Pipeline Application Crude Oil Pipeline From 12-30-001-25 W1M to 13-17-009-28 W1M And NGL Pipeline From 12-30-001-25 W1M to 13-17-010-28 W1M Southwestern Manitoba Manitoba Innovation, Energy and Mines Petroleum Branch Date: September 19, 2012
Table of Contents 1. Introduction... 1 2. Applicant Information... 1 2.1 Technical Qualifications... 1 2.2 Financial Qualifications... 1 3. Pipeline Need/Intended Use... 1 4. General Project Description... 2 4.1 Design Specifications... 2 4.2 Safety Systems... 3 4.3 Corrosion Mitigation... 4 4.4 Construction... 5 4.5 Specifications of Vessels... 6 4.6 Air Dispersion Model... 6 5. Consultations with Landowners and Occupants... 6 6. Environmental... 6 6.1 Environmental Assessment and Environmental Protection Plan... 6 6.2 Emergency Response Plan (ERP)... 7 7. Other Approvals... 7 7.1 Municipalities... 7 7.2 Department of Municipal Affairs, Culture and Housing... 7 7.3 Manitoba Infrastructure and Transportation... 7 7.4 Railway Crossings... 7 7.5 Department of Fisheries and Oceans (Canada)... 7 7.6 Utility or Right of Way Crossings... 7 List of Appendices Appendix A Appendix B Appendix C Appendix D Survey Plans Pipeline Right of Way Typical Crossing Details Drawings/Specifications Plot Plans Process Flow Diagrams Piping and Instrumentation Diagrams Penn West CSA Piping specifications Proof of Consultation and Access Environmental Assessment and Environmental Protection Plan
1. Introduction Penn West Petroleum Ltd. is submitting this application to the Manitoba Innovation, Energy and Mines Petroleum Branch, as required by Section 149 (2) of the Oil and Gas Act, to seek approval for the construction of two proposed pipelines: A 219mm OD crude oil pipeline from the Penn West 12-30-001-25 W1M Facility to the Enbridge Cromer Terminal at 13-17-009-28 W1M and a 114mm OD NGL pipeline from the Penn West 12-30-001-25 W1M Facility to the Provident Terminal at 13-17-010-28 W1M. 2. Applicant Information Penn West Petroleum Ltd., based in Calgary, Alberta, converted from an income trust into an exploration and production company in January, 2011 and operates under the registered trade name of Penn West Exploration. Penn West is one of the largest independent (nonintegrated) oil and gas producers in Canada with over six million acres of land base, including a significant portfolio of opportunities in light oil. 2.1 Technical Qualifications One of the key resource plays in the company s portfolio is located in the Waskada area. In addition to numerous well sites, gathering systems and facilities in the area, Penn West has a main processing facility at 11-30-001-25W1M and an existing 168mm OD crude oil pipeline from 12-30-001-25 W1M to the Enbridge Cromer Terminal at 13-17- 009-28 W1M. The pipeline has been in service since the mid 1980 s. Penn West has the technical expertise to construct, operate and maintain the proposed new pipelines. 2.2 Financial Qualifications Penn West is a publicly traded company, listed on both the TSX and NYSE, and has the financial capacity to fund the proposed project. 3. Pipeline Need/Intended Use Penn West currently has a 168mm OD crude oil pipeline from the 12-30-001-25 W1M Facility to the Enbridge Cromer Terminal at 13-17-009-28 W1M. Penn West intends to replace the existing pipeline, constructed in the 1980 s, with the proposed new 219mm OD crude oil pipeline. The project will enhance the sustainability and recovery of hydrocarbon reserves in the area. A 114mm OD NGL (natural gas liquid) pipeline is also proposed to be installed in parallel with the 219mm OD sales crude oil pipeline. Currently solution gas produced at the Penn West 11-30-001-25W1M Facility is flared because suitable infrastructure does not exist nearby the facility for gas conservation. The proposed pipeline will connect the 11-30 1
Facility, where NGL will be extracted from gas, directly to the sales point at the Provident Terminal at 13-17-010-28 W1M. Gas conservation will reduce greenhouse gas emission and environmental impact to the surrounding area. Traffic will also be reduced as it eliminates the necessity to transport the sales product by trucks. 4. General Project Description The proposed right-of-way, with both new pipelines, will parallel the existing crude oil pipeline from the Penn West 12-30-001-25 W1M Facility up to Sec. 16-009-28 W1M. At this location, the NGL pipeline will diverge north to the Provident Terminal at 13-17-010-28 W1M. The new crude oil pipeline will parallel the existing pipeline toward the Enbridge Cromer Terminal at 13-17-009-28 W1M. The intent behind the route selection is to minimize the footprint and impact of the two new pipelines as they will be adjacent to the existing pipeline which has been in place since the 1980 s. The crude oil pipeline is approximately 89.3km long and the NGL pipeline is approximately 100.3km long. It is proposed to construct both pipelines at the same time. Major highway and railway crossings will have pipe casings. In order to minimize environmental impact, high pressure drilling will be the proposed method of construction at major water crossings. Qualified environmental monitors will also be present during construction to ensure necessary measures are taken to minimize impact in sensitive areas. Refer to Appendix A for the survey plans, crossing details and Table 1 for the locations of each segment. Table 1 Proposed Pipeline Locations From Location To Location Length Substance LSD SEC TWP RGE M LSD SEC TWP RGE M (km) Crude Oil & NGL 12 30 1 25 W1 3 4 4 26 W1 25.1 Crude Oil & NGL 3 4 4 26 W1 7 17 4 26 W1 4.3 Crude Oil & NGL 7 17 4 26 W1 3 2 5 27 W1 8.3 Crude Oil & NGL 3 2 5 27 W1 5 24 8 28 W1 39.5 Crude Oil 5 24 8 28 W1 13 17 9 28 W1 12.1 NGL 5 24 8 28 W1 13 17 10 28 W1 23.1 4.1 Design Specifications The pipelines will be constructed to applicable CSA Z662-11 Standard. Refer to Table 2 for pipeline specifications. The underground pipe wall thickness selected is above the minimum requirement of CSA Z662-11. For the crude oil pipeline, the minimum wall thickness required is 4.0mm 2
for general purpose, 4.8mm at road crossings and 6.4mm at railway crossings. The actual pipe wall thickness of the entire pipeline will be 6.4mm. For the NGL pipeline, the minimum wall thickness required is 3.2mm for general purpose, 3.2mm at road crossings and 4.8mm at railway crossings. The actual pipe wall thickness of the entire pipeline will be 4.8mm. The reason for choosing thicker pipe than the minimum requirement is because both pipelines are critical lines. Instead of transitioning to a different thickness at crossings, maintaining a consistent internal diameter will improve pigging effectiveness. The additional thickness will also provide more corrosion allowance. This will help improve the integrity and longevity of the pipelines in conjunction with the cathodic protection system and maintenance program. Table 2- Pipeline Specifications Substance H 2 S (mol/ kmol) OD (mm) WT (mm) Material Type Grade Joint Type External Coating MOP/ DP (kpa) Test (kpa) Flow Rate (m 3 /d) Crude Oil 0.07 219 6.4 Steel Z245.1 359 Cat.II Welded FBE 9300 13020 3180 NGL 0.00 114 4.8 Steel Z245.1 359 Cat.II Welded FBE 5100 6375 225 Above ground piping at the pipeline risers will be constructed in accordance to the Penn West ME.S.008, CSA piping specifications. The crude oil piping will be Class CSLC, 600# ANSI (PN 100), sour service and low temp. The NGL piping will be Class BLC, 300# ANSI (PN 50), sweet service and low temp. Refer to Appendix B for the two piping specifications. 4.2 Safety Systems A leak detection system will be installed to isolate the pipelines and alert operators when irregular process conditions are detected. The system collects inlet/outlet flow rate and pressure from each pipeline and the material balance of each pipeline will be monitored continuously by commercial software. Flow measurements will be taken from the 12-30 battery, the Enbridge sales point and the Provident sales point. Pressure measurements will be taken from the automated valve sites in Table 3. The system provides real time leak detection in dynamic and static conditions. It is also capable of estimating the location and volume of the leak. In the rare event of an emergency, a SCADA system will transmit signals from the battery PLC to close the ESD valves at the valve sites immediately; thus reducing potential environmental impact. It will also have an alarm and call out system to alert the operators of such events. Valve sites located along both pipelines provide automatic or manual isolation in the rare event of an emergency. Some of the valve sites also serve as access points for the cathodic protection system and leak detection system. Each pipeline will have ten valve sites. Six of the sites will have automated ESD valves, check valves and the remaining four sites will have manual isolation valves and check valves. The valve sites are spaced 3
to allow the pipelines to be isolated in shorter segments; reducing the potential release. They are also located near major water crossings to minimize potential impact to water bodies. Locations of the valve sites are proposed based on proximity to the existing valve sites and accessibility. They are away from seasonal flood plains and access roads will be built to each site. Penn West personnel will be able to perform maintenance work and handle emergency situations at the valve sites year round. Refer to Table 3, Appendix A and Appendix B for details. Table 3 Valve Sites Locations LSD SEC TWP RGE M Valve Type 12 30 1 25 W1 Auto ESDV, check valve 3 4 4 26 W1 Auto ESDV, check valve 7 17 4 26 W1 Auto ESDV, check valve 10 17 4 26 W1 manual valve, check valve 3 2 5 27 W1 Auto ESDV, check valve 16 19 6 27 W1 manual valve, check valve 5 24 8 28 W1 Auto ESDV, check valve 5 25 8 28 W1 manual valve, check valve 4 21 9 28 W1 Auto ESDV, check valve 13 17 10 28 W1 Auto ESDV, check valve At the automated valve sites, pressure transmitters will be installed to detect abnormally high and low pressure conditions. A SCADA system, transmitting signals between the valve sites and the battery PLC, will allow the ESD valves to be closed remotely. The system will ensure the pipelines will not be exposed to pressure above the design pressure/mop listed in Table 2. It will also have an alarm and call out system to alert the operators of a shut down or any impending abnormal conditions. 4.3 Corrosion Mitigation The pipe utilized on both pipelines will be externally coated with fusion bonded epoxy (FBE). All girth welds and shop bends will be coated with HBE-95 epoxy. The coating will prevent shielding which makes the cathodic protection system more effective. A deep anode impressed current cathodic protection system will be utilized. Anode beds and rectifiers will be installed at three of the valve sites: 03-02-005-27W1, 05-24- 008-28W1 and 04-21-009-28W1. Both new pipelines will be bonded to the same system. A rheostat junction box will regulate the current drain to each pipeline. These locations are selected to ensure uniform current distribution, sufficient to maintain adequate protection on both new pipelines. Test stations will be installed at regular intervals. 4
A chemical and pigging program will be implemented to mitigate internal corrosion. Pig senders will be installed at 12-30-001-25W1, pig receivers at 04-21-009-28W1 and 13-17-010-28W1. Riser bends will be minimum 10D-15D to allow smooth passage of cleaning pigs and inspection tools. Corrosion coupons will be installed to monitor corrosion. In addition, line logs will be done periodically to record wall thickness degradation. Log analysis will provide feedback on the effectiveness of the maintenance program and improvements will be made if required. 4.4 Construction At the Penn West 12-30-001-25 W1M Facility, new sales meters and ESD valves will be installed between existing above ground facility piping and the new pipelines. A 273mm OD pig sender will be installed on the crude oil pipeline and a 168mm OD pig sender will be installed on the NGL pipeline. A transition piece will be installed at the riser to transition wall thickness from the S bend to the first joint of line pipe. The riser and associated above ground piping will be securely supported. The minimum cover depth will be 2.0m on lease and 1.5m off lease. Cover depth will be deeper at some of the crossings. Refer to crossing details in Appendix A. The two pipelines will be installed at the same time in a common ditch. They will be spaced a minimum of 30cm as per CSA Z662 requirement. Most of the right of way will be trenched with the exception of some of the crossings. Major road crossings and railway crossings will be bored, with casing pipe to protect the carrier pipe. The Souris River and Jackson Creek crossing will be directionally drilled to minimize impact to the water bodies and surrounding areas. Refer to crossing details in Appendix A and Appendix D. The crude oil pipeline and NGL pipeline will be hydrotested at 13,020kPag and 6,375kPag respectively. The test medium will be water and methanol will be added when test is conducted in cold weather. To reduce water usage, the pipeline will be isolated at the valve sites and tested in shorter segments. Once the test of a segment is completed, the water will be transferred to the segment downstream for the next test. The duration of the hydrotest will be minimum 8 hours, with a 4 hour strength test followed by a 4 hour leak test. Two pigs will be used to displace air pockets in the line. A test chart will be installed and monitored periodically to ensure any pressure loss is recovered and correlates with temperature change. After the new crude oil pipeline is operational, the existing crude oil pipeline will be decommissioned and abandoned. The pipeline will be purged and pigged of residual fluid. The risers will be cut and capped. Cathodic protection will be removed. During construction, there will be environmental inspection especially for critical activities such as constructing in environmentally sensitive areas, water crossings and 5
stripping topsoil. Water quality will be monitored during the directional drilling operation at water crossings. Contingency plan is in place in case of a hydraulic failure. After construction is completed, a surface reclamation assessment will be conducted to ensure all requirements are met. Further details on the inspection plan, water quality monitoring and reclamation assessment are included in the enclosed Environmental Protection Plan. 4.5 Specifications of Vessels Not applicable, there will not be any pressure vessel associated with this project. 4.6 Air Dispersion Model Not applicable, there will not be any continuous venting associated with this project. 5. Consultations with Landowners and Occupants As per the requirements in the Oil and Gas Act, Drilling and Production Regulations, it is required that all parties who are or may be affected by any new energy developments are made aware of any new development and be given the opportunity to voice any concerns they may have. Notification of all landowners and occupants within the following distances is completed: 1.5 km radius of the end points of the pipeline, and 0.5 km radius along the length of the proposed pipeline The following information has been provided to the Petroleum Branch under a separate cover due to privacy reasons: Names and addresses of all landowners, occupants and residents within the specified radiuses. A summary of consultations with all landowners, occupants and residents, including any concerns raised during the consultation process. A summary of any actions taken or proposed to be taken by Penn West to address any concerns. 6. Environmental 6.1 Environmental Assessment and Environmental Protection Plan An Environmental Assessment report with an Environmental Protection Plan, which outlines mitigation plans for construction and water crossings, has been prepared and enclosed with the application. The following have been completed: Notification and consultation with the applicable regulatory agencies. A record of communication is included in the Environmental Assessment report. 6
Geotechnical and hydrological studies for stream crossing design and wetland crossings Soil survey report Horizontal directional drill design for water crossings Souris River hydrotechnical flood evaluation Aquatic assessment for water crossings Wetland assessment Rare plants and weed survey Wildlife survey 6.2 Emergency Response Plan Penn West maintains a corporate level Emergency Response Plan (ERP) which is intended to handle any emergency situations that may arise. Penn West s emergency number is 1-877-792-2990. This number is attended 24 hours a day, 7 days a week. The ERP for the existing pipeline will be reassessed and amended to include the new proposed pipelines. 7. Other Approvals 7.1 Municipalities The R.M. of Brenda, Arthur, Albert, Pipestone, Wallace and the Municipality of Melita have been notified of the proposed project. 7.2 Historic Resources Branch A Historical Impact Assessment is underway on areas that do not directly parallel the existing pipeline and consultation with Historic Resources Branch is ongoing with respect to appropriate mitigation during construction. 7.3 Manitoba Infrastructure and Transportation The majority of crossing agreements have been received. We expect to receive the two outstanding agreements in the very near future. 7.4 Railway Crossings All railway crossings agreements have been received. 7.5 Utility or Right of Way Crossings Applicable crossing and proximity agreements have been acquired. 7
Appendix A Survey Plans
Appendix B Drawings/Specifications
Appendix C Proof of Consultation and Access
Appendix D Environmental Assessment and Environmental Protection Plan