Canada regulator plans new rules as firms find bad pipeline parts

TK

12/06/2017 21:28

By Ethan Lou 
    CALGARY, Alberta, June 12 (Reuters) - Canada's National 
Energy Board (NEB) will push for a shift in standards for 
pipeline parts after TransCanada Corp  TRP.TO  and Enbridge Inc 
 ENB.TO  discovered some that they were using had been 
substandard, a senior regulatory official told Reuters. 
    The NEB's changes must pass external standards committees 
that include the pipeline industry and would change the way 
manufacturers have been designing parts, making production more 
complicated, NEB chief engineer Iain Colquhoun said.  
    The NEB will set out precise measures after a multi-party 
workshop in June, Colquhoun said in an interview in late May.  
    "They're big changes in philosophy because the standards 
that we are (currently) using evolved over many decades," 
    The changes are unlikely to significantly affect pipeline 
operators, although parts manufacturers may see some increased 
costs as they try to meet new requirements.  
    The NEB in April warned about parts from Tecnoforge, a 
subsidiary of Italy's Valvitalia SpA  IPO-VALIT.MI , and South 
Korea's TK Corp  023160.KQ , but did not name the companies 
using them. 
    An internal NEB memo seen by Reuters under 
access-to-information laws named TransCanada as the company 
using Tecnoforge fittings and noted it had two similar cases 
with other manufacturers.  
    Colquhoun, who spoke to Reuters after it had seen the memo, 
identified Enbridge as the company using TK Corp fittings. 
    TransCanada and Enbridge said in separate statements they 
acted immediately and proactively after discovering the issues 
and that all their pipes were safe. Valvitalia and TK Corp 
declined to comment, with the latter calling the issue 
"sensitive."  
    Both firms discovered the substandard parts prior to putting 
them into operation, and the companies were not penalized. 
    Pipe parts are usually made stronger than needed, and the 
substandard ones had not caused safety issues, but the "repeated 
occurrence" of the matter demands broad action, according to the 
NEB memo, dated October 2016. 
    Colquhoun said the NEB would push for manufacturing 
processes in which strength was determined at the design level 
through more calculations in coming up with attributes such as 
thickness and diameter. 
    The NEB may also push for other changes to production 
processes, including in heat treatment, he said. 
    According to the NEB, TransCanada discovered a substandard 
Tecnoforge fitting in 2016 on a compressor station on its Nova 
Gas Transmission Ltd  TCPNG.UL  network, which spans the 
provinces of Alberta and British Columbia. The company has since 
removed at least 44 of its "several hundred" fittings from the 
maker installed since 2011, the NEB said. 
    According to the NEB, Enbridge discovered a substandard TK 
Corp part in 2012 on a minor pipeline system under the authority 
of the province of Alberta.  
    Enbridge said that it has replaced more than 400 fittings, 
although it did not name the pipeline system they had been on. 
 
 (Additional reporting by Yuna Park in Seoul; Editing by Andrew 
Hay) 
 ((Ethan.Lou@thomsonreuters.com; +1-403-531-1634; Reuters 
Messaging: ethan.lou.thomsonreuters.com@reuters.net)) 
 
Keywords: CANADA PIPELINES/QUALITY