2016: A challenging year? (Part 3)

Keystone XL pipeline

TransCanada is challenging President Obama’s November 2015 rejection of its proposed Keystone XL, as he denied a required Presidential Permit.

Attempting to recover US$15 billion in claimed damages, TransCanada announced that it had taken legal action under the North American Free Trade Agreement (NAFTA) and was initiating “constitutional litigation against the US Administration.” In June, the corporation moved forward with a lawsuit against the US under the NAFTA.

USA

Dakota Access pipeline

The fate of the Dakota Access pipeline (DAPL) is unclear. Set to go online in 4Q16, its construction began in May. It was halted in September due to opposition from local Native people, who were backed by the federal government due to the pipeline’s alleged threat to the Natives’ water supply and the risks facing their cultural heritage. Despite a federal judge’s ruling in the DAPL’s favour on 9 September, FERC has recently retracted its permit so the project has been halted.

The pipeline will connect North Dakota’s Bakken and Three Forks oil production areas to a terminus in Patoka (Illinois) to transport around 470 000 bpd of light sweet crude oil.

Roadrunner gas transmission pipeline

In March, ONEOK Partners completed the first phase of West Texas’s Roadrunner gas transmission pipeline, which connects its WesTex natural gas pipeline system near Coyanosa (Texas) to a new international US-Mexico border crossing connection near San Elizario (Texas). Providing 170 million ft³/d of gas to markets in Mexico and El Paso (Texas), this phase is designed to increase the capacity of the company’s gas pipeline infrastructure in west Texas and help supply Mexico’s gas market.

Its ongoing second phase will increase the pipeline’s capacity to 570 million ft³/d in 1Q17 to be followed by its final phase, which will push its total capacity to 640 million ft³/d in 2019.

Mexico

Tula-Villa de Reyes pipeline

In April, Mexico’s Comision Federal de Electricidad awarded TransCanada the contract for building, owning and operating the Tula-Villa de Reyes pipeline for transporting gas from Tula (Hidalgo) to Villa de Reyes (San Luis Potosi) to fuel power generation facilities in Central Mexico. Set for completion in early 2018, the pipeline will connect to TransCanada’s Tamazunchale and Tuxpan-Tula pipelines. It will complement TransCanada’s pipeline network in Mexico.

Africa

Horn of Africa pipeline

Ethiopia and Djibouti are moving forward with plans for construction of the Horn of Africa pipeline. Reports suggest that its construction is to begin before mid 2017 to connect the Djiboutian ports via Dire Dawa (Ethiopia) to a fuel depot in Awash (Ethiopia) to transport diesel, petrol and jet fuel. This is a joint venture between Black Rhino Group and South African-based Mining, Oil & Gas Services Ltd. Planned for completion in three years, the project will include an import storage facility in Damerjog (Djibouti) linked to a storage terminal in Awash.

Cyprus-Egypt gas pipeline

On 8 September, a preliminary agreement was reached between Cyprus and Egypt for the construction of a subsea gas pipeline between the countries. The pipeline will transport gas from Cyprus to Egypt to enter its grid or be used in its LNG facilities. Egypt has been facing growing domestic demand to opt for imports, while maintaining its export capability.

The recently discovered offshore gas reserves in Cyprus’ Mediterranean Sea exclusive economic zone has prompted it to seek export markers for its excess production. Egypt has also found such offshore reserves to be developed for meeting its domestic need, while also aiming at turning itself into a regional gas hub by importing Cypriot gas.