FEBRUARY 2016
/
World Pipelines
5
W
o
rld News
SIGN UP TO RSS NEWS FEEDS AT
North Dakota approves Dakota Access
Pipeline
North Dakota regulators have approved a proposal to build
the largest capacity pipeline to date. The 1130 mile long
pipeline will transport approximately 600 000 bbls of
crude oil from the Bakken oilfields through 50 counties
across four states.
On 19 January, the North Dakota Public Service
Commission approved permits for the pipeline, which
would transport crude oil through the Dakotas, Illinois, and
Iowa.
The project is expected to cost US$3.8 billion, with the
North Dakota leg alone costing US$1.4 billion.
Dallas-based Energy Transfer Partners claims to have
easement agreements on 85% of the land the pipeline
crosses.
The pipeline’s capacity is about half of North Dakota’s
current production. The North Dakota portion is the longest
leg of the pipeline. The company says regulators in South
Dakota and Illinois already have approved permits for the
project.
The Iowa Utilities Board announced it has scheduled
four days of public meetings in February for deliberations
about an Iowa permit.
The pipeline is to be built by Dakota Access LLC, a
partner of Energy Transfer Partners.
Tentative plans are to begin pipeline construction in the
spring and have the line in service by late this year.
TransCanada to make headway after Keystone XL
denial
Despite the rejection of TransCanada’s Keystone XL pipeline
expansion project by US President Barack Obama, the company is
now attempting to make headway in the oil refinery complex, in
America’s Gulf Coast.
TransCanada’s Houston Lateral pipeline and tank terminal is
intended to be available by 2Q16. It will connect the existing Keystone
pipeline system to the company’s Houston refineries.
Paul Miller from TransCanada stated: “Today, we probably move
over 300 000 bpd of crude oil from Canada to the US Gulf Coast, and
we represent about a third of that. As we see the connection of our
system going to these additional markets in the US Gulf Coast, we
would look to increase both our share as well as the absolute
volume.”
In order to strengthen the relationship between its Houston
Lateral pipeline and terminal and the Gulf Coast energy markets, the
company – along with Magellan Midstream Partners LP – has decided
to construct a US$50 million pipeline, which will transport
200 000 bpd from TransCanada’s terminal in Houston to Magellan’s
East Houston terminal.
Miller explained: “It’s small from a dollar perspective, but it’s
hugely significant from a connectivity perspective, providing
connectivity to both the Houston and the Texas City refineries.
[Additionally,] Louisiana is another attractive market for TransCanada,
considering the existing footprint we have down to the US Gulf
Coast.”
However, despite numerous smaller pipeline projects being
undertaken by TransCanada, the Houston Lateral pipeline and terminal
will not be able to replace the benefits or success the Keystone XL
pipeline project could have brought.
Yet, TransCanada is not deterred from the Keystone XL’s rejection.
In early January 2016, the company announced that it had filed a
Notice of Intent to initiate a claim under Chapter 11 of the North
American Free Trade Agreement (NAFTA) in response to the US
Administration’s decision to deny a Presidential Permit for the
Keystone XL pipeline on the basis that the denial was arbitrary and
unjustified. TransCanada also filed a lawsuit in the US Federal Court in
Houston, Texas, asserting that the President’s decision to deny
construction of Keystone XL exceeded his power under the US
Constitution.
TransCanada CEO Russ Girling said the Keystone XL pipeline was
still possible, continuing to state: “It’s pretty clear we have been
harmed in an arbitrary and discriminatory way. I don’t think there’s
anybody that would say this isn’t an egregious abuse of authority and
that we weren’t treated fairly or equitably to whatever standards you
choose – cross-border pipelines, domestic pipelines, or imports from
other countries.”
Similarly, BMO Capital Markets Analysist Ben Pham argued that
the company could have a “credible case.” However, he continued to
explain that “having said that, the odds appear to be against
TransCanada, as no company has been successful with a NAFTA
challenge so far with the US, and the process could take years to
resolve unless early settlement.”
BP spends millions to upgrade Baku-Supsa
pipeline
British oil company BP intends to spend US$150 million in
order to upgrade certain parts of the Baku-Supsa oil
pipeline, which runs from Azerbaijan to Georgia, reports
from the Georgian government stated.
The issue was discussed during the Georgian Prime
Minister’s meeting with BP’s CEO Bob Dudley at the World
Economic Forum in Davos, the Georgian government’s press
service said in a statement.
“BP will spend US$150 million on modernisation of some
stretches of the pipeline and improvement of ecological
standards,” the Davos press service said.
Azerbaijan exports oil via the Baku-Supsa pipeline from
the Chirag oilfield, which is operated by BP.
Exports through the Baku-Supsa pipeline rose to
3.9 million t in January - November 2015 from 3.8 million t in
the same period a year earlier.
In related news, BP CEO Dudley is reported to have said
that despite the volatility of oil prices at the world market,
the South Caucasus gas pipeline project is being
implemented according to schedule and will be completed
by 2018.
