Natural Gas and NGL
Processing Cost Allowances on NGL Royalties
Provided expert reports and testimony on behalf of twelve major and large independent gas producing companies in Federal Qui Tam litigation. Responded to Relator’s claims to exclude recompression costs from the processing cost allowances allowed by the Mineral Management Service (MMS). Reviewed the design and operation of numerous gas plants, and demonstrated that recompression is integral to the cryogenic turboexpander process and its associated costs were fully deductible.
Propane Product Quality Dispute
Investigated the design and operation of a natural gas liquid fractionation, storage, and loading facility located on the Red Sea to determine potential causes of alleged hydrogen sulfide contamination of propane cargoes. Matter was filed in London High Court of Justice, Queen’s Bench Division Commercial Court.
Investigation of Gas Processing Plant Accident
Assisted a major oil company in the investigation of an explosion and fire with resulting failure of natural gas supply from onshore crude oil, condensate, and natural gas processing facilities located near the Bass Strait of Australia. Reviewed facility design, operating, and maintenance standards and assisted in the preparation of testimony before a Royal Commission formed by the State of Victoria.
Gas Storage Project
Project Manager for a $50 million natural gas storage project with responsibility for development of a 12,000 horsepower (hp) compressor station and wellhead gathering system. Performed engineering for pipeline gathering system and compressor station; developed EPC scope of work; and managed EPCM firm for detailed engineering phase.
Gas Distribution System Damage Assessment
Assessed damage to urban natural gas distribution system that experienced flooding from Hurricane Katrina. Prepared cost estimates for repairs to city gate stations, pressure regulating stations, mains, service line, and customer meters.
Natural Gas Processing Plant Construction Delay
On behalf of a state-owned oil company, reviewed Engineering and Construction contractor’s claims of delay and disruption associated with a major debottlenecking project for a 2.4 billion standard cubic feet per day natural gas treating facility located in the Middle East. Claims were associated with the design and construction of a high-pressure DGA unit, a 535,000 ton per day sulfur recovery unit, and new high-pressure flare systems.
Natural Gas Price Hedge
On behalf of a large pipeline company, reviewed a Gas Industry Standards Board (GISB) standard contract used to memorialize a fixed forward physical contract price hedge by a producer. The contract confirmed a verbal transaction for a 10-year forward sale of natural gas at a fixed price. Rebutted claims by the producer who later attempted to characterize the transaction as a floating price contract with a price floor.
Audit of Gas Contract
Conducted an audit of the revenue settlement of natural gas liquids and residue gas per the terms of a gas processing agreement. Investigated causes of reduced product yields, and reviewed compressor operation, fuel consumption, and product and fuel allocation procedures.
Pipeline and Treating Plant Due Diligence
Conducted due diligence on natural gas gathering and transmission pipelines and a large gas treating complex in Northern Michigan, on behalf of large international bank. Conducted physical inspection of the facilities, reviewed historical and projected O&M and capital costs, and reviewed primary producer transportation and treating contracts. Assessed historical corrosion problems in the treating plant due to oxygen content in inlet natural gas feedstock. Reviewed natural gas quality specifications along with measurement and detection systems. Reviewed financial model and identified and evaluated key sensitivities to determine market valuations of assets in support of structured financing arrangement on behalf of bank client and owner/operator.
Owner's Engineer
Conducted independent process design review of gas processing plant design prepared by EPC Contractor to ensure optimum process performance and ability to meet contractual guarantees. Also prepared process design and cost estimate for a gas-condensate inlet separation and condensate stabilization system that was used by client to verify change order claims being made by EPC Contractor.
Helium Recovery Facility
Investigated the cause of the permanent shutdown of a 500 million standard cubic feet per day NGL/helium recovery facility in southwest Kansas. Located the sources of off-specification natural gas supplies containing excessive levels of carbon dioxide, and assessed pipeline options to isolate the poor quality gas from the plant. Reviewed plant performance including operating costs, helium recovery efficiencies, and ongoing efforts to attract new gas supplies exceeding the facility’s minimum turndown capacity.
Fair Market Valuation of Compressor Station
Determined the value of a large compressor station on an interstate natural gas pipeline system for the purpose of proper assessment of property taxes. Valuation considered comparable sales, depreciated replacement cost, and discounted cash flows.
Canadian Natural Gas Liquids
Advised the government of Canada on the reasonableness of a formula used to allocate natural gas and natural gas liquids production revenue at processing facilities. Compared allocations to arm's length third-party gas processing agreements and calculated the recoveries of natural gas liquids and the composition of residue gas streams at hydrocarbon dew point temperature and pressure.
Natural Gas Liquids Supply/Demand Study
Prepared an analysis of the demand for NGL products as feedstocks to the petrochemical and refining industries, the availability of NGL supplies in the U.S. and Canada, and the level of current and future NGL fractionation capacity.
LPG Pipeline Specifications
Evaluated pipeline tariffs, product specifications, connection agreements, and LPG sales agreements for the export of LPG to northern Mexico from fractionation facilities in West Texas. Also calculated fractionator feedstock and product economics.
Construction Dispute Litigation - Gas Plant
Assisted in a litigated dispute between Owner-Operator and Engineering and Construction Contractor over whether a cryogenic gas plant, as engineered, procured, and constructed, met the stipulated contractual performance guarantees; prepared expert witness rebuttal report with respect to relevant issues.
Gas Processing Plant Dispute
Prepared expert reports and testified in Australian arbitration on behalf of Engineering, Procurement and Construction (EPC) contractor involved in engineering and construction of offshore platform, sub-sea pipelines, and onshore gas processing plant. Issues involved impact of change to feedstock design basis as well as numerous engineering and construction related defect claims made by owner.