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North American pipeline companies are building, planning and studying 24,890 miles of natural gas, crude oil and petroleum pipelines in the U.S. and Canada.
The leading area of construction is the Upper Gulf Coast, in north and east Texas and northern Louisiana, as operators seek to build new infrastructure that will move Barnett Shale and Bossier Sand gas production to new markets.
In addition, growing crude oil demand has revived plans for expanded oil sands transportation capacity. Work has begun on a portion of these projects in the U.S. Midwest, and operators are gearing up to build the Canadian portions of the systems as well.
Upper Gulf Coast
Much of the work in the U.S. will take place in the Upper Gulf Coast region, in Texas and Louisiana. One of these projects is the $530-million East Texas natural gas pipeline expansion, developed
by Enbridge Energy Partners. It involves building a 192-mi, 36-in. from Bethel
to Orange County, and a 60-mi, 24-in. pipeline from Crockett to Franklin County. Construction is underway, and contracts have been awarded to H.C. Price Co., Willbros RPI, and Troy Construction Co. A fourth-quarter 2007 completion is planned. The project will also include a number of upstream facilities, including gathering pipelines to tie existing facilities into the new intrastate pipeline, as well as a new gas processing plant that will be built near Marquez, in Franklin County.
Crosstex Energy is moving forward with its $90-million North Louisiana expansion project, designed to move gas from Shreveport, Louisiana, to markets accessible off of its existing Louisiana Intrastate Gas system. The project calls for 65 mi of 24-in. line and nine miles of 16-in. line to run through three parishes before reaching existing Crosstex systems near Natchitoches. Quanta Utility Services, LLC, is performing the construction, and is working to meet a first-quarter 2007 completion.
CenterPoint Energy reports that construction has begun on its $425-million Carthage-to-Perryville natural gas pipeline project. The line run with 172 mi of 42-in. pipe to move gas from Carthage, Texas, to the company’s Perryville hub in northeast Louisiana. As designed, the pipeline will provide market access for growing production from East Texas and north Louisiana through interconnects with interstate and intrastate pipelines serving the East Coast, Midwest and Southeast U.S. markets. The line is being built in two phases, with phase one expected to be in service in the first quarter of 2007, and phase two set for a summer 2007 completion.
Contracts have been awarded to
H.C. Price Co., Associated Pipe Line Contractors, Inc., Sheehan Pipeline Construction Co., and Willbros RPI for the pipeline construction. Contracts have been awarded to Michels Pipeline Construction and Bluewater Constructors, Inc. for compressor station construction, and contracts have been awarded to Michels and WHC, Inc. for construction of the interconnect stations. In addition, Centerpoint says that based on market response to date, it is contemplating a third phase of construction, subject to FERC approval. This third phase, which would expand the pipeline’s capacity, would be complete by the end of 2007.
Work on the Southeast Supply Header project is also expected to start this year. The project is designed to link gas supply from East Texas and north Louisiana basins to growing U.S. southeast and northeast markets. It involves construction of a 270-mi, 36 and 42-in. gas pipeline that would run from the Perryville hub in northern Louisiana to the Gulfstream Natural Gas System near southern Mobile County, Alabama. The project is being developed by CenterPoint Energy, Duke Energy Gas Transmission (now Spectra Energy), and Southern Natural Gas. An FERC application was filed in December, and Spectra Energy says it hopes to receive the certificate in third-quarter 2007. With timely approvals, construction would get underway in fourth-quarter 2007 to meet a summer 2008 completion date.
Energy Transfer reports that work
is continuing on its $895-million proj-ect designed to help Barnett Shale and Bossier Sands producers move their gas to new markets. Construction is underway on a 265-mi, 42 and 30-in. pipeline which will connect the company’s ET fuel system with its HPL system, running from Cleburne, Texas in Johnson County to a point near Reed, Texas in central Freestone County, and from there to the Texoma pipeline at the Carthage, Texas hub. Construction contracts have been awarded to Sheehan Pipeline Construction Co. and Willbros RPI, and crews are working toward a March 2007 completion.
The project also calls for an expansion of the system currently being built. The expansion consists of adding 157 mi of 42-in. pipeline and 132,700 in added compressor horsepower. Plans call for this line to begin in Limestone County and run in a southeasterly direction to interconnect with the 30-in. Texoma system in Hardin County Texas, northeast of Beaumont. Interconnects with several interstate pipelines are being contemplated. Construction on this part of the project will begin this summer, and work toward a November 2007 completion.
And there are still other projects in
the region. Boardwalk Pipeline Partners has announced that it is making progress in its development of two natural gas pipeline projects being developed by its subsidiary Gulf South Pipeline Company. The Gulf Crossing project involves construction of a new $1.1-billion, 355-mi,
42-in. interstate gas pipeline that would move gas from Sherman, Texas, to the Perryville, Louisiana, area. Subject to regulatory approval, the project is expected to be complete during the fourth quarter of 2008. The $330-million Southeast expansion project will entail the addition of 116 mi of 42-in. pipeline to expand transmission capacity on the Gulf South pipeline system between Harrisville, Mississippi, to Choctaw County, Alabama. Subject to regulatory approval, work will get underway to meet a first-quarter 2008 completion. Depending on market response, Gulf South says it is prepared to add up to $300 million in additional facilities as well.
Enterprise Products Partners reports plans to construct the Sherman extension, a 178-mi, 30 and 36-in. pipeline that will provide takeaway capacity for natural gas producers operating in the Barnett Shale area of North Texas. The Sherman extension will originate at Enterprise’s Texas intrastate pipeline system near Morgan Mill, Texas (southwest of Fort Worth), and will extend through the center of the current Barnett Shale development area to Sherman, Texas. From there, it will connect to Boardwalk Pipeline Partners’ proposed Gulf Crossing project, which will deliver gas to the Perryville, Louisiana, area. The project is estimated to cost approximately $400 million, most of which will be spent in 2008, and is expected to be placed in service in the fourth quarter of 2008.
South Texas
Tidelands Oil & Gas has filed applications with the FERC to build the U.S. portion of its Northeast Hub natural gas pipeline project in Texas, which will connect the North American pipeline grid with natural gas supplies and markets in northern Mexico. The project consists of two pipelines: the 172-mi, 30-in. Mission line, which will run from the Gilmore plant in Texas to Monterrey, Mexico; and the 65-mi, 30-in. Progreso line from the Donna station in Texas to the Campo Brazil storage facility in northern Mexico.
Southeast
Construction has begun on the Southern Natural Gas’s $240-million Cypress natural gas pipeline project. Work involves building a 165-mi, 24-in. pipeline from Savannah, Georgia, to Jacksonville, Florida. Latex Construction Co. is building the line, and is working to meet a May 2007 completion.
El Paso also reports progress on its Elba Express project, designed to transport natural gas from Savannah, Georgia, to markets in Georgia and South Carolina. An FERC application has been filed to build the project, which calls for construction of a 190-mi, 36 and 42-in. pipeline that will transport natural gas from Savannah, Georgia, to markets in Georgia and South Carolina.
Midcontinent
Kinder Morgan and Energy Transfer have announced their intention to jointly develop the $1.25-billion Midcontinent Express pipeline, designed to move gas from Oklahoma and Texas to eastern markets. Plans call for an approximately 500-mi pipeline that will originate near Bennington, Oklahoma, and run with 42, 36 and 30-in. pipe through Perryville, Louisiana, before terminating at an interconnect with Transco in Butler, Alabama.
Pending necessary regulatory approvals, the project is expected to be in service by February 2009.
Midwest
Work has begun on Enbridge’s Southern Access project and Southern Lights pipeline projects. Southern Access involves an expansion and extension of Enbridge’s existing crude oil pipeline system in Wisconsin and Illinois. The Southern Lights project is designed to carry diluents from Chicago to the Canadian oil sands area of Alberta.
Enbridge has entered into a three-year alliance agreement with Global Pipeline Partners, LLC for the construction of nearly 400 miles of pipeline for its Southern Access and Southern Lights project in Wisconsin. The agreement currently calls for construction of 321 mi of 42-in. pipeline for Stage 1 of the Southern Access project, and 75 mi of 20-in. pipeline for the Southern Lights project. Southern Access Stage 1 calls for new pipe to be installed within the existing Enbridge right-of-way between Superior and Enbridge’s Delavan pumping station near Whitewater. The Southern Lights portion will be built concurrently and along the same route as the 42-in. pipeline.
Global Pipeline Partners is a partnership of four construction contractors including Michels Corporation of Brownsville, Wisconsin; Precision Pipeline, LLC of Eau Claire, Wisconsin; U.S. Pipeline, Inc. of Houston, Texas, and Welded Construction, L.P. of Perrysburg, Ohio. Construction was expected to begin in late 2006 and early 2007, and work toward a 2008 completion.
Rockies
Kinder Morgan reports that the second segment of the first leg of the Rockies Express pipeline (REX) project – a 192-mi, 42-in. line from the Wamsutter hub in Wyoming to the Cheyenne hub in Colorado – has been completed. The first segment of the project (formerly known as the Entrega project) entailed the construction of 136 mi of 36-in. line from the Meeker hub in Colorado to the Wamsutter hub, and was completed last year.
Meanwhile, Kinder Morgan continues to move the remaining 1,323 mi of the REX pipeline project through the regulatory process. The company says that it expects to receive the FERC certificate for REX-West project this spring, and hopes to commence construction shortly thereafter. REX-West will consist of 713 mi of 42-in. pipeline from Weld County, Colorado, to Audrain County, Missouri, and has a targeted in-service date of December 2007. REX-East, a 622-mi segment from eastern Missouri to the Clarington hub in Ohio, is expected to be completed by June 2009.
Western states
Work is expected to begin this year on the $500-million Overland Pass pipeline project, being developed by Northern Border Partners and Williams. The project calls for construction of a 750-mi, 14 and 16-in. system to carry natural gas liquids from Opal, Wyoming, to Conway, Kansas. The project also calls for three pump stations that will add up to 4,500 horsepower to the system. With timely approvals, construction is expected to begin in the summer of 2007 and move toward an early 2008 completion. Right-of-way acquisition is underway, and bids for construction were expected to be sent out in January. Developers are targeting a late summer 2007 construction start.
Oilsands region
Enbridge Inc. and Enbridge Energy Partners have announced that they will proceed with construction of two projects as additions to the Enbridge common carrier mainline system. These projects are the (U.S.)$2-billion Alberta Clipper project and the (U.S.)$257-million Line 4 extension project. They are designed to help western Canadian operators move oil sands production to new markets.
The Alberta Clipper project will involve the construction of a 990-mi, 36-in. crude line from Hardisty, Alberta, to Superior, Wisconsin, primarily follow-ing Enbridge’s existing right-of-way.
To balance the increased capacity into Superior, a low-cost expansion of the
42-in. Southern Access line to Chicago will be undertaken at an estimated cost of approximately (U.S.)$100 million. The Canadian segment of Alberta Clipper is expected to cost approximately (U.S.)$1.28 billion and the U.S. segment is expected to cost approximately (U.S.)$800 million.
The Line 4 extension project is designed to eliminate a potential capacity bottleneck on the mainline system between Edmonton and Hardisty, Alberta. The project involves the construction of 85 mi of 36-in. segments that will connect existing 48-in. segments between Edmonton and Hardisty, and move the origination point of Line 4 from Hardisty back to Edmonton.
