Enbridge Inc., announced that it will build, own and operate a crude oil pipeline in the Gulf of Mexico to connect the proposed Heidelberg development, operated by Anadarko Petroleum Corporation, to an existing third-party pipeline system.
The lateral pipeline is expected to be operational by 2016. Construction of the pipeline is subject to finalization of definitive agreements and sanction of the development by Anadarko and its project co-owners.
The Heidelberg lateral will originate in Green Canyon Block 860, approximately 200 miles southwest of New Orleans and in 5300 feet of water. The pipeline will be 20 inches in diameter and approximately 34 miles in length.
“We are pleased to be working with Anadarko and the Heidelberg producers,” said Leon Zupan, President, Gas Pipelines. “The Heidelberg lateral pipeline is an attractive investment opportunity for Enbridge. It also furthers our objective of diversifying our offshore business to include facilities that support the substantial crude oil discoveries in the deepwater of the US Gulf Coast.”
Enbridge’s offshore pipelines transport approximately 40 per cent of the natural gas produced in the deepwater Gulf of Mexico. The company’s offshore assets include interests in 13 natural gas gathering and transmission pipelines and one crude oil pipeline in five major pipeline corridors off the coasts of Louisiana and Mississippi.
- Enbridge to build crude oil pipeline in Gulf of Mexico (transportationandstorage.energy-business-review.com)
- Enbridge not threatened by rival’s eastern oil pipeline (cbc.ca)
Golden Pass Products said it has received authorization from the United States Department of Energy to export domestically produced natural gas as liquefied natural gas from the Golden Pass LNG terminal in Sabine Pass, Texas, to nations that have existing Free Trade Agreements (FTA) with the U.S.
The proposed project involves construction of natural gas liquefaction and export capabilities at the existing Golden Pass LNG facility. If developed, the project would represent approximately $10 billion of investment on the U.S. Gulf Coast, generating billions of dollars of economic growth at local, state and national levels and millions of dollars in taxes to local, state and federal governments. The project would generate approximately 9,000 construction jobs over five years with peak construction employment reaching about 3,000 jobs.
The proposed project would have the capacity to send out approximately 15.6 million tons of LNG per year. New infrastructure required to export will be located on the existing property, which contains two berths for LNG tankers, five storage tanks and access to the Golden Pass pipeline. The expanded facility would then have the capability and flexibility to both import and export natural gas.
As noted in the FTA application, Golden Pass also plans to submit an application to export LNG to non-FTA nations. A final investment decision will be made following government and regulatory approvals and will be based on a range of factors.
The U.S. shale boom has driven the cost of Gulf Coast light, sweet oil to its lowest level versus Brent crude in almost a quarter century as the nation’s dependence on foreign supplies wanes.
Light Louisiana Sweet, the benchmark grade for the Gulf Coast known as LLS, has traded on the spot market at an average of 15 cents a barrel more than Brent this year, the smallest premium since at least 1988, data compiled by Bloomberg show. The spread’s highest annual average was $4.02 in 2008.
The drop has cut costs for refiners in Texas and Louisiana accounting for 45 percent of U.S. capacity and replaced competing shipments from Africa. Gulf imports of light, sweet crude have fallen 56 percent since 2010, according to U.S. Energy Department data. A shale-oil influx from the Eagle Ford formation in Texas and Bakken in North Dakota and new ways to bring crude to the Gulf, such as this year’s reversal of the Seaway pipeline, may accelerate the shift.
“The market dynamics are changing,” Edward L. Morse, head of commodities research at Citigroup Global Markets in New York, said in a telephone interview. “When the Gulf Coast was a crude importer, they had to attract crude from elsewhere in the world, which meant LLS had to be at a premium to Brent. But now we’re moving into a totally different situation.”
Light Louisiana Sweet, a grade prized because its low- sulfur content and density make it easier to process into fuels such as gasoline, was 92 cents cheaper than Brent yesterday. It averaged 20 cents less than the benchmark in the third quarter.
Brent oil for October settlement rose 40 cents, or 0.4 percent, to $113.49 a barrel yesterday on the London-based ICE Futures Europe exchange. The contract advanced as much as 0.5 percent to $114.05 in trading today.
U.S. oil output surged to the highest level in 13 years in July, according to weekly Energy Department data. The U.S. met 83 percent of its energy demand from domestic sources in the first five months of this year and is heading for the highest annual level since 1991, department figures compiled by Bloomberg show.
“Unconventional oils and gas are changing everything about our competitiveness in the United States,” Bill Klesse, Valero Energy Corp.’s chief executive officer, said yesterday at the Barclays CEO Energy/Power Conference in New York. “Before you know it, we’re going to have so much light, sweet crude that in the U.S. Gulf Coast we’re not going to be importing light, sweet crude, and we think that happens next year.”
Houston, New Orleans and other ports along the Gulf Coast accepted about 554,000 barrels a day of light, sweet oil from outside the U.S. in June, down from 964,000 barrels a day in June 2011 and about 1.25 million in June 2010, according to the Energy Department’s Energy Information Administration.
The West African nations of Nigeria, Angola, Gabon and Equatorial Guinea accounted for 58 percent of the light, sweet crude imported into Gulf Coast ports in June 2012. North African nations accounted for a further 30 percent.
LLS will become about $5 a barrel cheaper than Brent during the next 12 months, David Pursell, a Houston-based managing director for Tudor, Pickering, Holt & Co., said in a telephone interview. The discount would take into account the extra cost of getting LLS to other customers, such as refiners on the East Coast, Pursell said.
Like oil in the Midcontinent, the relationship between LLS and Brent has been upended by surging shale production. West Texas Intermediate oil at Cushing, Oklahoma, the U.S. benchmark grade traded on the New York Mercantile Exchange, shifted to a discount to Brent almost two years ago after trading at a premium for decades.
Cushing inventories surged to 47.8 million barrels in June, the highest level since Energy Department records for the hub began in 2004. The WTI-Brent spread reached a record $27.88 in October. It was at $18.03 a barrel today.
“Over the last year and a half, with the WTI-Brent spread blowing out, the primary beneficiaries have been the Midcontinent players,” Cory Garcia, a Houston-based oil analyst for Raymond James & Associates, an arm of the financial-services company with almost $40 billion under management, said in a phone interview. “As LLS disconnects next year, the benefits to Gulf Coast refiners will be brought to the forefront.”
Enbridge Inc. (ENB) and Enterprise Products Partners LP (EPD) reversed the flow of crude on the Seaway pipeline on May 19. The link, carrying as much as 150,000 barrels a day from Cushing to Gulf Coast refineries, is scheduled to pump as much as 400,000 barrels a day early next year.
- Report: Shale boom revamping U.S. refining industry (fuelfix.com)
- Gulf of Mexico production ramps up after Isaac (fuelfix.com)
Golden Pass Products, a partnership of Qatar Petroleum International and ExxonMobil affiliates, has submitted an application to the U.S. Department of Energy (DOE) to export liquefied natural gas (LNG) from the Golden Pass LNG receiving terminal at Sabine Pass, Texas.
The proposed project involves construction of natural gas liquefaction and export capabilities at the existing Golden Pass LNG facility. A final investment decision will be made following government and regulatory approvals.
If developed, the project would represent approximately $10 billion of investment on the Gulf Coast, generating billions of dollars of economic growth at local, state and national levels and millions of dollars in taxes to local, state and federal governments. The project would generate approximately 9,000 construction jobs over five years with peak construction employment reaching about 3,000 jobs.
The proposed project would have the capacity to send out approximately 15.6 million tons of LNG per year. New infrastructure required to export will be located on the existing property, which currently contains two berths for LNG tankers, five storage tanks and access to the Golden Pass pipeline. The expanded facility would then have the capability and flexibility to both import and export natural gas.
The proposed expansion of Golden Pass is an opportunity to capitalize on America’s abundant natural gas resources. The Energy Information Administration’s Annual Energy Outlook 2012 shows that the United States has substantial gas supplies that can support gas exports, including LNG exports, over the longer term.
The application filed with the DOE is to export natural gas to nations that have existing free trade agreements (FTA) with the United States. A similar application is planned for non-FTA countries.
- U.S. Expected to Approve Expanded LNG Exports to Japan (mb50.wordpress.com)
- Pro-LNG Export Group Urges Chu to “Think A Little Differently” (mb50.wordpress.com)
- Houston, TX: OGS Wins FEED Work for Lavaca Bay LNG Project (USA) (mb50.wordpress.com)
The project will be the first floating liquefaction facility in the United States, and is designed to export LNG from the Texas Gulf Coast to markets worldwide by 2017.
The work involves naval architecture, hull structure, and topsides process facilities, designed for a capacity of 4 million tonnes per year. OGS will perform FEED engineering work associated with the topsides facilities.
OGS previously collaborated with Excelerate Energy for a FEED on a similar vessel for a location outside of the Unites States. The new FEED takes into account new metocean, geotechnical and regulatory conditions related to the Texas Gulf Coast.
OGS’s CEO, Bob Lindsay said, “OGS’s experience gained on previous FLNG projects and especially the prior work with Excelerate coupled with the company’s quality technical personnel and special relationship with the EPC Contractor, Samsung Heavy Industries, played a significant role in being chosen to perform this work. We look forward to working again with Excelerate Energy and enhancing our relationship with this very dynamic and respected client.”
(RTTNews.com) – Enterprise Products Partners L.P. (EPD) and Enbridge Inc. (ENB, ENB.TO) said Thursday that modifications to the Seaway crude oil pipeline allowing it to transport crude oil from Cushing, Oklahoma to the U.S. Gulf Coast have been completed.
According to the companies, the pipeline is in the process of being commissioned, and the first flows of crude oil into the line are expected to begin this weekend.
The reversal of the 500-mile, 30-inch diameter pipeline, which had been in northbound service since 1995, provides North American producers with the infrastructure needed to access more than 4 million barrels per day of Gulf Coast refinery demand.
The reversal will initially provide 150,000 BPD of capacity, which is expected to increase to more than 400,000 BPD in the first quarter 2013 with additional modifications and increased pumping capabilities.
Seaway Crude Pipeline Company LLC is a 50/50 joint venture owned by affiliates of Enterprise Products Partners and Enbridge Inc. In addition to the pipeline that transports crude oil from Cushing to the Gulf Coast, the Seaway system is comprised of a terminal and distribution network originating in Texas City.
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Excelerate Energy® L.P. is moving forward with the development of the first floating liquefaction facility in the United States utilizing its Floating Liquefaction Storage Offloading vessel (FLSO™) technology.
The Lavaca Bay LNG project will be located in Port Lavaca, situated between Galveston and Corpus Christi on the Texas Gulf Coast, and will be designed to export liquefied natural gas (LNG) to markets worldwide by 2017.
Excelerate Energy’s FLSO comprises 3 million tonnes per annum (MTPA) of production capacity, 250,000 cubic meters (m3) of LNG storage, and a fully integrated gas processing plant. With this gas processing capability, the FLSO can accommodate a wide range of gas compositions at its inlet making it well suited for virtually any application near shore or offshore. For those situations where gas processing is not required due to presence of existing processing facilities or where pipeline quality gas is used as the feedstock, the processing equipment can be removed and liquefaction capacity increased to 4 MTPA.
The FLSO will measure 338 meters in length, with a breadth of 62 meters. Front End Engineering and Design (FEED) is in an advanced phase and Excelerate is now entering into discussions with potential off takers and natural gas suppliers as well as investors and potential sources of finance to take the project forward. Excelerate Energy expects FEED to last until the end of 2012, and following its completion and successful permitting project delivery will take approximately 44 months from final investment decision (FID).
In its initial phase, the Lavaca Bay LNG project will consist of one permanently moored FLSO with multiple connections to the onshore natural gas grid in South Texas. The project will be designed with the potential for expansion and the addition of a second FLSO over time for a total production capacity of up to 8 MTPA. Excelerate Energy expects to begin the export authorization and Federal Energy Regulatory Commission (FERC) permitting immediately, and is in the process of completing its site-specific final front-end engineering design (FEED) effort.
“Excelerate Energy applies the same philosophy to its liquefaction vessel design as it does to its regasification vessel fleet – essentially using proven technology in an innovative way to provide more efficient and timely solutions to the LNG industry,” stated Rob Bryngelson, Excelerate Energy President and CEO. “Port Lavaca provides us with the unique opportunity to further capitalize on our position as a market leader in floating LNG solutions.”
Excelerate Energy selected Port Lavaca for the site of the facility because of its direct access to the highly liquid south Texas natural gas market, access to the Atlantic Basin through the Gulf of Mexico, and potential access to the Pacific basin with the widening of the Panama Canal. The facility will interconnect to the region’s existing pipeline system in order to obtain natural gas and liquefy it onboard the vessel. The Port Lavaca location being developed by Excelerate Energy has previously received FERC approval as an LNG import facility, which should facilitate the permitting process.
- Excelerate Energy LP Selects PENTA Software for Unified Procurement, Job Cost, Document and Project Management (prweb.com)
- USA: Mitsubishi Inks Development Deal with Cameron LNG (mb50.wordpress.com)
- USA: Cheniere Urges FERC to Approve Sabine Pass Liquefaction Project (mb50.wordpress.com)
- Zachry-CB&I venture lands Freeport FEED (mb50.wordpress.com)
- USA: ETE Units File with FERC for Proposed Lake Charles Liquefaction Project (mb50.wordpress.com)
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President Barack Obama’s decision to delay approval of the Keystone Pipeline project is hurting job creation opportunities in the United States, particularly among Hispanics, said officials with the American Petroleum Institute (API) on Tuesday.
The Keystone Pipeline will not only help lower oil prices for U.S. consumers, but have a ripple effect spreading outward from Nebraska and neighboring states to create jobs and help small businesses.
This job creation will be helpful in particular for the U.S. Hispanic population, the unemployment rate for which is one to two points higher than other demographic groups in the United States.
The Los Angeles Times reported in 2010 that the unemployment rate among U.S. Hispanics rose because of their disproportionate unemployment in industries and regions significantly impacted by the economic downturn.
According to a U.S. Department of Labor report, the unemployment rate among Latinos in the United States averaged 11.5 percent in 2011; the most recent unemployment report in February 2012 shows improvement for all Americans, including Latinos, who have seen their unemployment rate decline to 10.7 percent in February from a high of 13.1 percent in November 2010.
In 2011, 5.8 percent of Latinos were self-employed compared to 7.2 percent among whites, partly due to lower educational attainment and less access to financial wealth.
The entry rate of Latinos into self-employment compares favorably to that of non-Latino Whites and their entry rate is even higher compared with whites in low-barrier sectors, according to the Department of Labor report. However, Latinos tend to have lower success rates with their new businesses and exit self-employment at a higher rate than whites.
People of Hispanic or Latino ethnicity represented 15 percent of the U.S. labor force in 2011, or nearly 23 million workers. By 2020, Latinos are expected to comprise 19 percent of the U.S. labor force, according to the U.S. Department of Labor.
API ‘Disappointed’ in Keystone Delay, Impact on Jobs
“We’re disappointed that the current administration doesn’t see how this project doesn’t add up,” said Hispanic Leadership Fund President Mario Lopez during a conference call with reporters, noting that the project appears to be delayed for political reasons.
“Four years ago, Obama promised to push unemployment lower and lead us out of the depression,” Lopez said. “Approval of the Keystone pipeline would demonstrate to all Americans and to Latinos across the country that he cares about jobs and domestic energy.”
API has committed significant resources to support all aspects of the Keystone project.
“The earth hasn’t moved and the geology hasn’t changed,” said API Executive Vice President Marty Durbin, adding that the Keystone pipeline project is “as ready as it can get.”
Durbin said that imports of Canadian oil sands supply to the U.S. Gulf Coast would not create a supply glut, but would displace oil imported from other countries.
Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at email@example.com.
- Republicans say Obama is running out of excuses to delay Keystone pipeline (gds44.wordpress.com)
- Obama to get do-over on Keystone pipeline (cajunconservatism.wordpress.com)