PG&E pushed controversial pipeline inspection plan

SAN FRANCISCO, Calif. - Pacific Gas and Electric Co. led a successful lobbying campaign to persuade federal regulators writing natural-gas safety rules seven
years ago to endorse a pipe inspection method many experts see as deficient - the technique used on the pipeline that later failed catastrophically in San Bruno.
A PG&E executive was one of the main industry proponents of the then-new testing regimen, interviews with people who were involved in the rule-writing process and a San Francisco Chronicle review of documents show.

The federal government's decision to allow the method - despite knowing it was seriously deficient in detecting problems - saved PG&E (and other pipeline companies) millions of dollars because the utility didn't have to upgrade its system to accommodate more effective inspection technology such as the use of smart tools.
The method PG&E used in San Bruno is called direct assessment, which involves records research, surface-level electronic testing and digging holes to spot-check small portions of buried pipelines. When the utility used it on the San Bruno transmission line in November 2009, it found no problems.
Ten months later, the line ruptured, causing an explosion and fire that killed eight people and destroyed 37 homes. The National Transportation Safety Board is investigating the blast and has not arrived at a cause, but said that it was looking into whether a weld on a lateral seam of the pipe had failed. (Source: Eric Nalder and Jaxon Van Derbeken, San Francisco Chronicle, Dec. 23, 2010)

Mexico launches investigation into deadly oil pipeline explosion

MEXICO CITY - Mexican officials say investigators have begun probing a massive oil pipeline explosion that killed 28 people.

Valentin Meneses says a commission has been formed in tandem with state oil company Petroleos Mexicanos to investigate. Menses is interior secretary for the state of Puebla, where the blast took place in the town of San Martin Texmelucan.

Petroleos Mexicanos, Latin America’s largest oil producer, expected to reopen the pipeline as early as Dec. 20 after an explosion killed 28 people and scorched homes in the central Mexican city.

Pemex Chief Executive Officer Juan Jose Suarez Coppel and Deputy Refining Director Francisco Fernandez told reporters on Dec. 19 in Mexico City that the explosion may have been caused by thieves trying to steal fuel, “There are elements that point towards an illegal tapping, but we won’t have a definitive cause until the affected pipeline gets a metallurgical investigation," said Coppel. The probe is expected to last at least three months, Fernandez said.

The 30-inch Nuevo Teapa pipeline in San Martin Texmelucan, Puebla state, exploded at 5:50 a.m. local time on Dec. 19, causing crude to flow into a nearby river and a cloud of smoke to blacken the sky, the Milenio television network reported.

Pemex said that it had five million barrels worth 9.3 billion pesos ($750 million) stolen in 2008. Pemex has detected more than 600 cases of illegal tapping from its pipelines this year, Suarez Coppel said.

Enbridge prorates pipes to U.S. on high demand, dig inspections

CALGARY, Alta. - Enbridge Inc. said demand for shipments in January exceeds space on some of its crude oil pipelines because of high demand and restricted capacity resulting from inspections and digs.

Enbridge apportioned its Line 6B by 43 percent and Line 5 by 33 percent, according to an e-mailed statement. “Self- imposed rate restrictions in support of maintenance and integrity dig activities” caused reduced capacity on Line 5, the company said.

Shipments on lines 6A, 14 and 62 were pro-rated in aggregate by 26 percent, the company said. Orders to ship oil through the pipelines exceeded the lines’ capacities. Shippers must cut their nominations by the apportionment ratio.

Koch Pipeline Co. to begin building 16-Inch crude oil pipeline in Texas

WICHITA, Kansas - Koch Pipeline Co., L.P. will create the capacity to move an additional 120,000 b/d of Eagle Ford crude in late 2012.

Koch Pipeline said it has received final shareholder approval to build the new pipeline into Karnes County, Texas.

“This will be our most extensive project to date to connect Eagle Ford producers with refineries in Corpus Christi,” said Kim Penner, president of Koch Pipeline. “It not only allows us to ship more crude oil to Corpus Christi refiners and to the Flint Hills Resources waterborne terminal at Ingleside, but it also improves our efficiency and reliability as this project includes new tanks and a new truck station.”

The new 16-inch line will have future expansion capability of more than 200,000 b/d and include direct pipeline connections to producer tank batteries in Karnes and DeWitt counties. A new station, likely near Helena, will connect into Koch Pipeline’s existing crude system in Pettus and Refugio.

Brad Urban, senior vice president of supply for Koch Pipeline’s affiliate Flint Hills Resources, said: “This project fits well with our plan to process a large volume of South Texas crude oil and condensate at our Corpus Christi refinery as well as move a large volume of those products via the water. We continue to evaluate projects to enhance our Corpus Christi refinery processing capability and believe the majority of what we will refine in the future will be South Texas domestic crude oil and condensate.”

Koch Pipeline Co. to begin building 16-Inch crude oil pipeline in Texas

WICHITA, Kansas - Koch Pipeline Co., L.P. will create the capacity to move an additional 120,000 b/d of Eagle Ford crude in late 2012.

Koch Pipeline said it has received final shareholder approval to build the new pipeline into Karnes County, Texas.

“This will be our most extensive project to date to connect Eagle Ford producers with refineries in Corpus Christi,” said Kim Penner, president of Koch Pipeline. “It not only allows us to ship more crude oil to Corpus Christi refiners and to the Flint Hills Resources waterborne terminal at Ingleside, but it also improves our efficiency and reliability as this project includes new tanks and a new truck station.”

The new 16-inch line will have future expansion capability of more than 200,000 b/d and include direct pipeline connections to producer tank batteries in Karnes and DeWitt counties. A new station, likely near Helena, will connect into Koch Pipeline’s existing crude system in Pettus and Refugio.

Brad Urban, senior vice president of supply for Koch Pipeline’s affiliate Flint Hills Resources, said: “This project fits well with our plan to process a large volume of South Texas crude oil and condensate at our Corpus Christi refinery as well as move a large volume of those products via the water. We continue to evaluate projects to enhance our Corpus Christi refinery processing capability and believe the majority of what we will refine in the future will be South Texas domestic crude oil and condensate.”

By the end of 2011, Koch Pipeline will have added 10 to 15 new employees and completed several other projects that add more than 140,000 b/d of new pipeline capacity in South Texas. The company is the largest transporter of South Texas crude oil.

Engineering for the new pipeline to connect Eagle Ford producers to Corpus Christi, Texas, has begun. Construction, which will require numerous contractors, is expected once project permits are received.

“We are evaluating several other major pipeline projects in South Texas in addition to this one, including a project to connect producers in Western counties such as Dimmit and LaSalle,” Penner said. “We are working with producers and our affiliate Flint Hills Resources to ensure producers have transportation to markets for the rapid growth of crude oil production projected in South Texas.”