Raising the Bar: Unique Financing Offers Solution to Fast Track Project in West Texas

Raising the Bar


By Rick Deremiah

Although it had a booming economy fueled by the oil and gas industry, Midland, Texas, a city of about 120,000, was running on empty — water, that is. In 2011, West Texas suffered its third worst drought in recorded history. By 2012, two of the town’s three surface reservoirs were bone dry and the third was nearly depleted, operating at less than 15 percent of capacity. The future looked bleak as well, with potential restrictions from the Colorado River Municipal Water District slated to kick in mid-2013. Time was running short; a city that had blossomed amidst the vast oil fields was in danger of drying up.

Luckily, the city’s forefathers had planned ahead. Back in 1965, Midland city officials had purchased roughly 22,000 acres of land and water rights at a cost of $750,000 on a place called T-Bar Ranch, in hopes of developing it into a future well field. It was time to use the resource.

Challenges

First, the Midland County Fresh Water District No. 1 (MCFWD#1) had to overcome a number of challenges. T-Bar Ranch was located nearly 60 miles from Midland, near the Texas-New Mexico border. The district would need to secure easements from more than 50 landowners, since the pipeline would cross miles of privately-owned land scattered across three counties. Finances were a challenge; there was no allowance in the city budget to handle the $200 million project. Time was also a factor; Midland residents would need 20 million gallons of potable water per day by summer 2013. The proverbial well was running dry, and time was ticking.

To speed up the project and to address the funding and timeline issues, MCFWD#1 decided to take a Design-Build-Finance-Operate-Maintain (DBFOM) approach. They formed a public-private partnership (P3) with Black & Veatch Engineers, Garney Construction and others to take on the fast-track construction schedule. This allowed them to begin work before full funding was secured, and allowed them to count on suppliers like U.S. Pipe, a Forterra company, to deliver pipe via an early-procurement strategy — before the contract was even signed.


Project Details

Owner: Midland County Fresh Water District No. 1
Engineers: Black & Veatch, Fort Worth, Texas
Contractor: Garney Construction, Houston Texas
Completed: May 2013


Unique Financing Plan

MCFWD#1 used a unique financing plan, where it turned to local banks for the upfront funding, allowing the team to proceed without waiting for bond approvals. Loans were then repaid by issuing short-term bonds. Revenue notes financed the remainder of the project.

According to Black & Veatch, the funding solution offered multiple benefits. It allowed MCFWSD#1 to secure public sector financing at municipal interest rates and then pay back the loans with tax-exempt revenue bonds. It also minimized risk by capitalizing on private sector efficiencies through local banks. But most importantly, the approach allowed them to get started on the project much faster. The result was eventual city ownership of facilities and lower rates to Midland water users.

The district’s ingenuity earned the T-Bar Ranch Well Field Development and Delivery Project and its partners the 2014 National Public-Private Partnership Infrastructure Award from the National Council for Public-Private Partnerships (NCPPP).

Fast-Track Tactics

Time was of the essence, so the team implemented a number of measures to meet the looming deadline. One of the earliest challenges was that of obtaining rights of way. While MCFWSD#1, the pipeline owner, possessed the power of eminent domain, the land acquisition team decided to use this tactic only as a last resort. In fact, at several locations, the project team made major route changes to avoid using the eminent domain powers, avoiding confrontations that would delay the project. Within six months, they signed 32 easements and negotiated hundreds of utility crossings, highway and county road crossings and railroad crossing permits.

Design and construction occurred concurrently with easement acquisition. Black & Veatch and Garney Construction broke the 58-mile transmission main into four segments, and then divided each of those into three sub-segments. Four mainline crews and four support crews worked on each segment simultaneously. Black & Veatch designed each sub-segment of the line and U.S. Pipe started producing and delivering pipe for each section as soon as design sheets were approved.

U.S. Pipe worked closely with project leaders at Black & Veatch and Garney Construction, not only to develop specifications and solve the inevitable challenges that would arise with a project of this magnitude, but also to develop a schedule that met Midland’s fast-track needs. U.S. Pipe’s manufacturing facility in Grand Prairie, Texas, had been working to develop and streamline its processes over the years to accommodate such high-production, time-critical projects. And it paid off. The Grand Prairie production team was able to deliver pipe for each section within five to six weeks, well within the schedule requirements.

Pipeline Challenges

Texas is a big place, and much of the work took place in desolate areas, with 47 worksites along the route. The T-Bar well field alone had 44 wells spread over more than 4,000 acres. They collected the water in two million-gallon ground storage tanks before being pumped to the City of Midland. From its starting point, the line climbed some 500 ft over 25 miles (with about 200 pipeline and roadway crossings) to five million-gallon intermediate tanks, then back down 500 ft across the final 40 miles to two elevated million-gallon water tanks near Midland.

In segments one and four, they used 105,000 linear feet (lf) of U.S. Pipe’s 48-in. AWWA C200 Steel Pressure Pipe to accommodate higher pressure ratings. Most of the remainder of the pipeline, including some within the well field collection system, was constructed of 48-in. AWWA C303 Bar-Wrapped Concrete Pressure Pipe from U.S. Pipe (128,000 lf). A few areas along the line required a change in pipe material and a reroute from the original plans, explained John Sedbrook, project manager for Garney Construction. In fact, the final route had some significant variations from the original.

“At one point, the pipeline intersected a rock quarry,” says Sedbrook. “Our original plans ran the line around the quarry, but mine owners wanted to provide for future mining activity in the proposed right-of-way. So, we ran the pipeline through the center of the already-excavated mine area, using 1,100 lf of AWWA C301 pre-stressed concrete pressure pipe from U.S. Pipe. We chose that product because it can withstand additional soil loading in case the quarry pit is filled in at some point in the future.”

Another variation occurred near an area of sand dunes in the Monahans Sandhills State Park. Texas winds cause the dunes to shift over time, which would have resulted in various depths of cover over the pipe. Left alone, pipe in this area would have had to be designed for soil covers of up to 30 ft; they also faced the possibility for no cover over the pipe. The team decided to relocate the pipe north of the State Park. This required additional pipe, but the decision ultimately saved money.

In another location, the pipeline had to navigate through a maze of 225 high-pressure gas and oil lines with extensive underground utilities. Engineers designed special fittings which allowed crews to divert the pipeline under and around the utilities. They kept additional fittings on hand in case the team encountered unknown infrastructure during pipe installation. The line also passed through a wind farm in another location, and crossed multiple oil and gas lines.

It was not practical for crews to use conventional hydraulic excavators, due to the hard rock (known as caliche) and soils that they would encounter along the route. Garney elected to use large chain saw-type trenchers, some of the largest they’d ever utilized, which could both cut the ditch and grind and pulverize the rock and soil. After screening, the pulverized rock and soil was used for bedding and backfill.

The pipeline was designed to deliver a maximum of 20 million gallons of water per day (MGD) in 2013. It also has the capacity to be expanded, with the ability to deliver up to 35 MGD by 2029.

Quick Delivery

There’s a lot that needs to happen to design, manufacture, and install 58 miles of pipeline, and much of the project’s success hinged directly on having product ready to install. Close management of all aspects of the project resulted in a transmission pipeline completed ahead of schedule and under budget.

The delivery requirements were a challenge, particularly considering the volume of pipe required and the fact that the project was completed in just about a year. Careful planning allowed the team to meet both these requirements. Since 2013, a second welded steel pipe manufacturing mill has been added production operations, giving even more capacity for projects like this.

“The installation went well,” adds Sedbrook. “We always had pipe in front of us, and deliveries came in on schedule.”

As a result of coordination and teamwork between the City of Midland, the water district, the engineer, contractor, U.S. Pipe and others, the T-Bar Ranch Well Field Pipeline project was completed in less than 12 months — 17 days early, in fact — in May 2013.

A poignant moment occurred at the end of the project when a city council board member involved in the purchase of the water rights at T-Bar Ranch 50 years ago, was able to drink the first glass of water delivered by the completed pipeline. Water flows once again to Midland.


texas2texas3Why Bar-Wrapped Concrete Cylinder Pipe?

Bar-Wrapped Pipe combines the physical strength of steel with the structural and protective properties of high strength cement mortar, making it an ideal choice for transmission mains like that used to bring water 70 miles across west Texas to the town of Midland. A round, mild steel bar is helically wound around the steel cylinder and all surfaces are then encased in Portland cement mortar. This composite pipe reacts as a unit when resisting internal pressure and external loads. The dense mortar coating is applied to the cylinder and bar wrap to provide decades of durable service, even under harsh Texas conditions. The pipe is manufactured in accordance with the AWWA C303 Standard, and is designed in accordance with AWWA Manual M9.


Richard E. Deremiah, P.E.Rick Deremiah is the technical resources engineering manager for concrete and steel pressure pipe for U.S. Pipe, a Forerra company. He is a registered professional engineer in Ohio, Massachusetts, Indiana, Missouri, District of Columbia, Mississippi, Maine, Florida and Kansas. Since entering the industry in 1977, he has gained significant experience with the application, design and manufacture of all types of concrete and steel pressure pipe and steel fittings. He has conducted numerous seminars and training sessions all over the world dealing with the design, manufacture, application, maintenance and repair of concrete and steel pressure pipe.

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