Saturday, February 26, 2011

Magellan line spills up to 225,000 gallons of gasoline in Louisiana

TEXAS CITY, Texas - Twelve hours after a Magellan pipeline carrying gasoline ruptured, state officials reopened state Highway 146 and allowed evacuated residents to return home.


As much as 225,000 gallons of fuel may have spilled into Texas City's Bayou Pierre, officials said.

The pipeline carrying gasoline ruptured at about 3 a.m. Feb. 24, forcing the evacuation of about 30 homes and the highway.


The pipeline owner confirmed at a news conference that as much as 250,000 gallons of gasoline may have leaked from the ruptured pipeline into Bayou Pierre before it was shut down.

No injuries were reported, and there was no fire or explosion.

"We could have 6,000 (barrels) of fuel on the ground and we want to be extra careful," Clawson said.

Officials of Magellan Midstream Partners LP, the owners of the line, said the company received a leak detection alarm on the line at about 1:00 a.m. Crews confirmed the leak at about 3 a.m.

Magellan spokesman Bruce Heine said the underground line is an 18-inch supply line from Texas City to its Pasadena Products Pipeline. The line is a multi-carrier product line and transports refined products to multiple shippers along the company’s Texas City to Houston pipeline, he said.

The company is removing the failed section of the line to determine what caused it to rupture.

Heine said the line was in "compliance with all laws and regulations," but would not confirm when it was last inspected.




Friday, February 25, 2011

PG&E hikes cost of San Bruno disaster to up to $760 million

SAN FRANCISCO, Calif. - PG&E on Feb. 17 said its costs from the Sept. 2010 San Bruno natural-gas explosion could exceed $760 million by the end of this year - $150 million more than previous estimates - and that it will probably want some of that expense passed on to consumers.

The San Bruno disaster killed eight people and destroyed 38 homes.


PG&E officials stressed that the full cost of the San Bruno calamity won't be known until federal and state regulators have determined the accident's cause, the numerous lawsuits stemming from the blast are resolved and regulatory authorities clarify what improvements the utility will have to make to its gas system.

Some of those additional costs are expected to include the installation of automatic or remote shut-off lines for the gas transmission lines, since PG&E's crews had trouble shutting off two manual valves feeding gas to the San Bruno fireball. Based on PG&E's previous estimates, those valves could cost as much as $450 million.

According to PG&E's filing on Feb. 17, its costs through this year could total $400 million for liability claims and $363 million for other expenses, many related to improvements on its gas-line system and the search for records.

Much of that expense should be covered by the company's insurance policy, they said. But Kent Harvey, PG&E's chief financial officer, suggested that the company may ask the California Public Utilities Commission to pass on some of the cost to PG&E customers.

Of particular concern to the company is the cost it may incur from having to conduct expensive new tests on its pipelines. Because the SanBruno pipe ruptured at a pressure level below what PG&E had thought was safe, the commission fears the pressure level for other PG&E pipes also may be too high. It has ordered PG&E to produce inspection and other documents verifying that the pressure levels on its various gas lines are appropriate.

PG&E has assembled a small army of hundreds of workers to search for those records.


Thursday, February 24, 2011

Alyeska CEO: Low volume biggest threat to safety of trans Alaska pipeline system

JUNEAU, Alaska - Alyeska Pipeline Service Co.'s new president, Tom Barrett, on Feb. 17 told legislators that the biggest problem facing the trans Alaska pipeline is the low volume of oil being shipped from the North Slope.

, Alaska

Designed to deliver up to two million barrels of oil per day, it is now carrying a little more than six hundred thousand b/d.

Barrett and members of his staff specifically addressed the most recent oil spill on the line that began Jan. 8.

Barrett, a former commander of the Coast Guard, says his Coast Guard experience has taught him to throw every tool available into responding to an emergency, and low oil flow is an emergency.

Betsy Haines, the oil movements director for Alyeska, explained the effects of low volume in the line. She said TAPS was designed to handle warm oil and to carry that oil for shipment relatively quickly. But at current low flow rates, it is taking 15 days for oil to get from pump station one on the North Slope to the terminal at Valdez.

Wednesday, February 23, 2011

Enterprise Products makes $2.41 billion offer for Duncan Energy


HOUSTON, Texas - Enterprise Products Partners LP (NYSE: EPD) has offered to acquire Duncan Energy Partners LP (NYSE: DEP) in an all-unit deal valued at about $2.41 billion.


Such an acquisition would see the web of oil-and-gas pipeline and processing companies controlled by the family of late Texas billionaire Dan Duncan, who died last year, further consolidated.

Enterprise owns Duncan's general partner and about 58 percent of Duncan's common units. Late last year, Enterprise merged with Enterprise GP Holdings LP.


Duncan has "received Enterprise's merger proposal and will begin our review process," said William A. Bruckmann III, chairman of the audit, conflicts and governance committee of DEP’s general partner.


Enterprise's results have improved in recent quarters thanks to its $3.3 billion merger with Teppco Partners LP in late 2009, which created one of the U.S.'s biggest pipeline companies. Enterprise is increasing its focus on developing pipeline projects serving the Eagle Ford and Haynesville shale gas fields in Texas and Louisiana.


Advances in technology and increased investment have led to surging natural-gas supply as companies tap resources trapped in shale rock formations.


Earlier this month, Enterprise reported its fourth-quarter profit soared, helped by production growth in shale regions and increasing demand for natural-gas liquids. Duncan's earnings for the period rose 7.8 percent.


Enterprise units closed on Feb. 22 at $43.70, while Duncan finished at $32.56, compared with the $41.71 offer price. Then came the offer after the close of the market. On Feb .23, DEP closed at $39.57 a unit, up $7.01. EPD closed on Feb. 23 at $42.97, down $0.73.

Tuesday, February 22, 2011

Enbridge to phase out shipments of sour crude from North Dakota

BISMARCK, N.D. - Calgary-based Enbridge Inc. says eliminating the practice of shipping "sour" crude - oil that's high in sulfur and more difficult to refine than low- or no-sulfur "sweet" crude - will allow it to more than double by early 2013 the amount of sweet crude it will be able to ship from the Bakken and underlying Three Forks formation.

"It is an end of an age," said Kesley Myhre, a company spokeswoman in Minot. "But it also is something that is very exciting for the industry and our state."

Enbridge since 1962 has shipped North Dakota sour crude, which typically flows more slowly through a pipeline that the sweet variety, but it's a minor part of the state's crude mix now.

Myhre said sour crude accounts for fewer than 5,000 of the 161,500 barrels Enbridge moves daily on its North Dakota mainline, which runs from the western part of the state through Minot and to the company's terminal at Clearbrook, Minn.

By cutting heavier sour crude out of its mainline in North Dakota, Enbridge expects to add 23,500 barrels of sweet crude from the Bakken and Three Forks, Myhre said. There also will be no interruption of the pipeline's flow to segregate shipments of sour crude and sweet, she said.