Development of Shale Play Slows, but Other Pipeline Work Continues

by Luke Jones  on Monday, May. 27, 2013 12:00 am  

Even as the mad rush to develop the Fayetteville Shale slows, the pipeline construction business in Arkansas remains viable.

The shale boom attracted pipeline construction companies to Arkansas. Indian company Welspun Tubular LLC, for example, employs 800 at its 700-acre Little Rock Port location. That company has continually reinvested in its Little Rock facility since it appeared in 2007, and it announced another expansion last year.

Smaller companies showed up too: Southern Pipeline Construction Co. Inc. started in Searcy in 2007. Circle K of Arkansas moved from Oklahoma to Rose Bud (White County) the same year. Butch Crain Construction Inc., a subsidiary of Crain Brothers Inc. of Grand Chenier, La., moved its operations from Louisiana to Damascus (Faulkner County) in 2005. All of those companies are still doing business.

Weber Fontenot, general manager at Butch Crain Construction, said business has shrunk, but the work is still there.

“At one time we had 225 people; now we have 50 people,” he said. “Most of the gas companies have completed their main line structures, and right now they’re completing what they call ‘loot,’ or their gathering systems.”

Butch Crain intends to stay another 20 to 30 years in Arkansas, and Fontenot said that dwindling construction business can be made up with maintenance jobs and construction of natural gas compressor stations.

Pipeline projects are enormous feats of engineering: The Pegasus pipeline, the longest crude oil line in Arkansas, travels 850 miles from Illinois to Texas. (And that engineering is, of course, subject to weakness: Click here to read about the Mayflower spill.)

Pipelines are also monumentally expensive.

“When you’re looking at newer construction lines, one of the most well-known in the U.S. is the TransCanada Keystone pipeline,” said Peter Lidiak, pipeline director for the American Petroleum Institute. “Their going-in numbers for the project were somewhere around $4 billion to $7 billion, depending on which leg you’re looking at, and as much as $12 billion for the entire length.”

When completed, the Keystone would be almost 4,000 miles long. A little more than 2,000 miles of the Keystone has already been completed, with the remaining phases mired in political controversy.

The pipelines are generally split into two different types, one carrying liquid like crude oil and refined petroleum and the other carrying natural gas. According to the Pipeline & Hazardous Materials Safety Administration, the country has 175,000 miles of onshore and offshore petroleum pipes and more than 2.3 million miles of natural gas lines.

Arkansas alone has 30,171 miles of pipe, including 1,805 miles of oil and 28,366 miles of gas lines. Union County has the most mileage of oil lines, with 210; White County has the most gas miles, with 476.

 

 

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