 25,000 MMBtu/d; Triad Hunter for 100,000 MMBtu/d; Gulfport Energy for 54,000 MMBtu/d; and Kaiser Marketing Ohio for 50,000 MMBtu/d. P&GJ

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38 | Pipeline & Gas Journal • September 2015

n the oil and gas industry, there is not and never will be a priority higher than the safety of a company’s employees. Go to any industry conference and you’ll see how seriously the topic of safety is

taken. It bears repeating: safety is job one.Exterran, a Houston-based compression

company, realizes that an effective safety program always starts from the top. Brad Childers, Exterran’s president and CEO, clearly understands that as does the National Safety Council (NSC) which earlier this year singled out Childers as one of just nine CEOs in the United States who do “get it.”

“It” in this case refers to recognition for being “dedicated to safety for the long haul and committed to continuous improve-ment for both their organizations and them-selves,” according to Deborah Hersman, president and CEO of the NSC.

Childers’ efforts have not gone unno-ticed by others. In June he received the EY Entrepreneur Of The Year® 2015 “Transformational CEO” Award for the Gulf Coast Area for demonstrating “excellence and extraordinary success in such areas as innovation, financial performance and personal commitment to their businesses and communities.” Leaders are nominated by external third parties, and Childers was selected by an independent panel of judges.

Safety Emphasis Wins Exterran NSC Kudo By Jeff Share, Editor

Compression reportPipeline & Gas Journal’s

I

In this interview, justifiably proud Childers discusses safety in all of its essen-tial components and how a successful pro-gram should work.

P&GJ: What was your reaction to being recognized by the National Safety Council?

Childers: I was honored to accept this award for Exterran employees because I know how high the NSC sets the bar for this award and how many companies were in the running. Our employees are the reason we earned this recognition. They are the ones who work safely every day, not just for Exterran, but for their families. And that’s what matters most.

P&GJ: How do you (or how have you) prioritize(d) safety among Exterran’s busi-ness responsibilities?

Childers: Our approach to prioritizing safety is straightforward. For us, safety is not one of a number of business priorities; it’s the most important job we do. We are first and foremost in the job of saving lives, saving limbs and saving families.

P&GJ: What does it take to create and then nourish a successful safety program? Must it always start at the top?

Childers: Setting boundaries and expectations at the top is required in order for everyone to clearly understand the vision and also the playing field to achieve that vision. Then, it’s important to take stock of the current state of affairs – the priori-ties of the management and employees; the routines used to run the business; and the

impact of the operation of the total enter-prise on safety.

Next, you have to build a plan that ensures everyone knows what they need to do to achieve the current focus. We use a planning process for safety that is built in and around our annual business planning process, so that the safety plan becomes part of what we measure, action and review on a regular basis throughout the year.

Then comes commitment which we dem-onstrate by sharing our plans publicly and measuring progress in frequent management routines. This keeps every level of manage-ment engaged with our current focus as we continue to strive toward our vision.

Finally, I believe you need courage. Courage is needed because so many things in our business can get in the way of our commitment to our core value of safety. We must have the courage to say no to those distractions. Similarly, there are some people who are naysayers or fence-sitters, and we all must have the courage to work to get them aligned or address the problem if we cannot.

P&GJ: How does Exterran communi-cate the need for total safety to its employ-ees, especially those who work outside of the U.S.? Is it through team meetings, email, etc.?

Childers: Several years ago, we launched the “XFactor™” platform at Exterran. It’s a means for us to train and communicate about health, safety and envi-ronment (HSE) to all levels of our organiza-tion around the world.

“XFactor for Leaders” provides training

Brad Childers

40 | Pipeline & Gas Journal • September 2015

and insights for managers mid-level and up so they are prepared to carry the message of HSE to their teams. “XFactor 24/7” provides tools and techniques for our frontline supervi-sors to lead, communicate and coach all of our employees on safety. “XFactor 3D” conveys key messages and expectations to employees who are engaged in the most challenging and risk-laden aspects of our business.

We also have an expectation that every meeting starts with an XFactor moment where someone shares a short message on safety. And our intranet frequently publishes features on our safety performance – stories of stopping a job because of a safety prob-lem, a business unit’s success in working incident-free for a record period or custom-ers recognizing Exterran for safety. All of this is intended to keep our vision and focus fresh and our value of safety alive and well.

Most recently, given progress in our performance, we’ve amped up our message in our quest to better save lives, limbs and families, our new goal: Goal Zero.

P&GJ: In an equipment and service com-pany such as Exterran, what are some of the challenges that workers face in doing their jobs every day, both in the field and in the office?

Childers: Employees working with hydrocarbons face inherent hazards and risks each and every day. There are ways around it, but these are challenges we can help mitigate. First, it can be a challenge for some workers to overcome a former energy-industry culture that may linger from a time when safety wasn’t prioritized as it should have been.

Another challenge we face is the “graying” of the workforce and our ability to pass along the learnings of years of experience to those coming up in the industry. In periods of rapid ramp up, we must get our new employees quickly and effectively trained for their roles, as well as oriented to our safety culture.

Additionally, one of the industry’s biggest challenges has been and continues to be our work with rotating equipment. Throughout the energy industry, from exploration to pro-duction to transportation to refining, employ-ees work with rotating equipment each and every day, in many cases all day long. Ensuring new people in the workforce under-stand and can address the hazards of rotating equipment is an absolute must. Likewise, we have to work hard with our experienced workforce to make sure they do not become complacent. Finally, the continued evolution

of technology is something we will always have to deal, which, in essence, is about help-ing our organizations better deal with and embrace ongoing change, period.

P&GJ: Does a successful safety culture include helping employees improve their personal health? Does this also involve tak-ing better care of the environment?

Childers: There’s no doubt that safety and employees’ personal health go hand in hand. We strive to address this by having solid benefits programs and we work hard to help our employees better understand and manage their personal health through tools and edu-cation. And of course we strive always to be good stewards of the environment. We have been involved with our industry and various agencies to strike that right balance of regu-lation that helps all of us achieve our goals of protecting the environment while sustaining successful businesses that provide jobs and create shareholder value.

P&GJ: When you became CEO of Exterran, did you see a need to improve its safety culture?

Childers: When I took the role of CEO in 2011, Exterran was well-prepared to

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make a step change. We had a good cultural foundation, HSE processes were moving forward globally and leaders were looking for the next steps.

P&GJ: What were some of the first steps you took, and how were they received by managers, field and office workers, and your board?

Childers: Using those insights, we focused most of our attention on culture change. We enhanced our XFactor plat-form, we improved our safety communica-tions, we retrained leaders, we formalized our HSE management reviews, we put an incident-review process in place that went all the way to my desk, and we added lead-ing indicators.

Then we purposely identified and began to formally and frequently recognize front-line leaders who were demonstrating, in often very tough conditions, the leader-ship and ownership of safety that was the essence of our core value of safety.

P&GJ: How do you quantify the results of your safety program?

Childers: When I’m in the field, meet-ing with employees in our manufacturing

plants or service operations, they shake my hand and the first thing they want to talk about is the safety of their operation. That’s a powerful testament to safety being a core value for Exterran.

Our vision truly is becoming engrained in our culture, and leadership and personal ownership of HSE is taking hold. Tracking TRIR (Total Recordable Incident Rate) is important, but it’s a number; it’s a numerical expression of what we have done. At the end of the day, it’s that handshake, that look in the eye, that story of courage that quantifies who we are and our real values.

P&GJ: As many energy field jobs involve hazardous activities in often hazard-ous conditions, do you think companies are doing as much as they should to emphasize worker safety?

Childers: Our industry has made a lot of progress in the past 25 or so years to improve safety and environmental manage-ment throughout. But I don’t think any of us can or should be satisfied with our current performance until we reach a point where no one gets hurt. No injuries, no accidents, no incidents. We’ve rolled out a Goal Zero focus at Exterran this year to help drive us

to the next level of safety excellence.

P&GJ: What advice do you have for other companies that are trying to improve their safety culture?

Childers: It has to start with culture. If you get your culture right, getting the other things to fall in place is much easier. Next would be to establish that clear vision, understand where your organization is rela-tive to that vision and then find your focus — those few things you must do now to move you closer to your vision. Measure and stay on that focus until it is ingrained, then find a new focus that takes you another step closer to your vision. P&GJ

Editor’s note: Exterran Holdings Inc., the parent company of Exterran Corp., last month announced plans to spin off its international services and global fabrication businesses. Exterran Corp. will be a stand-alone, publicly traded company focused on global business opportunities not limited to compression and will have 7,000 employees. Exterran Holdings will be renamed Archrock Inc. and will focus on the U.S. compression market with 2,500 employees. Both companies will be head-quartered in Houston with Childers becoming president and CEO of Archrock.

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44 | Pipeline & Gas Journal • September 2015

P&GJ: What is your perspective inter-nationally, especially as Mexico opens up to natural gas development?

Paris: Mexico’s opening to the private sector will generate numerous opportunities for exploration and production operators, international oil and gas companies, suppli-ers and investors. The Energy Reform will spur engineering and construction activity across Mexico, offering a whole host of opportunities to the business.

Currently, there are a series of changes that will increase the amount of business related to natural gas, especially in the power generation and exploration of natural gas. We are expecting to see a huge boom in shale gas production all along the northern part of Mexico. Many new companies are focusing on self-generated power (using natural gas as fuel) as well as new pipeline projects to satisfy the growing demand in natural gas.

Pipeline projects are a critical part of our business model as they require new compres-sor stations to be built to redistribute the gas.

Valerus has offered a strong market posi-tion in Mexico since 2006 and we intend to capitalize on our strengths, partnering with local and international clients to help deliver these projects. For example, Valerus was an integral partner on the team to work with Pemex to provide in excess of 200,000 hp of compression capacity to devel-op the Magallanes and Santuario blocks in Tabasco State. Foreign expertise in the form of technology, when combined with the local tal-ents of Mexican personnel, will help open new frontiers.

P&GJ: What new com-pression technologies and meth-odologies is the industry exploring?

Compression Trade Keeps Sharp Eye on Changing Market A Pipeline & Gas Journal Staff Report

It’s a topic the general public doesn’t know much about, but there would be no natural gas pipelines – hence no natural gas – without com-pressors. Today compression is a main topic of conversation in the industry for many reasons, environment – which includes siting, noise and emissions control – economics, and engineer-ing/construction challenges. As the natural gas industry continues to expand and change direc-tion, more pipelines will be built in the next few years, all dependent on compression.

Mike Paris is vice president of the compression

product line at Houston-based Valerus, an industry leader. He began his career in 1985 in Corpus Christi, TX as a project engineer in the packag-ing division of Energy Industries. He spent two years in Broken Arrow, OK working for Dresser-Rand Compressor Services, then moved on to The Hanover Company where he spent the next 12 years, his most recent position being vice president of engineering. He holds a bachelor’s of sci-ence degree in mechanical engineering from Louisiana Tech University and is a registered professional engineer in the state of Texas.

In this interview, Paris provides a perspective of today’s com-pression business, starting with Mexico where the ongoing Energy Reform is expected to be a boon for the U.S. natural gas industry and the compressor manufacturers.

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Paris: We are constantly eyeing new technology and practices to better service our customers. Compression technology is rooted in very basic and, as I like to say, “tried and true” methodology. However, we are now seeing more efficiency in compres-sion technology and a shift to a more modu-lar, plug-and-play concept being adopted here in the U.S.

Modularized structures at a well site allow production companies to adjust to shifting production levels as the need arises without overspending on unnecessary com-ponents. Modularization eliminates waste while providing scalability that the static structure of a permanent or semi-permanent compression station simply cannot deliver.

While the concept of modularization is not

new, a tidal change in the natural gas industry has taken place in recent years. No longer perceived as temporary or inadequate for full-scale production, modularization combined with the plug-and-play model is becoming an industry standard. The plug-and-play model offers companies limitless customization to provide what they need when they need it. Modules may be quickly and easily added as necessary, or removed to reduce costs on unneeded or unused equipment. Thus, the structure keeps pace with production needs, while efficiently managing structure costs. It makes good economic sense.

Shale plays are more popular and populated than ever. However, each shale region has a specific lifecycle and viability. When a site is tapped, remediating and cleaning the area is expensive. But by using modular equipment, companies may reduce the cost and time needed for cleanup. The plug-and-play modu-lar structures allow companies to pull out of these shale plays more quickly and remediate the location without significant cost.

The industry has been using modular design internationally for years, and it is exciting to see the concept become more accepted domestically. We have found mod-ular design works very well in remote areas with harsh climates, such as the Northeast in the dead of winter. Prebuilt modular designs can be installed in days instead of weeks, increasing efficiency, saving costs and providing a sound design solution.

Pre-fabricated structures are already the norm for offshore construction; the historic build-on-site model is becoming antiquated and is highly dependent on a number of vari-ables. As industry experts know, coming in on-time and on-budget is contingent on controlling variables. Thanks to 3-D modeling and fabrica-tion of modular equipment in a manufacturing facility, the variables of atmosphere, personnel and resources may be overseen and better controlled. Model and testing ensure that a high-quality and functional product is delivered to the site. This process results in the delivery of build stations and piping that are functional, efficient and highly mobile.

P&GJ: What are your thoughts on emission issues, specifically, how more strict regulations challenge compression operators and manufacturers?

Paris: There can be no denying that reduced emissions should be required from sources where the technology is readily avail-able and economically feasible. However, too often the rules initially proposed are simply too onerous for the industry and impose an unfair burden. They may not even be practi-cal for how equipment is actually operated. Sometimes where controls are available, the economic trade-off for implementation is too great, or creates other consequences not antic-ipated by regulators.

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This is where industry involvement in the regulatory process is critical: When rules are proposed for a given industry, those affected should comment on the draft rules, whether through the company or industry trade groups. Bringing new facts, econom-ics and operating scenarios to the table with the regulators will often result in some changes before rules become final.

For example, the Environmental Protection Agency (EPA) rules through Subpart ZZZZ of its National Emission Standards for Hazardous Air Pollutants (NESHAP) for stationary reciprocating internal combustion engines regulation requires more manpower for recordkeeping, reporting and equipment maintenance. This results in a pretty signifi-cant increase in operating costs just by virtue of the sheer number of engines out there. Most would say this hurts the industry.

To facilitate compliance, each company’s environmental and operations group must com-municate closely to ensure they have an accu-rate inventory of engines and their locations. Where catalysts are required, it’s also important to talk to vendors to ensure their products are in compliance. Similarly, if an engine is a rental, companies must make sure they do their due-diligence to ensure it complies.

The most obvious benefits to these regula-tions are the reduced emissions from engines that may not otherwise require controls, which in turn preserve or improve local air quality. As I mentioned, challenges include keeping track of all of the testing, recordkeeping and reporting that is required to comply with the new rules. While companies already do this for other equipment, these rules can add another layer of “compliance burden.”

Our industry works very hard – both indi-vidually and in various work groups – to pro-vide significant input on any new rule that’s pending, and the EPA really listens to many of these comments, and amends the rules accord-ingly. I think this shows how the regulators and industry can work together successfully for a common cause, and should encourage participation in regulatory negotiations.

P&GJ: Are manufacturers able to keep up with increased demand as natural gas usage continues to increase? What are the challenges involved?

Paris: Manufacturers are able to keep up with demand providing that our custom-ers are able to help us plan and “level load” our facilities. Where the manufacturing supply chain gets squeezed is when custom-

ers have to wait until late in a project cycle to place firm orders, thus requiring quick delivery. Often this strains available trained manpower and shop space, as well as sourc-ing of major components such as engines, exchangers and compressor frames.

P&GJ: What new products and services will have an impact on the industry and why?

Paris: Speed to market has always been the pivotal driving factor for natural gas compression manufacturers; however, it is of even greater importance in today’s competi-tive landscape and current market conditions. The industry continues to see more and more manufacturing companies begin to offer pre-designed and pre-engineered products to meet customers’ demand for speed and efficiency.

Valerus, for example, has developed configurable gas compression packages that are available for delivery in only four weeks, assembled in the industry’s only ISO 9001-certified packaging facility. Customers are seeking solutions to bring their gas stream to market faster, and are demanding products that meet their production needs with configuration flexibility, superior per-formance and rapid delivery. P&GJ

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t the first-of-its-kind Distribution Contractors

Association/American Gas Association (DCA/AGA) Utility Contractor Workshop in Chicago, present-ers and attendees were single-minded in their focus on one goal: to ensure the grow-ing contractor work-force has the requisite knowledge to safely build the nation’s gas distribution infrastruc-ture while expanding the contractor workforce to meet the needs of utility main replacement and expansion programs.

With plans at many utilities to accelerate programs aimed at replacing aging pipeline systems, meeting this goal is more impor-tant than ever.

Going forward, operators will need to ensure that the increasing number of contractors who work for them are thoroughly trained, as the number of pipeline infrastructure replacement projects continues to grow over the next two decades. Utilities are looking to replace leak-prone pipe and regulators would like to see this happen at a quicker pace – but both have safety as a top priority and understand that training is essential.

Regulators across the country, in fact, are paying particular atten-tion to the proficiency and competency of the industry’s contractor-supported workforce and now have higher expectations for opera-tors when it comes to workforce qualifications.

Bob Wilson, director, pipeline safety compliance strategy at National Grid, said there has been a paradigm shift of behavior in the industry – from reacting to regulator concerns to proactively training crews in fundamental construction practices and procedures. More and more seasoned workers are retiring, too, adding even greater urgency to the need to transfer knowledge to a new workforce.

“It’s a huge challenge for the industry,” Wilson said. “National Grid [the largest distributor of natural gas in the Northeast] is one of the largest players in the U.S. and it’s an enormous challenge for us, especially when you consider the number of people we’ll be looking to replace and the assets we’re looking to enhance.”

Because the Northeast states have older pipeline systems than the national average, there is a pressing need in that region for utili-ties to replace older components. For its part, National Grid, with a distribution system in Massachusetts alone that comprises over 11,000 miles of main, plans to replace over 3,600 miles of pipe in the next 20 years.

According to Wilson, regulators in the states in which National Grid operates, while pleased to hear about the utility’s infrastruc-ture replacement plans, have expressed concern about ensuring that

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The tablet-learning tool makes National Grid’s procedures available as a quick reference for crews in the field.

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52 | Pipeline & Gas Journal • September 2015

qualified people would be performing the work, knowing that it takes time to properly train new employees.

Regional CollaborativeRecognizing the expanding need to ensure the qualifications

of an emerging workforce, National Grid leveraged its long-term relationship with Gas Technology Institute (GTI) a research, development, and training organization serving natural gas industry stakeholders – to take the first steps in developing a standardized training program for contractors in the Northeast.

“We were looking to develop a consistent set of modules cov-ering basic construction principles that we could provide to our contractor workforce,” said Wilson. “GTI is highly skilled and very knowledgeable. I consider them to be the go-to technical resource for the industry.”

The background knowledge offered in GTI’s training modules supports the Northeast Gas Association’s (NGA) operator qualifica-tion (OQ) program, which is used by the majority of operators in the Northeast, so it made sense for the organizations to work together in developing a contractor version of GTI’s course content.

A series of workshops were held to review the core GTI material and to develop a course that would cover basic construction principles applicable to contractors serving operators in the Northeast, and spe-cific enough to address National Grid’s construction practices.

Feeney Brothers Excavation, LLC, one of National Grid’s contractors from Boston, played a key role in defining, creating and refining the material, as well as providing critical support in development of a tablet application.

Throughout the course development process, the group kept four key objectives in mind: n Course content should be a standardized, consistent presenta-

tion of basic construction skills for contractors. n When delivered, the approach should also be consistent, always

balancing the learning experience by employing both hands-on and classroom training.

n Students should have opportunities to learn about operator-specific procedures which contain company-specific require-ments in addition to the basic skills content.

n A quality assurance (QA)/quality control (QC) component should be in place to ensure the program is always delivered in the manner in which it was designed.

Following the workshops, the group launched a pilot test of the course with participants from Feeney Brothers.

Pilot CourseThe 40-hour course that came out of the development process

comprised 26 modules covering construction, corrosion control, pipeline installation, pipe joining, pipeline operations and mainte-nance and emergency preparedness.

Developed by a team of industry veterans and reviewed by sub-ject matter experts, the course content is based on the typical work a contractor performs. It is specific enough to ensure safety, quality and efficiency, and covers the fundamental steps of each process including relevant OQ-covered tasks. PowerPoint presentations and videos are combined with hands-on activities and supplemented with knowledge assessments.

An innovative feature of the course has proved to be the tablet-learn-ing tool, which is designed to include National Grid’s work methods, specifications and procedures, as well as instructional videos of essen-tial construction procedures such as the fusion of polyethylene pipe.

Wilson said the tablet tool is a key component of the program.“Because of the nature of differences in infrastructure, proce-

dures may be different from operator to operator,” he said. “Yet, when contractors are in the field, they must follow company-spe-cific operating procedures or risk regulatory violation. The tablet-learning tool was developed to help students understand where and

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when National Grid’s procedures are more specific than the core principles and to serve as a quick reference for crews in the field.”

Vanessa O’Neil, training program manager at GTI, led develop-ment of the training modules, guided the design of the learning experience and served as an independent observer during the pilot. She said the tablet proved to be an invaluable tool for integrating company-specific procedures into the classroom sessions.

“Instructors used two screens, one for the training module and the other for the tablet,” she said. “That way, students can practice the procedure following National Grid guidelines.”

Because crews are often working in areas without cellular connectivity, the tablet offers critical portability and flexibility. The National Grid application is stored locally on the tablet, providing workers immediate, on-the-spot access to procedures and work methods.

Feeney Brothers, a utility contractor that has worked with National Grid on many projects, agreed to lead the pilot classes during the first week of April 2014. After completing a “train-the-trainers” program, designed to ensure consistency in program deliv-ery, knowledge, intended use of the program and integration with the field tablet, GTI certified the trainers. Ready-to-use training materials and a leader’s guide with talking points and step-by-step guidelines for activities and discussions were also provided.

Following this preparation, several full-time Feeney Brothers instructors led classes at the company’s training center in Dorchester, MA. About 35 students, mostly new hires, attended the pilot sessions.

“Our goal was to create a dynamic learning environment,” Wilson said. “Students were continually engaged, moving throughout the facility from hands-on demonstrations of procedures to classroom presentations. It was a good mix of learning activities.”

Regulators from the state also sat in for the pilot sessions.NGA’s vision is for all of its member companies to have access

to the GTI training program to help prepare contractor employees.

GTI as an Industry ResourceGTI has served as a resource for the natural gas industry for

decades, having trained more than 65,000 participants since opening its doors in 1941. Since 1996, GTI’s Registered Gas Distribution Professional (RGDP) certification program has provided a thorough grounding in the theory and practice of gas distribution engineering, operations and auxiliary systems to hundreds of energy professionals.

Upcoming courses for transmission and distribution compa-nies held at classrooms in downtown Chicago include:

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28-Oct. 2 n Pipeline Safety Regulatory Compliance, Oct. 26-30 n

“Ideally, operators and contractors will conduct classroom training during the winter months when crews are hiring and training and getting everyone ready for spring,” O’Neil said. “In addition to managing their OQ Program, NGA’s new role will be to visit the contractor-training sessions to ensure they’re maintain-ing high standards – that they’re following the agenda, delivering the content as intended, maintaining a good balance of hands-on and classroom experiences, and engaging students.”

After The PilotAfter a series of workshops held throughout the Northeast in

2014, the new contractor-training program was unveiled to a group of National Grid contractors in December.

“We described what worked and the recommendations made by the regulators who had attended the sessions,” Wilson said. “We also put everyone on notice that we were moving toward adopting the program as a standard way of ensuring that National Grid has the highest quality workforce in place.”

Since completion of the workshops, Wilson said 30% of its contractors signed up for the program and now have access to the modules and the tablet device.

Moving forward, GTI will review and update the field skills training program each year, based on code rule change, technol-ogy advances, or a change in industry standard construction prac-tices. The learning tablet will be updated more frequently, based on changes to National Grid’s operating procedures.

Since the initial pilot, Wilson and the GTI staff have been on the road, spreading the word about the contractor program at the NGA Contractor Workshop, as well as the DCA/AGA conference.

Most recently, at the NGA Spring Operations Conference in Stamford, CT, Wilson told a packed room about the successful partnership of NGA, National Grid and GTI. Judging by the enthu-siastic response from the audience, contractors across the country will soon be establishing content-licensing agreements with GTI for the 26 standardized contractor modules.

GTI Training ProgramsRecently, GTI revamped its 77-module Natural Gas Field

Skills Training Program, a prepackaged program available for licensing to utilities to prepare internal workforces for safety and regulatory requirements. The 26-module contractor-version of the program, which was used in the April 2014 pilot, is also available for licensing.

“Our plan is to work closely with utilities to help them provide their contractors with consistent, formalized procedures that meet their specific objectives,” O’Neil said.

For further information, visit gastechnology.org/training or con-tact Vanessa O’Neil at (847) 768-0560, vanessa.oneil@gastechnol-ogy.org. P&GJ

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esearch development organiza-tion Pipeline Research Council International (PRCI) official-ly opened its new Technology Development Center at a ribbon-cut-

ting ceremony and tour on July 15 in Houston.“We want you to think of this place as

yours,” PRCI President Cliff Johnson told attendees, many of whom represented pipe-line and service companies. “How would you use this space?”

Ground for the 30,000-square-foot facil-ity was broken on July 7, 2014 on a 10-acre campus in northwest Houston with about half of the area earmarked for a state-of-the-art pull-test facility.

PRCI, which established a pipeline repos-itory in 2012, has built an inventory of over 600 specimens to support technology devel-opment through testing at its previous site, also in Houston. Among the new equipment at the facility is a 23,000-pound forklift and a lifting device dubbed “the million dollar wench,” which can pull over 5,000 pounds at a rate of 5 meters per second.

PRCI found itself in need of more space in recent years in order to be more responsive to industry needs, Johnson said. The new center includes 20,000 square feet of workshop and test facilities along with 9,000 square feet of office and meeting space.

The $10 million center is the result of a major commitment by the oil and gas pipeline industry to provide an indepen-dent third-party site to fully understand the capabilities of current tools and to guide the development of the new technologies need-ed to push toward industry goal, he said.

Past-President Eric Amundsen told the gath-ering that doing research is just part of the job.

“If we’re not sharing the research, we’re not doing our job,” he said. “This is the information hub.” P&GJ

PRCI Welcomes Pipeline Community to Tech Development CenterA Pipeline & Gas Journal Staff Report

R

Cliff Johnson, PRCI president, along with Eric Amundsen, past

president, cuts the ceremonial ribbon.

Guests at the opening look at exhibits.

Some of the pipe available for testing at the facility, located in

northwest Houston.

56 | Pipeline & Gas Journal • September 2015

s Mark Miller, a senior oil and natural gas executive with years of experience, was address-ing a Baker Hostetler Shale Symposium in Houston in mid-

2015 he could not resist the opportunity to talk about a favorite subject, “the transfer of knowledge to the next generation of work-ers” in the industry and an industry-backed program in Houston schools. It involves early energy education for high school students.

“It allows young people to learn a career as early as the ninth grade,” Miller told a group of mostly young professionals at the shale symposium. “They’re learning about geosciences, engineering, land applications

Building a Career Pipeline: New Generation of Industry Talent AwaitsBy Richard Nemec, Contributing Editor

A

Senior advisors to the Young Pipeline Professionals include, from left, Garry Matocha- Spectra Energy; Patrick Vieth-Dynamic Risk USA; Mike McGonagill-Alliance Pipeline; Steve Koetting-ExxonMobil Pipeline, and Chris Yoxall-Rosen.

www.pgjonline.com | 57

and geophysics. Think back how much fur-ther ahead you would be if you had a chance in ninth grade to be exposed to the careers you’re involved in now.”

As president of Louisiana-based Merlin Oil & Gas and vice chairman of the Independent Petroleum Association of America (IPAA), Miller credited IPAA with starting a decade ago to address the now more imminent challenge of ensuring the next generation of engineering and techni-cal talent in the energy industry through what is now called The Petroleum Academy in the Houston schools.

“If you’re 15 years old, and that fire is lit inside of you, then you can enter college knowing exactly what you want to do. These kids are starting younger and they’re getting it,” said Miller, calling the effort “an amaz-ing success story” made possible by various companies providing money and site visits.

What Miller and other experienced ener-gy industry leaders are saying and reflect-ing is the profoundly different businesses that oil, gas and pipelines are today, 16 years into the 21st century. A lot of the guesswork and gambling is gone and it’s a lot like 20th century manufacturing. The influences on the developing intelligentsia making the sector go are no longer found in silos embedded in global companies, but in horizontal networking with stakeholders,

operators, regulators and interest groups.The approach in Houston is just one

initiative addressing where the talent will come from to replace a graying workforce that is projected to have hundreds of thou-sands of new jobs by 2030. It is a conun-drum facing both the private and public sectors worldwide, particularly in North America. Efforts in California and Canada, as well as Houston, recognize the challenge and are addressing it.

A recent Harvard/Boston Consulting Group (BCG) economic treatise found unconventional energy development will be a critical piece of the future U.S. economy,

contributing $430 billion and 2.7 million jobs in 2014. The report called unconven-tional gas and oil resources [shale and tight oil/gas] “the single largest opportunity to improve the trajectory of the U.S. economy.”

“Today, this industry has moved from an environment of exploration/production into one more closely aligned with manufactur-ing,” said Mike McGonagill, retired COO from Alliance Pipeline, whose father and grandfather worked in oil and gas in New Mexico. “That’s the downhole side. Due to the decades of drilling and mapping they know where the reservoirs are and now it’s pure manufacturing, efficiencies of scale,

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scalability, requiring up-down adjustments as we experience in shale plays today. It is very similar to the supply/demand econom-ics of any commodity.”

That, in turn, is changing the pipe-line industry as it “repipes” America for this new economic environment, McGonagill said.

The Harvard/BCG report, which exam-ined energy broadly, including renewables and efficiency programs, said general pub-lic support for the energy sector is lacking, and listed 11 goals for fully developing U.S. potential, including “timely develop-ment of new infrastructure” and “deliver-ing a skilled workforce.” This and other analyses envision 25-50% of the workforce leaving by 2020.

Globally, the London-based World Energy Council established the Future Energy Leaders Programme as its platform for “engaging the best and brightest of young professionals” with the specific aim of helping create a crucible for shaping the next generation of energy industry leaders. Members of the group share a commitment to shaping the global energy future.

McGonagill said it’s been widely rec-ognized that a body of young profession-als was needed in the U.S. industry. “To our surprise, young, self-motivated pro-fessional groups have sprung up on both sides of the U.S.-Canadian border” with the Young Pipeline Professionals (YPP) grow-ing wings this year in the U.S. and a more mature 3-year-old group, Young Pipeliners Association of Canada (YPAC), he said.

YPP has had the double benefit of learning from its peer group at YPAC and from seasoned industry professionals such as McGonagill and Patrick Vieth, Dynamic Risk’s senior executive for tech-nical services.

“This effort has been championed through the American Society of Mechanical Engineers [ASME] at a national and inter-national level by Vieth, who is part of ASME’s senior leadership team,” said McGonagill, adding that Vieth’s leadership and encouragement of YPP has been a key. Meanwhile, the public sector is feeling the drumbeat, too. California has recognized a need for a special program aimed at long-term recruitment and retention of oil and gas technical expertise.

“We’re looking to call it a ‘career pipeline’ in keeping with our theme of oil/gas regula-tion,” said a spokesperson in the California Department of Conservation’s Division of Oil, Gas and Geothermal Resources (DOGGR). There has been unprecedented growth with the advent of hydraulic fractur-ing rules and climate change-driven regula-tions that are straining the state unit’s ability to keep up with enough skilled staff.

Being proactive in professional recruit-ment and development is a relatively new

phenomenon for the state agency, said Jason Marshall, the conservation department’s acting director.

“We’re talking to trade journals and let-ting people know in the industry that the state of California is hiring. We want to drive candidates toward us, and if they come, we’ll help them through the process. Now a candidate can take the required state qualifying examination online and see how well he or she scores,” Marshall said.

Scoring big time is part of the motivation for the networking and professional devel-opment objectives at YPP and YPAC. One of four bullet points in the stated “purposes/vision” for YPP is identified as “Be awe-some!” The other three talk about educating young professionals, creating leadership opportunities and networks for them and the betterment of the industry overall.

Lofty sounding … energetic … enthu-siastic. This pretty much describes Molly Laughlin, Tara Podnar McMahan, Colin McGonagill and Cassandra Stacey, four of the young professionals in the industry who have helped shape YPP as a budding organi-zation expected to flower by the end of 2015.

Using the older YPAC organization in Alberta as a model, the founding YPP members have coalesced with some experienced mentoring senior advisors, such as Vieth, whose Dynamic Risk is one of the leading integrity management providers in North America, and Colin McGonagill’s father, Mike, the retired Alliance Pipeline executive.

Emphasizing the need to retain the knowl-edge and experience of the pipeline indus-try’s most senior personnel, McMahan, an integrity solutions leader at Det Norske Veritas (USA) and head of YPP, said the successors to today’s pipeline technical experts must be prepared and equipped “to accept the ‘duty of care’ for the pipeline industry, which includes care for the envi-ronment, the public, the industry’s assets and care for one another.”

The gumbo this has produced includes a new U.S. organization for young pro-fessionals in the industry that counted hundreds of prospective members and over a dozen chapters waiting to spring forth after July’s meeting of the Southern Gas Association (SGA) in Nashville. Involving nearly two dozen working groups, the initial YPP board worked for six months “to get all our ducks in a row and avoid getting overwhelmed,” said Laughlin, who is marketing manager for Clock Spring, a Houston-based manufacturer of composite pipeline repair solutions.

Reflecting on his 2014 chairmanship of the International Pipeline Conference, Vieth recalled being inspired by a presen-tation on YPAC which motivated him to help create a similar organization in the U.S. He wants to see YPP develop relation-

ships across the industry with major estab-lished groups such as the SGA, ASME, Pipeline Research Council International (PRCI), National Association of Corrosion Engineers (NACE), American Petroleum Institute (API) and Interstate Natural Gas Association of America (INGAA).

“It’s my hope that YPP USA meets its mission so that the young pipeliners of today are prepared to accept the transfer of the duty of care for the pipeline industry so that today’s industry leaders can retire with full confidence in their successors that they have the knowledge, confidence and net-works to meet any challenge they may face in the future,” said Tara Podnar McMahan.

Noting their colleagues at YPAC were instrumental in helping shape YPP, Laughlin said the Canadian young professionals, now a 780-member organization, offered “advice on how they got started and what we needed to do early on. Overall, I think we comple-ment each other very well.”

Two of YPAC’s founding members and leaders, Alina Gabdrakhmanova, a Russian/Australian-educated, Calgary-based engi-neer with Worley Parsons, and Peter Tanchak, a Canadian-born engineer work-ing with Enbridge Pipelines, were previous-ly coworkers at Worley, and view alliances and networking as keys to their professional and career growth.

Like YPP, the Canadian group owes its success to a dedicated group of senior advisors from the industry, and particularly the leadership and vision of Daryl Ronsky, a vice president at The Rosen Group in Canada. “Without his efforts, YPAC might not exist,” said Gabdrakhmanova.

This summer Gabdrakhmanova was focused on being a project engineer on a team planning the proposed 560-mile Prince Rupert Gas Transmission Pipeline in northern British Columbia, while Tanchak, who previously had worked on pipeline/LNG proposals in Alaska, was helping Enbridge analyze how new pipelines could best be integrated in the company’s existing network over the next 10 years.

The Canadians see young engineers and other technical professionals moving from one company to another rather easily and frequently in today’s industry.

“Companies need to make more efforts to retain their professional employees,” said Gabdrakhmanova. “They need to ensure the young professionals are interested and chal-lenged in their jobs.”

While YPAC President Gabdrakhmanova called the impending retirement of techni-cal talent in the industry a “silver tsunami,” Tanchak, YPAC vice president, said not all of the graying engineers are leaving at once, and some individual companies are establishing six-month, post-retirement work assignments for the veterans to return and allow young professionals to “shad-

www.pgjonline.com | 59

ow” them for a few months at a time. Tanchak represents YPAC’s efforts with the Canadian Energy Pipeline Association (CEPA) Foundation to establish joint men-toring programs.

Cassandra Stacey, YPP’s treasurer and an operations engineer with Hilcorp Energy Co.’s midstream unit, Harvest Pipeline, received a lead for her latest job after golf-ing in The Woodlands with the president of the company. She was brought into YPP through Vieth, who encouraged her and others such as McMahan to join the new organization’s planning process.

“YPP’s main goals relate to networking and training, and bridging the generational gap which Patrick began talking about, and I was completely onboard,” said Stacey, who manages daily operations on privately held Harvest pipelines along the Texas Gulf Coast, including carrying responsibility for integrity management programs.

“I really want to develop a tight network, so for things beyond my expertise I can have others to turn to,” she said. “In metallurgy, for example, which isn’t a strong suit of mine, I want to be able to trust that another person can tell me what I need to know.”

While the U.S. young professionals spent the first half of 2015 on mostly organizational activities, creating an iden-

tity and structure, senior advisors like Vieth and Mike McGonagill are over-joyed by the YPP theme, which aims to prepare its members to accept the widely recognized “duty of care” for the pipeline industry. That duty is taken seriously throughout the ranks of the American pipeliners at all levels and skill sets.

“That is so powerful, it is exactly what they need to do,” said McGonagill, whose son, Colin, is a YPP vice president and an engineer with QStar LLC. “For the industry to thrive and grow there must be a new generation of leaders that will assume that duty of care,” he said, adding that the future industry will be nothing like the one he entered 40 years ago. He equates pipeliners’ obligation of caring to that of the oath of an airline pilot for passengers’ safety.

“Within this organization, I can tell you, there are the future John Kiefners of this world,” he said, referring to the well-known pipeline integrity technical expert. “We just don’t know who they are yet. They will nominate themselves in time. At least that’s what we hope for.”

YPP’s preamble to its organizing docu-ment describes the need for “technical net-working with peers and industry leaders,” education through technical presentations and site visits, and the chance to develop

“professional friendships.”Vieth said time is short for “ensuring that

we capitalize on transitioning the knowl-edge and experience from those leaving the industry to the young professionals.” He notes that “a disproportionately smaller portion” of the pipeline industry expertise is residing with those having 25 or fewer years of experience, many with five or less years. In other words, those approaching retirement may be less than 25% of the workforce, but represent about 75% of col-lective industry expertise.

What YPP, YPAC and other groups high-light is the essential need for “continuous learning and professional development, and also the responsibility that [young pro-fessionals] will undertake in progressing through their careers,” Vieth said. “I hope YPP provides an opportunity for the young professionals to develop leadership skills; these are just as important as learning how to manage and learning various technical aspects of our business.”

Colin McGonagill, the fourth-generation oil and gas worker whose great-grandfather he calls the original “fracker” because his job as a “shooter” involved placing nitro-glycerin down the holes of drilling jobs, came to the YPP planning meeting last March at his father’s urging and ended up

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writing its governance documents. For someone who earned a mechani-

cal engineering degree from Purdue University less than six years ago and has a lifetime commitment to not follow in his father’s footsteps in the oil and gas space, McGonagill has amassed a variety of expe-riences in geothermal energy, waste heat recovery and with TAS Energy, a global innovator in packaged chilling and waste heat/geothermal energy solutions for utility and nonutility customers.

The TAS job brought him to Houston and then to ConocoPhillips as a project manager in the Eagle Ford play but the oil price crash eventually led to a layoff. Since April, he has been with the QStar startup that is bus-ily buying up assets in the Permian, East Texas and New Mexico basins, backed by a $150 million commitment from Dallas-based EnCap Flatrock Midstream.

When he was talking to P&GJ, McGonagill was assembling a presentation to his young company’s board.

“From a professional development per-spective, I love what I am doing now,” he said. “It gives me a lot of exposure to more experiences which is good for me because I like organic experiences; I’ve never been the type who does well in a classroom.”

Vieth is confident the industry can attract, develop and retain technical professionals, but warns that it will require “a continued focus and investment.” He doesn’t think past approaches necessarily work anymore. Instead, he sees YPP becoming a corner-stone for developing innovative ways for young professionals to define their own professional development.

“One of the biggest differences compared to 25 years ago is the influence from all stakeholders, operators, regulators, special interest groups and the general public,” Vieth said. “While the technical standards and tech-nologies used across the pipeline industry have advanced, there is a growing demand to communicate and defend [to the media and general public] the technical rigor in order to maintain the social license to operate.”

Collaboration is the key, said Mike McGonagill, his son, Vieth and others involved in YPP and YPAC. Today’s young professionals believe strongly in horizontal communications among peers.

“This is the Facebook stuff where they are communicating sideways all the times,” said the senior McGonagill. “My generation was very linear, up and down; the young professionals today are very horizontal.

“The new world that the industry is going into must have a level of collaboration like that. With many major pipelines over 50 years old in an environment of zero inci-dents, in a period of much closer govern-ment oversight, they are going to need each other, and that’s what I hope for.”P&GJ

Richard Nemec is P&GJ’s Los Angeles-based contributing editor. He can be reached at: rnemec@ca.rr.com.

www.pgjonline.com | 61

outhern Company and AGL Resources announced on Aug. 24 that the boards of directors of both Atlanta-based companies have approved a definitive merger agreement to create

one of America’s largest U.S. electric and gas utility companies. AGL will become a wholly owned subsidiary of Southern in a transaction valued at $12 billion.

“Natural gas will play a greater and great-er role in primary energy needs,” Southern’s Chairman, President and CEO Thomas A. Fanning told investors and analysts on a conference call. “Driving this deal are growth opportunities.”

AGL distributes natural gas to 4.5 million customers in Georgia, Illinois, Virginia, New Jersey, Florida, Tennessee and Maryland. Southern owns utilities in Georgia, Alabama, Florida and Mississippi and services about 4.4 electric customers. The deal’s significance is that it supports Southern’s shift away from coal.

AGL shareholders will receive $66 in cash for each share of AGL common stock, a premium of 36.3%.

A joint news release stated that when completed, the combination will better posi-tion the companies to provide necessary natural gas infrastructure to meet custom-ers’ growing energy needs, and will create the second-largest utility company in the U.S. by customer base with: n Eleven regulated electric and natural

gas distribution companies providing service to nearly 9 million customers with a projected regulated rate base of $50 billion;

n Operations of nearly 200,000 miles of electric transmission and distribution lines and over 80,000 miles of gas pipelines; and

n Generating capacity of 46,000 megawatts.“We believe the addition of AGL Resources

to our business will better position Southern Company to play offense in supporting America’s energy future through additional natural gas infrastructure,” said Fanning.

“For some time we have expressed our desire to explore opportunities to participate in natural gas infrastructure development. With AGL Resources’ experienced team operating premier natural gas utilities and their invest-ments in several major infrastructure projects, this is a natural fit for both companies.

“We believe this combination will also advance our customer-focused busi-ness model. AGL Resources and Southern

Company have long been leading corporate citizens and the combined company will further our support of all of the communi-ties we serve,” Fanning added.

“AGL Resources’ management team and board of directors wholeheartedly support this transaction, and we believe it will provide new opportunities and enhanced value for our shareholders, customers and employees. The purchase price is reflective of the strong platform for growth that we have diligently cultivated over the past sev-eral years, and accelerates value recognition for these efforts,” said AGL Chairman and CEO John W. Somerhalder, II.

Somerhalder also said, “We’ve found a strong partner in Southern Company with its complementary businesses, excellent reputation and shared values. They have committed to continuing our tradition of community and philanthropic support and exceptional service to customers.” n For investors it will create a unique

platform well-positioned to compete for growth across the energy value chain;

n For customers it will strengthen reli-ability and improve current and future energy infrastructure development; and

n For communities it will provide for expansion of the companies’ customer-focused business models.

After closing, AGL will keep its own management team and board of directors, and, as is the case with Southern’s other operating subsidiaries, AGL will retain its own corporate headquarters in Atlanta. Customers will continue to be served by their current gas and electric utility com-panies. Completion of the transaction is expected in the second half of 2016.

The deal makes Southern a major player in the quickly evolving East Coast natu-ral gas market, stretching from Florida to New Jersey. The market for inexpensive and plentiful natural gas continues surging while demand for electricity shows little movement, coal plants are in decline and nuclear power shows little promise.

News reports said Southern has struggled in recent years with other energy invest-ments, including coal- and nuclear-powered generation projects. Delays and cost over-runs have curtailed its efforts at build-ing new reactors in Georgia, as well as a first-of-its-kind clean-coal power plant in Mississippi. Southern has tried to get regu-lators to agree to rate hikes in certain areas to help cover soaring costs, but with limited

success, according to Bloomberg.Southern’s bid for AGL expands its ros-

ter of customers and bolsters its ability to buy low-cost natural gas to supply its own power plants. The number of coal-fired power plants is widely expected to decline because of tougher air pollution regulations which aim to limit carbon emissions from power plants. Since no new coal plants are likely to be built, and nuclear power has largely fallen out of favor owing to the huge cost of construction, utilities like Southern are increasingly turning to natural-gas-fired power plants to supply energy needs.

Southern operates 73 power plants and has retail customers in Georgia, Alabama, Mississippi and Florida. Last year the com-pany’s power-plant portfolio was 40% coal-powered, 40% gas, 16% nuclear and 4% renewable sources, according to its annual report. By 2020, company management hopes as much as 55% of its electricity will be generated from gas if prices stay low, while coal would be reduced to 21%. Southern is expected to use about 1.8 Bcf/d in 2015, an increase of over 20% in the past three years. The combined company’s gas usage will grow to about 4 Bcf/d.

In addition to its large base of natural gas customers, AGL serves additional cli-ents through a joint venture called SouthStar Energy Services. AGL also operates several gas storage plants and is developing gas pipe-line projects. One project is the Atlantic Coast pipeline, a joint venture with Southern rivals Duke Energy Inc. and Dominion Resources.

AGL and Piedmont Natural Gas have joined with Duke and Dominion to build a $5 billion, 550-mile natural gas pipeline that will stretch from West Virginia to Virginia and North Carolina. Dominion and Duke along with NextEra Energy Inc and DTE Energy Co. have also formed joint ventures to build pipelines for natural gas.

Adding a growing gas utility business with increasing revenue could help Southern offset problems from two costly projects. Expenses have skyrocketed at Southern’s Georgia Power utility, which is building nuclear power reactors in Waynesboro, GA.

In Mississippi, Southern’s Kemper clean-coal project is turning into one of the most expensive fossil fuel plants ever built in the U.S. as the company has had to write down billions of dollars’ worth of charges. Regulators have to decide whether Southern’s shareholders or its customers will have to pay future bills. P&GJ

Southern Company to Acquire AGL Resources for $12 BillionA Pipeline & Gas Journal Staff Report

S

62 | Pipeline & Gas Journal • September 2015

istorically, India has relied on coal to generate power, liquid fuels as feedstock and oil for its trans-port sector. But for environmental reasons India needs to focus on

cleaner fuels. Natural gas has emerged as the fuel of choice for many industries in India owing to its environmental benefits and higher economic efficiency. However, India’s natural gas market is seeing a supply deficit due to its low domestic production.

The demand and supply gap is increas-ing, and there is no reason it will stop. MarketsandMarkets expect that the demand for natural gas will reach about 705 MMscm/d by 2029-30, up from about 260 MMscm/d in 2014-15.

Demand for natural gas has risen signifi-cantly due to demand from the fertilizer and power sector which cumulatively accounted for over 60% of gas consumption in 2014. The demand is also driven by growing usage in the city gas distribution (CGD) sector and industrial sectors such as refin-ing and petrochemicals. Rising concerns on carbon emission have also contributed to the demand for natural gas in the country.

Viability of India’s Gas Pipeline Options

India has been mulling several transna-tional gas pipelines, onshore or offshore — over the past two decades to meet the rising demand of natural gas, mainly from new power generation projects, fertilizer plants, and industrial users. But, till now none of the projects becomes a reality.

Over the years, several routes for gas pipe-lines have been proposed such as the Iran-Pakistan-India (IPI) Pipeline, Oman-India Deep Sea Pipeline and the most talked about Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline. However, all these projects were limited to the drawing board except for TAPI, which made some progress this year. The 1,735-km pipeline will run from Turkmenistan to India via Afghanistan and Pakistan.

The pipeline’s designed capacity is 33 Bcm annually. Investments are estimated at $7 billion. The multibillion-dollar TAPI project could be off to a year-end start, as the legal framework is expected to be in place by September, followed by the announcement of the consortium. However, TAPI pipeline faces an uncertain future with the recent oil price fall, ambiguity regarding

transit via Afghanistan, and an increase in the estimated project cost.

Although energy companies such as Total, Chevron and ExxonMobiI have shown inter-est in financing and running the pipeline project and have been shortlisted for the con-tract, no company or consortium has stepped forward to take the necessary lead to manage the finance, design, construction and opera-tion of the pipeline.

Critically, the oil and gas giants with the capacity to support TAPI have told the Turkmenistan government they will need exploration rights in country’s onshore gas fields, mainly Dauletabad, to make the project economically attractive. Turkmenistan so far will only consent to offshore exploration. This bottleneck has made any deal impossible.

The IPI pipeline was envisaged to link the South Pars gas field in Iran with India via Pakistan. The total length of the proposed pipeline is 2,700 km, costing $7.5 billion (current cost may be much higher) to trans-port 20-100 Bcm/y. Initially, this project was planned to link Iran and Pakistan; India later joined as a partner but withdrew, citing geopolitical and security reasons and the U.S. and EU sanctions on Iran.

Another project is the Oman-India Deep Sea pipeline which South Asia Gas Enterprise (SAGE) and Fox Petroleum claimed to be the most promising option. The project intends to transport over 200 Bcm to India over 20

years. The pipeline would be 1,300 km, laid at a depth of 3,400 meters below the seabed. It will connect the Middle East compression station near Oman with the receiving termi-nal near Gujarat. The estimated cost of this project is $4-5 billion and can be executed in about five years.

Geographically, the Oman-India Pipeline is

comparatively more feasible because India is close to the sources of natural gas in the Middle East and the undersea distance is less than 1,300 km, if connected to Gujarat coast only.

Another reason in favor of this project is the landed cost at Oman Point, which will be lesser by $1.5-2/MMBtu as compared to LNG imports. It should be noted this proj-ect will overcome the security issue of IPI and TAPI projects. However, Oman does not have large gas reserves compared to Iran and Turkmenistan. Oman has 0.7 Tcm of gas reserves with reserves to production ratio of

A Pragmatic Approach to Understand Indian Natural Gas MarketBy Priyank Srivastav, Senior Research Analyst, MarketsandMarkets

H

Sources: Vision 2030, Natural Gas Infrastructure in India and MarketsandMarkets Analysis

www.pgjonline.com | 63

24 years. Hence, it makes no sense to build an infrastructure which will be stranded soon if Iran is not taken into consideration.

It is expected Iran will be freed from almost all economic and financial sanctions within the next six months, and India should kick start the IPI pipeline talk that had been in the doldrums. The IPI pipeline faces a seri-ous problem of security as it passes through an area where the Taliban has a stronghold. The TAPI pipeline faces double the risk as it passes through Afghanistan and Pakistan.

In Afghanistan, the TAPI pipeline passes through Kandahar, which is considered to be the spiritual home of the Taliban. In a nutshell, the TAPI pipeline traversing Afghanistan and Pakistan is riskier than IPI, which has only to cross Pakistan.

TAPI and IPI pipelines are not feasible options due to the aforementioned reasons. The Oman-India Deep Sea pipeline, how-ever, seems a promising alternative, but in reality, it will remain a dream inside a pipe. Since India’s domestic production of natural gas has not been increasing and a cross-border pipeline is not on the cards anytime soon, importing LNG is the only feasible option to meet the rising natural gas demand in the country and an expensive one.

With a delivered price of $12.33/MMBtu, it is not easy for the fertilizer and power sec-tors to absorb such high-priced LNG. We are already in a low-oil price scenario; had it been a high oil price scenario, it would be next to impossible to feed the fertilizer and power sectors with LNG as it is oil-linked. Over the past five years, there has been an increase in LNG imports. India imports about 13.7 mil-lion tons of LNG, which accounts for about 33% of the total supply. Future LNG imports will depend on the expansion program of LNG terminals in India and the international

spot price for LNG. If the gray situation of low domestic gas

production is allowed to continue, India will have no option but to import more LNG as the fuel source for its fertilizer and gas-based power plants. In view of the prevailing situation of gas production and supply and the price-sensitive nature of the fertilizer and power sectors, the government is promulgating gas-price pooling options to meet the sector’s gas shortage.

With the gas pooling mechanism, the price of gas supplied to fertilizer and power plants could settle close to $7.50-9/MMBtu including transportation cost. However, pooling of gas entails multiple risks. With high-priced LNG pooled with low-priced domestic gas, LNG negotiators could enter into unattractive contracts. It would be critical to ensure that this does not become a political issue.

What Does the Future Hold?The cross-border gas pipelines from

Turkmenistan and Iran are essential projects in Pakistan’s energy calculus. In the case of India, the TAPI and IPI pipelines are not realistic alternatives for multiple reasons: Pakistan’s precarious security situation and lack of an agreement that guarantees protec-tion to the supply and alternatives in case of disruption are some of them. Hence, it is not the cross-border pipeline gas but LNG that will play a crucial role in meeting India’s energy demand in the future.

Gas pooling to the extent of domestic gas availability would benefit the fertilizer and power sectors and would also result in saving in subsidy outgo. The gas-pooling mechanism seems to be a worthwhile option for reviving India’s ailing fertilizer and gas-based power sector and can be implemented through collaborative efforts from all stake-

holders. Gas pooling can only serve as a short-term solution for today’s concerns. The need is for more proactive government policies that will make every effort to find ways of attracting more public and private players to the sector and increase the coun-try’s gas production.

Global natural gas markets have already felt some impact from the slide in oil prices. But those markets will be affected to a much greater degree if oil prices remain in the $50-60/bbl range for an extended period of time, given the interaction that exists between the two fuels. LNG capacity will increase by almost 50% by 2020, due to a huge number of LNG trains coming online in Australia and the United States.

LNG prices are expected to remain under pressure, given the increase in supply and decrease in demand. U.S. LNG has an advantage over the other LNG suppliers, since U.S. natural gas prices at $3-4/MMBtu are much lower than gas prices elsewhere. However, transportation cost of U.S. LNG to India is much higher and nullifies some of the advantages. Major LNG suppliers like Qatar and Australia have much lower transportation costs to India.

It is a price war but also a waiting game. Oversupply of LNG in the market and lower prices represent a real challenge to the industry, but that doesn’t mean the future is all gloom. What the future holds for India is the sufficient quantity of LNG from different countries, both the hub and oil-indexed. P&GJ

Author: Priyank Srivastava works as a senior analyst specializing in oil and gas for MarketsandMarkets, a full-service market research and consulting firm. He has written high-level, strategically analyzed full-length reports on issues impacting the oil and gas industry.

64 | Pipeline & Gas Journal • September 2015

atural gas producers regularly have to meter wet gas flow. Separator systems or multiphase wet gas meters are beneficial but the eco-nomic reality of many applications

is that standard gas meters must be used. Hence, understanding the wet gas perfor-mance of gas meters is important.

Wet gas flow is a very adverse flow condi-tion. However, operators want the problem solved and manufacturers want to persuade operators that their meter copes with wet gas. A can do attitude pervades. But in truth wet gas flow seriously degrades all gas meter design performance specifications. In this article we look at the known wet gas perfor-mance of orifice and ultrasonic meters.

Wet Gas Flow TerminologyWet gas metering has specific terminology.

Each wet gas parameter describes a fundamen-tally simple concept. The four most commonly used parameters are explained in Table 1.

Table 1: Wet gas flow parameter simple descriptions.

Orifice Meters, Wet Gas Flow

Figure 1: 8-inch orifice plate with stratified flow.

Years of testing show the orifice meter to have a very reproducible and predict-able wet gas flow performance. Concerns

Orifice and Ultrasonic Meters in Wet Gas Flow ServiceBy Richard Steven and Josh Kinney, CEESI

that the orifice plate may “dam” liquid or cause an unsteady DP signal have proven unfounded.

CEESI videos of wet gas flow through orifice meters show that an orifice plate does not dam liquid. Figure 1 shows a still from video of stratified flow of natural gas and light liquid hydrocarbon flowing left to right through an 8-inch, 0.6 beta orifice plate. No damming was evident during the 30-minute tests.

Without the plate present, a stratified wet gas flow has a liquid depth. With the plate present, this liquid depth showed no significant change over time. Furthermore, it was evident that rather than damming, the stratified liquid rose up through the orifice (Figure 1). This stratified liquid can leave a “tide mark” on the upstream face of a plate, but this is only an indication that stratified flow (of a given liquid depth) approached the plate; it does not mean the plate dammed the liquid.

The CEESI videos showed liquid entrained downstream in the recirculation area. Whereas there has been concern that this could cause DP instability, this has been shown to not be a significant problem. Wet gas increases the DP signal (causing the over-reading) and also increases the DP standard deviation (i.e. fluctuation around the average).

However, although wet gas flow DP has a significantly higher standard deviation than the dry gas flow DPs, massed orifice meter wet gas data sets have shown that the aver-age DP is still repeatable and reproducible. Stability of the DP and liquid damming is not a problem for orifice meters in wet gas flow service.

ISO TR 115831 and ISO TR 127482 show an orifice meter wet gas flow correction fac-tor. This correction factor effectively says:

Figure 2 reproduces massed industry data obtained over 20 years from multiple laboratories. Table 2 shows the data range. The data is remarkably reproducible and therefore predictable. The orifice meter can over-read the gas flow rate across the wet gas range (XLM ≤ 0.3) by up to 45%. For known “wetness” the ISO correction cor-

rects the gas flow rate prediction to 2% uncertainty at 95% confidence.

Figure 2: Massed 2- to 4-inch orifice meter wet gas data with and without the ISO correlaton.

Table 2: ISO TR12748 multiphase wet gas flow orifice meter correlation flow range.

This ISO gas meter wet gas correction factor is the most comprehensive yet pro-duced. The Achilles heel, as with all gas meter wet gas correction factors, is the requirement for the liquid flow rate to be found from an external source.

This is a real practical problem, but it is the reality of using any gas meter for wet gas service. There are ways of estimating the liquid flow rate, e.g. tracer dilution and test-separator histories, but these methods

Parameter Symbol Description

Lockhart Martinelli Parameter

XLMNon-dimensional measure of the ‘wetness’

Gas to Liquid Density Ratio

DRNon-dimensional measure of pressure

Gas Densiometric Froude No.

FrgNon-dimensional measure of gas flow rate

Over Reading %

OR%Gas flow pre-diction error induced by liquid

N

Parameter Range Practical Comments

Pressure 6.7 to 78.9 bara i.e. applicable for > 100 psi

DR i.e. across normal industry velocities

i.e. applicable for > 100 psi

Frg 0.22 < Frg < 7.25

i.e. across normal industry velocities

XLM 0 ≤ XLM < 0.5

i.e. across a very large wetness range

Diameter 1.94'' ≤ D ≤ 4.026'' i.e. limited meter size

Beta 0.341 ≤ ß ≤ 0.683 i.e. wide beta range

Fluids Gas /Hydrocarbon Liquid/ Water

i.e. across normal industry fluids

www.pgjonline.com | 65

are only truly valid at the time of the mea-surement. Liquid flow can change between checks and therefore gas meter liquid load-ing monitoring systems are desirable.

Prognosis (Lewis3) is a simple and effec-tive proprietary orifice meter diagnostic/liquid-loading monitoring system. Figure 3 shows the Prognosis setup. Two additional DPs are read, the recovered and permanent pressure loss (PPL). Figure 4 shows sample wet gas data from an 8-inch orifice meter at CEESI. The recovered to PPL DP ratio is sensitive to wet gas. A reduction in this ratio, combined with increasing DP stan-dard deviations, signifies increasing wet gas liquid loading. This technique can identify wet gas at XLM ≥ 0.01.

Figure 3: Sketch of orifice meter with down-stream pressure tap for diagnostics.

Figure 4: 8-inch orifice meter wet gas data, liquid loading monitoring.

Ultrasonic Meters, Wet Gas Flow There are multiple ultrasonic meter

(USM) designs. There is sporadically pub-lished wet gas research on USMs, although this research is type-dependent. However, the limited published information shows com-mon wet gas traits between different designs. It is therefore generally valid to discuss one USM and treat the results as generally valid for USMs as a group. There is as yet no pub-lished USM wet gas correction factor.

It is sometimes claimed that USMs work well with wet gas flow. This statement means the meter continues to read a signal. However, this signal is adversely affected by wet gas flow. USMs, like all gas meters, cannot correctly measure the gas flow of a wet gas flow. Figure 5 shows CEESI wet gas data recorded from modern 4- and 8-inch Westinghouse USMs. The USMs have an over-reading that is related to the Lockhart Martinelli parameter (i.e. the wetness).

There is a significant amount of scatter. Unlike the orifice meter, this is unrepeatable scatter and not the predictable effects of pres-sure and gas flow rate. Such results explain in part why no USM wet gas correlation has yet been produced. A wet gas correlation is a statement that industry truly understands

a meter’s wet gas performance to the point that correct performance predictions can be made. If and when a USM is shown to have reproducible wet gas performance, a wet gas correlation can and will be produced.

Figure 5: Combined 4- and 8-inch ultrasonic meter wet gas results.

USMs have a well-established general diagnostic system. Manufacturers have sug-gested that path performance, path speed of sound (SOS), path turbulence, symmetry and profile factor are the best diagnostics to “see” wet gas flow. Figures 6 through 9 show these diagnostics sensitivity to wet gas flow. These 8-inch USM diagnostic results are from the same wet gas flow condi-tions as the 8-inch orifice meter diagnostics shown in Figure 6.

The performance diagnostics indicates a problem when path 4’s performance drops noticeably at XLM > 0.015. The SOS diag-nostics indicates a problem when path 4’s performance drops noticeably at XLM > 0.02, just below the path fails. The turbu-lence of all paths has no clear relationship with wet gas until path 4 fails at XLM > 0.03. The most obvious (and best) indication of wet gas comes from a symmetry vs. profile factor plot. This shows an abnormal flow condition by about XLM > 0.01. Hence, the USM diagnostic suite indicates something is wrong by a wetness of XLM > 0.01.

The USM diagnostic suite will indicate something is wrong by XLM > 0.01, but it is a generic alarm, not wet gas specific. Nevertheless, the USM diagnostics do alert the operator to a problem, and could poten-tially help monitor wetness. The USM diag-nostic suite begins to show a distinct pattern that can indicate wet gas as the specific problem as Path 3’s performance begins to drop at XLM > 0.03.

Conclusions Wet gas flow has adverse effects on all gas

meters. Both orifice meters and USM have degraded performance in wet gas applications.

Wet gas causes the orifice meter to sig-nificantly over-read the gas flow. However, this over-reading is predictable and for a known liquid flow rate an ISO-published correction factor can correct the gas flow rate prediction to 2% at 95% confidence. Furthermore, an orifice meter liquid moni-toring system is available that can specifi-cally identify wet gas flow by XLM ≥ 0.01.

Wet gas causes the ultrasonic meter to significantly over-read the gas flow. To date, no ultrasonic meter correction factor has been published. However, the USM diagnostic system is capable of identifying a generic problem exists by a wetness of XLM ≥ 0.01. P&GJ

RefeRences:1. ISO TC30 TR 11583, “Measurement of Wet Gas Flow by Means of Pressure Differential Devices Inserted in Circular Cross-Sectional Conduits.”

2. ISO TC193 TR 12748, “Natural Gas – Wet Gas Flow Measurement in Natural Gas Operations.”

3. Lewis K., “The Response of Differential Pressure Meters and their Diagnostic System to Wet Natural Gas Flow,” Canadian School of Hydrocarbon Measurement, Calgary, March 2014.

Figure 8: 8-inch USM turbulence % vs. XLM Figure 9: 8-inch USM profile factor vs. symmetry.

Figure 6: 8-inch USM performance % vs. XLM Figure 7: 8-inch SOS % vs. XLM

66 | Pipeline & Gas Journal • September 2015

he oil and gas industry is con-stantly changing, no more so than over the past several years with new technology, new production hot beds and new developing mar-

kets to deliver product to. These changes have set the stage for new opportunities and challenges for the midstream industry, particularly when it comes to the pressure of transporting commodities from the produc-tion fields to market. Pressure to do it faster but also safer.

This article concludes a two-part series (June 2015) designed to explain how these trends are driving investments in the midstream industry and what companies need to consider to meet business and regulatory goals.

U.S. regulated pipelines are now man-dated to meet all the requirements of CFR 49 192.631 & 195.446 for Control Room Management (CRM). The CRM regula-tions have created many new challenges for pipeline operators when upgrading SCADA systems, as change is the trigger for many of the more onerous requirements of the regulations. Some pipeline operators are reluctant to, or have delayed upgrading their SCADA systems as a result.

Change Triggers for Verification of Adequate Information

“Implement API RP 1165 (incorpo-rated by reference, see §195.3) whenever a SCADA system is added, expanded or replaced, unless the operator demonstrates that certain provisions of API RP 1165 are not practical…

Conduct a point-to-point verification between SCADA displays and related field equipment when field equipment is added or moved and when other changes that affect pipeline safety are made to field equipment or SCADA displays;”

The CRM regulations are performance-based; meaning pipeline operating compa-nies must provide detailed documentation in their written plans on how they are going to meet the requirements of the regulation. As such, it is up to the operating companies to interpret the regulations, determine how they apply to their operating environments, and ultimately decide what steps they are going to take to be compliant.

This article examines some approaches to address these challenges relative to SCADA upgrades, and how improved upgrading tools and migration documentation could signifi-cantly reduce the expense and effort required to commission changes and be compliant in the area of “providing adequate information.”

Upgrade Commission Tools and Utilities

Automated tools are commonly used to convert SCADA displays and databases. When properly documented, they can be effectively used to provide the evidence that these conversions have resulted in the new system having the same key settings as the legacy system and ensure that the new information is mapped correctly.

Database Migration Certification

Database conversion from third-party SCADA systems or an upgrade of a legacy SCADA system is to be completed accord-ing to a detailed database migration plan. This migration plan identifies all the key fields in each telemetered database that must be verified to ensure information pre-sented to controllers is unchanged.

In order to provide evidence of a com-pletely successful conversion, a documented and signed report that clearly indicates the “before” configuration matches the “after” configuration as described in the migration plan must be produced.

Parallel System Operations Side-by-side operations, whereby the old

system and the new system’s Human Machine Interface (HMIs) are run in close proximity with both observed receiving polled data from the field, has long been used as an effective way to confirm the new system is displaying data the same as the original system. What was lacking were screen captures with sign-offs as evidence of the commissioning.

A variety of tools have been used over the years to create listen-only or duplicate data paths to validate that polled data is accurate-ly processed and presented. No single tool is suitable for all cases based on the version of SCADA software, the type of communica-tion channel and the protocols used. Parallel

Operation “Listen-only” methods include:

Listen-Only Protocol Drivers n For some protocols, “listen only” driv-

ers are available, making listen- only possible with little effort.

Port Forwarding n Using hardware configuration, data

arriving on a switch/router port is rep-licated to another port where a listen only connection record processes the incoming data

Signal Cloning n Custom Tools” used to clone the data

transmission enabling parallel operationsThe production system must remain

unchanged and stable with polling frequen-cy and reliability unaffected.

Point-to-Point Verification Requirement

When changes that affect pipeline safety are made to SCADA displays, a point-to-point check out is required. Taken literally, this could mean that if a display had a safety point moved slightly for better alignment, it would then need to undergo a full end-to-end, point-to-point check out. The time, cost and effort to dispatch field technicians to perform verification on field devices that have not been changed is hard to justify.

As such, it is important to define what a “point” is relative to the change made and document it in your control room manage-ment plan. Depending on what the specific change is, the end points may be defined as the point on the display to the corresponding point in the database. In other cases where the field device has been touched, the point-to-point would be defined as the point on the dis-play to the end point of the device in the field.

Display Upgrade Commissioning

For software upgrades that do not alter the display presentation, it is still necessary to provide documentation that the display migration has not altered any display ele-ments or point addresses, and also the displays are evaluated for compliance with API RP 1165. Where the displays do not conform to API RP 1165 any deficiencies must be addressed, or rationalization pro-

Control Room Management Best PracticesProviding Adequate Information, Point-to-Point Verification

By Lars Larsson and Kelly Doran, Schneider Electric

T

www.pgjonline.com | 67

vided why the displays are inconsistent with the best practice guidelines.

To ensure the migration techniques meet regulatory requirements, documentation of the results of display software migrations must be provided. Artifacts would include: n “Before & After Upgrade” Screen

Captures – Attached to each display commissioning record

n “Before & After Upgrade” Display Migration Report” – Showing point names and database addresses have not been altered for every display migrated.

SCADA Upgrade Scenarios and Verification Considerations

Depending on the architecture of the SCADA system, upgrades may be done in stages. For example, a front end upgrade consists of updating the HMI while leaving the backend (configuration databases) of the real-time server unchanged. For each upgrade scenario the required commission-ing and documentation must be part of the upgrade plan.

SummaryThe methodology discussed above is the

formalization of the good engineering practices that most pipeline organizations have generally followed with regards to SCADA upgrades, but with a focus on defendable documentation.

By following a well-documented upgrade commissioning process including parallel SCADA operations in some cases, the CFR 49 Part 192.631 & Part 195.446 regulation requirement for a host end to field end device testing may be limited to just the new or modified points that affects pipeline safety, significantly reducing the overall cost of a SCADA upgrade. P&GJ

Upgrade Scope Commissioning Strategy

HMI Upgrade with no layout or navigational changes. No Field Change

Version Change. No Data Presentation Changes, automated tools used

Documented Confirmation of Translation (coordi-nate check). Confirmation of behavior

HMI Upgrade version upgrade or patches Software Change onlyNo additional displays

Standard display check out. Documented Confirmation of Translation (coordinate check) Confirmation of behavior

Display navigation or layout changes (i.e. no point mappings change)

Manual redraws, Data Presentation Changes Standard Display Check Outs Point-to-Point verification only for display with safety points, Display to Database verification only, if no field changes made.

Database (Backend)(i.e. no point mappings change)

Database port using automated toolsNo Field Changes

Documented Certificate of Migration Parallel System Operation

New Points (regardless of SCADA version) Addition of New Points, Modification of Existing Safety Related Points/Displays

Complete End to End verification for new Safety Points. Coordinate check only for additional dis-plays containing the new safety points

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68 | Pipeline & Gas Journal • September 2015

he ROSEN Group brought key industry stakeholders together for a roundtable on the topic of “Linear Threats in Pipelines,” on May 28. The event attracted over 100 attend-

ees from throughout North America and Europe who were hosted at the ROSEN facility in Gahanna, OH.

The roundtable began with an official wel-come by ROSEN Executive Vice President Chris F. Yoxall, who emphasized the impor-tance of “why we are here.” He addressed the goal and set the tone for the day – bringing together all stakeholders to collectively work on common topics of interest.

The keynote address from the company president and founder, Hermann Rosen, emphasized the need of being proactive

by undertaking pre-ventative measures to mitigate or minimize the effect of conse-quence management. Recognizing complex-ity, Rosen compared the human body to a pipe-line network, saying without good integrity management, failures

can occur with unwanted consequence.“Whether we talk about the pipeline net-

work, an aircraft or the human body there are a lot of similarities,” he said. “We are talking about different diameters, flow rates, gravity, pressure, debris, scale, wall thickness, as well as valves and y-pieces, reductions, lifetime. There is a lot in common. If the integrity of such a system fails to due blockage, leak-age or rupture, this will cause a disaster, for example, a heart attack.”

Rosen recognized three groups of stake-holders, each having accountability – those involved in generating rules, the operators, and those proving technologies or services. In the short-term, these groups are all driven by performance indicators, while in the mid-term there has been more of a direction toward better alignment. In the long-term, there is a need for more alignment driven by cooperation, this is needed to achieve the ultimate no incident industry objective.

Rosen concluded by urging more assemblies of this nature. He also suggested “pro-active management and collaboration of [all] stake-holders to avoid consequence management.”

Steve Nanney, representing the federal Pipeline and Hazardous Materials Safety Administration (PHMSA), spoke on behalf of the regulatory environment, reflecting on past incidents and the effects on rule-making

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and recommendations. His presentation gen-erated questions pertaining to some of the future rules that may be introduced including the Integrity Verification Process, as well as the need for hydrotesting at 1.25 X MAOP.

Stuart Saulters, representing the American Petroleum Institute (API), spoke about the institute’s strategic initiatives. He referenced standards that relate to address-ing linear threats, API6. RP 117.

David Chittick, director of Pipeline Engineering from TransCanada Pipelines (TCPL), offered an operator’s historic over-view, keeping a perspective of technology and standards, management systems, and improved culture. Chittick reflected upon all the differ-ent efforts undertaken by TCPL over the last three decades, emphasizing the importance of reliable and accurate technology to support the decisions being made by operators. He also recognized that all stakeholders need to be fully committed to achieving the long-term needs.

Thomas Beuker, ROSEN corporate mar-keting director, comple-mented Chittick’s presen-tation by discussing the need to understand big data. Beuker provided an overview on the process associated with advanced analytics, keeping the need for dynamic learn-ing, accuracy and confi-dence and prediction in focus. Data-gathering capabilities are growing

exponentially and the importance of being able to manage this accordingly, needs to be under-stood, he said.

Beuker gave an overview of the process and expectations. However, today’s capa-bilities make more data available offline, allowing for more support in the interpre-tation process. IT changes outside the ILI tool are also required to support big data.

Steve Nanney (PHMSA), Dr. Brian Leis (Consultant), Thomas Beuker (ROSEN Group) and David Chittick (Director TransCanada) (l to r).

A wide array of tools were

displayed at the meeting.

Hermann Rosen

ROSEN Sponsors Roundtable on Linear Threats Special to Pipeline & Gas Journal

This includes remote control, which offers scalable storage globally to remotely access data in shorter time frames, allowing for quicker decisions to be made.

Rounding out the event, Brian Leis of Battelle Research Center summarized the presentations and provided some final thoughts. His observations included: n Blunt vs. Sharp (planar vs. volumetric) n Quantification of the size? Or the

shape? n The failure process and implications of

collapse versus fracture control n Understanding the importance of balanc-

ing conservatism with accurate modelsHe concluded by recognizing industry gaps

and needs, encouraging big picture thinking and emphasizing that cooperation by all stakeholders is a key parameter to the way forward. P&GJ

Thomas Beuker, ROSEN Corporate Marketing Director

www.pgjonline.com | 69

(Editor’s note: This update, provided by the Kenai Peninsula Borough mayor’s office, is part of an ongoing effort to help keep the pub-lic informed about the Alaska LNG project.)

laska is vast, with a lot of open ground, but it seems like trans-portation projects in the state — be it roads, railroads or pipelines — can’t help but cross over or

under each other while traversing the same natural corridors.

Preliminary plans for the proposed 800-mile North Slope natural gas pipeline south to Cook Inlet show it would cross the trans-Alaska oil pipeline 12 times, the Dalton Highway 22 times, the Parks Highway 12 times, Alaska Railroad tracks four times, and the Elliott and Kenai Spur highways one time each.

And don’t forget the natural transpor-tation routes. The line would cross the Nenana River in four locations, just once for the Yukon River. All told, the mid-May 2015 version of the proposed pipeline route includes 446 waterbody crossings. Some are rivers, some are creeks, some smaller than that. Some are much larger, such as almost 30 miles across Cook Inlet.

Over two dozen Alaska LNG team mem-bers and contractors met with 60 federal, state and municipal agency personnel this spring in Anchorage to discuss the project’s latest revisions to the proposed natural gas pipeline route from the North Slope to Nikiski on the Kenai Peninsula.

Adjusting Pipeline Route The project teams reported they have

made multiple adjustments to the pipeline route since filing the first draft route with the Federal Energy Regulatory Commission (FERC) in February. It’s all about finding the best path for the pipeline to move North Slope gas 800 miles across the state to reach the liquefaction plant in Nikiski.

The project is undergoing the engineering and design phase, working toward a late-summer 2016 FERC application. The feder-al agency regulates LNG plant construction and operations and will prepare the project’s environmental impact statement.

While seeking feedback from govern-ment regulatory agencies at the all-day

session, the Alaska LNG team listed the optimal engineering criteria for pipeline route selection: stable ground, good drain-age, and flat or gentle slopes.

“We try to stay on the high ground every place we can,” a team leader said.

All the while, the team is aiming for the shortest distance between two points while avoiding — as much as possible — fault lines, wetlands, frost-heave soils, power lines, fiber optic cables, visual impacts, cultural sites and private land.

The pipeline execution team reported they would like to keep the 42-inch, high-pressure gas line at least 200 feet away from the trans-Alaska oil pipeline, particularly to allow gas line construction equipment to maneuver a safe distance from the above-ground oil line. But some pinch points will require closer spacing.

“In many cases, the oil line, built in the mid-1970s, picked the best spot, and we have to pick the next best spot,” a team member said. The challenge is to find the preferred route within the constraints of geology, ter-rain and environmental considerations.

Several stretches along the route are still under review with project teams looking for the best way to manage geological, environ-mental and historic preservation issues.

Best Crossing PointOne example is the effort to find the

best place to cross from the west to the east side of the Nenana River in the area where the Parks Highway, Alaska Railroad and a steep canyon all come together, about 120 highway miles south of Fairbanks near the entrance to Denali National Park and Preserve. This is near where the Moody Bridge crosses 174 feet above the canyon floor. No surprise, the span also is known as “Windy Bridge.”

The Alaska LNG team would prefer to stay away from steep, failing slopes, keep outside of the national park, and run the line east of the tourist commercial area known as “Glitter Gulch.”

“We’ve got some additional work to do … the answer is still in front of us,” a team member said at the routing workshop. At the same time they’re working to minimize effects on highway traffic during construc-tion, especially during the busy summer

season, and preserving the scenic views along the highway and at viewpoints that are so important to visitors - and Alaskans.

The Alaska LNG pipeline execution team is working with their counterparts at the Alaska Gasline Development Corp. during the route selection, sharing information in an effort to avoid duplication of efforts as the two projects look for the best way past problem areas. The state corporation is designing a smaller-volume pipeline project as a backup for Alaskans to consider if the producer-led Alaska LNG project does not move forward.

Alaska LNG teams include staff assigned by all four commercial partners in the effort: North Slope oil and gas producers ExxonMobil, BP and ConocoPhillips, and pipeline partner TransCanada. The state of Alaska would also be an investor in Alaska LNG.

Another area still under review by the pipeline team is Atigun Pass, the highest point on the route at 4,739 feet above sea level in the Brooks Range. The pass is about 175 miles south of the start of the pipeline at the gas treatment plant proposed for Prudhoe Bay. The intent is to thread the gas line over the pass while keeping a safe distance from the Dalton Highway, the oil line and steep slopes.

Above vs. Below GroundCrossing the Yukon River, about 180

miles south of Atigun Pass, also needs more ground sleuthing, the team reported, partic-ularly geophysical and geotechnical studies to learn every possible detail of ground and subsurface conditions. As of mid-May, the team was assessing the option of directional drilling and pulling the pipe underneath the river, at a point west of the existing oil pipeline bridge and downstream from deep shoreside bluffs. But that could change as the team learns more, and a bridge crossing is an option.

Horizontal drilling and pulling pipe also would be used to run the line beneath high-way and river crossings along the route, along with possible open cuts and burying the pipe.

Although most of the gas line would be buried, several sections of the route would need to be above ground, much like the oil line. Such construction, with the pipe-

Alaska LNG Reviews Pipeline Route with Government AgenciesBy Larry Persily, Kenai Peninsula Borough, Alaska

A

70 | Pipeline & Gas Journal • September 2015

line supported on horizontal steel beams between two vertical columns, would allow the line to span fault lines, staying out of harm’s way.

The most serious earthquake risk is the Denali Fault, which crosses the Parks Highway near Cantwell, just 35 miles south of where the gas line crosses the Nenana River near Denali National Park. A 7.9-magnitude earthquake in 2002 tested the oil pipeline, which crosses the fault about 130 miles to the east of the gas line route. The oil pipe survived the quake, thanks to its elevated support structure.

Other aboveground stretches for the gas

pipeline would include the 60 miles between the Point Thomson gas field and the gas treatment plant at Prudhoe Bay where gas from both fields would be cleaned of carbon dioxide and other impurities. The first draft routing submitted to FERC in February indi-cated the line would be buried in this area, but the team reported at the spring workshop that it had decided aboveground construction is a better option to avoid drainage problems of surface and subsurface water flowing north to the Beaufort Sea.

Along with Atigun Pass, the Yukon River and Glitter Gulch, another area still under review by the pipeline team is the Deshka River crossing, about 65 miles north of where the line would enter Cook Inlet for its final stretch to Nikiski.

Field crews have found multiple cultural sites along the river, with its rich history of subsistence fishing. Historic-use sites along the Deshka are so plentiful the area looks like it “could have been a subdivision,” a pipeline team member said. Alaska LNG is working with its cultural team and the State Historic Preservation Office to find the best river-crossing location.

Cook Inlet CrossingAnother routing question raised in Alaska

LNG’s February filing with FERC is where the pipeline should cross Cook Inlet to reach Nikiski. For now, the project is focus-ing on what it calls the western route, run-ning the pipeline on the west side of Cook Inlet until Milepost 764 from Prudhoe Bay, then going underwater for almost 29 miles, coming up on the east side of the inlet just 7 miles or so to the liquefaction plant site in Nikiski’s industrial area.

On its west side approach, the line would stay away from the Beluga power plant, ENSTAR natural gas line, and drilling pads and access roads. A barge landing would be built on the west side to bring in equipment and supplies, just as a barge landing would be built on the east side for the same purpose — including delivery of the huge modules that would become the liquefaction plant.

On the west side, the team is looking at a couple of sites about a mile apart for the pipe-line to enter the water, considering shoreline terrain and how far the buried pipe would have to run before reaching water deep enough (about 30 feet) for pipe-laying barge access.

For landfall on the east side of Cook Inlet, the line would likely come up at a location called Boulder Point, though the team is also looking at another spot just a couple of miles farther up the Kenai Peninsula coast, near Seneva Lake, with lower bluffs at tidewater. Just as with the westside location, the shortest distance to deep water is a consideration.

An alternate path across Cook Inlet, called the eastern route, is not now under active review, team members said. That

route would have the pipeline veer east after the Deshka River, cross the Susitna River and come to Port MacKenzie across the inlet from Anchorage. From there, the line would run through Upper Cook Inlet to the Kenai Peninsula, several miles northeast of the preferred crossing route.

Onshore problems with the eastern route, team members told regulatory agencies, include crossing through an old artillery range with unexploded ordinance and prox-imity to power lines and tower guy wires. Offshore, the concerns are numerous: sub-marine cables in the pipeline’s path; sharp turns in the route needed to avoid the dredged channel for Anchorage port traffic; critical feeding habitat of endangered belu-ga whales; and scouring along the seabed that could undermine the pipeline.

In gathering data for the Cook Inlet crossing, the project teams have learned much about the currents and siltation, and will be surveying for obstacles and mapping the seabed this summer as route-selection work continues.

The teams reported that currents along the preferred crossing route run 6 knots at the surface and 4 knots on the bottom. Water depth along the route would be 140 feet at the deepest point, generally about half that for most of the rout

To cross Cook Inlet, the pipeline would be lowered from barges to the sea floor. Each heavily concrete-coated section of 40-foot-long, 42-inch pipeline would weigh 33 tons — the pipeline’s weight would keep it in place on the bottom

Summer Field WorkAlaska LNG contractors have a busy

2015 summer field season planned of soils testing, borehole drilling, stream surveys, wetlands mapping, geophysical work, cul-tural resource surveys and other data gather-ing as the project works toward submitting its next round of draft environmental reports to FERC in the first quarter of 2016.

The summer work will include “ground truthing” data obtained by light detection and ranging (LiDAR), which maps out surface data and details with an airborne laser. Teams will walk the ground to verify LiDAR data at over 100 sites along the pipeline route, particularly looking at slope stability and geophysical hazards.

Additional Alaska LNG workshops for gov-ernment agencies are planned for August and September to cover in more detail route selec-tions and construction methods for waterbody crossings, wetlands and Cook Inlet, along with the dredging that would be required to bring in construction barges. P&GJ

(Larry Persily can be reached at lpersily@kpb.us. He formerly was the federal coordinator for the Alaska Gasline Project. That office was closed earlier this year.)

Cook Inlet Basin.

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72 | Pipeline & Gas Journal • September 2015

n the five years since the Deepwater Horizon spill in the Gulf of Mexico, operators have undergone progressive-ly tighter regulatory restrictions in both offshore and onshore environments.

Along with restructuring the Department of the Interior to include the Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM), more than seventeen reforms have been implemented since the 2010 accident, targeting everything from well-design to maintenance reviews to safety culture.

Navigating these developments requires the effective use of a safety management system to maintain compliance and reduce risk. However, as the drop in the price of oil places further pressure on fiscal opera-tions, pipeline safety management systems must evolve to create value for the business, beyond a sole focus on compliance.

Best Practices In response to pressure for safer pipeline

systems from the National Transportation and Safety Board (NTSB), the Pipeline and Hazardous Material Safety Administration (PHMSA), American Petroleum Institute (API), along with industry leaders, togeth-er, will soon publish Pipeline Safety Management System (PSMS) Requirements Through API RP 1173.

Similar to the BSEE Safety and Environmental Management System (SEMS) II requirements, the goal is to reduce both personal and operational incidents based on industry best practices. The areas of concern include leadership accountability, change management, incident management, con-tinuous improvement, effective information sharing and contractor/vendor management.

In many cases, operators are condi-tioned to meeting regulatory compliance and adherence to best practices as defined by the requirements and elements within SEMS II, API RP 1173, OSHA PSM CFR 1910, and other regulatory statutes.

Successful organizations that meet the higher expectation of reducing major releases and incidents while simultaneously improv-

ing business per-formance have key characteristics, such as the ability to cultivate a sys-tem think culture, align management system compo-nents with busi-ness functionality and measure lead-ership accountabil-ity for achieving yearly safety and business goals/objectives.

System-Think CultureSystem-thinking is a way of viewing

an organization as a whole – commercial, engineering, procurement, environmental health and safety (EH&S), operations/main-tenance, human resources – to understand how one area affects others.

In essence, it focuses on providing capa-ble people with quality information to make better and safer decisions. Typical system-think organizations focus on holistic view points and approaches to openly understand vulnerabilities and solve problems.

Organizations with a system-think culture routinely evaluate what is needed to reach performance targets. These organizations provide evidence of high-value performance and generate transferable lessons for con-tinuous improvement. This supports reducing offshore pipeline construction and operation-al risk, improving safety and reliability, and delivering maximum value to stakeholders.

Alignment to Business Functions

Aligning management systems with busi-ness functions requires a shift in thinking from demonstrating compliance as the pri-mary driver to reducing overall risk of opera-tions and adding value to the business. As opposed to building a compliance system to the regulatory components, the requirements are ingrained within the business functions.

For example, the Interior Department’s

Beyond Compliance: Reducing Major Incidents, Creating Business Value

IBy Katherine Molly, Principal, and Josh Arceneaux, Expert Practitioner, North Highland

recently released well-control rule requires outside audits of equipment, requires that each blowout preventer have a back-up pipe-cutting shear and mandates real-time moni-toring onshore for wells offshore. These rules will require changes in how business functions operate within and with each other. These requirements should be embed-ded in the existing engineering and design processes to become standard practice as opposed to a specification only referred to as an external EH&S requirement.

This shift supports a holistic understand-ing of business functions and dependencies involved with acquiring oil and gas product from the point of production or storage, transporting these products through the pipeline assets and delivering the products to the customer.

This alignment and understanding is magnified for offshore operations where the consequences of incidents increase sig-nificantly compared to onshore activities. Alignment provides for a better use of the safety management system to reduce overall risk and add value, which includes: n Preventing major incidents by enabling

cross-functional information exchange and communication to create under-standing of how areas affect each other

n Improving governance and account-ability across the organization

Beyond Compliance...Continued on page 77

www.pgjonline.com | 73

ast February, Canada promulgated Workplace Hazardous Materials Information System (WHMIS) 2015, the globally harmonized system of clas-sification and labeling of chemicals,

and decreed that companies have until Dec. 1, 2018 to fully implement the new system.

Pipeworx Ltd. has already nearly complet-ed its WHMIS 2015 implementation, offer-ing free training to all employees. The about 200 Pipeworx employees will have complet-ed their required WHMIS 2015 training by Sept. 1 and as the company gears up for the busy winter season, when it typically peaks at about 500 employees, all new workers will be trained in WHMIS 2015 upon hire.

Why rush to WHMIS 2015?“The new system standardizes the clas-

sification and labeling of chemicals world-wide,” said Chad Wagner, Pipeworx human resources manager. “This makes it much less confusing and dangerous for workers who need to understand the hazards of a chemical in order to work safely. It’s just a better, safer way of doing things for everyone.”

In addition, he said, Pipeworx management talked with some of the company’s largest clients and learned that they were eager to implement WHMIS 2015 as soon as possible.

“The clients knew they could count on us to join them in early implementation because we have the reputation as the strict-est pipeline contractor in the region when it comes to safety,” Wagner said. “So it only made sense for us to jump right in. This way, there will be no problems or confusion when our employees are on their worksites.”

Chemicals covered by WHMIS 2015 that Pipeworx employees deal with include lubricants, cutting fluid, antifreeze, paint and printer toner, as well as everyday house-hold products such as WD-40, Windex and Armor All. If it’s a chemical, no matter how common, there are guidelines for safe han-dling that must be followed, Wagner said.

Pipeworx is a subsidiary of PLH Group Inc., a leading provider of construction and mainte-nance services to the electric power delivery and pipeline industries in North America. For infor-mation, visit www.PLHGroupInc.com. P&GJ

Pipeworx Implements WHMIS 2015 Ahead of Deadline Special to Pipeline & Gas Journal

Product DevelopmentTECHNOTES

PLH Group is a major sponsor of the Warrior Wellness Solutions, a program designed to help injured. One beneficiary is U.S. Marines Cpl. Michael Politowicz, left, receiving an award from Clarissa Kussin, director of operations and Elijah Sacra, executive director of the non-profit organization. Politowicz was on patrol in Afghanistan when an improvised explosive device (IED) exploded, shattering a forearm and causing a traumatic brain injury.

L

oday (July 9) , we are introducing a new corporate brand that brings together our existing business lines under the G2 Integrated Solutions banner,” said Jody Mitchell, president

of Houston-based G2 Integrated Solutions. “This new, consolidated brand reflects

our focus on developing integrated solutions for the complex challenges facing upstream, midstream and downstream operators in the energy sector. Through acquisitions and organic growth, we have been building a powerful delivery platform capable of pro-viding end-to-end solutions for managing risk, optimizing assets, and ensuring com-pliance with current and emerging require-ments, both operational and regulatory.”

The new G2 Integrated Solutions (“G2-IS”) banner consolidates our four lines of business: n G2 Partners – G2 Partners provides cost-

effective solutions to the integrity man-agement challenges facing pipeline and facility operators across North America,

spanning a host of services from indus-try-leading approaches for MAOP deter-mination and lifecycle management of integrity-related data, through risk-based prioritization of operations and manage-ment (O&M) and capital expenditures. www.g2partnersllc.com

n Frontline Energy Services – Frontline provides an extensive set of integrity services to downstream utility and mid-stream clients, including project man-agement, field inspection, mobile data collection technology deployment, aerial patrol program management, cross-bore program implementation, and integrity management program administration. www.frontline-energy.com

n Eagle Information Mapping – Eagle is a leading provider of geographic informa-tion system solutions to large-scale oil and gas infrastructure operators, provid-ing a comprehensive suite of geospatial software solutions and services designed

to support operators in improving asset safety and reliability. www.eaglemap.com

n NRG Technologies – NRG delivers assurance solutions that provide energy company leadership with answers to the “How do you know?” question regarding asset integrity. Solutions include process assurance systems, services and software for risk identification and risk quantifica-tion, and asset reliability and optimiza-tion support. www.bpm4energy.com

“We have assembled an industry-leading solutions platform,” Mitchell added, “as we continue to expand our service and technology offerings and with the ability to leverage these four companies as one is creating new ways to solve our client’s most challenging problems.”

Concurrent with the adoption of the new corporate banner, G2 Integrated Solutions has launched a new web site URL at www.G2-IS.com. P&GJ

Launch of New G2 Integrated Solutions“ T

74 | Pipeline & Gas Journal • September 2015

Product DevelopmentTECHNOTES

here is much to talk about these days at Lyall. The company that has been supplying gas piping products to natural gas utilities across the United States for the

past 45 years continues to expand, bring-ing its manufacturing expertise to new markets within the oil and gas industry.

With the opening of a 95,000-square-foot plant in New Berlin, WI in 2013,

Lyall began manufacturing larger scale products for customers in the oil and gas midstream and transmission markets. The new facility is equipped with the space, technology and manpower required to produce skid-mounted or stand-alone integrated pipeline assemblies such as pig launchers and receivers, pressure reduc-tion stations, LACT units and gas and water measurement buildings.

Six overhead cranes with capacity up to 12½ tons move materials through the manufacturing process run by a team of skilled and qualified welders and assem-blers. The in-house coating process runs through state-of-the art blasting and paint booths, resulting in a corrosion-resistant, aesthetically pleasing finish that is diffi-cult to reproduce in the field. As well, 3D modeling and engineering documentation, material test data, quality assurance test-ing and documentation are included with all products as required. The expansive facility also offers the ability to load trucks indoors, providing shelter from the cold Wisconsin winters.

“I am extremely excited about the expansion of our capabilities through this new factory,” said Jeff Lyall, Lyall presi-dent. “Increased demand from our tra-ditional natural gas utility market, com-

bined with new demand from the oil and gas midstream markets for Lyall quality in larger fabricated products, resulted in a need for more space. This facility pro-vided solutions on both fronts.”

Continuing its ongoing effort to build a presence in the shale oil market, Lyall recently opened a new Service Center in Dickinson, ND. The 4,000-square-foot facility, offering service to well pad equipment in the area, officially opened its doors on March 18, with an open house on June 19. The initial start-up operation includes two service technicians, two ser-vice trucks (pick-up and craned utility) and will also include a repair shop with

Lyall Looks Forward to Serving New Markets Special to Pipeline & Gas Journal

Gas meter run facility consists of 167,000 square feet of dedicated manufacturing footprint within two facilities.

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inventoried parts. The Lyall pipeline sales office has also been moved to the new facility, calling on the oil and gas well-head and midstream market.

Bruce Lange, COO states, “The opening of this facility helps Lyall further enhance our commitment, and dedication to, and presence in, the oil and gas wellhead and midstream market in this area of the country.”

When asked about the direction of the company, Lyall responded, “Our expansion into these new markets is a natural transi-tion for us. We bring to the table a history of quality and manufacturing expertise that we believe provide tangible benefits to custom-ers in these new markets.” P&GJ

Large fabrication services include pig launchers/receivers, pressure regulator stations and vaulted below ground and pipeline farm taps.

“Increased demand from our tradi-tional natural gas utility market, com-bined with new demand from the oil and gas midstream markets for Lyall quality in larger fabricated products, resulted in a need for more space. This facility provided solutions on both fronts.”

– Jeff Lyall, Lyall president

www.pgjonline.com | 75

platform for valuable new ideas, solutions and results to improving the safety, secu-rity and life extension of worldwide pipeline assets. The RSTRENG+ organization is being initially funded and supported by Technical Toolboxes. www.technicaltoolboxes.com

McLaughlinThe McLaughlin

CBM48 cradle-boring machine is designed to help speed the installa-tion of steel casing used in the cross-country pipeline industry. Powered by a 162 hp air-cooled, turbocharged diesel engine, the CBM 48 produces 170,000 ft.-lbs. of auger torque to install steel casings ranging from 10-48 inches in diameter and up to 120 feet in one pass from a single set up. The CBM 48 does not require a construction pit, shoring or the need to set auger boring tracks up on grade; instead, a trench the length of the casing is excavated and the cradle-boring machine, along with the casing, are suspended in the trench using appropriate sized pipe-laying or side-boom equipment. www.mclaughlinun-derground.com

Pergam Pergam is offering the Laser Methan

Copter (LMC) sensor. Applications are line, tank and asset inspections, landfill emission monitoring and surveys in difficult to access areas that previously required scaffolding. The LNG and the shale gas industries are other markets with opportunities for leak detection services with the LMC sensor. Designed to fit on a large variety of UAVs/drones, the base for the sensor is Pergam’s Laser Methane mini-instrument. The additional onboard LMC data grabber records the flown track together with the gas concentration in parts per million. Data are available for reporting immediately following the flight and can be easily exported in a comprehensive leak survey report. www.pergamusa.com. P&GJ

improved ground speed, carriage speed, rotational speed and rod breakout efficiency – the D24x40 S3 is built to help maximize machine and jobsite productivity. A carriage speed of 240 feet per minute (73.1 m/min) and a rotational speed of 253 rpm - outpac-ing rival machines – help contractors install more linear feet per day, maximizing jobsite efficiency. The D24x40 S3 is powered by a 125-hp (93 kW), liquid-cooled, turbo-charged diesel John Deere 4045 4.5L Tier 4 engine. www.vermeer.com

Ditch WitchThe Ditch Witch organization, a Charles

Machine Works Company, has released the industry’s first web-based Horizontal Directional Drilling (HDD) Advisor tool. Customers can use the advisor to quickly determine the right tooling configuration for their Ditch Witch® or Vermeer® direc-tional drill string. Historically, identifying the proper tooling for job sites was time-con-suming, cumbersome and paper-intensive. The Advisor gives operators and dealers an intuitive tooling-product roadmap and quick-ly recommends configurations and solutions based on a few questions. It includes the option to save drill string configurations for future reference and streamline ordering of replacement parts. Operators can share their drill string configurations with their dealer of choice, and print or email summaries from a PC or mobile device. To increase the value for operators, both Ditch Witch and Vermeer drills can be selected within the tool. To see the HDD Advisor in action, visit www.hddadvisor.com. www.ditchwitch.com

Technical ToolboxesFor over 15 years Technical Toolboxes

(TTI) has developed the RSTRENG software, which the company says has become the standard in the oil and gas industry. One goal of the RSTRENG+ organizations is to collect RSTRENG data on pipelines worldwide for Big Data analytics and the resulting benefits to all worldwide stakeholders. Using the lever-age generated by member resource contribu-tions, RSTRENG+ can provide the Big Data

Pigs Unlimited International, Inc.

Pigs Unlimited International Inc. announced acquisition of the original Flex-I-Pig molds from Greene’s Energy Group. The Flex-I-Pig was initially designed to be used for coating, but has proved to be a very effective utility pig. With its superior seal-ing capabilities and wear characteristics, the Flex-I-Pig can be used for batching, clean-ing, coating, and de-watering applications in sizes from 2- to 36-inches. This effective pig design has become a standard in the industry. www.pigsunlimited.com

Pipeline Equipment Inc. Pipeline Equipment

Inc. (PEI) is offering a new line of pigging

solutions. The line includes: Spherical Pigs – inflatable

spheres used in automated sphere launch systems for remov-al of liquids in wet gas systems; Multi-Seal pigs – rebuildable all-urethane pigs that can be configured for displacement, batching or cleaning applications; Tuff Cast Pigs – all-urethane disposable multi-cup, multi-disc pigs for displacement, batching or cleaning applications; Conical Flex Pigs – rebuildable metal bodied pigs that can be configured with cups, discs, cleaning brushes or clean-ing blades for most pigging applications and will traverse reductions up to 20%; and BIDI Pigs – multi-disc Pigs that can be run bidirec-tionally for displacement and cleaning appli-cations. www.pipelineequipment.com/pigs

VermeerT h e

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Case Construction EquipmentCASE Construction Equipment introduced five new plate compac-

tors to its attachments lineup – the SC-30, SC-60, SC-80, SC-110 and SC-220. The plate compactors are ideal for utility work and are primarily used to compact the foundation in shallower trenches and prevent movement/ground upheaval. These plates run on unidirec-tional hydraulics and are available in a variety of sizes, ranging from 19-by-20 inches to 32-by-42 inches. For soil compaction, the SC series can compact up to 4 feet – more than five times the efficiency of handheld compactors. For slopes, the SC can compact materials on an incline. Each SC series plate compactor is covered under a two-year limited warranty. www.CaseCE.com

in Products & ServicesWHAT’SNEW

76 | Pipeline & Gas Journal • September 2015

Association News The American Gas Association (AGA)

was selected as one of The Washington Post’s Top Workplaces for 2015. “It’s an honor to be included,” said Dave McCurdy, president and CEO of AGA.

Chris Fowler, global corrosion director of Exova, was recognized by the NACE International Institute with a re-appoint-ment to the board and a first-ever life-time achievement award by the NACE Middle East area. Fowler, a past president of NACE and currently president of the Institute, was re-elected for a further three years from January 2016. His presidency will run until the end of 2016 when he will continue as past president.

Tennessee Gas Association announced its 2015-16 officers and Board of Directors, along with the presentation of the 2015 Silver Flame award to Randy Nipp, Jackson Energy Authority senior vice president of Gas Systems. A posthu-mous presentation of the Thomas R. Bell Pioneer Award was made to William J. Hatfield, Oak Ridge Utility District.

The new officers are Tae Eaton, general manager of Paris-Henry County Public Utility, president; Daniel C. Hicks, vice president of administration for Middle Tennessee Natural Gas Utility District, first vice president; John “Joey” Sauls, account manager for Spectra Energy, sec-ond vice president; Rob Neil, president of Powell Clinch Utility District, TGA treasurer; and Jamie Wellman, director of Member Services for the Tennessee Gas Association, secretary.

Personnel ChangesHenkels & McCoy, Inc.

named Ron Scott as direc-tor of Gas & Industrial Services. Based in the Pomona, CA office, he is responsible for the over-all direction, development, profitability, and growth of the natural gas distribution

and transmission utility pipeline construc-tion and maintenance operations throughout the company’s west region.

Plains All American Pipeline, L.P. and Plains GP Holdings announced several executive changes at PAA. Willie Chiang was appointed executive vice president and COO for PAA’s U.S. operating and commercial activities. John Keffer and Sam Brown were each promoted to senior vice president, and Jeremy Goebel and James Pinchback were promoted to vice president. Executive Vice President John Rutherford is retiring. He will serve as

an advisor and consultant to the CEO and president.

Fine Tubes named Amanda Clark as procurement specialist.

Matthew L. Trerotola was named CEO and a director of Colfax Corp., succeed-

ing Steven E. Simms who is retiring.

Greene’s Energy Group, LLC’s CEO Robert “Bob” Vilyus is retiring from the company and board of directors. Frank Matthews will be presi-dent and CEO and will be

added to the board.

Company News, Mergers & Acquisitions

Shawcor Ltd. announced eight divisions will co-locate in downtown Calgary, AB. The move will see Canusa-CPS, DSG-Canusa, Flexpipe Systems, Guardian, Shawcor CSI, Shaw Pipe Protection, Shaw Pipeline Services and ShawFlex form a sales supercenter in the Dome Tower, Suite 2200, 333 7 Avenue S.W.

Sempra Energy’s Mexican subsidiary, Infraestructura Energética Nova, S.A.B. de C.V. (IENOVA) and Pemex jointly announced that IEnova will buy Pemex’s 50% equity interest in the Gasoductos de Chihuahua joint venture for $1.325 billion, plus assumption of $170 million in debt. The acquired joint venture assets under long-term contracts include three natural gas pipelines, an ethane pipeline, a liquid petroleum gas (LPG) pipeline and a LPG storage terminal.

In addition, IEnova and Pemex maintain a joint venture for the Los Ramones Norte pipeline project.

Elgin Equipment Group announced the formation of Elgin Separation Solutions. Elgin Separation Solutions retains the product brands that have long been recognized in the oil and gas drilling and HDD industries. The new division is also responsible for the development, manufacture, sales and service of a num-ber of specialized products.

Cross Country Pipeline Supply Co., Inc. has acquired Sideline Specialty Equipment. Through the acquisition of Sideline, Cross Country has entered the Canadian market.

H&E Equipment Services, Inc.’s oper-ation in Oklahoma City relocated to its new facility at 10700 NW 4th St., Yukon, OK 73099.

HammerHead Trenchless Equipment, a Charles Machine Works company, has formed a strategic alliance with RS Lining

Systems, LLC, provider of RS Technik pipe rehabilitation solutions in the Americas. This will complete the suite of non-intru-sive rehabilitation solutions available to HammerHead customers.

Fall River, MA-based Apollo Safety Inc. has formed a division specializing in gas detection equipment, mainte-nance and monitoring serving the oil and gas industry.

AMERICAN Steel Pipe, a division of AMERICAN Cast Iron Pipe Co., has completed its 150,000-square-foot steel pipe processing facility in Birmingham, AL. The $70 million plant doubles the company’s annual processing capacity to 700,000 net tons. AMERICAN manufac-tures electric-resistance-welded (ERW) steel pipe in diameters from 10.75 to 24 inches and in lengths up to 80 feet.

NGL Energy Partners LP and Meritage Midstream Services II, LLC are forming a joint venture to develop crude oil gathering and water services infrastructure to serve oil and gas produc-ers in Wyoming’s Powder River Basin.

Willbros won a three-year preferred sup-plier agreement for pipeline integrity ser-vices. The contracts, expected to generate C$120-150 million, cover assessment digs and preventative maintenance work on a network of existing pipeline infrastructure across Western Canada.

Willbros also won a construction contract for pipeline and off-site fabrication services to support tailings facility requirements at a major oil sands site. The contract is expected to begin shortly and be completed by the end of 2016.

ObituaryBaxter Abbott Sparks, Jr. died July

6 at his home in Dallas from complica-tions of cancer. He was 95. Sparks was born to Baxter Abbott and Vivian Sparks on Nov. 11, 1919 in Pauls Valley, OK. After serving in the Navy, he acquired and developed an international publishing company, Petroleum Engineer Publishing Co. (PEPCO), which he later sold to Harcourt Brace Jovanovich. At PEPCO, Sparks published seven magazines and a score of books, guides and engineering aides worldwide.

He leaves his wife of 39 years, Vicki; two sons, Braden (Christie) and Ryan; eight grandchildren and 13 great-grandchildren. Sparks was predeceased by his first wife, Jean, and their daughter, Andrea Sparks Underwood. P&GJ

Ron Scott

Frank Matthews

Association News, Personnel Changes, Mergers & AquisitionsBUSINESS

www.pgjonline.com | 77

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n Creating a capability for real-time or nearly real–time reporting and analysis of cross-functional dependencies

n Reducing costs, increasing transparen-cy and improving quality of outcomes by increasing standardization across geographical, organizational, and func-tional silos.

Measuring Leadership Accountability

Effective business transformations and safe cultures require leadership account-

ability from top executives down to field level management. But it begins at the top and must be demonstrated and communi-cated across the organization.

Top management must establish and maintain policies, goals and objectives of the program following the API recom-mended practice. Next, leaders at all levels of the organization must commit to mak-ing informed decisions and taking actions consistent with safety management system guidelines. One way to share commitment is for all leaders and employees to sign a “safety pledge” that outlines the organiza-tion’s safety vision and culture.

It’s only when leaders collaborate and work with front-line employees that a pro-gram will be successful. This allows for the effective delegation of authority clearly communicated expectations before each job. By sharing leadership for the safety management process, teams and individu-als from the board room to the drilling deck feel supported, ensuring implementa-tion of the safety process. A true safety culture then emerges with the mechanisms in place for continuous improvement to achieve measurable positive results.

Effectively measuring leadership’s prog-ress toward API RP 1173 guidelines will help promote alignment across the organi-zation and speed adoption.

Business of Safety A culture of trust and shared values

can produce numerous benefits, including improved achievement of commercial tar-gets, improved asset lifecycle costs, along with cost-savings due to less safety incidents, downtime and unplanned maintenance.

A well-implemented pipeline safety man-agement system that incorporates best prac-tices of a system-think culture, alignment to business functions and accountability from the top to the bottom will yield busi-ness value beyond those of compliance and reduced risk. Safety is about more than just people and the environment; safety is also just good business. P&GJ

Beyond Compliance...Continued from page 72

78 | Pipeline & Gas Journal • September 2015

Sept. 15-17, Pipeline Week: GITA’s Oil & Gas Conference and PODS User Conference, The Woodlands, TX. Phone: (918) 831-9701; Fax: (918) 831-9161.

Sept. 16-17, Shale Insight 2015, Penn-sylvania Convention Center, Pennsylvania, PA. Web: www.shaleinsight.com.

Sept. 21-24, 50th American School of Gas Measurement Technology, Marriott Westchase, Houston, TX. www.asgmt.com.

Sept. 30-Oct. 2, PetroTrans Summit and Training Program, Marriott O’Hare, Chicago, IL. www.petrotrans2015.com

Oct. 4-7, Gas Machinery Conference 2015, Austin, TX. Phone: (972) 620-4026; Fax: (972) 620-1613.

Oct. 5-9, International Pipe Line & Offshore Contractors Association, Fairmont Hotel, Singapore. Phone: +44 22 306 0203; Fax: +44 22 306 0203 39.

Oct. 5 – 9, Ageing Pipelines Conference and Training Courses, Andromeda Hotel, Ostend, Belgium. Phone: +44 1494 675139; Fax: +44 1494 670155; Email: confer-ences@gs-press.com

Nov. 5-7, 2015 INGAA Foundation Annual Meeting, Ritz-Carlton Key Biscayne, Key Biscayne, FL. Phone: (202) 216-5900; Web: ingaa.org.

Nov. 16-18, 2015 Natural Gas STAR Annual Implementation Workshop, Sheraton Pittsburgh Hotel at Station Square, Pittsburgh, PA. www.epa.gov/gasstar/work-shops/index.html.

Nov. 25-26, European Gas Technology Conference 2015, Park Royal Palace Hotel, Vienna, Austria. Web: www.egatec2015.com P&GJ

MEETINGSUpcoming events 2015

energy renaissance began in the Barnett Shale a little over a decade ago. Once George Mitchell and his team worked out the bugs in horizontal drilling, it was only a matter of time until it spread to the pre-viously unproductive formations, most of which have been known about for decades.

P&GJ: As the pipeline industry moves into somewhat unchartered regions such as Pennsylvania, what are some of the biggest challenges companies face?

Bodenhamer: We shouldn’t forget that the first commercially producing oil well in the United States was drilled in western Pennsylvania and pipelines were laid in these areas by our great-great-grandfathers’ generation.

The biggest challenge then and now is the terrain. A hundred years ago the problems were solved by using small-diameter pipe and laying it on top of the ground. Today we are faced with totally burying large-diameter pipe in much more congested circumstances. New technologies such as direct pipe are being used in challenging areas.

P&GJ: What do you think the public’s perception of the pipeline industry is today, and what can be done to make it more positive?

Bodenhamer: I believe that the pipe-line industry is largely “out of sight, out of mind” until something noteworthy comes to their backyard or neighborhood. Education is one method.

The average American is unaware of

Q&A: Executive Profile...continued from page 96 the importance of pipelines in their daily lives. They don’t realize that the gasoline to run their cars, the natural gas to heat their homes or businesses, the fresh water to drink, and the sewer that carries away the waste are all provided by pipelines, many of which come directly to their home.

I believe that if the public realized how critical pipelines are to their daily lives and how commonplace they are, they would be more receptive to the pipeline industry.

P&GJ: What’s your outlook for the pipeline business for the next couple of years, both in terms of new construction and pipeline integrity work?

Bodenhamer: I’ve been through sev-eral ups and downs of the energy business throughout my career and I’m sure this dry spell will pass, too. We’ve seen continued strength on the gas side and pipeline integ-rity continues to be immune from the cur-rent economic downturn.

P&GJ: What achievements are you most proud of?

Bodenhamer: One of my proudest achievements was being named a Fellow by the American Society of Mechanical Engineers in 2013 after having served for over 20 years on pipeline standards committees.

P&GJ: How does one achieve a PE license in all 50 states, as you’ve done?

Bodenhamer: It takes a lot of paper-work and perseverance. Each state has its own rules and requirements for licensure. A person must first graduate from an accred-ited university, pass an initial eight-hour

exam, work four years under the direction of a professional engineer, and then pass another eight-hour exam. This gets you licensed in one state, which you can then use to get licensed in others.

P&GJ: What are your leading priorities as a senior executive, and how do you go about implementing them with your staff?

Bodenhamer: My first priority at Willbros is to meet the needs of our cli-ents by delivering to them engineering solutions that are safe, compliant and reli-able. To meet these deliverables, I keep my staff current on the latest codes and regulations, new technologies and up to date on the best practices in the industry. We also keep our employees current on safety training and procedures.

P&GJ: Are you seeing more young peo-ple enter the industry, and what do you advise those who are interested in such a career?

Bodenhamer: We have a good number of recent graduates and actively recruit on cam-pus. I believe the energy industry is an exciting career and I encourage those in college to give it serious consideration. The industry needs a vibrant upcoming generation to continue what has been accomplished thus far.

P&GJ: What about your family and your activities outside of work?

Bodenhamer: I’ve been married to my wonderful wife Mary for 33 years, and we have a married son who has a Ph.D. in computer science. I’m very proud of them both. When work doesn’t get in the way on weekends, I like to upgrade and renovate old homes. P&GJ

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90 | Pipeline & Gas Journal • September 2015

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Index provided as a courtesy to readers. While every effort is made to compile accurate listings, publisher assumes no responsibility for errors.ADVERTISER’S INDEXA & E Construction Supply, www.a-econstsupply.com ...................................93

A+ Corporation ...............................................................................................92

Above Ground Markers.com LLC, www.abovegroundmarker.com .................88

AECOM, www.aecom.com .............................................................................42

AGS ................................................................................................................85

Air Logistics, www.airlog.com .........................................................................79

Airport Windsock Corp. ...................................................................................91

American Cast Iron Pipe Company ..................................................................9

American Pipe Bending, www.apb-bend.com ................................................80

Anchor Pipe International, www.anchorpipe.com ...........................................87

ArborMetrics Solutions, Inc., www.arbormetricssolutions.com .......................36

AUMA Riester GmbH & Co., KG ....................................................................22

Bishop Lifting Products, www.lifting.com ........................................................93

BKW, www.bkwinc.com ......................................................................80, 85, 92

Bredero Shaw, www.brederoshaw.com ............................................................7

Burns & McDonnell, www.burnsmcd.com ......................................................15

Carhartt, Inc. ...................................................................................................29

CCI Pipeline Services, www.ccipipe.com .......................................................88

Challenger Services, www.challengerservices.com .......................................92

Cicor Energy Products ...................................................................................40

Coastal Corrosion Control Inc, www.coastalcorrosion.com ...........................89

Colonial Pipeline Company, www.colpipe.com ...............................................60

Commercial Resins Company, www.commercialresins.com ..........................83

CPI Pipe & Steel, www.cpipipe.com ...............................................................83

CRC-Evans Pipeline International, www.crc-evans.com ................................24

Cross Country Supply, www.ccpipeline.com ..................................................82

D.C.I., www.davcorpipelinerollers.com ...........................................................86

Denso North America, www.densona.com.....................................................45

DMI International, www.dmiinternational.com ..........................................81, 92

Drilltech, Inc. ...................................................................................................83

Drinkwater Products, www.drinkwaterproducts.com ......................................33

Dualco, www.dualco-inc.com ..........................................................................82

E-Z Line Pipe Support Co., Inc., www.ezline.com ....................................... IBC

EagleView Technologies/Payables, www.eagleview.com ...............................41

Enduro Pipeline Services, www.enduropls.com ............................................BC

Essentra Components, www.essentracomponents.com ..................................0

Geo Corr, www.geocorr.com ..........................................................................87

Gulf Interstate Field Services, www.gie.com ..................................................86

Harding Directional Drilling, www.hardingdrilling.com ....................................87

Harsco-Air-X-Changers/Randy Benson, www.harscoaxc.com .........................5

Heaman Pipe Bending, Inc., www.heaman.com ............................................93

Heath Consultants, Inc., www.heathus.com ...................................................91

Henkels & McCoy attn: P. Freind, www.henkels.com......................................35

Hold Tight Solutions, www.holdtight.com .......................................................93

IFT Industrial Service Freeze Plug .................................................................87

Illinois Truck & Equipment/Rolf Helland ..........................................................83

International Corrosion Control, www.rustrol.com ..........................................80

Kidd Pipeline & Specialties ............................................................................32

Kiene Diesel ...................................................................................................90

KS Energy Services, Inc., www.ksenergyservices.com .................................84

Lane Trailer Manufacturing Co., www.lanetrailers.com ...................................82

Laney Directional Drilling, www.laneydrilling.com ..........................................48

Master Bond, Inc., www.masterbond.com ......................................................90

Mears HDD .....................................................................................................28

Meridien Energy, LLC, www.meridienenergy.com ..........................................67

Mesa, www.mesaproducts.com ......................................................................91

Meter Engineers Inc., www.meterengineers.com ...........................................87

Midwestern Contractors, www.midwesterncontractors.com ...........................85

Midwestern Manufacturing Co., www.sidebooms.com ...................................31

MPG Pipeline Contractors, www.mpg-plc.com ...............................................25

NDT Global GmbH & Co. KG, www.ndt-global.com .......................................27

Oilfield Manufacturers Warehouse, www.timmillersales.com .........................85

Online Pipeline Solutions, www.online-electronics.com .................................86

Otis Eastern Service LLC ...............................................................................19

Outlaw Padding Company ..............................................................................90

Pe Ben USA, www.pebenusa.com .................................................................90

Pergam Technical Services ............................................................................89

Philadelphia Gear Corporation .......................................................................43

Pigs Unlimited International, Inc., www.pigsunlimited.com ............................19

Pipeline Equipment Inc., www.pipelineequipment.com ..................................89

Pipeline Opportunities Conference, www.pipelineandgasjournal.com ...........23

Pipeline Pigging Products, Inc., www.pipepigs.com .......................................89

Polyguard Products, Inc., www.polyguardproducts.com ................................49

Power Associates International, www.paiinc.com ..........................................89

PPSA, www.piggingassnppsa.com ................................................................54

Price Gregory International, Inc., www.pricegregory.com ..............................52

Priority Energy Services LLC, www.priorityenergyllc.com .............................91

Project Consulting Services, www.projectconsulting.com ..............................37

Proline Pipe Equipment, www.prolinepipeequipment.com .............................84

R-Value Foam, www.rvaluefoam.com ............................................................59

Revco Industries .............................................................................................91

Reynolds French and Company, www.r-f.com ................................................82

Rock Guard ....................................................................................................86

Rosen Swiss AG, www.roseninspection.net ............................................. IFC, 3

Russell NDE Systems, Inc., www.russelltech.com .........................................82

Sawyer Manufacturing Co., www.sawyermfg.com..........................................84

ShawCor .........................................................................................................21

SLR Consulting (Canada) Ltd., www.slrconsulting.com .................................91

Smart Pipe Company Inc ...............................................................................47

Southern Gas Association, www.southerngas.org .........................................84

Steel Etc. ........................................................................................................86

Step-Ko Products, www.stepko.com ...............................................................80

Stopaq BV ......................................................................................................17

Stroud Diving & Hydrography, www.mesco-offshore.com ..............................84

TDW c/o Mediaassociates, Inc. ......................................................................13

TMK IPSCO, www.tmk-ipsco.com ..................................................................51

Triple D Bending, www.pipebending.com .......................................................91

Troy Construction, Inc., www.troyconstruction.com ........................................88

U.S. Pipeline, Inc., www.uspipeline.com .........................................................46

U.S. Trencher & Supply, Inc. ...........................................................................80

UCT, www.uctonline........................................................................................39

ULC Robotics, www.ulcrobotics.com ..............................................................53

United Piping Inc., www.unitedpiping.us ........................................................59

Universal HDD, www.robbins-hdd.com ...........................................................56

Universal Vortex, Inc., www.universal-vortex.com ..........................................61

VACO, Inc., www.vaco.com ............................................................................93

VACUWORX, www.vacuworx.com .................................................................87

Weamco/Metric, www.weamco.com ...............................................................88

Weldbend Corporation, www.weldbend.com ..................................................10

Wilcrest Field Services, Inc., www.wilcrest.com .............................................92

William Riggs Inc., www.flangespreader.com ................................................79

Wood Group Mustang/Accts Payable, www.mustangeng.com .......................57

Zeeco, Inc. ......................................................................................................30

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96 | Pipeline & Gas Journal • September 2015

hat more can you say about Kevin Bodenhamer other than he has had a career that most people in the pipeline business can only dream of having.

His professional accomplishments can fill a whole page so let’s start with his resume:

n 1979-1993, engineer, supervising manager for Cities Service/Occidental Petroleum/Trident NGL.

n 1993-1998, manager, Mid-America Pipeline Co. n 1998-2002, director, Williams Cos. n 2002-2013, vice president, senior vice president,

Enterprise Products. n 2013-2015, vice president, chief engineer, Willbros Engineers Inc.

Bodenhamer was responsible for two significant pipeline construc-tion projects in the 1900s, the Rio Grande Pipeline, which was the first LPG pipeline built between the U.S. and Mexico, and the Discovery offshore 30-inch gas gathering system.

Add to those accomplishments that he is one of just a handful of professional engineers licensed in all 50 states, and that in 2013 he was named American Society of Mechanical Engineers Fellow. Now you get a sense of one of the premiere engineers in the pipeline business, and one who has worked on both the contract and operations side of the business.

Bodenhamer has a story worth telling, especially beginning with his humble roots in rural Missouri. It’s indicative of the type of person any company would want on its payroll; in this case, it’s the pipeline business that won out. His answers in this interview are direct and focused, just what you would expect from a trained engineer.

Kevin Bodenhamer Sets Lofty Standard for Engineers

Q&A: Executive Profile...continued on page 78

I started my career with Cities Service Company in Tulsa designing and building gas-gathering systems and compressor sta-tions. The energy business has been a great career and if I had it to do all over again, I wouldn’t change a thing.

P&GJ: In what ways has the energy and pipeline business changed since you began your career?

Bodenhamer: I’m glad to say that I have seen (and glad to have been a part of) many changes in the business, all for the good. Pipeline hydraulic modeling programs used to take hours to run on the mainframe while today much more complex models run in a matter of seconds on your tablet.

Materials and equipment have gotten stron-ger, better and more reliable. Information and communication have moved from paper to the cloud, and anyone around the world can have instant access. While the time and effort to permit projects has grown exponen-tially, the number and volume of spills and releases continue to decline.

However, the most important improve-ment is that the industry is much safer, both for the public and for the people who build and operate the systems as incidents and accidents continue to decline.

P&GJ: What are your responsibilities with Willbros, and why did you decide to join the service sector at this point in your career?

Bodenhamer: As vice president and chief engineer, I’m responsible for the engi-

By Jeff Share, Editor

ExclusiveEXECUTIVEPROFILE

neering, design, mapping, and GIS informa-tion for the pipeline portion of our clients’ projects. After spending 35 years in the engi-neering, operations, compliance, regulatory and EHS (environmental, health and safety) areas of various operating companies with the last decade of that in Houston, my wife and I wanted to go back to Tulsa.

After talking to several operating and engineering firms in Tulsa, I saw a unique opportunity at Willbros where I could work with a broad base of clients and projects while being able to mentor some of the next generation of individuals who will be taking the energy industry forward.

P&GJ: How have you witnessed the relationship between operating companies and service providers change?

Bodenhamer: Over my career, I have seen virtually all of the energy companies outsource the majority of their engineering, design and construction work to firms such as Willbros. This transition has made it criti-cal that suppliers and operators have very close relationships and stay in close commu-nication throughout all phases of a project.

P&GJ: When did you have your first inkling that an energy renaissance in North America was looming?

Bodenhamer: I’ve seen several “booms and busts” in the energy industry over my career, but I believe the current

P&GJ: Where are you from and what were your interests growing up?

Bodenhamer: I grew up a poor farm boy in the hills of southwest Missouri. My dad had a great mechanical and “hands-on” aptitude. He built every building on the farm and sev-eral pieces of farm equipment. He taught me to use all types of hand tools and equipment, so overhauling an engine or adding on a room to a house was all part of my formative years.

When it came time to graduate from high school, I knew that I wanted to get a degree where I would be building or making something, so engineering was a natural fit. I worked (during school and summers) my way through the University of Missouri-Rolla and received my BS in civil engineering in four years with no debt or student loans.

P&GJ: How and why did you get into the energy business, in particular pipelines? Did you ever have any second thoughts about your decision?

Bodenhamer: When I was attend-ing college I thought that I would go into building or highway construction, but when it came time to interview on campus in my senior year, all of the major oil companies were there recruiting (it was the middle of the late ’70s/early ’80s oil boom) for their engineering departments.

I ended up taking lots of energy company recruiting trips and after discovering that I could design and build pipelines for a better salary than building buildings or roads, the choice was clear, I was going into the energy business.

W

R

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E-Z Line®’s In-house structural engineer and designers created supports based on axial, lateral, and vertical loads provided by our customers.

Custom Weld-on Pipe Shoes with Guides and Anchor Stops.

P.O. Box 767 | Manvel, TX 77578 | Phone: 713-675-6693 | Fax: 713-947-0768 | www.EZLine.com

E-Z Line® Builds Custom Pipe Supports

Made In

EZLine 4th Quarter 2015-PGJ-PN.indd 1 8/24/2015 8:59:34 PM