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The Toro Company announced Feb. 15 that it has entered into a definitive agreement to acquire privately-held The Charles Machine Works, Inc., an Oklahoma corporation and the parent company of Ditch Witch, American Augers/Trencor and several other leading brands in the underground construction market, for $700 million in cash subject to certain adjustments set forth in the definitive agreement.

RELATED: Keeping Your HDD Maxi Rig Up and Running

The transaction is subject to regulatory approvals and other customary closing conditions and is currently anticipated to close before the end of Toro’s fiscal 2019 third quarter. More detailed information regarding the transaction is included in an investor presentation available at thetorocompany.com.

Headquartered in Perry, Oklahoma, Charles Machine Works designs, manufactures and sells a range of products to cover the full life-cycle of underground pipe and cable, including horizontal directional drills, walk and ride trenchers, utility loaders, vacuum excavators, asset locators, pipe rehabilitation solutions and after-market tools. In addition to Ditch Witch, the companies include American Augers, Trencor and Subsite Electronics.

The company, known as “The Underground Authority” for their deep understanding of the structures and systems in those markets, and the most important needs of underground construction professionals, generated calendar year 2018 revenues of approximately $725 million.

“The addition of Charles Machine Works will further strengthen our portfolio of market-leading brands supported by talented employees, a commitment to innovation, a best-in-class dealer network and long-standing customer relationships,” said Richard M. Olson, Toro’s chairman and CEO. “As an organization, Charles Machine Works aligns well with and will contribute to our own strategic priorities of profitable growth, operational excellence and empowering people. The company expands our business in a meaningful way in an adjacent category we know well through our own specialty construction business and in a market that is attractive given the potential for growth in addressing both aging infrastructure that is currently in place and new infrastructure that will be needed to support next generation technologies like 5G.”

RELATED: Trencor Introduces T1460 to T14 Trencher Upgrade for Lower Cost of Ownership

“Culturally, our two organizations are very well aligned and, in our past experience, that has been essential to the success of a business combination like this. We share similar people values, performance expectations, business models focused on innovation, brand and channel, and strong community ties. With its rich multigenerational family legacy, commitment to its employees and market leadership position, we have respected and admired Charles Machine Works for a long time. We were excited when joining forces became a possibility, and we know that both companies will be stronger together.”

“Our success is the result of years of hard work and an unwavering commitment to developing innovative solutions for customers,” said Rick Johnson, Charles Machine Works chief executive officer. “From developing the world’s first service line trencher in Perry, Oklahoma, to today’s robust Ditch Witch dealer network, our family of companies is well-positioned to join The Toro Company’s family of brands. We look forward to building upon our founder’s legacy of best-in-class offerings in the expanding underground construction market.”

Toro expects to finance the transaction with a combination of cash on hand and debt, including from additional financing arrangements and borrowings under its existing credit facility. The all-cash purchase price of $700 million represents a multiple of approximately eight times Charles Machine Works’ calendar year 2018 EBITDA, including $30 million of anticipated annual run-rate cost synergies phased in over three years, that Toro intends to achieve through opportunities in purchasing, manufacturing best practices and administrative efficiencies. Toro expects the transaction to be immediately accretive to EPS excluding purchase accounting adjustments and transaction related expenses.

J.P. Morgan Securities LLC acted as financial advisor to Toro and Fox Rothschild LLP and Latham & Watkins, LLP acted as Toro’s legal counsel. Bank of America Merrill Lynch and J.P. Morgan Chase Bank, N.A. have provided committed debt financing to Toro for the transaction. McAfee & Taft A Professional Corporation, acted as Charles Machine Works’ legal counsel.

SOURCE – The Toro Company

The post The Toro Company Announces Charles Machine Works Acquisition appeared first on North American Oil & Gas Pipelines.

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Miller Pipeline announced its acquisition of Hamlet Construction, based in Ocala, Florida. The acquisition expands Miller’s territory in Central Florida.

Founded in 1973, Hamlet has grown from a small family business to an organization known for its detail-oriented project planning and execution. Hamlet specializes in natural gas mains and services, water and sewer lines, fire hydrants, and reclaimed water lines. Miller is a leader in providing a comprehensive range of pipeline contracting and rehabilitation services for natural gas, liquids, water, and wastewater pipelines.

“For several years we have wanted to expand our natural gas operations in Florida, and the opportunity to join forces with Hamlet’s top-notch team is a huge step in that direction,” said Chad Davis, vice president of South Region Construction for Miller Pipeline. “Their core values of honesty, hard work, doing a quality job and building long-term relationships align closely with Miller Pipeline’s four core values of safety, quality, commitment, and reputation. We feel our companies could not be a better match for one another.”

For Miller Pipeline, the acquisition adds 100 construction professionals to an existing roster of 3,300 employees across the country. Day-to-day operations will continue to be coordinated by Harvey Vandeven, general manager of Florida Operations, who will report to Davis.

“Hamlet is consistently viewed as a top contractor around central Florida, and we are excited to have them join our team,” said MVerge CEO Doug Banning. “The Florida gas construction market is a relatively new market for us. The Hamlet team brings local expertise and resources to help us expand our customer base. We are committed to providing the same level of customer service, safety, and quality work to customers. We look forward to the new employees adopting our culture built around our core values, making safety personal, and our core purpose of ‘Building Infrastructure; Building Relationships.”

Miller Pipeline, an MVerge Company, is a wholly-owned subsidiary of CenterPoint Energy. Based in Indianapolis, Miller Pipeline is comprised of highly trained and skilled employees totaling more than 3,000, with office locations in over 20 states around the United States.

SOURCE – Miller Pipeline

The post Miller Pipeline to Acquire Ocala-Based Hamlet Construction appeared first on North American Oil & Gas Pipelines.

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Phillips 66 Partners and Kinder Morgan Inc. are developing a joint project to supply crude oil transportation from West Texas to Houston.

The companies announced Feb. 11 the start of a joint open season by Gray Oak Pipeline LLC and Kinder Morgan Crude & Condensate LLC (KMCC) to provide shippers with long-term crude oil transportation service. The project would transport crude from Gray Oak Pipeline origin points in the Permian Basin to KMCC delivery points at or near the Houston Ship Channel under a binding joint transportation services agreement. Delivery from the Gray Oak Pipeline to the Houston Ship Channel would be achieved through a connection in South Texas.

The joint transportation service offering is part of the Gray Oak Pipeline expansion open season that was launched in November 2018. The expansion includes new takeaway capacity from Gray Oak Pipeline origination stations in West Texas to destinations in the Corpus Christi and Freeport markets. The final scope and capacity will depend on the outcome of the expansion open season. The pipeline expansion is expected to be placed in service in the fourth quarter of 2020.

About Phillips 66 Partners

Headquartered in Houston, Phillips 66 Partners is a growth-oriented master limited partnership formed by Phillips 66 to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum products and natural gas liquids pipelines, terminals and other midstream assets. For more information, visit www.phillips66partners.com.

About Kinder Morgan Inc.

Kinder Morgan is one of the largest energy infrastructure companies in North America. We own an interest in or operate approximately 84,000 miles of pipelines and 157 terminals. Our pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO2 and other products, and our terminals transload and store liquid commodities including petroleum products, ethanol and chemicals, and bulk products, including petroleum coke, metals and ores. For more information please visit www.kindermorgan.com.

The post Phillips 66 Partners, Kinder Morgan to Develop Joint Permian Project appeared first on North American Oil & Gas Pipelines.

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The Pipeline Leadership Conference had its most successful year yet in 2018. The fourth annual event attracted a record of 166 attendees to the Hyatt Place Houston/The Woodlands, Nov. 7-8.

The two-day conference focused on “The Changing Environment of Pipeline Construction” and featured a mix of speakers and panel discussions. The agenda was divided into two section: The Executive Forum on Nov. 7 highlighted industry trends and management concerns, whereas the Workforce Forum on Nov. 8 took aim at attracting and retaining younger professionals to the oil and gas pipeline industry.

As part of the Workforce Forum, 23 students from Oklahoma State University, Skills USA, Houston Community College, Louisiana Tech, Arizona State University and the University of Alberta participated in the inaugural Student-Led Pipeline Innovations Workshop. These college and high school students are aspiring to enter the oil and gas pipeline sector. As part of the agenda, they presented school projects and their experiences to the attendees.

Participants of the Student-Led Pipeline Innovations Workshop pose with Townsend.

The students also had the opportunity to directly interact with conference speakers and attendees as attendees of the full conference, having been sponsored by Centuri Construc-tion Group, the Distribution Contractors Association and Vacuworx. These sponsoring organizations also served as mentors to these young leaders in preparation for the workshop.

One of the major highlights of the agenda was the Executive Roundtable, featuring Brandon Anderson, senior vice president, commercial, U.S. natural gas pipelines, at TransCanada; Todd Denton, president of Phillips 66 Pipeline LLC; Patrick Lamb, president of the Pipeliners Association of Houston; and Tracy Townsend, vice president of construction, compliance and safety at Washington Gas. The panel discussion was moderated by Mark Bridgers, principal at Continuum Capital, and covered a wide variety of topics related to the safe construction and operation of oil and gas pipeline assets in North America.

The first day of the Pipeline Leadership Conference was capped off with the presentation of the Pipeline Leadership Award to Townsend, for her role in developing a strategic partnership program at Washington Gas. You can read about Townsend’s story in the November/December 2018 issue of North American
Oil & Gas Pipelines, or by visiting napipelines.com/passion-pipelines-tracy-townsend-pipeline-leadership-award.

Tracy Townsend (left) received the Pipeline Leadership Award, presented by Bernie Krzys of Benjamin Media and Mark Bridgers of Continuum Capital.

Thorn

The Pipeline Leadership Conference also recognized long-time industry veteran Don W. Thorn with the inaugural lifetime achievement award during the reception. Thorn was an active member of the conference program committee since its inception and helped shape the agenda. Thorn died unexpectedly on Aug. 3, 2018, at age 69. Accepting the award on behalf of the Don’s wife Judy Thorn and the Thorn family was Melissa Wise, a long-time family friend and wife of Ronnie Wise, who worked with Don at the Pipe Line Contractors Association (PLCA).

Melissa Wise (center) accepts the inaugural Pipeline Leadership Conference Lifetime Achievement Award on behalf of Don Thorn (inset) and his family. Thorn unexpectedly passed away in August 2018 and was a member of the conference program committee. Wise is joined by Pipe Line Contractors Association colleagues (from left) Kevin Barrett, Rob Riess, Ronnie Wise, Bob Osborn and Beth Worrell.

A special guest joined the Pipeline Leadership Conference during the Four Craft Unions & Tribal Nations panel, which included Lou Thompson and Bobby Gonzalez of Tribal Energy Resource, David Barnett of the United Association, David LaBorde of the Teamsters and Robert Wilds of the International Union of Operating Engineers. (Shawne Owens of the Laborers International Union of North America was scheduled to appear, but was unable to attend at the last minute.)

The Honorable James E. Campos, director of the Office of Economic Impact and Diversity at the U.S. Department of Energy, concluded the panel by explaining how his office looks at the pipeline industry by helping to enact legislation that considers the impact on minority populations and minority businesses. He was especially interested in the Four Craft Unions & Tribal Nations panel because of the potential partnerships between major pipeline companies and Native American populations across the United States.

The Honorable James E. Campos, director of the U.S. Department of Energy Office of Economic Impact and Diversity, was a special guest during the conference. He spoke during the Four Craft Unions & Tribal Nations panel and shared some of the projects that his office has undertaken in the energy sector.

The Four Craft Unions & Tribal Nations panel produced another highlight, with the signing of two Memoranda of Understanding (MOU) between the Sac and Fox Nation of Oklahoma, represented by Audrey Rose Lee, Second Chief of the Sac and Fox Nation, and the Pipeliners Local Union 798, represented by Danny Hendrix, and the Teamsters, represented by LaBorde. Hendrix was also honored with a traditional blanket ceremony conducted by Robert Williamson, committee member of the Sac and Fox Nation.

During the Four Craft Unions & Tribal Nations panel, the Sac and Fox Nation of Oklahoma and the Pipeliners Local Union 798 signed a memorandum of understanding, with Danny Hendrix (left) representing the union and Second Chief Audrey Rose Lee representing the Sac and Fox.

A panel that drew considerable discussion was the Perspectives from the Next Generation of Pipeline Professionals, with Young Pipeline Professionals (YPP) organization leaders Kaushal Shah of Mott MacDonald and Sheri Baucom of RCP Inc. and YPP veteran mentors Amber Rabo of Cheniere Energy and Jerry Rau of RCP. The YPP representatives discussed some of the challenges they have faced in their careers and gave advice for industry veterans and the student participants on how to navigate relationships, communication and advancement in the pipeline industry. The presentation sparked a lengthy question and answer period with the audience, and several people came up to speak to the panelists afterward to further the discussion of inter-generational relations in the workplace.

Representatives of the Young Pipeline Professionals Kaushal Shah and Sheri Baucom, with mentor Amber Rabo and Bridgers, during the Perspectives from the Next Generation of Pipeline professionals panel.

Other notable presentations included a panel discussion on Pipeline Safety Management Systems with Charles Dolezal of CenterPoint Energy and Diana Goff of Enbridge Gas Transmission, moderated by David Murk of the American Petroleum Institute (API); a panel discussion on Prudency and Effective Communications in Pipeline & Distribution System Construction Programs, with Lindsay Sander of Sander Resources and Ivan Crespo of Pathfinder LLC, moderated by Bridgers; a presentation on Project Management Lifecycle with Dave Klimas of EN Engineering LLC and Mike O’Shea of Xcel Energy; a presentation on The Road to Success, regarding the IPLOCA publication, by Kevin Parker of Mears Group; and a panel discussion on Training Qualifications, Benchmarks and Risk Management panel with Jody Mitchell of MOSAIC and David Schramm of EN Engineering, moderated by Kramer.

The Pipeline Leadership Conference is organized by Benjamin Media Inc., publisher of North American Oil
& Gas Pipelines, and in partnership with Continuum Capital. The 2019 Pipeline Leadership Conference will be Nov. 6-7, at the Hyatt Regency in Houston. Visit plconference.com for updates.

2019 Pipeline Leadership Conference Announces Call for Abstracts

The Pipeline Leadership Conference has launched a call for abstracts for the fifth annual event on Nov. 6-7, 2019, at Hyatt Regency Houston Intercontinental Airport in Houston, Texas. Abstract submissions should be sent via the conference website, plconference.com/call-abstracts. Deadline for submission is Friday, March 29.

The Fifth Annual Pipelines Leadership Conference is designed to recognize companies and individuals driving transformation and innovation in pipeline and distribution system design, construction and operations through people, process and practice. The presentations at this two-day event are focused on innovative and hands-on leadership approaches that achieve revolutionary improvements in performance in the areas of new development, system replacement, ensuring safety, improving efficiency and overcoming challenges from inside and outside the industry.

The Pipeline Leadership Conference Program Committee will review and select topics for the event. The committee is comprised of long-time oil and gas pipeline industry veterans, representing operators, contractors, engineers and trade associations.

If you have questions regarding the Pipeline Leadership Conference call for abstracts, contact Brad Kramer, managing editor of North American Oil & Gas Pipelines, at bkramer@benjaminmedia.com or call (330) 467-7588. Visit plconference.com for updates and additional information.

The post Pipeline Leadership Conference Draws Record Crowd in Houston appeared first on North American Oil & Gas Pipelines.

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Vacuum excavation is a growing — and in some cases a mandated — methodology for digging near underground utilities, at compressor stations or refineries. One of the companies doing its fair share of the work in the Southeast United States is Delta Daylighting.

Operating out of Houston, the company works in the Texas Gulf Coast region but has worked on several projects out of the state as it builds its reputation for reliable and efficient services.

Opening its doors in 2013, the company, like many in the vacuum excavation industry, works as a subcontractor for larger pipeline and oil and gas contractors. In Delta Daylighting’s case that includes Sunland Construction, Strike, Tucker Midstream, Primoris and Troy Construction, to name a few. Projects include work for customers including Kinder Morgan, Marathon, Shell, Williams and Enterprise.

“In the last two years we have worked in 10 to 12 states,” says Jesse Pletts, president of Delta Daylighting. “A lot of what we do is project driven. While we are based in Houston, and our customers are based here, when they mobilize to a job for a pipeline spread in the middle of Georgia, because of the reputation we have built for reliable service and reliable trucks, our customers then bring us to those regions where they mobilize.”

In the last year, Delta Daylighting crews spent about nine months in Tennessee working on a Kinder Morgan station project, in Missouri and Oklahoma working on Marathon’s Ozark Pipeline project, and they traveled to Georgia, Alabama, Mississippi, and North and South Carolina on various Williams Transco Pipeline projects.

Operating the trucks in the field is a crew of 20 full-time employees and an additional 30 temporary hires when the workload hits its peak. It is in this realm that Pletts sees the biggest issue emerging for the industry — a lack of skilled workers.

Because hydro-excavators are driven to project sites on a daily basis, the driver/operator must have a CDL Class B license, and there is a shortage of those workers nationwide. “Nationwide, we are seeing fewer and fewer people want to drive and then on top of that there are less who want to drive the truck and do the work,” Pletts says. “It can be a challenge to find, locate, screen, recruit and retain talent that wants to do this work.”

According to Jesse Pletts, Delta Daylighting president, the CV Series hydro-excavators are ideally suited to work in ground formations present in the Southeast United States.

A Variety of Work

Delta Daylighting’s crews complete an assortment of projects that test the possibilities of what a vacuum excavator can do, including potholing and line locating to creating 5x5x10 boxes and massive trenches. To help keep pace with this busy schedule, Delta Daylighting relies on an in-house fleet of eight Kaiser Premier CV Series hydro-excavators, though the company typically adds another six rental units during the peak summer months.

Pletts, who joined the company in 2016, says that when he started, they were running equipment from another manufacturer, but it could not meet the demands of the work Delta Daylighting was performing. It slowly transitioned to the current fleet, which as of 2018 is solely sourced from Kaiser-Premier.

“If you are digging in the ground near underground utilities of any sort that you do not want to damage, our CV Series trucks can go head-to-head against any other company, crew or vehicle and come out ahead. That is a function of both the CV’s capabilities, as well as the team that we have at Delta Daylighting,” Pletts says. “We have a saying, ‘We don’t want today’s job. We want tomorrow’s job and next month’s job.’ The best way to get that is not to drag our feet and take two days to do a one-day pothole.”

One of the keys to this in the region where his crews work, is the use of a hydro-excavator versus a suction excavator (air only or combination), which Pletts notes some people are using as a way to save water and be able to dump the spoils more easily.

“When you are working from Texas east and the Mason-Dixon line south, the ground composition tends to be a hard and thick red clay the deeper that you go,” Pletts says. “An air truck can’t break through that and get you the production needed to not only satisfy the customer, but also in a way that separates you from the competition.”

He adds that the CV Series, with its Robuschi vacuum blower system and the high-pressure waterjet technology allows his crews to easily cut through the dirt in a safe, timely and productive manner. All three of which have become hallmarks of a Delta Daylighting project. Based on his conservative estimates, the crews haul about 20 cubic yards of material a day. That number increases if there is a water source nearby and the ability to dump debris on site.

Delta Daylighting operates a fleet of eight Kaiser Premier CV Series hydro-excavators working on oil and gas pipelines, compressor stations and refineries in the Southeast.

“Most of our work is primarily pipeline construction projects, pipeline facility work and refineries, and these big hydro-excavators do the job well for us,” Pletts says. “The tech specs of the CV Series make it one of the biggest and baddest hydro-excavation trucks on the market. And now with it on a Peterbilt chassis, it’s been a great marriage of technology and capability.”

These are important things when working in an industry that is growing and still fairly fragmented. According to Pletts, there are many small owner-operators running one or two trucks, a large chunk of mid-size companies like Delta Daylighting and a handful of large companies. Looking ahead, Pletts sees more companies entering the industry, but also a consolidation of some of these regional players too. Running the CV Series has helped Delta Daylighting enhance its reputation for timely, accurate and safe vacuum excavation services.

“The industry is starting to undergo some changes that are the result of the oil and gas pipeline operators becoming stricter on their mechanical excavation requirements,” he says. “There is more regulation being imposed on projects to ensure safety and that reduces the number of line strikes. As that comes down, there is more need and a desire for vacuum excavation on projects. Today, companies are including vacuum excavation in project budgets.”

Mike Kezdi is associated editor of North American Oil & Gas Pipelines. He can be reached at mkezdi@benjaminmedia.com.

The post Vacuuming for Integrity: Delta Daylighting Provides Services in U.S. Southeast appeared first on North American Oil & Gas Pipelines.

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Kinetrex Energy, the leading supplier of liquefied natural gas (LNG) in the Midwest, continues to keep customers warm even on subzero days. Unlike other cities where customers have been urged to conserve natural gas, Kinetrex has a plentiful supply of LNG that can be turned back into natural gas and pushed into the distribution system for commercial and residential usage.

“The importance of keeping customers warm cannot be underestimated, especially during weeks like this one when temperatures drop below zero for several days in a row,” said Kinetrex Energy CEO Aaron Johnson, referring to the recent cold snap that swept through the region at the end of January. “Thursday [Jan. 31], gas customers throughout the Midwest were asked to turn down their thermostats to 65 degrees due the risk of natural gas shortages. Fortunately, our utility and industrial customers in states such as Ohio, West Virginia and right here in Indianapolis did not have these issues as our LNG was used and available to supplement pipeline natural gas supplies as needed.”

Kinetrex operates two significant LNG production facilities located in Indianapolis, with 2 billion cubic feet of cryogenic storage capacity. As part of the liquefaction process, Kinetrex converts natural gas to its liquid form through a complex series of steps which involve compressing, cooling and condensing methane to minus-265 degrees. Kinetrex sells natural gas, renewable natural gas and liquefied natural gas to transportation, agricultural, industrial and utility customers throughout the Midwest.

In addition, Kinetrex can move LNG by tanker truck outside Indianapolis to other locations. Once there, the LNG is turned back into natural gas. Kinetrex can economically ship LNG to locations across the eastern seaboard and as far west as Denver, Colorado.

“Kinetrex’s ability to take natural gas wherever it needs to go gives us the ability to transport it to other states in case of natural gas shortages,” said Johnson.

Kinetrex operates two significant LNG production facilities and provides turn-key energy solutions from a comprehensive portfolio of natural gas solutions including LNG, renewable natural gas (RNG) and pipeline natural gas for customers in the transportation, commercial, industrial, agricultural and power markets.

The post Midwest LNG Supplier Keeps Customers Warm on Subzero Days appeared first on North American Oil & Gas Pipelines.

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Tallgrass Energy LP and Kinder Morgan Inc. have agreed to jointly develop a solution to increase crude oil takeaway capacity in the Powder River and Denver-Julesburg basins. The companies will also add incremental capacity to the Williston Basin and portions of Western Canada.

Pursuant to the agreement, announced Jan. 22, the proposed venture would include both existing and newly constructed assets. Tallgrass would contribute its Pony Express Pipeline System, and Kinder Morgan would contribute portions of its Wyoming Intrastate Co. and Cheyenne Plains Gas Pipeline and begin the process of abandonment and conversion to crude oil service. In addition, approximately 200 miles of new pipeline would be constructed to provide crude oil deliveries into Cushing, Oklahoma.

In total, the combined pipeline system is expected to be capable of delivering up to 800,000 barrels per day (bpd) of light crude oil and 150,000 bpd of heavy crude oil from points in Wyoming and Colorado to Tallgrass Energy’s and Kinder Morgan’s Deeprock terminal in Cushing. From there, customers will have pipeline connectivity to the Gulf Coast and export markets through Tallgrass Energy’s planned Seahorse Pipeline and other existing or proposed future pipeline projects. The combined project is expected to provide initial service as early as the second half of 2020.

“This combination of assets creates a significant growth opportunity for both companies,” said Tallgrass chief operating officer Bill Moler. “Shippers benefit by gaining access to a pipeline system that can source from multiple basins and access numerous demand markets including existing refinery connections on Pony Express and Tallgrass’ downstream options. Other shipper benefits include a quicker in-service date and the ability to batch a greater variety of common streams.”

“There are a number of competitive advantages to jointly developing this project and leveraging [Kinder Morgan’s] and [Tallgrass Energy’s] existing assets, including the expansion of our Double H Pipeline system,” said Don Lindley, chief commercial officer for products pipelines at Kinder Morgan. “Chief among them is the ability to quickly and efficiently place an additional 550,000 barrels per day of crude transportation takeaway capacity in service from the Rockies, which helps domestic producers and offers near-term relief for Canadian producers.”

Completion of the transaction between Tallgrass and Kinder Morgan remains subject to conditions, including receipt of applicable state and federal regulatory approvals, among other items.

Extension of Pony Express Open Seasons

In conjunction with the execution of the agreement, Tallgrass Energy extended its current Pony Express expansion and joint tariff open season with Seahorse to Feb. 28.

The post Tallgrass Energy, Kinder Morgan Join Forces for Downstream Rockies Crude Oil Transportation appeared first on North American Oil & Gas Pipelines.

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The “maxi” class of horizontal direction drilling (HDD) machines are the largest and most powerful rotation units designed for daily use to bore the longest, deepest and largest diameter bores.

Thrust and pullback of the biggest maxi units can be 1.1 million lbs or more, with torque capabilities of 100,000 ft-lbs or greater. World-class record runs for maxi machines exceed two miles installing pipe 18 in. (460 mm) in diameter.

Productivity and reliability with minimal downtime and lowest cost of ownership of these machines for the most part simply requires following the manufacturer’s prescribed mainten-ance routines.

“We go through the maintenance manual with a new owner at every start up,” says Tim Slarb, an HDD fluid system field technician for 13 years with American Augers. “We point out the maintenance routines and emphasize the importance of following them. Owners who adhere to the recommended practices can expect long, trouble-free service life.”

Slarb says he knows of owners who have been drilling hard with their machines for more than 30 years. “It would be interesting to know the total hours they have on their rigs, but over the decades they’ve lost track,” he says. “They just know their trusty rig starts up for them and gets the job done, each and every time they need it. That’s because they’ve cared for their machine.”

A maxi rig’s capabilities can lull operators into taking them for granted. They may start cutting corners on their normal maintenance routines. Slarb says, “It’s a shame because their maintenance is not really that timely or expensive – especially compared to downtime loss of productivity and the cost of repair when maintenance items are neglected.”

One of the most common causes for downtime and repair is ignoring proper greasing. “Grease is cheap. We try to reinforce that when we instruct the drilling crews – more grease and more grease – and more grease,” Slarb says.

Slarb advises rig owners to keep the fluid swivels and slip spindle properly lubricated. The slip spindle must be free to move to keep pressure off the pipe threads. Failure to grease the slip spindle not only causes premature wearing of splines in the shaft but can result in damage to pipe. “Some drillers see thread damage and don’t immediately recognize its relationship to insufficient slip spindle lubrication,” he says.
Failure to keep a bearing lubricated can also result in an expensive repair. “When a bearing is shot, you’re looking at a pretty significant rebuild,” Slarb notes.

Other than daily greasing, Slarb says a maxi rig doesn’t have many components with firmly established service intervals. This makes a greasing routine additionally beneficial. “We instruct HDD crews to keep their eyes open as they’re going around the rig,” Slarb says. He described it as an inspection opportunity similar to the pre-flighting pilots do before they climb into a plane. “They can visually identify such things as loose nuts or bolts and monitor the condition of component wear points.”

Diligent monitoring of the rig’s components enables owners to schedule servicing ahead of time, before part failure, eliminating preventable downtime and lowering overall cost of ownership. “Keep an eye on hydraulic components, the rotary box and bearing end play before it’s out of tolerance. Noticing something that will need service soon means you can order parts in advance to have them ready and schedule the repair between jobs – instead of addressing the issue in the middle of one,” Slarb says.

One routine maintenance item that does have a manufacturer-specified service interval is changing out hydraulic filters, a root cause of some expensive repairs. “The heart of these machines is their hydraulics. You don’t want to forget that. Change the filters out as specified in the service manual,” Slarb advises.

Slarb describes a repair call for a customer who had run its new rig only a couple thousand hours. The field technician sent to troubleshoot the problem discovered the rig’s hydraulic filters had disintegrated. Filter material had corrupted the hydraulic fluid, causing damage throughout the hydraulic system. Slarb relates, “The tech’s first question to the owner was, ‘How often do you change the filters?’ The owner told him he had never changed them since he bought the rig.”

Even with so much damage, the rig was repairable, a tribute to just how robust these machines are. However, it meant flushing out the hydraulic circuits and inspecting and repairing the motors and pumps. The cost of making these repairs on any given rig can total tens of thousands of dollars.

Slarb says, “Oh, we can do a lot for a rig. We can almost always bring it right back to OEM specs, no problem – but how much do you really want us to be fixing something so easy and so inexpensive to maintain? Follow the service manual, you’ll keep your rig in the field making money for you, not in our shop ringing up a tab for preventable component failures.”

Slarb says since almost all a maxi rig’s components are rebuildable or replaceable, they have remarkable longevity. Yet recently there has been a growing trend for owners to sell or trade in their older rigs for new models. “Lately we’re seeing more projects specifying Tier 4 Final compliance. Some won’t let maxi rigs with pre-Tier 4 engines on their jobs,” he says.

From an engineering point, Slarb says, a legacy rig could be upgraded with a Tier 4-compliant engine and the latest electronics packages. “But when you’re looking at the expense of retrofitting an engine to an older machine,” he said, “it makes more sense to most owners just to invest in a new rig altogether.”

Newer rig or older, Slarb said the best way to ensure it’s paying you back for your investment is follow the manufacturer’s maintenance routines.

Joe Bradfield is senior writer at Ellenbecker Communications.

The post Keeping Your HDD Maxi Rig Up and Running appeared first on North American Oil & Gas Pipelines.

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Pipeline inspection companies face increasing demands from asset owners and operators to do more with less. As any sort of failure — whether a leak or a rupture — is met with intense public scrutiny, the industry has developed a zero-tolerance attitude for these incidents.

Through regulatory mandate and innovation, inspection companies have developed high-tech tools to better detect anomalies and damage to pipelines in an effort to support safety and integrity across the millions of miles of oil and gas pipelines throughout North America. But as technology has evolved, so too have owner and operator demands for higher accuracy and better-quality data.

Inline inspection (ILI) tools can perform a variety of tasks, such as detect and characterize metal loss, cracks and geometry deformations (aka dents, wrinkles, buckles, ovalities, etc.). The industry is rife with acronyms like UT for ultrasonic technology, MFL for magnetic flux leakage, POD for probability of detection and plenty more. While the alphabet soup may get confusing, the technology these abbreviations represent allow pipeline inspection companies to better inform owners and operators about their critical assets.

As more data is collected about oil and gas pipelines, integrity management now has the chance to become more proactive, says Chris Yoxall, a vice president of the ROSEN Group.

NDT Global’s Nathan Leslie says that pipeline operators are looking for higher quality data that will deliver higher accuracy for the detecting and sizing of deformities.

“Often, the industry focuses on what has happened in the past,” Yoxall says. “While we certainly can learn from the past, having a reactive approach will only take us so far.”

As the pipeline industry moves toward a mentality of zero incidents, Yoxall says that it grows increasingly important to obtain high-quality inspection data and use it for predictive analytics.

Looking into the future, pipeline operators will continue to demand not just more data, but better data, says Nathan Leslie, chief sales officer at NDT Global.

“We’ll continue to see ILI grow, with operators completing more inspections,” Leslie says. “There will be a shift to higher quality data, and we will be challenged to deliver higher accuracy for the detection and sizing of deformities.”

In fact, the pipeline inspection market already has been growing over the past decade, Leslie says. Depending on the research you look at, it continues to grow by 4 to 6 percent annually.

“North American growth originates from a couple of areas,” Leslie says. “There is a glut of product in oilfield areas like West Texas and the Permian Basin. They can’t get the product out fast enough. When you build a new pipeline, it requires a baseline ILI survey to get online. The United States has an aging infrastructure that is developing more and more features, like cracks and metal loss, and that deformation must be addressed. And not to forget regulations are getting more prescriptive in mandating how an operator manages its lines. Those are the big drivers right now.”

Yoxall adds that the pipeline inspection industry has also matured, and advancements in technology allows service providers to detect anomalies that might not have been identifiable in the past.

“As technology advances and more data is being collected, operators need a way to integrate that information into one single source,” Yoxall says, “where it can be processed in a way to gain a precise picture of the current and future behavior of their asset.”

“Perhaps the biggest way that the pipeline inspection industry has changed is that operators have become more sensitive to failures,” Leslie says. Increasingly, pipeline operators view “a failure for one is a failure for all.”

“Operators are demanding better technology and better solutions to ensure they don’t have failures,” Leslie says. “Seven years ago, some failures were acceptable, as consequences were not as severe as they are now. It is critical for everybody’s business to protect the environment. We have to be vigilant about stopping failures.”

The biggest focus for the industry today is on improved accuracy when detecting threats to pipeline integrity.

“There is a common focus in the pipeline inspection industry on complex features,” Yoxall says. “While single defects may pose a threat to operational safety, combined features, such as corrosion in dents, introduce an even bigger risk to the overall safety of the asset.”

Better accuracy of pipeline inspection data that provides a better probability of detection eases the minds of pipeline operators, Leslie adds.

“One thing that keeps operators up at night is a concern of dents or deformation from metal loss or cracks,” Leslie says. “Recent events have put this issue at the forefront for a lot of operators. Finding fatigue cracks from dents and detecting defects can be difficult, but luckily we have developed technology to detect these features.”

Yoxall and Leslie agree that pipeline operators are considering alternative options to hydro-testing for validating maximum allowable operating pressure (MAOP) when applicable.

“The main driver is the demand to provide higher resolution, more accurate, more precise technology to detect size and classify injurious features,” Leslie says. “The pipeline industry wants 100 percent POD. Many operators are looking to move away from hydro-testing and replace those tests with ILI.”

In addition to the limitations of hydrostatic testing, Yoxall adds that cost is another concern.

“The problem with dependency on hydro-testing is that it requires an operational shutdown, which can be costly,” Yoxall says. “Additionally, a hydro-test only shows one piece of the puzzle, critical features may even go undetected.”

Hook cracks are one particular type of defect causing concern today among pipeline operators in North America, Leslie says. Hook cracks occur on the long seam of a pipeline.

“Unlike straight-line cracks, hook cracks curve and hook like a J-shape,” Leslie explains. “Once a crack starts to turn like that, it becomes especially problematic as they grow fast, and they can interact with laminations or other cracks. They propagate over time, and may not show up on a hydro-test, but they can lead to failures.”

“Requirements on our industry are increasingly growing, which means that we need to keep up by being more efficient, accomplishing more in less time,” Yoxall says.

Despite the competition in the market, Yoxall adds that everyone in the pipeline industry has a common interest.

“In the past, our industry was mainly driven by performance and cost. Now, we’re driven more by safety, and we’re united in that effort,” Yoxall says. “Our challenge is to collaborate with all players in our industry to make sure we are reaching excellence in integrity management without exceptions.”

Leslie sees a lot of opportunity in the market.

“There are not a lot of headwinds for the pipeline inspection industry. I see sails,” Leslie says. “Regulations are becoming more prescriptive. The wind’s at our back on this. For some, there may be challenges in terms of improving accuracy and efficiency. We welcome that challenge. This is a great environment for us.”

Yoxall adds that regulations are just a fact of life in the pipeline industry. As operators have been required to perform more pipeline inspections on their assets, regulations have continued to evolve.

“Regulation is always there,” Yoxall says. “It impacts all our lives. When we drive a car, we might have an alarm for our speed, we have traffic signs, and these are important for everyone’s safety. In our industry, regulations are the minimum requirement. The goal should not be to only meet these requirements, but to take initiative and exceed those standards of safety.”

Within the ROSEN technology and research centers, the company constantly strives to improve its products and services, to broaden their use and to develop new applications for the industry.

One of the areas where regulations have evolved is the increased focus on high consequence areas (HCAs) and now medium consequence areas (MCAs). However, Leslie sees more collaboration from rule makers.
“The regulators are working more with the pipeline operators and industry associations to find the best solutions to ensure the safe operation of pipelines,” Leslie says. “There’s more collaboration happening on the part of the regulators, and I think that is a good thing.”

Yoxall agrees that collaboration is integral to improving the industry.

“We have to keep working together,” Yoxall says. “Regulations are constantly evolving, so we, as innovators, need to make sure we are a few steps ahead of the game. We make research and development a top priority, to ensure the most advanced technology is available to our industry. For this to be successful, we need to work closely with key stakeholders to understand their needs not only today, but also in 10 years or more down the road.

“Our goal is to be a true partner along the entire asset lifecycle,” Yoxall adds. “We support operators throughout the entire integrity management process, providing them with not only accurate and reliable data, but also with the means to understand what that data means for the current and future integrity of their asset.”

This improvement in integrity management, Leslie says, is the only way for the pipeline inspection industry to survive and thrive.

“We have to get more accurate information,” Leslie says. “And we have to be a good partner to operator to ensure they don’t have a failure. If you cannot do this, you won’t be around for long. Operators are no longer going to tolerate 80 percent probability of detection. You have to do better, and they are demanding it.”

Bradley Kramer is managing editor of North American Oil & Gas Pipelines. Contact him at bkramer@benjaminmedia.com.

The post Pipeline Inspection Market Aims for Higher Accuracy appeared first on North American Oil & Gas Pipelines.

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The Pipeline Leadership Conference has launched a call for abstracts for the fifth annual event on Nov. 6-7, at the Hyatt Regency Houston Intercontinental Airport, in Houston, Texas. Abstract submissions should be sent via the conference website, plconference.com. Deadline for submission is Friday, March 29.

The Fifth Annual Pipelines Leadership Conference is designed to recognize companies and individuals driving transformation and innovation in pipeline and distribution system design, construction and operations through people, process and practice. The presentations at this two-day event are focused on innovative and hands-on leadership approaches that achieve revolutionary improvements in performance in the areas of new development, system replacement, ensuring safety, improving efficiency and overcoming challenges from inside and outside the industry.

Innovators and leaders who are interested in sharing their revolutionary strategies and tactics to achieve performance improvement in people, process and practice are invited to submit abstracts on the following topics:

  • Security Solutions During Pipeline Construction and Beyond
  • Collaboration Initiatives to Improve Public Perceptions of the Pipeline Industry
  • Workforce Development Solutions for Awareness, Recruitment, Hiring, Training and Retention
  • Innovative Pipeline Development Strategies in Partnership with Communities
  • Innovative Lessons Learned or Techniques to Achieve Future Performance Improvement
  • Development Strategies for Navigating Uncertain Marketplace and/or Regulatory Environment
  • Innovative Use of Social Media for Communication, Stakeholder Engagement or Recruiting
  • Labor-Saving Process or Technology Innovations for improved Construction and/or Design
  • Overcoming Permitting and/or Regulatory Challenges on Local, State and Federal Levels
  • Solutions for Prudent and Effective Distribution System Replacement Programs
  • Asset Management Strategy Innovations for Distribution or Pipeline Systems
  • Quality Control and Quality Assurance Strategy Solutions for Improved Integrity
  • Pipeline Integrity Innovations for Distribution or Pipeline Systems
  • Lean Construction Techniques to Drive Out Waste from the Process of Design and Construction
  • Crisis Management Programs to Ensure Public and Environmental Safety

The Pipeline Leadership Conference Program Committee will review and select topics for the event. The committee is made up of long-time oil and gas pipeline industry veterans, representing operators, contractors, engineers and trade associations.

If you have questions regarding the Pipeline Leadership Conference call for abstracts, contact Brad Kramer, managing editor of North American Oil & Gas Pipelines, at bkramer@benjaminmedia.com or call (330) 467-7588.

The 2019 Pipeline Leadership Conference will be Nov. 6-7, at the Hyatt Regency Houston Intercontinental Airport in Houston, Texas. The conference is organized by Benjamin Media Inc. and North American Oil & Gas Pipelines in cooperation with Continuum Capital. Visit plconference.com for updates and additional information.

For sponsorship opportunities, contact Brittany Cline at bcline@benjaminmedia.com or (330) 467-7588.

The post Pipeline Leadership Conference Launches Call for Abstracts for 2019 appeared first on North American Oil & Gas Pipelines.

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