Global Valve and Controls

12Mar/120

Pipe Logistics Contractor Opens New Houston Headquarters

AESC 1346967 L7 Pipe Logistics Contractor Opens New Houston Headquarters


Have you heard of a high dollar, well-known company called Pe Ben USA? Well, I have not, until now! I discovered being how I am located in Houston, TX; Pe Ben USA recently consolidated its headquarters, maintenance, and also storage facility right here at a 20-acre location; located in Northwest Houston. However, they opened an office back in 1996, but decided to make Houston their homebound. Shocking right? Well it gets better… The CEO, Dale Mykyte bought the site in August 2010. They finally moved in with a 9,000 square feet state-of-the-art office space with a 20,000-square-foot maintenance center. This large facility also consumes of, 20 offices, a board room, two conference rooms, and everyone loves an exercise facility, and most of all a safe room for company and client records. Is this cool or what?

But get this, Pe Ben goes way back to 1957, which serviced the oilfields in Western Canada. Mykyte entered the pipeline business in 1981, joined Pe Ben as operations manager, and then bought Park hill Pipe Stringing and J.L. Cox & Sons.

Pe Ben has worked on projects for major oil and gas companies though its principal clients are major pipe mills. They have executed projects for all major U.S. and European mills. Pe Ben has operations in Alberta, and British Columbia, Canada, as well as Texas and North Dakota A new heavy-haul division in Houston has been established, directed by Tony Beffer. Pe Ben USA completed 16 simultaneous stringing projects by the end of 2011, “to be invisible and anticipate the client’s needs, being proactive rather than reactive.”

Ball Valves Houston Pipe Logistics Contractor Opens New Houston Headquarters

It’s amazing how one day, someone can make something small into something huge. Word of mouth – Take what life has to offer – but don’t just take it as if it’s something that will turn into nothing, because it will soon be something large and not something that was nothing large!

Source:
http://pipeline-news.com/

 

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23Nov/110

When Drilling gets too close to you

It must be awful living in a small city, and the city decides to start drilling oil wells. Not just because of the noise, but because if the wells are not drilled the proper way- it could be very dangerous for the people who are living nearby, Even when if the wells are 800 or more feet away from where you live. I’m just hoping that the valves they use are good and will do their job in preventing major gas leaks.

“Wells drilled hundreds to thousands of feet into the ground are sealed in cement, either partially or all the way to the source of natural gas. If they are not properly encased, activists say, methane and other chemicals and substances can enter the aquifer. Hence the horror stories of people lighting their water on fire…”

BlogPic1 When Drilling gets too close to you

 

 

 

 

 

 

 

 

 

http://blogs.dallasobserver.com/unfairpark/2011/08/enviornmentalists_give_drillin.php

When Drilling gets too close to you
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7Jul/110

Best Flanged Valves On The Market

300px Seccion valvula de bola Best Flanged Valves On The Market

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Flanged Valves

The prosperity of the valve industry has been shown in many fields. Actually, there is great variety of the types of the valve. All these types are making their own contributions to the development of the whole modern industry. As we all know, Flanged Ball Valves are made to control the flow of gases, liquids and granular solids in many systems. In order to meet various requirements, valves are designed and manufactured with a wide range of the types, sizes, materials, working temperature and pressure and means of actuation and so on. At this moment, we take the type of the ball valve and gate valve out for a comparison.  Learn more about flanged valves below.

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Flanged Valves

Best Flanged Valves On The Market
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2Jun/110

Ball Valves – Are They Useful?

Ball Valves in our history, have always proven helpful in a variety of ways.  Review the article below and let us know what you think.  Enjoy!

Importance of Ball and Pressure Valves to Industry Today

from The Valve Blog by Valtorc International

Although the ball valve was invented in the 1950’s it is more used today than ever before in history. This valve made of a simple ball with a hole in it has found wide spread applications in the chemical, petroleum refining, paper making, water treatment plants, and many other industries.

The engineering beauty of ball valves and control valves from their simplicity. A ball with a hole in the middle sits inside passage way that fluid or air from passing through. When the ball is turned so its hole is in line with the pipe the fluid passes though, however when it is turned so the hole does not line up with the pipe the movement of fluid is stopped. This simple design allows ball valves to withstand temperatures of up to 200 degrees and pressures of up to 700 bars making them ideal for most industrial uses and easy to repair. The whole mechanism can easily be controlled by a handle outside the valve that can be turned 90 degrees.

Ball valves come in a large variety. There sizes range from as small as half of a centimeter to is much is 30 centimeters. They also come in five different body styles: split body, single body, top entry, three-piece body, and wielded. Despite the variety in ball valves, all ball valves work in much the same way.

Houston.jpg.scaled500 Ball Valves Are They Useful?

 

 

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2Apr/110

Valves and More at Global Valves and Controls

300px Duplex valves Valves and More at Global Valves and Controls

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Pipeline Ball Valves are manufactured and tested in accordance with the requirements of API 6D, and are designed not to rely on lubricant to ensure that they seal.
During manufacture and factory testing, the use of lubricants and/or sealants is prohibited. This is to prevent masking of any defects in the new valve.
Installation and commissioning into a pipeline is an interventive engineering process, making use of hot and cold working techniques relying on mechanical tooling. As a result it is inevitable that between valve installation and commissioning, an amount of foreign debris will enter the valve (i.e. sand / dirt / swarf / weld slag). This is a natural result of the manufacturing process that cannot be avoided.
Once installed the valve is usually cycled during the testing of its gearbox or actuator, and again during hydrostatic testing of the pipeline.
These activities create tiny scratches on the polished ball surface where the debris present in the line wears on the ball and seat during the cycling of the valve.
In time, this reduces the valves ability to provide an adequate seal, as these tiny scratches begin to cause minor leak paths. All fluid and gas flows contain an element of contaminant which contributes to this effect over the life of the valve.
Minor leak paths that seal at low pressure become obvious when using the valve to isolate high pressure gas. Seating material is often softer than the ball itself in order to provide a pliable material which takes up minor leak paths, but at higher pressures the gas compresses the seats and they become less pliable meaning that the minor leak paths become more significant at higher pressures.
This type of damage mechanism can also be said to be true for gate and plug valves, as gate and plug surfaces are also susceptible to the similar damage. In fact any sealing surface subject to mechanical friction is susceptible to the damage mechanism described above.
Lubricants, lubricant-sealants and emergency-sealants
Lubricants help clean valve internals, and reduce operating torque. Valvecare use a light lubricant called Equa-Lube Eighty from Sealweld immediately after hydrostatic testing of valve, to purge all test water from seat pockets where corrosion normally occurs. The advantage of this is that it removes as much debris as possible from the internal mechanism of the valve, thus reducing the chance for wear. Lubrication also reduces the friction between the wearing surfaces.  Of course, new contaminant can be introduced at any time via the flow in the pipeline.
Lubricant-Sealants help to preserve seat sealing effectiveness, and to seal worn valves with minor leakage problems. Valvecare use a lubricant-sealant called Total-Lube # 911 from Sealweld, this has been proven to seal minor scratches to sealing surfaces and shallow corrosion pits, as well as small nicks and cuts on soft seals.
For valves with sealing surface scoring, this is an effective way to achieve a bubble tight seal on a valve that would otherwise fail a leak test. Use of lubricant-sealants can delay or prevent the need for costly overhaul of a worn valve.
Emergency Sealants provide an effective temporary means of creating of leak tight seal, even on valves with severe leakage problems. Valve sealing plays an important role, when performing pipeline repair, modification or renewal work, as often the costs of shutting down, evacuating, draining, and excavating pipeline equipment are typically many times more than just the cost of a new valve. Valvecare use a Valve Sealant called Ball Valve Sealant #5050 from Sealweld, containing particles of PTFE, and is capable of sealing relatively large scratches to sealing surfaces.
Lubrication
Lubrication is introduced into the valve, using the seat injection fittings. Valves that do not have seat injections fittings can usually be retrofitted to include these. Specialist valve maintenance companies, such as Valvecare, can advise you on specifics for individual valves.
Seat lubrication, is a proven means of cleaning foreign debris from valve seats, and done properly as part of a scheduled valve maintenance programme, stops debris from getting there in the first place. This practice significantly reduces damage suffered during installation, commissioning and normal cycling operation, extending the service life of the valve dramatically. The costs associated with a scheduled maintenance program including lubrication are considerably lower than a full overhaul or replacement of the valve itself.

Lubricating your valves gives the following operational advantages:
  • Cleans their seats of potentially damaging particles (Sand / Dirt / Swarf / weld slag)
  • Stops debris from getting stuck between seats if administered before pigging pipeline
  • Prevents and removes stiction (Torque to operate reduced / less strain on stem and actuator)
  • Preserves the life of their seals, and components against mechanical and corrosion damage
These advantages reduce operational cost and should therefore form part of your planned valve maintenance programme.
Sealing
Emergency Sealing involves the introduction of heavy sealant, through the valve seat injection fittings, to achieve a temporary seal.  Valves that do not have seat injections fittings can usually be retrofitted to include these. Specialist valve maintenance companies, such as Valvecare, can advise you on specifics for individual valves.
Emergency Sealing your valves:
Provides an temporary bubble tight seal, even on valves with severe leakage problems
Has significant cost savings, when compared to alternatives
Saves time, with lead times for some replacement pipeline valves taking several months
The Lubrication, lubricant-Sealant and Emergency Sealant process involves the use of specialist equipment, capable of pumping a range of lubrication and sealant types safely at pressures of 10,000–15,000 psi. It is recommended that trained valve service engineers, proficient in the safe use of sealant guns and pumps, carry out this procedure.
Important Considerations
Lubrication and sealing becomes more critical in applications such as Natural Gas, Production Wellheads, Gathering Systems, Gas processing Plants, Pipelines, Gas Storage Facilities and Gas Distribution Systems. Applications like these are more likely to cause damage to the critical sealing surfaces of valves, due to the lack of lubrication present in dry gas, and the presence of sand and debris in production wellheads. As part of a valve maintenance programme, preventative valve maintenance helps minimises the adverse effects of these services, increasing the service life of your valves.
For increased valve service life, the presence of an emergency seat sealant injection feature is an important consideration when procuring pipeline valve stock.
Equally as important is the choice of injection fittings and/or adaptors that are installed on the valve. Sealant injection fittings feature a means of passing sealant or lubricant into the valve, and incorporate a high pressure metal seated check valve. As a safety precaution, Valvecare do not endorse the use of carbon steel, crimped style injection fittings. As standard, we only recommend the use quality stainless steel injection fittings incorporating a threaded spring retaining cage, in order to minimise the risk of dangerous fitting failure.
Valve lubrication and sealing is an essential part of an effectively managed valve maintenance programme. Once installed and lubricated, a regular documented lubrication schedule should be established for all critical valves. Valvecare specialise in a supplying a total management programme for your valves, with a focus on the criticality of valves in relation to impact on safety elements and production, maintenance routines, spares holding, valve tracking and selection procedures. This type of valve management programme is a highly effective way of optimising reliability and safety whilst minimising cost and downtime.
Valves and More at Global Valves and Controls
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1Apr/110

Global Valve and Controls has become one of the newest organizational members of ASTM

Global Valve and Controls has become one of the newest organizational members of ASTM

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Created in 1898, ASTM International has become one of the largest voluntary standards developing, not-for-profit organizations in the world. ASTM provides a forum for the development and publication of voluntary consensus standards for materials, products, systems, and services from its members. The members of ASTM represent producers, users, consumers, government, and academia from over 100 countries and are responsible for the development of technical documents that are the basis for manufacturing, management, procurement, codes, and regulations.

What is a standard?

As used in ASTM, a standard is a document that has been developed and established within the consensus principles of the organization and which meets the requirements of ASTM procedures and regulations. Full consensus standards are developed with the participation of all parties who have a stake in the standards’ development and/or use.

How and where are ASTM standards used?

ASTM standards are used by individuals, companies, and agencies around the world. Purchasers and sellers incorporate standards into contracts; scientists and engineers use them in their laboratories and offices; architects and designers use them in their plans; government agencies around the world reference them in codes, regulations, and laws; and many others refer to them for guidance.

For more information on ASTM, go to www.gvcintl.com and click on the ASTM hyperlink.

Global Valve and Controls has become one of the newest organizational members of ASTM

 

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1Apr/110

Making Use of Steel Ball Valves

Making Use of Steel Ball Valves

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Making Use of Steel Ball Valves

When it comes to infrastructure, we can really name a lot of companies which are getting into it and one of the most in demand services anywhere today is plumbing. Without plumbing, people would always have a ruin day due to an inadequacy of water. More than that, when we are also going to talk about plumbing, we also need to consider the things that they mostly use and one of which are those valves that are useful in order to make a job successful. If you are among the plumbers, you will surely look for the most durable and top-quality kind of valve, and in such case, the use of steel ball valves should be taken account.

There are now plenty of manufacturing companies who had study hard in order to make the best valve to use in any sorts of plumbing activity and good thing was, Global Valve and Controls had able to establish the perfect valve to be used in any sorts of plumbing constructions. Steel ball valves are among their recent valves being made which has been establish through the finest technological method and had able to pass various evaluations from experts as well. With these steel ball valves, you can really have the guarantee that this would last long despite the fact that it is being use constantly.

Global Valve and Controls had undergone careful study in order to perfectly design the right valves to be use in all sorts of plumbing construction. GVC’s have their own technical support team who see to it that all steel ball valves are of top quality and will even provide you with best function. You can now start buying these steel ball valves since these are now available in all markets in your place.

Making Use of Steel Ball Valves
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31Mar/110

Keystone XL Pipeline In Final Stages Of Federal Review – Helping Pipeline Companies

300px Truck Hauling 36 inch Pipe To Build Keystone XL Pipeline Keystone XL Pipeline In Final Stages Of Federal Review Helping Pipeline Companies

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"Keystone XL has been under review since 2008 and we are confident we have addressed the major questions raised by regulators and government agencies," says Russ Girling, TransCanada's president and chief executive. "We expect a final regulatory decision for this project by late 2011 and we are pleased the Department of State has committed it will conclude its review of Keystone XL by the end of the year. The Keystone expansion is expected to be operational in 2013."
Since 2008, TransCanada has held more than 90 open houses and public meetings along the pipeline route; given hundreds of hours of testimony to local, state and federal officials and submitted thousands of pages of information to government agencies in response to questions. The Department of State concluded in the spring of 2010 that Keystone XL would have limited impact on the environment during construction and operation.
"A growing number of opinion leaders, elected officials, labour unions, associations and members of the public are showing their support for Keystone XL," adds Girling. "Instability and unrest in Libya and other parts of the Middle East demonstrate the need for the U.S. to receive a safe, secure, stable supply of oil--Keystone XL will provide that. The project will help put America back to work, creating 20,000 jobs and injecting billions into the U.S. economy."
The U.S. Department of Energy stated in a recent study that "increased Canadian oil imports will help reduce U.S. imports of foreign oil from sources outside of North America." This supports TransCanada's point that we can reduce America's dependence on oil from Venezuela and the Middle East by up to 40 percent with the Keystone XL pipeline. As the American GI Forum of Texas recently pointed out, the oil that the Keystone system will deliver is "conflict free."
The study also confirmed that the construction of Keystone XL would not change global refinery carbon dioxide or total life cycle greenhouse gas emissions. Earlier analysis by The Perryman Group out of Texas regarding the economic benefits of the project concluded that:
•More than $585 million in new taxes will go to the states and communities along the pipeline route
•An additional $5.2 billion in property taxes will be paid over the operating life of the pipeline
•More than $6.5 billion in personal income will go to Americans
•U.S.-based producers will have new options to move crude oil to American refineries.
"Keystone XL is a shovel-ready project that is funded completely by private sector investment at no cost to American taxpayers," concluds Girling. "It will be a safe, modern and leading-edge pipeline and we have provided the Department of State and other agencies with the facts regarding Keystone XL's design, safety, operating procedures and limited environmental impact."
Keystone XL Pipeline In Final Stages Of Federal Review Helping Pipeline Companies
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31Mar/110

Sunoco Expand Pipeline Deal

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Sunoco Expand Pipeline Deal

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MarkWest Liberty Midstream & Resources, LLC, Denver, Colo., a partnership between MarkWest Energy Partners, L.P. and The Energy & Minerals Group, and Sunoco Logistics Partners L.P., Philadephia, Penn., have reported the development of Project Mariner West, a pipeline project to deliver Marcellus Shale ethane from MarkWest Liberty’s Houston, Pennsylvania processing and fractionation complex to Sarnia, Ontario, Canada markets. Mariner West, which is being developed at the request of Marcellus producer customers and is supported by Sarnia ethane consumers, will utilize new and existing pipelines and is anticipated to have a maximum capacity to transport up to 65,000 barrels per day of ethane by the third quarter of 2012. Mariner West is an expansion of Project Mariner, a pipeline and marine project developed to transport ethane produced in the Marcellus Shale basin to US Gulf Coast and international markets by mid-2013.
To support deliveries to Canadian markets in 2012, MarkWest Liberty will make minor modifications to its natural gas processing complexes and will install ethane extraction facilities at its Houston complex to deliver ethane to Mariner West earlier than will be required for deliveries to Project Mariner. In addition, MarkWest Liberty will construct a 25-mile pipeline from the Houston complex to an interconnection with an existing Sunoco Logistics pipeline at Vanport, Pennsylvania. The ethane will then be transported from Vanport to markets in Sarnia utilizing existing Sunoco Logistics pipelines, which will be modified for ethane service. Project Mariner and Mariner West are both designed to provide Marcellus producers with access to multiple ethane markets to match the growing rich-gas production in the Marcellus.
“When combined with our growing NGL pipeline network in the Marcellus and our highly integrated Houston fractionation and marketing complex, Mariner West provides a very significant advantage to Marcellus producers,” said Frank Semple, Chairman, President and Chief Executive Officer of MarkWest. “MarkWest and The Energy & Minerals Group are very pleased to partner again with Sunoco Logistics to further expand the midstream services we provide to our producer customers.”
“Project Mariner West has the advantage of allowing us to modify our existing pipeline facilities to reach Sarnia, Canada where there is a market for Marcellus ethane. We are pleased to participate in Project Mariner West and to partner with MarkWest Liberty in serving Marcellus producer customers," said Lynn L. Elsenhans, Chairman and Chief Executive Officer of Sunoco Logistics. “Our existing infrastructure is well positioned to provide an efficient solution for producers to move ethane to Sarnia as well as across Pennsylvania to a Delaware River marine port to access multiple markets.”
Sunoco Expand Pipeline Deal
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29Mar/110

Oil’s Changing Landscape: Ship Low, Sell High

Oil’s Changing Landscape: Ship Low, Sell High

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At GVC we know our market, keeping up to date on all the latest news.
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Editor’s Note: This is the fourth in a multi-part series examining the fundamentals behind the structural transformation of the U.S. oil markets and the downstream logistics challenges that are resulting. The third installment covered the “disconnect” between inland crudes priced off Cushing crude values when the North American oil hub is flush with crude in storage. (Image Source: CN)
As geopolitical turmoil drives crude prices skyward and lifts retail gasoline to US$4.89 per gallon (/gal) in cities like Los Angeles, it’s anything but business as usual in the U.S. oil patch.
Inland producers who are left in the dust amid triple-digit waterborne crude prices on most every U.S. coast are pioneering inventive downstream logistics to ship crude at low cost to higher-priced markets – thereby avoiding the disconnect in the wild west of North America’s oil industry.
Nearly every multimodal logistics opportunity short of yesteryear’s Pony Express and today’s Federal Express is being considered to cost-effectively ship crude oil to profit from high-price spreads between landlocked and waterborne crudes.
In intra-day trading on March 2, a remarkable spread was logged as the West Canadian Select (WCS) grade saw discount pricing around $80.00 per barrel (/ bbl), while both Heavy Louisiana Sweet and Light Louisiana Sweet (HLS and LLS) crudes on the Gulf Coast traded at more than $122.00/bbl.
That astounding discount of more than $40.00/bbl represents 50% of the then current WCS value. The basis differential can partly be explained by crude quality, but these theoretically, wide-open arbitrage opportunities attract pioneering innovators like the land rush days of old.
Furthermore, the $19.70/bbl discount to LLS prices that day for 38 million barrels of crude stored inland at Cushing at the time represented $750 million in dollar terms.
In the void left by insufficient pipeline takeaway capacity, tankers are stepping in to ship crude via rail and inland waterways away from the heavily utilized and smaller Mid-Continent refining fleet toward a Gulf Coast refining fleet twice its size.
Canadian Railway Company Rides the Rails to the Rescue?
Canadian National Railway Co. (CN), based in Montreal, Quebec, has pioneered and trademarked, PipelineOnRail – described as an “economically sound, surprisingly fast way to ship crude oil products within Alberta to the rest of Canada, the U.S. Midwest, the Gulf coast and other export markets.”
The plan seeks to use its extensive North American rail system that already traverses the Canadian continent on an East-West axis to tank crude south along its interconnected rail spine spanning the U.S. down the Mississippi River valley all the way to and around the U.S. Gulf Coast.
On March 1, Hart Energy contacted CN’s Kelli Svendsen, senior manager of regional public and government affairs, and learned that “CN has been testing concepts to move crude (heavy, light, and pure bitumen) from areas in Western Canada to various markets in the U.S.”
Svendsen said two areas of Canada are already exporting crude oil to the U.S: “CN has moved pure bitumen from Fort McMurray to U.S. markets,” and “from the Bakken reserves in Saskatchewan (Canada) to the U.S.”
The Bakken effort began recently with shipments “in October 2010.” Svendsen said, adding that “CN is optimistic that rail will play an increasing role in the transport of crude moving forward.”
EnSys Study Documents Crude-by-Rail Potential
EnSys Energy noted in a December 2010 North American crude logistics assessment that “CN Rail currently imports condensate, for blending with oil-sands bitumen to make DilBit (a.k.a. diluted bitumen)” from the Kitimat Port on Canada’s west coast.
According to EnSys, the “PipelineOnRail … avoids the large, fixed investments associated with major pipelines.” EnSys also noted that CN indicates potential capacity to move “as many as 200,000 b/d or more.”
EnSys said the study did not allow for the expansion of the PipelineOnRail capacity in any scenario, because tariffs for rail are generally not considered attractive relative to pipelines.
“However, during a period of constrained pipeline capacity, the PipelineOnRail could compete as an alternative,” the assessment reads.
Pioneers on the U.S. Side of the Border
The Bakken petroleum that CN is shipping originates from a producing region that extends into the U.S. states of North Dakota and Montana. Drillers in North Dakota produce the area’s greatest share of petroleum using unconventional hydraulic fracturing and horizontal drilling techniques.
Justin Kringstad, director of the North Dakota Pipeline Authority (PA), wrote in a September 10, 2010, release: “Because of our distance to market, regional producers have always absorbed a per-barrel discount on production.” Yet he noted that recent increases in rail and pipeline “takeaway capacity has pared that discount down substantially.”
Kringstad tabulated new capacity for crude oil shipments from several takeaway projects, including new rail-loading terminals in the area. These include EOG Resource’s 65,000-b/d rail facility in Stanley, N.D., which began rail tanker shipments to Cushing, Okla., in December 2009.
Hart contacted EOG spokesperson K. Leonard on March 1, who shared that “EOG is currently utilizing five trains, with plans to add a sixth in the future.” Leonard said EOG leases the rail tankers it uses to ship crude.
“The company typically loads one train daily and regularly hauls 68,000 gross barrels of crude per train,” Leonard said, adding that “Each train has approximately 100 cars.”
North Dakota PA’s Kringstad further noted in his release that Hess Corp. is readying a $48-million, 60,000 b/d rail facility in Tioga, N.D., for an early-2012 start-up. His post also said that Dakota Transport Solutions began shipping crude from New Town, N.D., to St. James, La., in August 2010. Kringstad said that facility reportedly had the capacity to transport 20,000 b/d by the end of 2010.
Kringstad also noted that smaller rail facilities operate with an estimated combined capacity of 30,000 b/d and include North Dakota locations in Minot, Dore, Donnybrook and Stampede.
Rangeland Energy LLC a New Pioneer
Rangeland Energy LLC (Rangeland), based in Sugar Land, Texas, has also announced plans that would enable Bakken producers to ship crude by rail tanker to the U.S. Gulf Coast.
On March 1, Hart spoke with Chris Keene, Rangeland president and CEO, and learned the company is developing the “COLT” rail terminal hub or connector to ship 100 rail tankers daily (60,000 b/d) of Bakken crude via the BNSF Railway Company to points including the Gulf Coast.
Keene said his company was formed in 2009 and noted: “It’s a huge opportunity, and I think our facility that we are building will be extremely valuable to the industry. It’s been great.”
“There are new rail tank cars being built as we speak. As fast as they can build them, they are being leased. In fact, they are being leased before they build them. Tank car makers, Keene said, have a huge backlog at present – driven by this trend.
Although Keene would not name names, Hart learned that Dallas-based Trinity Industries, Inc., and Oregon-based The Greenbriar Companies, manufacture multi-modal tankers for rail, barge and/or land transport. A review of company disclosures suggested a confirmation of strong backlogs in tanker manufacturers.
The new rail tankers “are coming on because you have a huge demand that has grown not only in North Dakota but also in the Eagle Ford,” Keene added.
Shippers also “are doing whatever they can using existing fleets … a refiner that has an existing fleet of rail cars that maybe they were moving refined products. They convert them and move crude oil,” according to Keene.
“We have not looked at rail into Canada although we have talked with the folks working Saskatchewan’s Bakken trend. Everything we have looked at doing is in and around Williams County in North Dakota where we will be building,” Keene noted. “But certainly the opportunity exists wherever there is existing infrastructure, rail infrastructure, there is an opportunity to do manifest or unit trains.
“Currently, we have a huge draw to get it to the Gulf Coast, into the LLS market,” he said, but “non-traditional” markets for inland crude could soon take the rising flows shipped by rail tanker from Bakken and Eagle Ford producers. “Bakken crude is going to California at Bakersfield right now, by manifest trains, a few cars at a time.”
Keene further mused about the potential for Eagle Ford to flood the Gulf Coast, saying that this could back crude up at Cushing and further back in the Bakken.
“Now you have this rush of light, sweet crude coming on the market; where is it going to go? It’s an interesting story,” Keene said. “It will be interesting to see which refiners run it given that a lot of these refiners just a couple years ago were converting to run heavy, sour crude with investments of billions of dollars.”
Musket Trading Makes The Connection
On March 1, Hart Energy also contacted Oklahoma-based Musket Trading and spoke to Dan House, managing director of crude oil. House said the shifting North American oil industry landscape has “been pretty active as far as the changes that are going on. That creates opportunity, so it’s a good place for us.”
Musket owns and operates rail-served terminals; maintains some 2,000 railcars; provides shipment logistics in 39 states and Canada; and distributes crude oil and other commodities via more than 20,000 railcars annually. That includes crude from the Bakken region to the U.S. Gulf Coast.
House confirmed that rail shipments of Canadian crude are increasingly being talked about and occurring in small batches. “We have done a small amount of it, and I know there are a lot of people looking at it in a bigger way recently,” House said.
Regarding Eagle Ford production, House said producers there yield “a lot more condensate type material that will be railed out of the Eagle Ford. The crude seems to have a good local market, but the condensate volumes that they are talking about do not seem to have a natural home down there.”
Hart also asked House if the Eagle Ford condensate could be sent northward to Alberta’s bitumen producers for use as diluent instead of importing it at Kitimat and shipping it by CN rails to Alberta. House agreed that this opportunity is “most likely” and “that’s where we are seeing it make sense.”
Kirby Inland – Heavy Oil to Crude Tanker?
To obtain the waterborne tank barge perspective, Hart Energy spoke with Steve Holcomb, communications officer for Kirby Corp. in Houston – among the largest inland waterway shippers in the U.S.
According to Holcomb: “We carry very little crude oil. We’ve had a lot of inquiries into it, but they have got to get the product to the Mississippi River or the Arkansas River. So it’s a logistics problem of getting the crude to a river system that is navigable.”
When asked about CN’s rail plan, Holcomb said: “A tank barge would be much more economical way to move it than rail cars. But then, of course, you have to have access to [load the crude] on a viable waterway.”
“Our utilization is pretty high, so we don’t have a lot of barges available, but the industry may have some available … If you move refined products in a barge and you switch it over to crude service, then you have a significant cost of cleaning that barge. You cannot carry a petroleum product upriver and bring crude oil back.
“That doesn’t work. It must be dedicated,” Holcomb said, or the shipper could incur something like “$50,000 to $60,000 to clean it.” That cleaning cost could be justifiable, Holcomb said, if spread-over barrels shipped over a lengthy lease commitment.
“If it’s moved in a black oil barge, it’s a little different. We have 112 black oil barges out of our total fleet of 825,” Holcomb told Hart, noting that such costly cleaning procedures would be unnecessary.
Hart noted the EnSys stance that “rail linked in to barge (or tanker) could also play a role in the transport market. Small volumes of WCSB crudes are currently arriving in the Gulf Coast in part via barge.”
Holcomb offered assurance that “Somebody will figure it out before long. If it involves inland tank barges, Kirby will benefit, because it will tighten up the inland barge market. Barge availability will be much less than what it is today, and rates will begin to escalate.”
According to Holcomb, several other black oil barge firms provide similar services. If Hart Energy makes headway on researching those, they will be covered in a future segment of Hart Energy’s Oil’s Changing Landscape special series.

 

Oil’s Changing Landscape: Ship Low, Sell High
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