BIG dreams, BIG dollars, BIG results.

®

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Eliminates need to open/close valves during launch — innovative flow-through barrel design helps increase valve life.

Releases a single spherical pig using dual launch pin system.

Requires less labor to launch — allows multiple spherical pigs to be loaded at one time.

*May also be used to launch standard cleaning, batching or inline inspection tools.

Multiple release options —timed, local push button orremote signal.

To learn more about the TDW automated combo pigging system

or our entire portfolio of pipeline services and pigging solutions,

contact your nearest TDW representative or visit www.tdwilliamson.com.

NORTH & SOUTH AMERICA +1 918 447 5400

EUROPE/AFRICA/MIDDLE EAST +32 67 28 3611

ASIA PACIFIC +65 6364 8520

OFFSHORE SERVICES +1 832 448 7200

® Registered trademark of T.D. Wil l iamson, Inc. in the United States and in other countries. ™ Trademark of T.D. Wil l iamson, Inc. in the United States and in other countries. © Copyright 2014 All r ights reser ved. T.D. Wil l iamson, Inc.

Scan with your smartphone for a demonstration.

We’re go for launch.SmartTrap® Automated Combo Pigging System

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2 | EXECUTIVE OUTLOOKThese are the “Good Old Days”

4 | GLOBAL PERSPECTIVEPipeline challenges meet pipeline solutions

6 | TECHNOLOGY FOCUS Tight-oil tidal wave and a looming threat

8 | SAFETY MATTERSMaking safety automatic: Automated pigging systems

10 | FUTURE THINKINGSolving O&G challenges in 3D

12 | MARKET REPORT Up-and-coming land down under

20 | TOUCHPOINTSPipeline events, papers and conferences

28 | BY THE NUMBERSThe four phases of progressive pigging

14 | Cover Story: A Tale as Big as TexasWith increasing regulation, operators work to overcome the shared challenges of the Eagle Ford Shale play.

22 | New Connections: Europe Reaches for Energy Security

To ensure against fluctuations in geopolitics, many European countries are driving toward more stable energy supplies and the infrastructure needed to support them.

D E P A R T M E N T S

EDITOR-IN-CHIEF Jim Myers MorganMANAGING EDITOR Waylon SummersART DIRECTOR Joe AntonacciDESIGN PRODUCTION Kat Eaton, Mullerhaus.netDIGITAL PRODUCTION Jim Greenway, Ward MankinPHOTOGRAPHY Adam Murphy, Cody JohnsonCOVER STORY ILLUSTRATIONS Greg Copeland represented by Deborah Wolfe, Ltd.

T.D. WilliamsonNorth and South America +1 918 447 5000Europe/Africa/Middle East +32 67 28 3611Asia Pacific +65 6364 8520Offshore Services +47 5144 3240info@tdwilliamson.com | www.tdwilliamson.com

Want to share your perspective on anything in our magazine?Send us an e-mail: Innovations@tdwilliamson.com

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Innovations™ is a quarterly publication produced by T.D. Williamson.

®Registered trademark of T.D. Williamson, Inc. in the United States and other countries. ™ Trademark of T.D. Williamson, Inc. in the United States and other countries.© Copyright 2014. All rights reserved by T.D. Williamson, Inc. Reproduction in whole or in part without permission is prohibited. Printed in the United States of America.

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In 1985, Fortune magazine made a grim pronouncement about Texas’ position as an energy producer: “The good old petro-days are gone.” According to Fortune, the only way a downtrodden Texas could return to prosperity would be by diversifying away from energy production.

That was 30 years ago. Fast-forward to 2014, and it becomes clear that Fortune’s verdict was wrong. The oil and gas industry is flourishing in Texas, and the boom in activity extends far beyond the Lone Star state’s borders.

Global dynamics — American shale, economic growth in Asia-Pacific, the reconfiguration of European supply systems, infrastructure expansion in Russia and the Caspian region — are making this an exciting and profitable time to be in the oil and gas industry.

In other words, the good old days are here again — in Texas and the rest of the world.

Transformation is everywhere. The biggest fundamental change in the United States is the emergence of the shale plays, which is altering the domestic supply and demand picture and generating a historically high need for the expansion and modification of pipeline infrastructure. The traditionally energy-hungry Northeast now finds itself in the middle of America’s largest gas reserves in the Utica and Marcellus shales. As a result, energy flows that have been in place for 30 or 40 years are being reversed, sending newly abundant northern gas southward.

In China, a growing Asian middle class is accelerating energy demand, creating greater export opportunities for a number of suppliers, including Australia, the region’s largest gas producer. Indonesia and Malaysia also need more energy than ever to keep their fast-growing economies on track, and Japan is continuing to seek diversified sources post-Fukushima. All together, the need for new infrastructure and maintenance of existing infrastructure in this part of the world has never been higher.

European nations are working to improve their energy security through changes that enable supplies to flow from new and different sources. In Russia and the Caspian countries, the expanding production of both crude oil and natural gas has created a tremendous opportunity to develop the infrastructure needed to grow exports essential to those economies.

BY BRUCE THAMESSENIOR VICE PRESIDENT & CHIEF OPERATING OFFICER,

T.D. WILLIAMSON

E X E C U T I V E O U T L O O K

These are the “Good Old Days”

It’s hard not to feel exhilarated when you think about everything that’s happening in the oil and gas industry right now. Of course we’ll admit that with all these opportunities a challenge or two can creep in. I am always amazed and inspired by the commitment

of our people to better serving our customers. Working alongside our employees to address and solve our customers’ unique challenges is what motivates and engages me. It’s the most rewarding part of my job ... especially during these good old days.

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Reliable Pipes 2014Reliable Pipes 2014, a 3-day workshop recently held in Abu

Dhabi, provided pipeline operators with a better understanding of the root causes of pipeline failure, as well as practical methods to avoid such occurrences. In addition to detailed analyses of pipeline design and construction, presenters and attendees discussed the various phases of Pipeline Risk Management, application and efficacy of Pipeline Integrity Management Systems (PIMS), SmartPlug® isolation technology, and Emergency Pipeline Repair Systems (EPRS).

ABU DHABI ITALY

GlobalPerspectiveRefinery Under Pressure

When a section of a steam line operating at 235°C becomes corroded and develops two defective valves, the consequences can be dramatic, and steps must be taken to replace them. When the line is part of a critical process in a major refinery, the challenge lies in repairing the line without disrupting production. Such was the challenge facing engineers at a refinery in Sardinia. The refinery, which processes approximately 15 million tons of crude oil into petroleum products each year, leveraged STOPPLE® Train technology to safely isolate its high temperature line so that the repair work could be executed without shutdown or loss to production.

NORWAY

Preparing for NewIn the Utsira High area of the North Sea, new pipeline construction is underway. In particular, two lines — one 16" gas and one 18" oil — require pig tracking as part of the pre-commissioning and commissioning processes. The primary owner/operator of these lines specified use of the SmartTrack™ pig tracking system on a rental basis. The system includes transponders, topside monitoring kit, and remote transceiver, allowing the operator to easily track and monitor every transponder-fitted pig.IN

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CAMEROON

Wildlife PreservedTo avoid submerging two 13-km sections of the Chad-Cameroon pipeline, as part of the massive Lom Pangar dam construction project, modification to the lines were required. It was essential there be minimal impact on the environment, which is home to Deng Deng National Park. The objectives of the modification program were to re-route and strengthen the two pipeline sections to ensure that they would be capable of supporting 20-meter water columns that would eventually be installed upon completion of the dam, all without shutting down the line. After more than 30 hot tap and plugging operations, executed by T.D. Williamson, the isolation project and pipeline modifications were completed with no disruption to the pipeline’s flow and minimal impact to the surrounding jungle.

Dragging the North Sea

About 125 km northwest of the Shetland Islands, in the UK sector of the North Sea, the primary owner of two gas and condensate fields suffered damage to a section of one of its 18" flow lines due to anchor drag. The contractor tasked with repairing the line utilized high friction pigs, retrofitted with transponders, and the SmartTrack™ monitoring system to safely carry out the required isolation, pipe replacement, and necessary repairs.

GlobalPerspective Pressurized Pipeline Solutions From Around the World

UNITED KINGDOM

GULF OF MEXICO

Friction on the Rise An operator in the Gulf of Mexico needed to replace two defective flexible joint

components, one on a 14" gas export Steel Catenary Riser, and one on a 10" oil riser. To avoid depressurizing the pipeline during maintenance activities, the operator chose to remotely isolate the 14" riser approximately 45 meters below the joint using the SmartPlug® isolation system. In addition, the operator chose four high friction pigs to isolate its 10" oil riser in a similar fashion.

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At a meeting of the American Fuel and Petrochemical Association, Michael Wojchiechowski, an economist at Wood Mackenzie, referred to the production from U.S. shale deposits as a “tight-oil tidal wave” — in other words, a large, unstoppable, liquid force.

But as operators from the Bakken to the Eagle Ford and Niobrara to Marcellus know, there are plenty of challenges to keeping that enormous flow going. One of them is the high paraffin content of shale oil.

Shale oil is full of highly variable paraffin. In fact, as many as 70 different types turned up in a single oil sample taken from the Eagle Ford, according to a recent Hydrocarbon Processing magazine report. In addition to creating processing and refining problems, shale oil paraffin can lead to financial disasters closer to the wellhead.

For example, stubborn waxy deposits accumulating on gathering line walls can reduce the pipe’s effective internal diameter, causing flow rate to slow or production to cease altogether. What’s more, when wax adheres to the sides and top of pipe interiors, water can collect in low spots, encouraging bacteria growth that can lead to corrosion and pinholes. And compressors have to work harder to pump through paraffin-filled lines, which adds to operating costs.

It’s no surprise, then, that paraffin control is a key concern in shale plays. This goes beyond simply keeping the pipe bore open: The ultimate goal is to completely clear the pipeline, then prevent future wax buildup.

Not only is a clean line fundamental to maintaining performance, but getting the wax out improves pipeline integrity by facilitating

Tight-Oil Tidal Wave and a Looming Threat

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T E C H N O L O G Y F O C U S

first-run success of inline inspection tools — which is becoming more important as the Pipeline and Hazardous Material Safety Administration (PHMSA) considers regulating gathering line integrity inspections. PHMSA representative Damon Hill said that although the agency hasn’t seen any particular evidence that shale oil has uniquely affected pipeline integrity, it continues to study potential gathering line hazards.

Increasing Throughput: Easier, Less Expensive, Safer It can take a combination of mechanical, chemical, and other cleaning techniques to eliminate all of the wax and debris from pipelines that carry shale oil, waxy crude, or natural gas liquids (NGLs), says Olga Kondratyeva, T.D. Williamson’s Director of Pigging Technology. A good place to start is to soften the wax with chemicals, then deploy a progression of cleaning pigs, gradually working up from light tools — like foam pigs — to more aggressive tools, utilizing a combination of urethane blades, cups, discs, and metallic brushes.

Kondratyeva also suggested having plenty of patience on hand. “Operators have had to manually run as many as 60 pigs to get a single dirty line completely cleared,” she says.

Once the pipeline is clean, routine maintenance pigging — generally performed weekly for most waxy crude lines — is in order to prevent contaminants like paraffin from accumulating and to maximize throughput.

To help operators reach these goals, pipeline service provider T.D. Williamson (TDW) has developed an automated pig-only launcher that can be remotely programmed to launch up to four cleaning pigs, sequentially, at designated times and intervals. The SmartTrap® Automated Pig System — or “AutoPig launcher,” for short

— is an extension of the SmartTrap product line, which already includes the AutoSphere

and AutoCombo systems. The AutoPig launcher is currently in the design validation phase, with commercialization anticipated later this year.

The AutoPig launcher was created at the request of operators who appreciated the

capabilities of the AutoCombo — which launches both spheres and pigs — and asked TDW to meet their needs for a pig-only launcher.

Kondratyeva says the AutoPig launcher will help operators respond to cost pressures by significantly reducing the number of trips crews make to the field. She also estimates a substantial safety increase, compared to traditional manual launchers.

“The riskiest part of a pigging operation is opening and closing the door,”

Kondratyeva says. “With the AutoPig launcher, the closure door is opened and closed fewer times than if you were manually launching pigs. The line is also pressurized and depressurized less often.”

With a torrent of shale oil continuing to lift the U.S. oil and gas industry, operators are continuously seeking new ways to increase throughput. Innovations like the AutoPig launcher that increase safety and performance, while reducing costs, will keep them doing just that — riding atop the

“tight-oil tidal wave.”

This goes beyond simply keeping the

pipe bore open: The ultimate goal is

to completely clear the pipeline, then prevent

future wax buildup.

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Consider this scenario: Your production plant is in a valley. It’s a strategic location, but the lower elevation is less than ideal. That means having to keep constant vigilance for potential flooding due to liquid collection in the pipelines. Whether due to water or liquid hydrocarbons, once you have enough buildup, you’re risking decreased flow or even stoppage. When pipelines are allowed to accumulate liquid, your employees and your facility may be at risk of dangerous consequences: emergency shutdowns, freeze ups, and excessive corrosion, to name just a few.

You know the manual pig launchers you’re using upstream of the plant are good, but they require direct attention, and as a result, your pigging maintenance schedule occasionally gets sidetracked due to unforeseen circumstances. You wonder, “If I invest in one of the new auto-launch pigging systems, will it really make things safer and more efficient?”

The answer is “Yes!”

Preparing for AutomationAuto-launch systems allow operators to set predetermined schedules for routine pigging. These programs can help keep lines clear of elements that can reduce efficiencies or shut down production, potentially exposing personnel and the environment to unintended consequences or uncontrolled conditions. They can also be used as part of a preemptive pigging program: Operators can launch inline inspection pigs to measure and monitor pipeline integrity conditions and identify potential safety problems before they escalate into dangerous scenarios.

Of course, being preemptive and proactive sometimes requires a bit of creativity and a lot of expertise — especially when it comes to ensuring an auto-launch system is the right fit for a given location. For some older pipelines, installation issues arise due to the pre-existing location of a power source or the production facility. But as piggability isn’t always the highest priority during site selection or construction, even newer installations may contend with site topography issues.

This is one reason why it’s critical to perform a thorough site survey before investing in any new auto-launch system. A site survey will help you identify any logistical impediments, and give you the answers for a best-case automated launcher installation and setup.

Sometimes, assuring a safe and efficient installation is as simple as providing adequate sumps, drains, and containment to areas where

S A F E T Y M AT T E R S

Making Safety Automatic

The importance of automated launchers

in regard to safety for workers and the

environment cannot be underestimated.

There’s really only one “Golden Rule” for the safe operation of an auto-launch system: start up well.

spills might be likely. It might come down to making sure there’s a place to vent gas pressure from the launcher before it’s opened, or employing different-sized feeding pipes or throttling valves to compensate for anomalous flow characteristics.

“The Golden Rule” As many experienced oil and gas professionals will tell you, there’s really only one “Golden Rule” for the safe operation of an auto-launch system: start up well.

That means having an expert engineer on-site to conduct initial system testing and pressure-up during commissioning. It also means making sure every member of your crew is well trained and comfortable with the system’s operation. In addition to field operations practice, classroom training is essential to fully leveraging the benefits of an auto-launch system, teaching your crews how to troubleshoot, reconfigure passwords, and manually reboot and reprogram the electronics, should the system go offline.

Automated launchers may only be one small component in a vast operation, but their importance in respect to safety for the crew and the local environment cannot be underestimated. Operators who become familiar with this technology soon realize its benefits.

“Since field personnel don’t have to blow down

an auto-launcher system as often, their exposure potential is greatly reduced,” notes Lee Shouse, Manager of Special R&D for pipeline service provider T.D. Williamson. Shouse, who spent decades on the construction and operations side prior to his current role, has educated dozens of major operators on the setup and safe operation of auto-launch systems, including the use of necessary components such as the D-2000 quick-opening closure.

As auto-launcher performance is largely independent of technician interaction, operators also appreciate their benefits with regard

to consistent operation and long-term maintenance. In other words: “Pigs are running as they should, rain or shine,” says Shouse.

FlowingSo, your new auto launcher is in place. It’s been specifically configured to address the concerns of your location. It’s been commissioned, your crew

is trained, and you’re now officially online. Thanks to the pre-programmed routine — whether liquid removal with spheres, regular maintenance and cleaning with pigs, or inline inspection — your product is flowing efficiently and safely. Flow restriction due to flooded lines and the drawbacks of manually launched pigs are a thing of the past.

When pipelines are allowed to accumulate liquid, your employees

and your facility may be at risk for dangerous

consequences.

VIEW THE VIDEO

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Solving O&G Challenges in 3DNot long ago, a patient was admitted to University Hospital Coventry in England with a life-threatening injury. His pelvis was badly crushed. At almost any other hospital in the world, doctors would have taken a CT scan, done their best to analyze the injury, and begun the operation. But at Coventry, the surgeons weren’t satisfied with that plan.

The surgery was going to be complicated. The patient was suffering from a segmental bone defect, in which the bone was shattered into many parts. The CT scan showed them a two-dimensional representation of the damage. It was good, but in this complicated case, it wasn’t good enough. They wanted a hands-on tool to help them plan the surgery.

They decided to get creative.Dr. Richard Wellings of Coventry got on the phone to Dr. Greg Gibbons, Head

of Additive Layer Manufacturing Research at the University of Warwick. Dr. Wellings already knew about 3D printers and their potential applications in medicine, but he hadn’t yet taken the leap to use one in a crucial situation such as this. He asked Gibbons if he could make a copy of the accident victim’s pelvis by the next morning.

It was a tight timeline, but Gibbons rose to the challenge. Within seven hours, Gibbons had used the CT scan to print an exact replica of the damaged bones.

The result: the surgeons could touch and feel the replica, and plan exactly how to complete the surgery before they ever reached the operating table.

The surgery was a resounding success. It may be surprising to learn that this story is not especially unique: Although

3D printing isn’t exactly commonplace, it’s getting there. The technology that, just a

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F U T U R E T H I N K I N G

Rapid prototyping

helps oil and gas operators.

few years ago sounded like something out of science fiction, is now being used in hundreds of industries. In the food and beverage industry, professional bakers are using the ChefJet™, a 3D printer that makes elaborate cake toppers and decorative candies. In retail, 4 AXYZ, a Seattle-based company, is experimenting with “smart wood” with embedded electronics for home automation.

In aerospace, 3D printing is poised to revolutionize the industry.

The Chinese, for example, recently used titanium laser additive manufacturing to print the main windshield frame for a C-919 commercial jet. It took them only 50 days and about US$50,000 — significantly less than the two years and US$500,000 it would have taken using traditional methods.1

They also saved an incredible amount of raw material. According to Gibbons, there is huge waste in the aerospace industry, an unavoidable byproduct of the traditional machining process.

“It’s called the buy-to-fly ratio. Twenty parts waste to one part final product is not uncommon,” says Gibbons. “You go through a lot of effort to get a huge block of aerospace grade titanium, then once you’ve machined this block [to get the aerospace part], you have to throw away 95 percent of it to make other stuff, like golf clubs.”

Because 3D printing lays down just the material you need, it drastically reduces the waste. Gibbons estimates the waste when printing titanium components to be less than one percent when using high-resolution laser melting, and less than ten percent with cladding systems for making large components.

New Ways to Solve Old Problems in O&G

The oil and gas industry is also beginning to embrace the 3D printing revolution, especially in cases where engineering departments are asked to solve unique challenges, like inspecting a hydrogen line.

The inside of a hydrogen line is one of the most brutal environments on the planet. It’s a constant

battle between steel and hydrogen — and hydrogen is almost always winning. Day by day, the metal lining of a hydrogen line is slowly corroding as the hydrogen turns the insides to dust one fallen molecule at a time. The extremely dry, high-pressure, high-friction environment is also incredibly rough on tools, which makes routine maintenance difficult.

So when the operator of an 18-inch hydrogen line asked for inline inspections, he was turned down several times before he found a company to say ‘yes.’ That company was pipeline service provider T.D. Williamson (TDW).

The challenging hydrogen environment forced design changes and considerations that would not usually be required in a more “standard” inline inspection tool design. For example, all metal pieces

— from large tool structures to the smallest screw — had to be considered for protection from hydrogen embrittlement. Hydrogen embrittlement causes many materials commonly used for inline inspection

tools to become brittle and break down very quickly. One of the most critical parts, the exposed

sensors — responsible for transmitting clear data about the line’s condition — presented a new challenge: The materials that could withstand hydrogen embrittlement were unlike anything the company’s engineers had worked with before.

That’s where 3D printing came in. With 3D printing, engineers built sample parts to figure out the best design options for this challenge.

When building something as complicated as a new hydrogen inspection tool, there are plenty of options to investigate. Take wires, for example. In

1http://igcc.ucsd.edu/assets/001/504640.pdf

ChefJet™ is a trademark of 3D Systems Corporation (“3D Systems”)

CONTINUED ON PAGE 27

The inside of a hydrogen line is one of the most brutal environments on the planet. It’s a constant battle between steel and hydrogen — and hydrogen is almost always winning.

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The Up-and-Coming Land Down Under: What Australia Can Learn from Shale Successes and Failures in Other Nations

In 2011, larger oil and gas companies like ExxonMobil, Marathon Oil, Talisman Energy, and Chevron started pouring into Poland. The United States Energy Information Administration (EIA) had just estimated the country’s potential shale reserves at 5.3tn cubic meters — the largest in Europe. The Baltic Basin, a giant shale gas play stretching from northern Poland up to Lithuania, seemed to be poised to become the site of the next shale boomtowns, similar to Williston, North Dakota; Williamsport, Pennsylvania; and Carrizo Springs, Texas.

And yet, by the end of 2013, only 49 wells had been drilled in the Eastern European country — a sharp contrast to the Marcellus shale play in Pennsylvania, where 4,969 wells were drilled in the same amount of time. Forty-nine wells is just a week’s work in a play in the United States, and it isn’t even enough for exploration companies to fully assess the play.

So after three years of making slow progress in Poland, large energy companies gradually shifted attention elsewhere. Despite the promise of significant shale reserves, the quest to unearth them got stuck at an early stage in the production process — and most operators didn’t wait around for improvement.

At first glance, Poland’s huge amount of unconventional resources seem like a sure bet for success. But experts agree that a single, but critical, factor is holding them back: Thus far, the country’s government has yet to develop a workable energy policy, and political pushback against fracking is creating an undesirable environment for operators.

A Checklist for Shale SuccessAccording to an Oil & Gas Financial Journal interview with Tom Petrie of Petrie Partners, political constraints present one of the biggest obstacles in shale development. When it comes to unconventional oil and gas, it’s not enough to simply have a large amount of estimated reserves and favorable geology. In order to develop a shale play, a country must also possess — or have the ability to establish — the following:

Predicting the next big shale frontier is more complicated than simply choosing to drill

in viable shale plays.

n Economic incentive

n Service availability

n Market access/pricing

n Infrastructure

n Access to capital

n Regulatory and environmental acceptance

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It is understandably difficult for a shale play to check off every box on that list. For this reason, world leaders in production don’t always need to have the largest amount of potential resources. For example, the EIA ranks the United States fourth in technically recoverable shale gas resources — after China, Argentina, and Algeria — but it is politically willing to develop its shale plays, which also have favorable geology. Energy companies in the United States also benefit from available technology, plentiful fracking crews, and responsive oilfield service companies.

Clearly you can see, predicting the next big shale frontier is more complicated than simply choosing to drill in a country with “viable” shale plays. So after carefully weighing the above criteria, which country will be the next to benefit?

Australia Gets a Green LightThe EIA ranks Australia as the seventh in the world for technically recoverable shale gas resources. But while Australia may present a smaller market than China or Russia, it has the benefit of a more operator-friendly environment. In fact, a study by

the Economist Intelligence Unit shows that the country may become the largest exporter of liquefied natural gas by 2020. Queensland alone has plans to drill more than 18,000 wells in the next 20 years, and is expected to produce 25.3 million tonnes of shale gas per year by 2020.

However, Australia is still in the early stages of the shale play manufacturing process. Like most of the world, this country is still in the exploration stage and at the very beginning of the production stage. Australia’s geology appears to be adequate, but more assessment is needed.

“Unfortunately, that’s the risk of this industry,” says Abdel Zellou, Ph.D. — a market development director in the gathering and midstream industry

for T.D. Williamson — when speaking about the complex geology of shale plays. “Even seven years after the beginning of the shale boom in the United States, we still see articles about whether reserves are accurate. There’s a lot of uncertainty.”

Perhaps more notable is the significant political progress: Overall, the Australian government is very amenable to oil and gas development. Western Australia (WA) — home to approximately one-fifth of the world’s shale gas reserves — is in the process of passing regulations to start commercial fracking in the region, and the WA government has stated that commercial production is five to 10 years away. Additionally, well assessments have yielded good results in the Cooper Basin, a shale play located in the northeast of South Australia. Tudor Pickering has rated the basin as a “Buy” for its good well economics, positive fiscal environment, existing rig and frack capacity, existing infrastructure, and the US$1.5 billion already completed joint venture deals.

Cooper Basin has already attracted Chevron, ConocoPhillips, Statoil, Total, Hess, and BG Group.

Learning from Experienced Markets Australia’s next challenge will be to amass the infrastructure, expertise, and professional personnel needed for success. Zellou says Australia and other countries in the early stages of shale play development can learn a lot about this from the market intelligence of the American shale industry.

Zellou stresses the need for Australian companies to get into a “manufacturing mindset” and realize that it takes years of drilling and building infrastructure before a market can start producing. He also suggests that companies

CONTINUED ON PAGE 27

FACTORS SHALE POTENTIALPOLITICAL ENVIRONMENT,

INFRASTRUCTURE, EXPERTISE, PROFESSIONAL PERSONNEL

RANKED SEVENTH IN THE WORLD FOR TECHNICALLY RECOVERABLE

SHALE GAS RESOURCES

& LARGEST LNG EXPORTER

BY THE YEAR 2020

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Like most stories about Texas, the one that’s being written in the Eagle Ford Shale is full of big dreams, big dollars, and big results.

The play itself is huge. Covering an area of about 52,000 square kilometers (20,000 square miles), it spans 25 south-central Texas counties and is roughly the size of Costa Rica.

According to energy consultants Wood Mackenzie, capital investment in the play is enormous, reaching US$28 billion by the end of 2013.

And production is immense: Late in 2013, the Eagle Ford beat the Bakken in the race to reach the coveted one million barrels of oil equivalent (BOE) per day mark. Some experts even predict that on the strength of Eagle Ford and Permian Basin production, by the end of 2014 Texas could become the world’s second largest producer of oil behind Saudi Arabia.

So who would think that something as small as bacteria might affect the narrative? Bacteria have been an ongoing issue for Eagle Ford operators since development began in the shale play in 2008. Not only do bacteria eat into pipelines, creating pinholes, it also contributes to the growth of hydrogen sulfide (H2S), a naturally corrosive and deadly gas.

High levels of paraffin wax in the area’s highly variable crude are a problem too, leaving fouling deposits in pipelines that threaten to reduce throughput.

And concerns over water use continue to occupy the minds of operators and environmentalists alike.

In short, companies are encountering operational challenges that they hadn’t experienced in conventional developments.

But the Eagle Ford is far from conventional.Most operators in the Eagle Ford are candid about the issues they’re

facing. And the good news is that they’re looking to one another for answers, finding common ground and sharing information at various forums in the United States and abroad. Operators are also leaning more on their vendors for support, a point brought home by Valerie Mitchell, General Manager, Newfield Exploration Co., who called for stronger partnerships between service companies and operators during her talk at the Midcontinent Developing Unconventional Gas (DUG) conference in Tulsa, OK, in March.

• Unconventional opportunity for independents & smaller companies

• Eagle Ford challenges tax operators

• High water use in drought-stricken Texas

• Pipeline regulation on the rise

• Opportunities outweigh the challenges

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A tale as BIG as TEXAS

Operating challenges in the Eagle Ford Shale

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MEXICO

UNITED STATES

EAGLE FORD SHALE PLAY

SAN ANTONIO

AUSTIN

HOUSTON

TEXAS

Unconventional Opportunity for Independents & Smaller CompaniesThe Eagle Ford Shale in south Texas is one of the most complex unconventional plays in North America in terms of geology and geophysics. Because the rock unit had such low permeability

— preventing oil and natural gas from flowing through it into a production well — the Eagle Ford had garnered little industry attention. That is, of course, until 2008, when Petrohawk Energy (which has since been purchased by BHP Billiton Ltd.) demonstrated the efficacy of “fracking” in the Eagle Ford, drilling a well that had an initial flow rate of 7.6 million cubic feet of natural gas per day.

Although fracking opened the Eagle Ford, the play’s unique characteristics continue to make it difficult to deal with.

In their report titled, “An Analytic Approach to Sweetspot Mapping in the Eagle Ford,” authors Murray Roth, Michael Roth, and Ted Royer describe the Eagle Ford as “grossly depth-driven.” In the Eagle Ford, the report explains, oil is produced at depths of 1,500-2,400 meters (5,000-8,000 feet) to the northwest, with the play grading through condensate and natural gas liquids until dry gas is produced at depths of 3,000-3,600 meters (10,000-12,000 feet) to the southeast. Combined with well-to-well production variability, those depth issues make it more difficult to find sweetspot locations, drill and complete wells,

and optimize production. Those tasks can be so arduous that some American majors have given up, and are selling their Eagle Ford assets.

Royal Dutch Shell is among them. Abdel Zellou, a U.S. midstream and gathering

market expert with TDW, said he learned at a recent Society of Petroleum Engineers (SPE) workshop in Dubai that the key reason for the pull-out is because Shell doesn’t hold sweetspot areas in the region. Shell recently confirmed its plans to “concentrate on asset opportunities with better economic metrics elsewhere in North America and around the world.”

The company hasn’t yet announced a buyer for

its 106,000 acres of Eagle Ford leases, which are located in Dimmit, LaSalle, and Webb counties and produce approximately 32,000 BOE per day.

Although Shell is one of the first integrated oil companies to publicly back away from U.S. shale plays, The Hague-based major doesn’t appear to be alone in having second thoughts about shale, at least according to a recent Houston Chronicle article. It reported that two years ago BP wrote down US$1.1 billion on its shale gas assets because the value of their reserves dropped along with natural gas prices. This was after BP’s net share of production in the United States fell 15 percent. The Chronicle also noted that Exxon Mobil’s seven percent return on capital for its U.S. upstream business last year was dwarfed by the 24 percent

return it collected on its international energy production business.

While the question remains whether certain “majors” will continue to participate in the shale-induced energy surge, there’s no doubt that the Eagle Ford has created a financial bonanza for others. After all, production is 25 times higher today than it was just four years ago: Somebody’s got to have a hand in all of that growth. The winners appear to be independents and small players. In fact, when the Chronicle analyzed data compiled by Bloomberg, it found that in the three top shale plays, small companies outweigh the majors 5-to-1 in terms of acreage.

“The independents jumped all over this right from the get-go; they got better acreage,” Kenneth Medlock, senior director of Rice University’s Center for Energy Studies, told the Chronicle.

According to Standard & Poors, the top Eagle Ford leaseholders include EOG Resources, Apache Corp., Chesapeake Energy Corp., BHP Billiton Ltd., ConocoPhillips, Marathon Oil Corp., Anadarko Petroleum Corp., and Pioneer Natural Resources, among others.

Eagle Ford Challenges Tax OperatorsNow that some of the key Eagle Ford characters have been introduced “in the play,” it’s time to get back to bacteria and the other antagonists.

At the Tulsa DUG conference, Tom Petrie, of investment banking firm Petrie Partners, did a good job of identifying the four general categories of risk faced by upstream and midstream companies operating in the Eagle Ford:

» Environmental » Infrastructure » Pricing volatility » Shifting globalization

Abdel Zellou says he agrees with Petrie’s list — and he has taken that list a step further by suggesting that upstream and midstream operators have different concerns that fit broadly into Petrie’s list.

“Upstream companies are challenged more by the sheer geology of the Eagle Ford, plus their need to capture accurate reservoir data,” Zellou says.

“Midstream operations are distinguished by an entirely unique set of challenges and expectations.”

According to Zellou, the chief issues for midstream operators in shale plays are:

» Infrastructure and infrastructure maintenance

» Paraffin build-up » Internal and external pipe corrosion » Environmental issues and constraints » Regulation of gathering lines » Lack of skilled personnel » Price volatility

Obviously, service providers can’t dampen price volatility or alter hiring patterns, but they can help operators better respond to other Eagle Ford challenges.

Consider infrastructure maintenance, particularly as it relates to paraffin and corrosion.

Although a lack of infrastructure is a recognized problem in the Marcellus and Utica shales, located in the Northeast United States, there’s generally sufficient infrastructure in the Eagle Ford to avoid bottlenecks from the wellhead.

Instead, the challenges in the Eagle Ford relate to the fact that operators are using existing pipelines originally intended to move conventional natural gas to now gather wet gas. The re-use means problems are cropping up that might not

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Apache450

0 100 200 300 400 500 600 700 800

639 EOG

Chesapeake

BHP Billiton

ConocoPhillips

Marathon Oil Corp

Anadarko Petroleum Corp

Pioneer Natural Resources

430

332

204

200

92

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EAGLE FORD TOP LEASEHOLDERS

Net acreage in 1000 (Standard & Poors estimates based upon public information, 2013)

occur in purpose-built pipelines.For example, Eagle Ford wet-gas is full of

natural gas liquid (NGL) condensates that vary in composition and concentration from well to well. In a recent report published in Pipeline and Gas Journal, engineers at San Antonio’s Southwest Research Institute called particular attention to the fact that there were considerably more pipeline-clogging hexanes in Eagle Ford samples than there were in those from other shale plays. Eagle Ford production is also laden with paraffin, which can coat the top and sides of pipelines, allowing bacteria-infused water to collect at the bottom. The water can cause corrosion while the bacteria can create pinhole damage and feed the growth of potentially deadly hydrogen sulfide (H2S).

“Paraffin is a problem across the board in the Eagle Ford. One operator told me they had a quarter-inch of paraffin covering 75 percent of their pipe,” says

Steve Appleton, Regional General Manager with TDW. “And the paraffin build-up is creating unanticipated issues with harmful bacteria. Operators run biocides in their lines to kill the bacteria, but if the bacteria are beneath the paraffin, the biocides can’t reach it.”

To combat these risks, Appleton says, service providers are helping operators determine and implement more rigorous pigging schedules. Not only does regular pigging promote productivity, it also presents an economic opportunity, allowing valuable NGLs to be collected for sale to refiners.

High Water Use In Drought-Stricken TexasBecause water is the largest component in fracking fluids, water use and conservation are key concerns in every American shale play. But in the Eagle Ford, the issue is further complicated.

In February, Ceres, a Boston-based investor group focused on sustainability issues, said the Eagle Ford used more water during an 18-month period than any other shale region — a total of 19.2 billion gallons, or 4.5 million gallons per well. As if that amount wasn’t significant enough on its own, it’s important to remember that much of Texas has experienced some level of drought conditions for years. Ceres found that 98 percent of the Eagle Ford wells were in areas of medium or high water stress, with 28 percent in areas of high or extreme water stress.

The report also said operators need to institute more creative water management. Specifically, they should minimize freshwater use, and undertake better long-term planning for the water infrastructure needed to maintain oil and gas development. The group also advocates water recycling, which is more common in the Northeast than in Texas, although the Eagle Ford’s first water

recycling facility was installed in 2011. These suggestions hardly took operators by surprise.

Potential water solutions are a stock item on the agenda at “unconventional” events, and were the centerpiece of the E&P Technology Panel at last September’s DUG Eagle Ford conference in San Antonio, TX.

Has that information-sharing brought forth any progress? Well, Ceres did acknowledge that some

The Eagle Ford has the advantage of existing infrastructure. But can it cope with the peculiarities of the shale production?

BACTERIA GROWTHCREATES PINHOLE DAMAGE IN THE PIPE AND FEEDS HYDROGEN SULFIDE (H2S)

PARAFFIN WAX BUILD-UPREDUCES THROUGHPUT AND PREVENTS BIOCIDES FROM REACHING BACTERIA

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PIPE

operators are ahead of the game, crediting Pioneer Natural Resources for installing evaporation covers on water pits. Omar Garcia, President and CEO of the industry group South Texas Energy & Economic Roundtable, said that more operators are stepping up. Speaking to the San Antonio Express-News, Garcia noted that some companies are reporting a decrease in their water use of as much as 30 percent. He believes that freshwater use in the Eagle Ford should continue to drop as new technologies are introduced by operators and the service companies that support them.

Pipeline Regulation On The Rise Although the water used in fracking in the Eagle Ford and other U.S. shale plays is exempt from key federal regulations, pipelines are a different story. The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) is considering regulating gathering pipelines. If that regulation is passed into law, it will likely require integrity inspections, creating more pressure on service companies to provide increasingly robust pigging and inline inspection services.

But even if the U.S. government doesn’t act, some states are already taking matters into their own hands.

In December, North Dakota — home of the Bakken shale — announced that about 28,968 km (18,000 mi) of previously unregulated underground gathering pipelines were now under the jurisdiction of the state’s Industrial Commission. Lynn Helms, director of North Dakota’s Department of Mineral Resources, called the move the “biggest amendment of oil and gas rules in North Dakota’s history.” And in April, North Dakota Public Service Commission Chairman Brian Kalk said it is “very likely” his agency will ask state lawmakers to create an inspection program for the state’s oil pipelines, a proposal coming on the heels of a 20,600 barrel crude oil spill in a farm field near Tioga, ND.

Although there’s no similar local action underway in Texas — a state that Zellou describes as being friendlier than most to the oil and gas industry

— PHMSA regulations might make regulation of rural gas pipelines a reality within five years.

Opportunities Outweigh the ChallengesDespite the challenges facing them, Eagle Ford operators are almost unanimous in their commitment to the region. According to research firm GlobalData, drilling and development in the Eagle Ford are expected to continue unabated, with nearly all of the more prominent operators projecting at least five more years of drilling at the current pace. In a recent Houston Chronicle interview, David Banks, general manager of the Eagle Ford region for BHP Billiton Petroleum, said the company expects to be in South Texas for as long as 50 years.

“We’re still in the infancy of the shale revolution,” Zellou says, adding that some E&P companies are still figuring out the size of their Eagle Ford reserves.

In other words, there are still plenty of chapters to come in this southeastern Texas tale. And one look at the September 2013 DUG Eagle Ford conference agenda — filled as it is with operator-led sessions on boosting recoveries, handling well variability, water management best practices, and more — indicates that companies are increasingly working and learning together in order to make the Eagle Ford storyline as successful as possible.

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Abnormally Dry

Moderate Drought

Severe Drought

Extreme Drought

Exceptional DroughtAuthor: Michael Brewer, NCDC/NOAA

Texas Drought MapDecember 10, 2013

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21-25 Louisiana Gas Association Pipeline Safety Conference

New Orleans, LA, USA

22-25 FEPA Summer Symposium Orlando, FL, USA

28-30 SGA Operating Conference & Exhibits New Orleans, LA, USA

TDW Events, Papers & Conferences

TouchPoints

Indicates TDW will present a white paper at this event

Louisiana Gas Association Pipeline Safety Conference

21-25 JULY | New Orleans, LA | USA

FEPA Summer Symposium22-25 JULY | Orlando, FL | USA

SGA Operating Conference & Exhibits28-30 JULY | New Orleans, LA | USA

Midwest Energy Association Operations Summit

12-14 AUGUST | Rochester, MN | USA

Western Regional Gas Conference19-20 AUGUST | Tempe, AZ | USA

The Pipeline & Energy Expo25-27 AUGUST | Tulsa, OK | USA

NACE 2014 Central Area Conference25-27 AUGUST | Tulsa, OK | USA

Oklahoma Gas Association8-10 SEPTEMBER | Norman, OK | USA

Arkansas Gas Association14-16 SEPTEMBER | Fayetteville, AR | USA

DUG Eagle Ford15-17 SEPTEMBER | San Antonio, TX | USA

Oil Sands Trade Show & Conference9-10 SEPTEMBER | Fort McMurray, AB | Canada

International Pipeline Conference & Exposition30 SEPTEMBER – 2 OCTOBER | Calgary, AB | Canada

TDW 50th Anniversary Celebration15 AUGUST | Swindon| UK

21

TDW experts deliver — providing technical presentations and hands-on demonstrations throughout the world. To learn more: tdwontour@tdwilliamson.com.

12-14 Midwest Energy Association Operations Summit

Rochester, MN, USA

15 TDW 50th Anniversary Celebration Swindon, UK

19-20 Western Regional Gas Conference Tempe, AZ, USA

25-27 The Pipeline & Energy Expo Tulsa, OK, USA

25-27 NACE 2014 Central Area Conference Tulsa, OK, USA

8-10 Oklahoma Gas Association Norman, OK, USA

9-10 Oil Sands Trade Show & Conference Fort McMurray, AB, Canada

14-16 Arkansas Gas Association Fayetteville, AR, USA

15-17 DUG Eagle Ford San Antonio, TX, USA

30-2 International Pipeline Conference & Exposition Calgary, AB, Canada

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TDW 50th Anniversary Celebration15 AUGUST | Swindon| UK

INTERNATIONAL PIPELINE CONFERENCE AND EXPOSITION

September 30 - October 2, 2014 Calgary, AB, Canada

Among 2014’s most anticipated events, the 2014 International Pipeline Conference and Exposition (IPC/IPE) is designed to inform, enlighten and motivate. In addition to providing attendees a wide spectrum of technical, tutorial and panel sessions, IPC continues its support by investing event proceeds into educational initiatives and pipeline research.

Attend TDW’s poster presentation or visit the booth to learn more about: Integrity Inspections and the Multiple Dataset Platform with SpirALL® MFL; Advancements in Non-destructive Evaluation and Positive Material Identification; and First-time Success with the STOPPLE® Train Double Block and Bleed Isolation System.

Don’t miss this opportunity to engage the technology and experts in person.

IPE Booth 308 T.D. Williamson #IPC2014

In the United States, shale development is being hailed as a way to improve energy self-sufficiency, reducing American reliance on imported oil and making the country a net exporter of natural gas in less than a decade.

As it stands, the United States isn’t the only country with a plan to increase energy security: The 28 states of the European Union are also on the road to energy independence, predominantly by diversifying their natural gas supplies and building thousands of kilometers of new pipelines. In fact, of the 188,030 kilometers (116,837 miles) of pipelines listed in Pipeline & Gas Journal’s 2013 survey as being planned or under construction worldwide, 21,148 kilometers (13,141 miles) of them are in Europe. That total includes the recently green-lighted 3,500 kilometer (2,175 mile) Southern Gas Corridor, which will start in Azerbaijan’s massive Shah Deniz gas field and end in Italy, connecting seven countries along the way.

As European natural gas operators expand their reach, their needs are also growing. More and more, they’re looking to their service providers not just for tools, but for comprehensive pipeline integrity solutions, from preparing pipeline reversals in Poland to maximizing throughput in The Netherlands.

Drive Toward More Stable SupplyIn Poland, coal is king. Sitting on the world’s largest deposit of the

combustible black rock, Poland is ranked among the top 10 coal producers on the planet. Coal is the source of 80 to 90 percent of Poland’s electricity generation, says the Polish Government Energy Policy Strategy. It’s also the backbone of the nation’s industrial-based economy.

But Poland doesn’t run on coal alone. The country needs crude oil and natural gas to fuel its transportation and heating sectors. A net energy importer, Poland gets roughly 95 percent of its oil and 65 percent of natural gas from other countries, chiefly Russia.

Now, however, Poland is expanding its own natural gas network, both to reduce its dependence on Russian energy exports and to diversify its energy mix away from coal-fired power in order to meet EU climate change targets.

By the end of 2014, Polish national operator GAZ-SYSTEM is expected to have completed a five-year, €1.95 billion (US$2.69 billion) project that includes the country’s first liquefied natural gas (LNG) terminal, being built at Świnoujście Port on the Baltic Sea to accept supplies from diversified sources, and more than 1,200

Reaches for Energy Security

NEW CONNECTIONS:

Europe• For Dutch Gas Supplier NAM,

a Way to Get Through Wax

• Will U.S. Natural Gas Help EU’s Woes?

• Drive Toward More Stable Supply

• Ensuring Friendly Supplies

• It Goes Both Ways: the Bi-directional Pipeline Solution

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kilometers (745 miles) of new gas transmission pipelines. These lines

will link the LNG terminal with the Polish natural gas network and, through

its domestic grid, with Czech and German gas transmission systems.

Although it’s unlikely that natural gas will dethrone coal as Poland’s energy monarch any time soon, the growth in natural gas infrastructure means the country is moving toward greater energy security and cleaner skies. At the same time, Polish

operators are facing increasing demands around asset management, including pipeline integrity.

Tomasz Olma, an authority with more than 20 years of experience managing T.D. Williamson’s pigging and inline inspection businesses in Poland, has seen the nation’s oil and gas industry embrace increasingly sophisticated methods for maintaining and rehabilitating their pipelines.

“Since the introduction of the intelligent pig into Poland in the early 1990s, operators have turned to leading edge inspection methods like ultrasonic

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testing of pipeline welds and using magnetic flux leakage (MFL) technology to detect corrosion, pitting and wall loss in metallic pipelines,” he says.

Interest in turnkey solutions from service providers who bundle multiple innovations has been high, he adds, because it allows for the logical, sequential delivery of products and services, which can streamline projects in terms of both time and cost.

The need is especially evident as GAZ-SYSTEM implements its plan to build new interconnections and upgrade infrastructure to enable reverse flows. And while those moves are intended to keep natural gas flowing to Polish citizens, the motivation for them began with oil.

Ensuring Friendly Supplies According to the CIA World Factbook, there

were 14,198 kilometers (8,822 miles) of gas and 1,374 kilometers (853 miles) of oil pipelines in Poland in 2013, most of which were over 30 years old.

One of them is the Friendship Pipeline, which

originates in the Russian heartland and essentially bisects Poland, traversing east to west through the country’s middle.

Also known as the Druzhba, the Friendship Pipeline has been in operation since 1962 and is the world’s longest pipeline, collecting and carrying oil from western Siberia, the Urals, and the Caspian Sea more than 4,000 kilometers (2,500 miles) to points in Ukraine, Belarus, Poland, Hungary, Slovakia, the Czech Republic, and Germany. It has a capacity of more than 2 million barrels per day (mbpd), of which some 1.4 to 1.6 mbpd go directly to consumers in the EU.

Despite its amicable name, however, the Friendship Pipeline has sometimes been a source of friction as well as energy.

During the winter of 2006, for example, a contract dispute with Belarus prompted Russia to halt the flow of oil over the Friendship Pipeline to Poland, Germany, Hungary, the Czech Republic, and Slovakia.

Three years later, in January 2009, a disagreement with Ukraine over natural gas prices resulted in Russia ceasing nearly all of its natural

“Investment in the connection of

the Polish section of the Yamal pipeline and the transmission system

belonging to the German operator has fundamental importance for improving

the transmission capacities between

Poland and Germany.”

UKRAINE

RUSSIABELARUS

POLAND

ROMANIA

GERMANY

ITALY

LITHUANIAYAMAL PIPELINE

DRUZHBA PIPELINE

AUSTRIA

HUNGARY

CROATIA

MOLDOVA

CZECHREPUBLIC

24

gas exports from multiple pipelines to Europe.These incidents highlighted the vulnerability

of Europe’s energy flow and served as a reminder to Poland about the perils of becoming too dependent on a single energy supplier.

The Economist magazine suggests that the 2009 natural gas crisis was the reason Poland decided to fast-track the construction of the LNG terminal at Świnoujście. And there’s no doubt that Warsaw’s desire to reduce its energy dependence on Russia was at the root of its decision to make a portion of the Yamal (or Jamal, in Polish) gas pipeline bi-directional, capable of transporting supplies from Germany as a safeguard against fluctuating politics.

It Goes Both Ways: the Bi-directional Pipeline Solution

Although Poland produces about one-third of its domestic natural gas, two-thirds of the country’s demand is met through imports from Russia, Germany, and the Czech Republic. The independent news organization Natural Gas Europe says that, historically, the lion’s share of Poland’s natural gas imports — about 80 percent

— has come from Russia via the 56-inch Yamal pipeline, which terminates in Germany. In 2012, the Yamal delivered 9 billion cubic meters (bcm) of Russian natural gas to Poland, according to BP’s annual statistical review.

Following Russia’s cessation of gas exports in 2009, Polish national operator GAZ-SYSTEM began work to enable reverse transmission services on a permanent basis on the Yamal where it links Poland’s network to the German natural gas system. In case of a disruption of the supply of gas from Russia, GAZ-SYSTEM will be able to reverse the pipeline, allowing Germany to transport its product to Poland’s consumers.

The physical flow opened in April of this year. It allows for reverse flow capacity of up to 2.3 bcm annually, with the potential to rise to 5.5 bcm in case of supply disruption. “Investment in the connection of the Polish section of the Yamal pipeline and the transmission system belonging to the German operator has fundamental importance for improving the transmission capacities between Poland and Germany,” GAZ-

SYSTEM said in a statement.Over the course of a year, the Warsaw

office of pipeline services provider T.D. Williamson (TDW) was contracted to perform an interconnected series of integrity-building activities that included:

• Conducting a multi-faceted feasibility study that included analysis of existing data, interviews with the front-line supervisors responsible for maintaining the pipeline, and a physical inspection of the pipeline’s condition

• Preparing a plan for cleaning and inspection that would utilize a range of pigs to rid the pipeline of abnormal amounts of condensate, compression station oil, rust, and sand

• Using hot tapping and plugging capabilities to replace a section of the pipe that ran under a rail crossing, along with several valves that were not full bore and therefore wouldn’t be able to withstand the pressure change

• Inspecting the pipeline using intelligent inline inspection tools

• Preparing a pipeline maintenance pump

• Reinforcing areas that displayed external corrosion with a high-strength composite wrap

• Hydrotesting the line to make certain it can handle the stress of 1.5 times the maximum allowable operating pressure (MAOP)

Of course, the ultimate test of the reversible link with Germany will come if and when Russia halts natural gas deliveries to its neighbors to the west.

For Dutch Gas Supplier NAM, a Way to Get Through Wax

While Poland continues to extricate itself from a sticky geopolitical situation with its primary natural gas supplier, a major natural gas supplier in The Netherlands is working on pipeline integrity and flow assurance, key objectives essential to global energy security.

Not only does The Netherlands contain the giant Groningen gas field, the largest natural gas field in Europe, the country is a key European hub for liquid

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fuels transportation and processing. It’s also one of the largest importers and exporters of crude oil and petroleum products. As such, keeping its pipelines flowing is a priority for both the nation and the Dutch exploration company NAM.

Recently, NAM, a joint venture between Shell and ExxonMobil, needed to simplify the above ground connection of two urban exploration and treatment facilities to the Shell Pernis refinery near Rotterdam. With a capacity of about 400,000 billion barrels per day (bbd/d), Shell Pernis is Europe’s largest refining facility.

The NAM project called for abandoning and replacing the above-ground scraper situated between the production facilities and the refinery with an underground piggable Y piece that could withstand pressures up to 95 bar (1377.9 psi), then using pigs to clean the lines. Adding to the challenge was the fact that the pipelines feeding into the scraper were different diameters. Because the line originating at the measuring station was 8-inch, and the line coming from the gas station was 10-inch, dual-diameter pigging capabilities were required.

After the initial cleaning pass, NAM engineers realized there was more wax in the pipeline than had been originally anticipated and they needed an even better way to power through the deposits. The answer came in the form of the PitBoss™ pig

from TDW, a thorough cleaning tool that comes equipped with spring-loaded wire scrapers. Although European pigging expert Ann Mariën says that brushes aren’t normally used to remove wax because they get “cluttered” immediately, the PitBoss pig’s self-cleaning capabilities allowed it to dispatch NAM’s wax problem.

The PitBoss pig also helped engineers take care of another problem facing the pipeline: corrosion.

“There was corrosion from pitting, and possible debris that needed to be removed from the pits, which was performed by the same tool. We also took additional measures to prevent further corrosion,” said NAM Pipeline Engineer Cindy Dirkx. “I believe that this custom-made cleaning solution has contributed to the fact that there’s been no further degradation of the pipelines.”

Will U.S. Natural Gas Help EU’s Woes?New connections and expanded infrastructure

doesn’t change the fact that the EU lacks the fossil fuel resources to meet all of its needs. The Institute of International and European Affairs (IIEA) says that the EU already imports 70 percent of its oil and 50 percent of its natural gas. Adding to those woes is the International Energy Agency (IEA) prediction that the EU’s foreign dependency will only grow in the near term, climbing 20 percent over the next 20 years.

The U.S. is no stranger to the predicament Europe faces: As recently as 2007, American natural gas supplies were dwindling to the point that the Bush administration considered importing supplies from less stable markets. And although the shale boom that has buoyed America has yet to be replicated in Europe, it’s possible that the growing supplies of natural gas from shale developments in places like North Dakota and Texas could help the EU further wean itself from less stable energy supplies. The U.S. doesn’t export its natural gas yet, but the Energy Department has begun issuing export permits to American companies, and there are some natural gas export terminals already in the early phases of construction.

In the meantime, European countries will continue driving toward greater energy security. Operators will keep building new pipelines and repurposing existing ones. And service providers will supply the advanced, comprehensive integrity solutions that will help Europe to more quickly and confidently reach its goals.

NAM is Dedicated to Creating a Sustainable Energy Future

Nederlandse Aardolie Maatschappij BV (NAM) has explored for and produced oil and gas in the Netherlands since 1947. Today, NAM is the leading natural gas producer in the Netherlands, with annual production in 2012 of 59.6 billion cubic meters, accounting for 75 percent of total Dutch demand for natural gas. The Groningen field accounts for roughly 70 percent of NAM’s gas production, with the remainder coming from more than 175 smaller fields elsewhere on the Dutch mainland and in the North Sea. NAM also continues to produce oil, accounting for one-fifth of the oil produced in the Netherlands. The company is committed to contributing to Dutch society by applying innovative techniques that optimize production and help deliver a sustainable, secure energy supply.

NAM has two shareholders: Shell (50%) and ExxonMobil (50%). NAM applies Shell’s operational processes and safety systems.

prototyping, routing wires can be one of the largest challenges: Tools are typically built in pieces using CAD. This means that it’s virtually impossible to see if the wires will fit correctly until the prototype is built. Wires vary in thickness and bend differential, creating unexpected kinks. Until an engineer actually lays down the wires on a test model, they’re really just making educated guesses about whether they’ll fit.

A 4-inch deformation sensing body is one of the many parts printed by TDW engineers to help them with their R&D process.

Using traditional methods, an engineer would model a new part in CAD, send the CAD drawing to the machine shop, and then wait a few weeks to a month for a prototype to be constructed. Only then could the engineer run preliminary tests to find out if the new piece was compatible with the other pieces in the design, and, of course, if the wires would fit. Using 3D printing, though, an engineer can send a CAD design straight to the printer, and have those questions answered in just a few hours.

Needless to say, being able to quickly print out test designs can save months during a typical R&D process.

Reducing Duplication, Increasing Efficiency

3D printing also aids with collaboration: When engineers are developing different tools through multiple teams, repetition of work is hard to avoid. Although companies keep libraries of virtual CAD parts, engineers can’t physically see how the parts would work into their designs, so they often end up spending hours designing and re-creating parts that were readily available in the library. 3D printing allows companies to create a physical counterpart to these virtual libraries: Instead of turning to virtual designs, engineers can choose pre-made plastic parts from in-house “boneyards.” Pieces like U-joints and sensor arms naturally become uniform, not because

“the rules say we should use the standard design,” but because engineers can see for themselves that the standard design will work.

“Rapid prototyping is spanning the gulf between I don’t have it, and I have it,” says Davin Saderholm, Manager of New Product Development at TDW.

As for the hydrogen line inspection tool — with

the help of 3D printing rapid prototyping — it was delivered to the customer on a greatly reduced timeline, despite the unique challenges faced.

It’s obvious that 3D printing is transforming vital processes in countless industries. Whether in your plane or in your pipeline, at home or even inside your body, it’s all but certain 3D printing will soon find itself in your life and business.

The Up-and-Coming CONTINUED FROM PAGE 13

involved in the United States’ shale process share their knowledge with operators in Australia. For example, the American oil and gas industry is currently embarking on a 12-year, US$890 billion investment in its own midstream and downstream infrastructure. Australia can learn from the huge amount of planning, resources, and workers needed for this process.

As for professional personnel and expertise, Australia will face the same challenges that every shale-developing country is facing: There is a shortage of worldwide oil and gas labor, especially in expert-level positions. One way to navigate this challenge is for operators to work with service companies that already have knowledge in the area — companies that have already been through the process in the United States.

Positioned to SucceedSo far, Australia is doing very well on the

checklist for shale play success. The country’s political environment looks promising and, as Poland found out, that can be the most difficult step for many nations. In theory, actually developing a shale play can be much easier: Although it requires a tremendous amount of time and effort, the overall process for shale development remains the same across the globe. Australia’s shale-friendly political environment and willingness to work with international companies will help put the country on the road to becoming one of the largest LNG exporters in the world.

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Solving Challenges in 3D CONTINUED FROM PAGE 11

PhasesFourBY THE NUMBERS of PROGRESSIVE PIGGING

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FOAM Foam pigs are inexpensive and indispensable, providing operators with valuable information regarding the condition and piggability of their line. Collapsible and resilient, a visual inspection of a foam pig at the end of the run will often determine the next step in the progressive process.

CHEMICAL Chemical batching is achieved by injecting a chemical slug between two urethane pigs, intended to lessen the cohesion of any contaminants or debris that have become attached to the pipe wall. The discs of the batching pigs will also help disrupt the debris before and after the chemical slug.

URETHANE Urethane pigs are where “progressive” really comes into play. These pigs can range from simple molded urethane with cups and then discs, to very aggressive, steel-bodied pigs with an array of molded urethane cups and discs, and hundreds or even thousands of steel pencil brushes.

SPECIALTY The unique challenges of pipeline operators often require a unique solution, such as ultra-aggressive steel-bodied pigs with spring-loaded steel mandrels (for removing corrosion deposits within internal pitting), and jet or spray pigs (for debris suspension and removal).

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FourPhases of PROGRESSIVE PIGGING

REDUCED FLOW AND INCREASED COMPRESSIONmeans pipeline operators are losing profit and increasing operational risk. To mitigate these unnecessary losses and maximize pipeline throughput, the industry relies on progressive pigging.

Due to the variety of complex factors unique to each pipeline, development and implementation of a progressive program can be challenging. To help simplify the process, the program can be divided into four basic phases: Foam, Chemical, Urethane, and Specialty. Inclusion and order of the phases and specific pigs will vary depending on the particular line conditions.

5% ROUGH DEBRIS>30% Flow Reduction>100% More Pressure

5% SMOOTH DEBRIS10% Flow Reduction30% More Pressure

CLEAN PIPENo Flow ReductionStandard Pressure

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