Pipes

Consol Energy Inc. said Thursday it has too much of a good thing — natural gas — and low prices will lead to reduced spending and well drilling in the Marcellus Shale this year.

French manufacturer Vallourec SA said progress is continuing on a $650 million steel mill it is building in Youngstown, OH to produce seamless pipes for use in hydraulic fracturing (fracking). The seamless hot rolling pipe mill of subsidiary V&M Star plans to create about 350 direct jobs and have initial production of 350,000 tons/year, but it can be expanded to 500,000 tons/year. Production is expected to ramp up in the next few months. According to Vallourec, the new mill would produce 2 3/8-inch to 7-inch diameter pipe for use in fracking operations. The company said it wants to support customers in shale plays across the continent; it has field offices in the Marcellus, Utica, Haynesville and Barnett shales and in the Piceance Basin.

Due to forecasted lower demand this weekend and limited operational flexibility to manage imbalances, three Spectra Energy pipes — Texas Eastern, Algonquin and East Tennessee — are requiring operators of all receipt and delivery points to maintain flat or negative imbalances for the gas days of Saturday and Sunday.

El Paso Natural Gas Co. (EPNG), which pipes natural gas to western markets, has secured two agreements to expand service into Mexico for growing power generation projects, El Paso Corp. pipeline chief Jim Yardley said Thursday.

In an effort to prevent fires and explosions caused when natural gas is used to clean or purge gas pipes of debris, air or other substances, typically during facility construction and maintenance, the U.S. Chemical Safety Board (CSB) in a 4-1 vote last week approved a list of “urgent recommendations” for the Occupational Safety and Health Administration (OSHA), the National Fire Protection Association (NFPA) and others.

In an effort to prevent fires and explosions caused when natural gas is used to clean or purge gas pipes of debris, air or other substances, typically during facility construction and maintenance, the U.S. Chemical Safety Board (CSB) in a 4-1 vote Monday night approved a list of “urgent recommendations” for the Occupational Safety and Health Administration (OSHA), the National Fire Protection Association (NFPA) and others. Among the recommendations is to require “the use of inherently safer alternatives such as air blows or pigging with air in lieu of flammable gas.”

As fast as producers are developing new supplies in the Marcellus Shale, pipeline operators are lining up new pipes to criss-cross the Appalachians. Recently Inergy Midstream LLC reported on successful open seasons for two pipeline projects in the area, National Fuel Gas Supply Corp. announced an open season for new pipe capacity in central Pennsylvania, and NiSource Inc. said it is looking for partners for the largest plan so far, a $1.7 billion investment in two new Marcellus lines.

Soaring Rockies prices, with some pipes going up by more than $3 and topping $7 in their high-end quotes, led a cash market uprising at virtually all points Wednesday. Cold weather in northern market areas and Tuesday’s 32.3-cent gain by May futures were responsible for the general firmness.

El Paso Corp. pipeline affiliates, Southern Natural Gas Co. and Florida Gas Transmission (FGT), said Friday they have begun open seasons for transportation capacity on planned and related expansions that are designed to meet the growing demand in southeastern gas markets by 2007.