2012 Pipeline Construction Report

By Rita Tubb, Managing Editor | January 2012, Vol. 67 No. 1

The report noted that the 30 percent rise in steel costs over the past year along with new industry regulations and practices to reduce right-of-way and minimize environmental effects are driving up construction costs.

In North America, work is progressing on DCP Midstream’s 700-mile Sandhills Pipeline. DCP is using new construction combined with existing pipeline to build a 100,000 to120,000 bpd NGL pipeline that will run from West Texas to Mont Belvieu in East Texas. The pipeline will be phased into service, with the first completed in the third quarter to accommodate DCP’s growing Eagle Ford liquids volumes. Service to the Permian Basin will be available as soon as the second quarter of 2013.

Greencore Pipeline Company LLC, a fully owned subsidiary of Denbury Resources Inc., is building the 231-mile, 20-inch Greencore CO-2 Pipeline from the ConocoPhillips Lost Cabin Gas Plant in Fremont County, WY, to a point in the Bell Creek oil field in Powder River County, MT. The CO-2 transported by the Greencore Pipeline will be used for enhanced oil recovery at the existing Bell Creek oil field. Completion is scheduled in late 2012.

Still awaiting a construction start is TransCanada’s $7 billion Keystone XL Pipeline. The route of the 1,661-mile, 36-inch crude oil pipeline begins at Hardisty, Alberta and extends southeast through Saskatchewan, Montana, South Dakota and Nebraska.

Late last year, the U.S. State Department announced it would delay a final verdict on whether the pipeline is in the national interest until early 2013 in order to conduct an environmental analysis of an alternative route that would navigate the pipeline away from environmentally sensitive areas in Nebraska.

North America also accounts for several pipelines in the planning and engineering phase, including Kinder Morgan’s 240-mile Cochin Marcellus Lateral Pipeline that will originate in Marshall County, WV, and terminate at an interconnect with the KM Cochin Pipeline in Fulton County, OH. Once completed, the pipeline will transport NGLs from the Marcellus producing region of Pennsylvania, West Virginia and Ohio to fractionation plants and petrochemical facilities in Illinois and Canada. The target in-service date for the pipeline is mid-2012.