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Oil Patch Insider Pipeliners Enbridge and TransCanada in all-out race to U.S.; Marushack, Konrad out of Alaska gas negotiations
Call it one-upmanship, or tit-for-tat of the battle of the giants.
You won’t catch spokesmen for either Enbridge or TransCanada using such terms.
But whatever it is they’re engaged in, it has all the appearances of what you would expect from Canada’s two energy pipeline powerhouses — an all-out tussle to line up customers to support their plans to build new links from Alberta to the U.S.
In the latest round, on back-to-back days, TransCanada announced it is holding an open season to both enlarge and extend its Keystone project.
Enbridge was quick to counter with its own open season to grow its Spearhead heavy oil pipeline after less than a year of operations.
TransCanada said it is looking for shipping commitments to increase the capacity of Keystone by about one-third to 590,000 barrels per day at a cost of US$700 million.
Chief Executive Officer Hal Kvisle said there has been strong interest from the shipping community to push more Alberta crude production beyond the Wood River and Patoka refining and storage hubs in Illinois to the Cushing, Okla., hub and on to the Gulf Coast.
Given that demand “we keep coming up with new alternatives,” he said.
Enbridge Chief Executive Officer Pat Daniel said the Spearhead link, which carries 125,000 bpd from Chicago to Cushing and on to refineries in Texas and Louisiana, has “validated to Canadian producers the benefits of having new markets.”
He said they “immediately started getting better prices for heavy crude” by lowering heavy-light crude price differentials, improving the returns to producers.
In addition to Spearhead, Enbridge is progressing with its planned 450,000 bpd Alberta Clipper project, which recently gained industry backing, and expansion of its Southern Access system.
The open season for Spearhead, which closes in March, will give the company a guide to the support for expansions.
If the Keystone expansion program goes ahead it should start carrying crude in 2010, Kvisle said.
Beyond there, TransCanada has its sights set on more additions to push capacity above 600,000 bpd.
—Gary Park
Thompson appointed pipeline coordinator Speaking of personnel changes, the Joint Pipeline Office out of Anchorage said Feb. 7 that Mike Thompson has finally been appointed state pipeline coordinator.
Thompson has been acting state pipeline coordinator for almost three years.
Conoco’s Marushack, BP’s Konrad out of Alaska gas line negotiations Anchorage Daily News reporter Richard Richtmyer broke the story Feb. 7 that top natural gas executives in Alaska for ConocoPhillips and BP are both leaving those positions, including their roles in pipeline negotiations with the State of Alaska.
Joe Marushack, Conoco’s vice president for Alaska gas development, is taking over his company’s Australia business unit, according to a note he sent Feb. 6 to members of the Alaska State Chamber of Commerce, a group that he chairs, Richtmyer reported.
Richtmyer’s story also said Ken Konrad, BP’s vice president for natural gas, is stepping away from that job, but the company hasn’t said what he’ll do next.
Both of the changes are effective March 1.
Marushack told Richtmyer that he and his family would be moving to Perth, Australia, where he would take over ConocoPhillips’ Australia business unit.
The article did not say who would be taking Marushack’s place.
“With a new administration and work on a gas project starting again, we thought it was time to take a fresh approach,” Daren Beaudo, a BP spokesman in Anchorage, was quoted in the Anchorage Daily News article as saying about the change in gas leadership at his company.
Richtmyer reported that late last year, BP merged the responsibilities of its natural gas vice president with those of its vice president in charge of pipeline transportation of crude oil, naming Konrad to the new position.
“Last week, BP announced internally that Angus Walker, the company’s commercial vice president in Alaska, will replace Konrad in that job beginning next month,” the article said, crediting Beaudo as the source.
Beaudo, who confirmed Richtmyer’s article was accurate, said Konrad would work with Walker for a period of time to ensure a smooth transition, and then was expected to move to another position with BP.
According to Richtmyer’s article, “Walker, who came to Alaska in 2004, has been responsible for BP’s core commercial activity in the state such as strategy, planning and business development. He also played a big part in his company’s lobbying efforts in Juneau last year during a major re-write of the state’s oil tax laws.”
ISER: Alaska oil boom to continue A surge in oil industry spending will help keep Alaska construction workers busy this year and offset a slowdown in military, health care, highway and other building projects, a new industry forecast predicts.
That was the lead in a Feb. 7 Anchorage Daily News article by Richard Richtmyer, who was the first reporter to write up the spring construction forecast released annually by the University of Alaska Anchorage’s Institute of Social and Economic Research.
The study is funded by The Construction Industry Progress Fund, which uses union dues to promote the industry, and the Associated General Contractors of Alaska, an industry trade group.
ISER predicted total construction spending would reach $7 billion in 2007, roughly 7 percent above last year’s levels, the article reported.
That’s the good news.
The bad news is this year's projected spending increase is more moderate and can be attributed in large part to higher building material and other costs, says Scott Goldsmith, who co-authored the forecast with Mary Killorin.
“Employment is probably going to remain roughly the same,” Goldsmith was quoted as saying in the article.
According to the story, AGC’s executive director Dick Cattanach said construction companies are generally pleased with the industry outlook, particularly those who work on the North Slope, where roughly $2.7 billion is expected to be spent on drilling pads, transit pipelines, gathering centers and other facilities related to oil exploration and development.
However, homebuilders are feeling a pinch after several years of sharp growth, Richtmyer reported.
Residential construction spending is expected to total $750 million this year, a 3 percent increase over 2006, according to ISER’s forecast.
Watch for a more complete report in the Feb. 18 issue of Petroleum News.
Jim Hughes named acting director of BLM Interior Secretary Dirk Kempthorne said Feb. 7 that James M. Hughes is the acting director of the department’s Bureau of Land Management, which manages 258 million acres of public land and 700 million acres of subsurface mineral resources.
Hughes, who has been BLM’s deputy director for programs and policy since 2002, will serve until a new BLM Director is nominated by the president and confirmed by the U.S. Senate as provided by law.
He is filling in for BLM Director Kathleen Clarke, who resigned.
Hughes is a veteran of the U.S. Army. He and his wife, Sandy, reside in Maryland, and have three grown children.
As acting director of BLM, Hughes is responsible for the agency’s stewardship of about one-eighth of the land in the United States, most of it located in 12 Western states, including Alaska; and more than 700 million acres of sub-surface mineral estate across the nation.
With an annual budget of about $1.8 billion, the bureau carries out its multiple use land management mission with a workforce of about 10,000 employees.
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