A Pipeline Blueprint

To build an 80-mile lateral capable of moving NGLs from Tioga, N.D., to Sherwood, N.D., the Alliance Pipeline team used state-of-the-art steel and drilling technologies during extreme conditions.
By Luke Geiver | December 26, 2013

Troy Meinke is well versed in Japanese steel, migratory wildfowl and cover crop mixes. As the Director for Health, Safety and Environment for the Calgary, Ontario-based Alliance Pipeline team, he has to be. For the past three years, Meinke has helped lead the efforts of an 80-mile pipeline project connecting a Tioga, N.D., Hess Corp. natural gas facility to Alliance’s mainline in Sherwood, N.D. The $170 million project first proposed in 2011 is now complete. Every day, the 12-inch diameter line moves 126 million cubic feet of rich natural gas, the kind that contains natural gas liquids (NGLs) such as ethane, propane, butane or pentane, all produced from shale energy resources in the Williston Basin. The NGLs eventually end up in Chicago at an Aux Sable-owned NGL processing facility. 

The build-out of the pipeline required long hours for Meinke and his team, and included many consultations with federal agencies, landowners and biologists on topics ranging from conservation easements to wetland impact issues to rerouting options created to move a pipe around an obstruction as simple as an old tree. “All of these issues play a huge role in the routing of the project—it is a big challenge with pipeline companies today. We always have a point A to start at and a point B to get to, but it’s getting from A to B that is the challenge, finding the right route that minimizes the impact on all fronts,” Meinke says. 

Although the project is now complete, Meinke is still working on the pipeline. For the next five years, the team will monitor the pipeline route through aerial photos, GPS sensors linked to individual welds on the pipelines and other built-in monitoring devices embedded throughout the system (the team will unofficially monitor for much longer). Meinke is also working with North Dakota State University on a seeding study that will determine the best way to restore the right-of-way impacted during the pipeline construction and installation process. “We want to try and give back and to give some good data to the industry,” Meinke says of the reseeding effort that will restore native grassland areas. 

The Alliance pipeline may be small compared to other proposed North Dakota pipeline projects that could move natural gas across the state from western N.D., to Duluth, Minn., or the 375-mile Sandpiper project planned from Beaver Lodge, N.D., to Clearbrook, Minn. But, as those projects are just now starting where the Alliance Pipeline team was three years ago, Meinke and the rest of the team have proven, regardless of size, how to successfully complete a pipeline project that moves Williston Basin energy out of the region. 

Non-typical Construction
The first thing Meinke noticed when he looked at a map showing the proposed route for the pipeline was the presence of three different wildlife refuges. “My background is in biology,” he says, “and I knew right away this was significant.” Meinke knew the U.S. Fish and Wildlife Service would have a keen interest in the pipeline due to the role the refuges played in migratory bird patterns, but he didn’t know the extent of the interest level until he met with members from the FWS. 

Not only did the FWS explain that no real infrastructure had been built in the proposed route area to date, the FWS also revealed that it had acquired a significant amount of conservation easements in the area. The easements protected certain parcels of land from certain development types, and in some instances, the easements disallowed surface development of any kind. After several discussions, Meinke found a way to work around two of the refuges. At the Des Lacs National Wildlife Refuge situated along the Des Lacs River near Kenmare, N.D., it was possible to tweak the pipeline route that passes under U.S. Highway 52 on state-owned property. 

In addition to the joint-effort with the FWS, Alliance provided the FWS with voluntary mitigation dollars to help the service acquire additional conservation easements in other areas. 

After finding a solution to the routing issues created by three national wildlife refuges, the construction crew had to cope with precarious, non-typical construction conditions. “We had to construct this project in the winter, that is not typically done,” he says. In Canada, where portions of the ground stay frozen for much of the year, it is more typical, but not in the U.S. Working in the winter extended the construction process and forced the team to tweak its normal operation strategies. 

“Our construction methodology was different than what you would use during the summer,” he says. Normally, a pipeline construction crew will grade the right-of-way on the other side of where the pipe will be laid. On the graded right-of-way, the pipeline will be strung together and welded before being lowered into the pipeline trench. After the majority of the pipeline is lowered into the trench, the trench will be backfilled and the right-of-way cleaned up and replanted. 

The winter conditions prohibited the team from following that process. The team wanted to minimize the amount of open trench exposed to the freezing temperatures. The goal was to get the subsoil removed from the trench back in the ground as soon as possible. The temperatures could have created problems in the removed soil for the pipeline as the temperatures varied from cold to warm, Meinke says.

The team actually strung out the pipeline before it dug the trench. The process limited the workspace for the crews and the large machinery situated in the vicinity, but the team had no choice. There were also issues moving and storing snow on the right-of-way workspace, another element of winter work that slowed the construction process. 

To minimize surface impacts in some areas of the route, the construction crew had to utilize a practice commonly linked to the oil and gas industry—directional drilling. According to Meinke, the team used a directional drill similar in purpose to those used in the oil industry, to lay pipe under a handful of ponds, portions of the Des Lacs National Wildlife Refuge and the Souris River. “While directional drilling is a great resource to minimize the impacts on certain areas, it isn’t without its technical challenges,” Meinke says. 

The process employs a drilling mud to lubricate the drill bit and well bore as the drill slices through the soil. Through pressure, the drilling mud is pumped into the well bore as the drill spins. In some instances, fissures or cracks were present below ground in the areas of the drill. The drilling mud entered those fissures and surfaced. Meinke says the drilling team had to be very careful about the pressure and amount of drilling mud used in the event that the mud did surface. In the few instances the mud did surface, Meinke worked with state and federal regulators to report and properly clean the affected areas, all of which, he says, have been remediated.

The pipeline used for the entire project was made with special steel sourced from a Japanese mill that could provide high-quality steel. Compared to most pipes, the wall is thicker, he added, and prior to installation, the pipe was coated with a fusion-bond epoxy that protects the pipe from corrosion. Cathodic protection, an electrical process used to aid in corrosion protection, was also implemented before pipe installation. After backfilling, each section of the pipeline was water and pressure tested multiple times for a period of 8 hours to verify the integrity of the pipeline. 

A Calgary-based monitoring facility watches the performance of the line 24/7. All valves can be remotely operated. A GPS system was installed on nearly every weld linking pipe to pipe so the team can retest those welds in the future or find problem areas if needed. Meinke calls the entire system state-of-the-art, based on the number of different technologies used to complete and ensure the pipeline. “That is something the industry is taking advantage of—the technology.” 

The Business of a Pipeline
The story of the Alliance Pipeline doesn’t just reveal the intricacies associated with building pipeline in North Dakota. It also shows why in the fast-paced Williston Basin world of the oil and gas industry, a pipeline project will always be the slowest infrastructure development.

Before the pipeline construction process could ever begin, the Alliance Pipeline team had to create an acceptable route that would be approved by the U.S. Federal Energy Regulatory Committee. FERC has the power to approve the pipeline, and, it also decides on an acceptable toll charge for using the pipeline. Because the Alliance Pipeline system includes hundreds of miles of line from Canada to Chicago, the team had to deal with both federal and state regulators. The entire process to solidify the Tioga lateral lasted two years before construction began. 

During that time, the company had to assure its financers of its relevance. “We are obviously spending a significant amount of capital to build the pipeline,” says Dan Sutherland, vice president of business development for Alliance Pipeline. “While everyone thinks the gas will come, you still need a certain amount of commitment.” A pipeline company always likes to have a diverse number of users because it offers better stability of credit ratings, Sutherland says. From the lender's, perspective, a pipeline should have six to seven investment-grade companies instead of one. 

At this point in the pipeline’s brief history, Sutherland has landed Hess Corp. as an anchor shipper for the pipeline, which is sufficient. The two have made a deal for use of the pipeline and FERC has generated recourse rates for any other shipper looking to use the line. 

All potential clients looking to attach to the line would have roughly one year of work before it could become operational. First, a client would have to provide a gas analysis to Alliance. In some cases, Sutherland says, clients may have to build minor treating facilities to remove condensate from its gas streams. In addition, a prospective user would also need to build a connection line to the main lateral including a metering station that would allow Alliance to monitor the amount and quality of the gas being delivered to the Tioga lateral. 

Above all else, Sutherland believes geographical proximity to the Tioga lateral is crucial, citing the right-of-way and easement acquisition issues as a hurdle to overcome. A potential shipper would also have to contact Aux Sable’s facility in Chicago to arrange an NGL extraction contract after the NGL’s arrive in Chicago. “The operator would look at his gas and what it would cost to arrange for the facilities to get it to us, plus what our toll is, and then he would take the gas value he would get on the Chicago market and then take the value of the NGLs he would get from Aux Sable and that would be the equation,” he says. Although the process sounds daunting, Sutherland says those who use the pipeline can reduce flaring while also gaining value for their NGLs without investing in technology needed to extract the NGLs from the gas stream before the gas is injected into the line. 

“We’d love to see a number of other producers in the area look at the volumes that they are flaring and try and get some value for that,” he says. 

As Hess continues to use the system and the Alliance team tweaks it with improvements, Sutherland will continue working in the Williston Basin to explain the merits of the Alliance Pipeline to potential users. Meinke is focused on monitoring and the results of the NDSU study that will provide benchmark results for replanting right of ways in the region. Both the governor of North Dakota and Hess have expressed their excitement for the pipeline. Meinke is not only excited to be finished with the project. He is also admittedly proud of how the team accomplished the project, and, what it can mean to the entire industry. “We want to be an example that industry can responsibly develop this infrastructure to take those resources away where everybody benefits.” 

Author: Luke Geiver
Managing Editor, The Bakken magazine
lgeiver@bbiinternational.com
701-738-4944