Big energy pipeline projects are driving much
of the market for large-diameter steel pipe, but they're not
the only source of demand.
In addition to the $4.4-billion Rockies
Express Pipeline project, billions are being spent to run
pipelines to the United States from the oil sands in western
Canada and from reserves in Texas and Arkansas to supply hubs
in the southeastern United States. And all of these big
interstate pipelines will require miles of feeder lines.
"You have a lot of smaller lines, and if you
add them up all of a sudden you're talking about something
significant," said Donald Santa, president of the Interstate
National Gas Association of America (INGAA), a Washington-based
trade group that represents the natural gas pipeline industry
in North America.
Buyers might not like the high prices they're
paying for line pipe, but most realize that it's part of the
cost of doing business in the current tight market. And they
don't want their projects to languish, Santa said. Demand for
liquefied natural gas (LNG) also is expected to lead to
construction of smaller-scale pipeline projects.
There are already five LNG terminals in the
United States and five more are under construction, according
to Bill Cooper, executive director of the Center for Liquefied
Natural Gas. As many as 44 new terminals have been proposed in
the United States, Cooper said. Many of these will never be
built, but there should be at least another two to nine
terminals under construction by 2025, he said, and new
terminals would require smaller lines to connect them to
interstate pipeline grids.
There also are a few wild cards to
Legislation currently under consideration
could call for extensive sequestration of carbon emissions by
2020, Terry D. Boss, senior vice president of environment,
safety and operations at INGAA, said. "And that means the
infrastructure would have to be up and running by then."
If sequestration legislation were passed,
requiring the capture and storage of carbon dioxide to prevent
it entering the atmosphere, it could mean a whole new set of
massive pipeline projects to transmit carbon dioxide (CO2) to
sequestration sites, Boss said. But others cautioned that such
projects are highly speculative and years down the road.
As for the longitudinally submerged
arc-welded (LSAW) pipe vs. helically submerged arc-welded
(HSAW) pipe debate, most big energy transmission companies
LSAW pipe generally has been preferred for
transporting high-pressure gas due to the length of its weld
seam, which is shorter than HSAW. However, it is argued that
advancements in welding technology have put the two types of
pipe on nearly equal footing.
Rockies Express Pipeline LLC, a joint venture
between Kinder Morgan Energy Partners LP, Sempra Pipelines
& Storage (a subsidiary of Sempra Energy) and
ConocoPhillips, Houston, declined to comment, as did the parent
But the U.S. Transportation Department's
Pipeline and Hazardous Materials Safety Administration in July
2006 granted Houston-based Rockies Express Pipeline waivers on
certain safety regulations for steel pipe used in the project,
according to the Federal Register. The rules also include
provisions for stepped-up inspection. The move should open more
market share to HSAW line pipe, several sources said,
"Are we lowering the safety factor, or has
spiral-weld (pipe) just gotten that much better," Jorge
Woldenberg, president and chief executive officer of
distributor and trader Corpac Steel Products Corp., Miami,
asked. "I don't think anyone has answered that question in
black and white."