Rick Hagar Gulf Coast News Editor Warren R. True Pipeline/Gas Processing Editor
Pipeline construction in the non-Communist world continues to show gains, due largely to planned gas transmission lines in the U.S.
The latest Oil & Gas Journal construction survey shows pipeline operators plan to lay 39,690 miles of crude oil, natural gas, and petroleum product line in the non-Communist world this year and beyond.
By comparison, there were 34,725 miles of planned pipelines in the hopper at this time last year (OGJ, Feb. 13, 1989, p. 13).
According to OGJ's 1990 survey, 10,091 miles of line either were being laid as the year began or are part of projects expected to be completed by yearend 1990. At this time last year, 9,314 miles were planned to be laid in 1989.
Cost of this year's work is an estimated $8.4 billion, compared with last year's estimate of $6.2 billion. For 1990 and beyond, total land and offshore construction costs will exceed $33 billion, compared with $23 billion last year.
The mileage differences in the two categories of planned 1990 construction and planned 1990 and beyond construction reflect the way pipeline companies change construction plans during the course of a year as business climates for different markets change.
Projects for 1990 mileage include only those in progress at the first of the year or scheduled to begin during the year and likely to be completed by yearend.
Projects for mileage for 1990 and beyond include 1990 projects and others set to begin this year but likely to be finished in 1990 or later.
Excluded from the projects are ones only under study or those planned but not set to begin construction until 1990 or later. In addition, projects are adjusted to eliminate mileage duplications caused by competing projects where only one or two are likely to be built.
OGJ's projections, which involve transmission and gathering lines 4 in. and larger in diameter, are based on an annual pipeline construction survey, semiannual worldwide construction surveys, and compilation of published industry and government data.
Cost estimates are based on U.S. average cost per mile for onshore and offshore construction as determined by OGJ's most recent annual pipeline economics report (OGJ, Nov. 27,1989, p. 41).
The cost projections assume that 90% of all construction will be onshore and 10% offshore. The exceptions are pipelines 32 in. in diameter or larger, which are assumed to be solely onshore projects.
Total land construction for 1990 will reach almost $7.9 billion-$2.1 billion for 4-10 in. pipelines, $2.2 billion for 12-20 in., $1.5 billion for 2230 in., and $2.1 for 32 in. and larger.
Total construction offshore for 1990 will reach $563.4 million-$206.5 million for 410 in., $210.2 million for 1290 in., and $146.8 million for 22-30 in.
Total land construction for 1990 and beyond will reach $31.2 billion-$5.4 billion for 4-10 in., $6.2 billion for 12-20 in., $8.2 billion for 22-30 in., and $11.4 billion for 32 in. and larger.
Total construction offshore for 1990 and beyond will reach $1.9 billion-$523.6 million for 4-10 in., $605.5 million for 12-20 in., and $799.4 million for 22-30 in.
GAS LINES DOMINATE
Gas pipelines once again represent by far the largest segment of industry's construction schedule. More than 74% of all planned pipelaying in the non-Communist world is for gas transmission.
In the U.S. alone, more than 13,000 miles of gas transmission lines are planned this year and beyond, compared with 9,284 miles planned at this time last year.
There are now twice as many miles of 30 in. and larger diameter pipe for gas service planned in the U.S. compared with what was planned at this time last year. There also has been a sharp increase in planned construction of 22-30 in. gas pipelines.
The large increase in U.S. gas line construction more than makes up for the 54% decrease in planned crude oil pipeline construction. One major reason for the large drop was completion of All American Pipeline Co.'s California-West Texas system.
U.S. GAS ACTIVITY
Big projects are to get under way this year to move more gas to California.
They originally were designed to serve the California thermal enhanced oil recovery market, but growing industrial and residential gas demand in California improved project economics to the point that more than one likely will be built.
Thus far, two of the competing projects, all certified by the Federal Energy Regulatory Commission for construction, have received enough firm, long term transportation commitments to proceed with construction this year.
The first to make the announcement was Coastal Corp.'s Wyoming-California Pipeline Co. (WyCal), which plans a $665 million, 1,000 mile, 30 in. project (OGJ, Jan. 15, p. 17).
Two weeks later, Kern River Gas Transmission Co. said it also will begin construction this year (OGJ, Jan. 29, Newsletter). Kern River, a joint venture of Tenneco Inc. and Williams Cos., is an 837 mile project.
Meanwhile, the proposed 386 mile Mojave Pipeline Co., owned by Enron Corp. and El Paso Natural Gas Co., is expected soon to announce a date to begin laying a third competing project.
And Pacific Gas Transmission Co. continues to seek regulatory approval for a $1.2 billion line from Alberta to California (OGJ, Nov. 20, 1989, p. 43). The line would compete with the proposed Altamont system, in which Tenneco Gas last month acquired a 50% interest (OGJ, Jan. 29, Newsletter).
El Paso also plans a $201 million project to lay 240 miles of 30, 34, and 36 in. loop on its system that serves California (OGJ, Aug. 14, 1989, p. 18).
MOBILE BAY
No Mobile Bay pipeline construction is expected this year in the prolific Jurassic Norphlet deep gas trend off Alabama. However, significant activity is expected next year from several competing projects (OGJ, Jan. 9, 1989, p. 28).
Transco Energy Co. owns and operates the only pipeline hookup with Mobile Bay.
The Transco line, however, is still without a FERC transportation certificate. FERC also has not certified any of the projects proposed to compete with Transco's Mobile Bay line. Certification for one or more of the lines may occur later this year.
So far, there is only one Mobile Bay development project on stream, but as many as two are scheduled to go on stream next year. More are pending for 1992.
The scramble to line up shippers for the proposed projects will begin in earnest later this year.
ARKOMA BASIN
Several competing projects have been proposed to transport gas from a series of discoveries in Oklahoma's Arkoma basin.
Coastal and Arkla Inc., as part of a larger project, may include a 200 mile, 30 in. line from Latimer County, Okla., to Jefferson County, Ark. (OGJ, May 1, 1989, p. 30).
Delta Pipeline Co. proposes an $82 million, 190 mile, 24 in. line from near Wilburton field, Latimer County, eastward.
Noark Pipeline System, Fayetteville, Ark., plans a $73 million, 258 mile, 10-16 in. line from Sebastian County, Ark., to Greene County, Ark. In addition, the system would have 44 miles of 6-12 in. laterals.
Oklahoma-Arkansas Pipeline Co. proposes a $273 million, 352 mile system from Wilburton field, Pittsburgh County, Okla., to Independence, Miss.
Also in Oklahoma, Northern Natural Gas Co. proposes a $38 million, 88 mile, 20 in. line from its Roger Mills station to its Pampa, Tex., compressor station in the Anadarko basin.
Natural Gas Pipeline Co. of America has begun work on a 350 MMcfd, $108 million interconnect gas pipeline. The project includes 97 miles of 30 in. pipe in southern Oklahoma and 94 miles of 30 in. pipe in North Texas.
COAL SEAM, OTHER PROJECTS
Northwest Pipeline Corp. and Transwestern Pipeline Co. are considering a 30 in., 154 mile line from Northwest's Ignacio gas treating plant at Durango, Colo., to Transwestern's system at Thoreau, N.M., to tie in coal seam gas.
Magnolia Pipeline Corp., owned by Energen Corp. and Transco Energy Co., plans to lay a $55 million, 55 mile intrastate pipeline with about 40 miles of laterals to link coalbed methane production in the southwest portion of Alabama's Black Warrior basin with Transco's interstate line in Central Alabama.
In the U.S. Northeast, FERC last year approved a settlement proposal that consolidates several projects filed under FERC's open season proceedings. Construction has begun on some of the projects.
Meanwhile, Endevco Inc., Dallas, plans to lay a $95 million, 240 mile, 20-24 in. gas pipeline from Shreveport, La., to South Central Mississippi. Start-up of the 300 MMcfd system is scheduled for the 1991-92 winter heating season.
Endevco operates the 400 mile Mississippi Fuel Co. intrastate system near the terminus of the planned line.
Missouri Pipeline Co., operated by Omega Pipeline Co., is laying 22 miles of gas line and converting to gas service 70 miles of crude oil pipeline in Pike, Lincoln, and St. Charles counties, Mo.
BP Exploration (Alaska) Inc. plans a $7 million project to lay 7 miles of 60 in. pipe in Prudhoe Bay field, Alas.
Part of Prudhoe Bay's gas handling expansion project, the line will move gas produced in the western part of the field to the central gas facility. Work is expected to be completed in April.
Associated Natural Gas Inc. and Gulf States Pipeline Corp. are laying a 42 mile, 12 in. gas residue/gathering line from Associated's Minden gas processing plant in Webster Parish, La., to Gulf's main line in northern Jackson Parish.
Questar Pipeline Co. plans to lay a $19 million, 81 mile, 20 in. gas line in Daggett and Uintah counties, Utah, to connect its northern and southern transmission systems this year.
CANADIAN GAS
In Canada, Pacific Coast Energy Corp., Vancouver, B.C., has begun work on the $506 million (Canadian) Vancouver Island gas pipeline project.
The mainland portion consists of 118 miles of 103/4 in. pipe in two sections with three laterals to pulp mills. The water portion consists of dual 10 in. crossings of the Georgia and Malaspina straits in water as deep as 1,450 ft.
Canada's National Energy Board is scheduled to conduct hearings this month on an application by TransCanada PipeLines Ltd. to lay 852.7 km of pipe, all but 5.4 km of it loop, in Saskatchewan, Manitoba, Ontario, and Quebec.
Meanwhile, competition to move North American arctic gas to market also is heating up.
Foothills Pipe Lines Ltd. seeks authority to extend the Alaska Natural Gas Transportation System (Angts) prebuild portion about 400 miles north to link with the proposed $4.4 billion (Canadian), 1.2 bcfd Mackenzie Valley pipeline (OGJ, Dec. 25, 1989, p. 34).
Meanwhile, the $11 billion Trans-Alaska Gas System (TAGS) is moving ahead with plans to lay an 800 mile, 36 in. gas line from Prudhoe Bay to Valdez paralleling the Trans-Alaska Pipeline System. The project, with pipelaying scheduled for 1993, hinges on a viable liquefied natural gas market.
U.S. PRODUCT LINES
Enron Liquids Pipeline Co. plans to lay a $25 million, 100 mile, 8 in. ethane pipeline from Mont Belvieu, Tex., to Westlake Petrochemicals Corp.'s Lake Charles, La., planned ethylene plant.
Phillips Pipe Line Co. and partners are laying a 10 in. products line between Borger and Amarillo, Tex., and expanding capacity of the Amarillo-Tucumcari-Albuquerque products line to 24,000 b/d from 18,000 b/d.
Seagull Energy Corp. plans to lay and begin operating a natural gas liquids/petrochemical pipeline system by this year's third quarter on the Texas Gulf Coast. Four pipelines totaling 73 miles long will be laid between Quantum Chemical Corp.'s Deer Park, Tex., olefins plant and underground storage at Mont Belvieu.
INTERNATIONAL GAS PROJECTS
European Marine Contractors plans to lay a 210 mile, 30 in. gas line from Mobil North Sea Ltd.'s Beryl field in the U.K. North Sea to St. Fergus, Scotland.
Nederlandse Aardolie Mij. and partners are laying the $45 million, 161 mile Nogat pipeline linking the F3 area of the Dutch North Sea to the Dutch coast. The project is to be complete late next year or early in 1992.
Development of competition for the near monopoly of British Gas plc is expected to trigger more U.K. pipelaying.
Gas Transmission U.K. Ltd., Britain's first independent gas transmission company, disclosed late last year plans for a 180 mile line from the major gas terminal at Bacton on England's east coast to an industrial area on the Thames Estuary east of London (OGJ, Nov. 13, 1989, p. 40).
Conoco (U.K.) Ltd. plans to form a joint venture with one of the proposed private sector electricity companies in the U.K. to build the country's second independent gas pipeline (OGJ, Dec. 4, 1989, p. 28).
The venture first would build and operate a 31 mile line from the Conoco operated North Sea gas terminal at Theddlethorpe, Lincolnshire, to Powergen's proposed combined cycle gas turbine power station at Killingholme, South Humberside.
Mobil North Sea Ltd. is proceeding with construction of a 30 in., 210 mile gas line linking its Beryl field in the U.K. North Sea with St. Fergus, north of Aberdeen.
Midal GmbH, owned by OMV AG, Vienna, and Wintershall AG, plans to lay and operate West Germany's first independently owned gas pipeline, running from Emden to Ludwigshafen.
Capacity of the 348 mile, 32 in. line will be 193.5 MMcfd, expandable to 774 MMcfd.
Empresa Nacional de Gas SA, Spain's state gas company, plans to spend $300 million in several projects to link its gas distribution system with the European network across the Pyrenees.
The main connection is a 44 mile, 24 in. line from Serrablo, Spain, to Lacq, France.
At the same time, Catalana de Gas SA, Spain's leading private gas company, plans to spend $375 million to expand its distribution network.
Libya plans to lay a 416 mile gas line from Al Brika in the northeastern part of the country through Misrata to Khoms in the northwest region.
A second phase of the project includes a western extension.
India's Oil and Natural Gas Commission is building a $32 million pipeline network for gas lift operations in offshore Bombay High oil field.
Abu Dhabi National Oil Co. is laying a 100 mile gas line from the Maqta gas terminal to a power plant at Al-Ain. Completion is scheduled late this year or early next year.
SEVERAL PLAN PRODUCT LINES
Cia. Arrendataria del Monopolio de Petroleos SA, Spain's national products distribution company, plans to spend $150 million to expand its products pipeline network by 500 miles to 2,100 miles. The project is scheduled to be completed late next year.
The company also is laying a 72 mile, 8 in. products line from Palencia to Leon in northern Spain.
The $87 million project is scheduled for completion in early 1991.
Petroleos del Ecuador is laying a 165 km, 6-8 in. gasoline pipeline from the La Libertad refinery to Manta, Ecuador.
Kenya Pipeline Co. plans to extend Kenya's main oil products line from Nairobi to the western part of the country.
BP Exploration commissioned a 15 mile, 12 in. NGL line linking Total Oil Marine plc's St. Fergus gas terminal to BP's Cruden Bay terminal.
Throughput will increase to about 5,000 b/d in this year's second quarter when Total completes an extension at St. Fergus to handle wet gas from North Alwyn field.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.