AMM.com Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5


SAWPIPE It’s a seller’s market and line-pipe buyers are lining up

Keywords:


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 consider.

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 remained tightlipped.

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 companies.

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."


Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.



Latest Pricing Trends