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.

“When you look within the two big categories, there are interstate and intrastate transmission lines,” Lidiak said. “Basically, they are the superhighways of energy products, moving refined products from a refinery to a marketing area, or they move natural gas from the production area to a processing plant to a city; then the local gas utility takes over from there.”

Smaller lines feed into the interstate and intrastate pipes to connect from a wellhead to a central gathering point.

Oil routes are divided into gathering systems, which collect crude oil from wells; crude oil systems, which pump crudes from the gathering systems to refineries; and refined systems, which move products like gasoline and kerosene from refineries to distribution terminals and consumers.

Building the Pipes

According to PHMSA, the process of building a pipeline starts with choosing a route, working with governmental entities and purchasing or acquiring land. A great deal of engineering goes into working around rugged terrain features and other obstacles.

“Large changes can be an issue for managing the pipe,” Lidiak said. “It’s not insurmountable, but if pipes go through large changes in elevation, it has to be designed into the system. That will also change how many pump stations you need to have, or compressor stations for gas pipelines.”

The Federal Energy Regulatory Commission then examines the project to ensure the route will have minimal impact on the environment and affected communities.

After FERC approves the route, the pipes are designed.

The vast majority of pipelines in the country are made of steel, Lidiak said.

Iron pipes were used to transport natural gas starting in the late 19th century. However, cast or wrought iron is vulnerable to leakage when the pipes are disturbed by changing temperature, water levels or digging. Iron can also degrade and become soft over time.

After several deadly accidents involving cast iron pipes, the National Transportation Safety Board in 1991 recommended that the Pipeline & Hazardous Materials Safety Administration require pipeline operators to keep track of iron pipes and replace them before degradation occurs.

“There are virtually no large cast iron systems in operation,” Lidiak said. “It’s very unusual these days.”

Thirteen states have eliminated cast iron pipes entirely.

PHMSA reports that Arkansas has only 145 miles of iron main lines. That represents 1 percent of the state’s total main line mileage.

None of the state’s pipes transporting gas between main lines to customers are iron.

By comparison, New Jersey has the most iron pipe, with 5,044 miles of iron main lines, representing 15 percent of the state’s main mileage.

Washington, D.C., has the highest percentage of iron pipes, with 35 percent, or 419 miles, of its main lines.

Steel pipes are built in rolling mills. Sections tend to be from 40 to 80 feet in length.

The geographic conditions of the area determine the physical aspects of the pipe; a 1971 federal standard requires them to be coated in coal, tar, asphalt or wax as protection against the elements.

Construction standards are imposed by committees of industry groups like API or the American Society of Mechanical Engineers, as well as various government entities. API, for example, sets standards for line pipes and welding.

After the site is prepared, the pipe sections are laid out along the right-of-way in a process called “stringing.”

Following this, holes are dug under the right-of-way into which the pipes are laid.

Special bending machines alter the shape of certain pipe sections to accommodate topography changes.

Pipe sections are then welded together. The weld of the pipe is actually stronger than the pipe itself. Secondary coating is applied to the ends of the pipe sections. Joints are coated with bonds like epoxy or polyethylene heat-shrink sleeves.

Finally, the pipes are lowered into the trenches with special machines called “sidebooms.” Usually the pipes are rigorously tested before the trenches are filled in and the area restored.

Pipe diameter varies depending on what’s carried. According to the Natural Gas Supply Association, gas pipes can be anywhere from 6 to 48 inches in diameter.

Lidiak said oil pipes range in size from 2 inches to 42 inches in diameter. A pipe pumping 800 barrels per day of crude oil would be 30 inches or more in diameter.

Fontenot at Butch Crain Construction said building a 5-mile, 16-inch diameter steel pipeline would take his company between three and four months, from the start of digging to filling in the trench and restoring the area.

A well-maintained oil or gas line can last a very long time, Lidiak said.

“It’s just like large bridges or other public works projects,” he said. “They’ve been around for years, and you don’t think twice about driving over them.”

 

 

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