Rio conference presented a hugely-encouraging pipeline outlook
THE Journal of Pipeline Engineering (JPE) was pleased to be able to attend the Rio de Janeiro Pipeline Conference held on 2-4 October, and organized by the Instituto Brasiliero Petroleo e Gas (IBP) in association with ASME. As is becoming the habit with these biennial meetings, a huge amount was shoehorned in to the three-day event, which not only included 350+ technical presentations in the multi-track conference, but also our sister publication Global Pipeline Monthly’s Pipeline Opportunities Forum, the ASME Global Pipeline Award ceremony, and an exhibition that seemed larger and of greater interest than ever. Run in parallel with the International Pipeline Conference (IPC) held in Calgary in even-numbered years, the Brazilian event in odd-numbered years provides a different ‘feel’ from its North American counterpart. This may be just down to a Southern Hemisphere exuberance that those of us from the cold and reserved North don’t instinctively embrace, or it may be because the pipeline industry, as seen from a Rio viewpoint, is exciting, expanding, and exhilarating.
The talk in Rio was of expansion, of ethanol …and of the skills’ shortage and demographic changes that may do more to curb some of the much-needed future projects than any efforts of those opposed on environmental, safety, or other grounds. But we’ll look here at some of the positive notes that were struck at the event.
Petrobras’ pipeline investment is to reach US$ 7.5 billion
BETWEEN NOW and 2012, Petrobras will construct more than 4560km of pipeline, ten compression stations, 31 city gates, and two LNG terminals, with investments that exceed $7.5 billion, according to the Brazilian company’s general manager for engineering Henidio Queiroz Jorge. This year, in the country’s SE region, the Campinas-Rio gas pipeline and the Cacimbas-Vitoria stretch of Gasene – which will join the SE and NE – will come on-line. “In the NE of the country, by the end of 2007, the Atalaia-Itaporanga and Itaporanga-Pilar gas pipelines will also start operation”, continued general manager of the company’s planning and implementation of logistic and natural gas, Celso Luiz Silva Pereira de Souza. According to Mr de Souza, the natural gas market in Brazil has been growing at 15% a year since 2001; in 2006, 46.3m cum/d was produced, while in 2012, the forecast is for 134m cum/d.
Transportation of hydrocarbon liquids is also growing substantially. “With annual rates of 5% a year, the liquid logistic is going to be challenged by Petrobras’ investment plans”, pointed out the general manager of operational planning of the company’s supply area, Carlos Felipe Guimarães Lodi. “The main challenges are to find able people to manage the projects, the minimization of delay in obtaining environmental licenses, and the difficulties in acquisition of equipment such as spheres and compressors, the delivery deadline for which often exceeds 450 days”, he summarized.
Pipeline Opportunities Forum highlights pipeline modernization and construction opportunities
PERHAPS MORE-importantly than the construction of new pipelines for transporting oil and gas, the seven presentations at the Pipeline Opportunities Forum emphasized the need to maintain the two million land pipelines in the world today. According to a report from Douglas-Westwood, of the United Kingdom, world gas consumption has grown 435% since 1965. “But it is a very old transportation infrastructure that cannot continue operating for more than 10 years,” warned the director John Westwood. (We are publishing a summary of this report on pages 251-254 of this issue.)
This is the reality in Ecuador, for example, where no new construction is foreseen for the short term, since the country is undergoing a constitutional revision and all investment has been paralyzed. Nevertheless, “Ecuador has 3,300km of pipeline that consumes nearly $40 million in annual maintenance,” said the president of Oleoducto de Crudos Persados (OCP), Wong Loon. The same occurs in Europe where the demand for gas should reach 652bn cum in 2030. “We have to invest in modernization since the number of pipelines that are more than 40 years old is increasing,” said the member of the Board for Energy and Transportation of the European Commission, Cristobal Burgos-Alonso. “Besides that, in 2008, the European Union will revise its energy policy, foreseeing additional investments in infrastructure for building CO2 and biofuel pipelines, for example,” he added.
However, when the issue involves new networks, the emphasis is on the distance between large gas reserves and the main consumer markets. In Brazil’s case, the demand for gas, which was 48.2m cum/d in 2006, will reach 121m cum/d in 2011, according to the general manager for new business development at Transpetro, Charles Labrunie. “According to Plangas – Petrobras’ Natural Gas Production Anticipation Plan – Brazil will increase natural gas production by 15m cum this year to 40m cum in 2011,” he said. Besides the approved projects, which total $6.5 billion in investment between 2007 and 2011, Transpetro plans to build 523km more pipeline between Urucu and Porto Velho, along with 88km for the Gaspal project and 1,190km for Gasbol. Douglas-Westwood’s projections for all of Latin America total 17,000km of new pipeline between 2008 and 2012.
Similarly, Canada has two large pipeline construction projects: the Alaska pipeline, which should start operations in 2014 and foresees an investment of $20 billion to transport from 120 to 180m cum/d, and the Mackenzie pipeline, with operations projected to begin in 2012, an investment of $7.5 billion, and the capacity to transport from 36 to 54,000 cum/d. “The increase in oil prices is driving new investments,” said Dr Mo Mohitpour, speaking on behalf of Canada’s Enbridge International. “In North America, projected investments in pipelines will reach $155 billion in the next 20 years,” he said.
Pipelines will transport 30% of the ethanol produced in Brazil in 2015
THE GROWTH of ethanol production in Brazil and the expansion of the pipeline system for transportation of the product were the central theme of the last panel at the conference. According to director of Transpetro, Marcelino Gomes, co-ordinator of the event’s organizing committee, by 2015 approximately 30% of ethanol produced in Brazil will be transported by pipeline.
During his lecture, Mr Gomes replied to the point raised by the Association of Oil Pipelines’ (AOPL) representative, Eric Gustafson, about the potential for pipeline corrosion by ethanol, especially that produced from corn. In Mr Gustafson’s assessment, the corrosion of pipelines is one of the greatest challenges the United States has in the biofuel area. “This is a critical technical point for the expansion of the pipeline network for the transportation of ethanol and has required a significant research programme”, he affirmed. Mr Gomes reminded the audience that pipelines have been used in the Brazilian alcohol programme for 32 years and there has not been, until now, any significant corrosion. “In 1996, we transported 2m cum/yr of ethanol, equivalent to 20% of the Brazilian production of the product. In 2015, it will be 15m cum/yr”, he pointed out.
In Mr Gomes’ assessment, the growth of the ethanol market will change the pipeline industry in the country, and will require the construction of new lines from the interior to the coast, from where the product will be exported. “The ethanol business is going to change the fuel logistics in Brazil and is going to bring other players to the sector, which will be very good for the national economy”, he affirmed.
Speaking at the meeting on the subject of the need for construction of new pipelines, the director of Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP) Victor Martins said that today there are no specific regulations that cover the design, construction, and operation of alcohol pipelines. The creation of regulations will depend either on amending the country’s petroleum laws, or on handling new projects for ethanol transportation as products pipelines, which would be subject to his Agency’s existing regulations. “It is important that there be regulation. The risk of …concentration production in the hands of few multinational groups could harm the national producers”, Mr Martins said, after pointing out the relevance of ethanol to the Brazilian economy.
Global Pipeline Award
A RELATIVELY-new and increasingly-important aspect of both the Rio and the Calgary conferences is the ASME Global Pipeline Award competition, which is growing both in stature and in the number and quality of entries. The JPE wholeheartedly supports this initiative, and congratulates ASME and, in particular Marcelino Gomes (the incoming chairman of the Pipeline Systems Division and one of the prime movers in setting the competition up in 2005) on this initiative. The Award was first introduced at the 2005 Rio pipeline conference, where it was won by TransCanada PipeLines. In 2006, in Calgary, the Award was won by Petrobras. This year, the 16 entries – an increase of nearly 200% over 2006 – presented the judging panel with significant difficulties.
One of the very encouraging aspects of this year’s competition was the geographical spread of the entries, which ranged from Saudi Arabia and Russia, via Europe and North America, to South America and Brazil. The basic intention of the Award competition is to recognize outstanding innovation and technological advance by organizations in the field of pipeline transportation, and the Award is presented to the organization that, in the opinion of the judging panel, has been responsible for the most outstanding achievement in the field of pipeline transportation for that year.
This year, the judging panel first whittled the entries down to a shortlist of five, all of whom were profiled at the Awards luncheon. The final five (in alphabetical order) were:
CPTI - Center for Research in Inspection Technology / PUC-Rio University, Brazil: Feeler-snake pig for the detection and sizing of internal corrosion
E.ON Ruhrgas, Germany: CH4 airborne remote monitoring
Nova Research and TransCanada, Canada: A supersonic ejector for capturing low-pressure gas leakage from dry seals and reinjecting the gas into the fuel gas of a gas turbine
Smart Pipe, USA: A self-monitoring composite pipe that can be used as a stand-alone pipe or as a tight-fitting liner for high-pressure pipelines
WorleyParsons, USA: A project to control the lateral buckling stress generated due to high internal pressure and very high temperature in subsea pipelines
The winning entry was the new pig from CPTI, and we warmly congratulate Miguel Freitas and his colleagues on this useful and interesting development, aimed a much as anything at the problems of hitherto unpiggable or, at least, uninspectable, pipelines. We are publishing a technical paper from CPTI on this development on pages 219-224, and a presentation on the subject will be made at the Houston pipeline pigging and integrity management conference on 12-14 February (see www.clarion.org for details, as well as pages 268-272).
If you are interested in entering for next year’s Global Pipeline Award – to be presented at the IPC in Calgary on 30 September-3 October – the details will shortly be available via the event’s site at https://www.asmeconferences.org/IPC08/index.cfm.
BP fined for Alaskan pipeline leaks
THE US Department of Justice reports that British Petroleum Exploration (Alaska) (BPXA) pleaded guilty on 29 November in a federal court to a criminal violation of the Clean Water Act for spilling 200,000 gallons of crude oil from a pipeline onto the tundra and a frozen lake on the North Slope in March, 2006. The announcement was made by Ronald J Tenpas, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, and Nelson P Cohen, US Attorney for the District of Alaska.
US District Court Judge Ralph R Beistline accepted the guilty plea to the one-count information and sentenced BPXA to pay a total of $20 million in criminal penalties, of which $12 million is criminal fine, $4 million is community service payments to the National Fish and Wildlife Foundation (NFWF) for the purpose of conducting research and activities in support of the arctic environment in the State of Alaska on the North Slope, and $4 million is criminal restitution to the State of Alaska. BP also will serve a three-year term of probation.
At the sentencing, Judge Beistline said, “This incident provides us all a clear warning of the need to be vigilant with regard to pipeline maintenance and with regard to safety and security of the pipeline and environmental protection. BPXA needs to make sure the oil flows smoothly but safely and I think we have to put particular emphasis on the need to give high priority to maintenance and maybe a little less priority on profits.”
The joint federal and state criminal investigation leading to the plea agreement involved two different leaks from oil transit lines (OTLs) operated by BPXA. The leaks occurred in March and August, 2006 and, according to the Department of Justice, were the result of BPXA’s failure to heed many red flags and warning signs of imminent internal corrosion that a reasonable operator should have recognized. The first pipeline leak, discovered on 2 March, 2006, by a BP employee who smelled the leaking crude oil, resulted in more than 200,000 gallons of crude oil spreading over the tundra and a nearby frozen lake. This was the largest spill ever to occur on the North Slope.
“BPXA failed to heed warning signs that would have avoided the corrosion that lead to oil spills onto the North Slope,” said Ronald Tenpas for the Environment and Natural Resources Division. “There is no excuse for these spills and today’s sentence is a fair and appropriate penalty. The Justice Department is committed to strong enforcement of environmental laws.”
The second leak occurred in August, 2006, but was quickly discovered and contained after leaking approximately 1,000 gallons of oil onto the tundra. Nevertheless, the second leak led to the shut-down of Prudhoe Bay oil production on the eastern side of the field. BPXA shut-down production because it could not guarantee the condition of the line and whether it was fit for service. By reason of BP’s immediate spill response and its cooperation with the investigation, it was not charged with the second spill.
During the investigation, the United States obtained a section of pipe where the March 2006 leak occurred. Approximately 6in of sediment was found on the bottom of the 34-in diameter pipe. When sediment such as this builds-up in a pipeline, it forms an environment in which acid-producing bacteria can thrive undisturbed by the flow of oil and chemicals intended to protect the pipe from corrosion. The acid produced by these bacteria can cause corrosion pits or, if unchecked, holes in the wall of the pipe. Knowing this, BPXA should have cleaned the OTLs with maintenance (or cleaning) pigs, and should have inspected the pipes for corrosion with a smart pig, which had not been done for eight years.
The investigation found that BPXA’s leak detection system was dependent upon a clean pipe in order to function optimally and, accordingly, the company’s failure to keep the pipeline clean led to product leaking from the pipe and the inability promptly to discover the leak. The Department of Justice (DoJ) points out that the failure to adequately manage the corrosion in the pipeline that leaked, in the light of the risks known to BPXA, was due to BPXA’s failure to allocate sufficient resources to ensure safe and environmentally-protective operation of the pipelines that leaked. Cost-cutting, the DoJ goes on to say in a statement, was the emphasis for operation of the Greater Prudhoe Bay Unit by BPXA for many years without sufficient regard for the ever-increasing needs and associated costs of running an ageing oilfield.