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Pipeline opportunities in Europe

World Pipelines,

EICDataStream, the EIC’s sophisticated database that tracks more than 7800 projects in the global energy industry reveals that there are 285 active and future pipeline projects in Europe alone at present, with a combined market value of US$ 342 billion. In Europe, the dominant countries in terms of current and projected project value are Russia with contracts worth an estimated US$ 156 billion, followed by Norway with US$ 38 billion and the UK with US$ 34 billion of projects.


In the UK we are seeing an extremely active pipeline market at the moment with subsea tiebacks being a prominent feature. With almost 100 projects on the table, nearly 90% of these involve subsea tiebacks within UK waters.

The use of subsea tiebacks are primarily being driven by the need to make smaller fields which do not warrant their own infrastructure more economically viable. In addition, energy market pricing has made exploration in harsh environments more attractive which in turn had led to an increasing focus on projects that require pipeline organisations to work in ever more difficult conditions.

The largest project in the UK is the US$ 3.8 billion French giant Total’s development scheme for the Laggan and Tormore gas fields west of Shetland that is currently in the tendering and bidding process. The UK government approved development of the field in March this year. Total is looking at a production capacity of almost 500 MMcf/d of gas. The fields lie more than 120 km northwest of Shetland, in water depths of around 600 m. A long distance subsea tieback is one of the favoured concepts at present, which would mean installing two 18 in. diameter pipelines with gas and condensate pumped directly to a gas processing plant at Sullom Voe, northern Shetland. From there, the gas would flow south through to St. Fergus, North of Aberdeen.

The project presents a number of challenges. It is the harshest environment on the UK shelf, with year-round bad weather, and wave heights of up to 33 m. Another  challenge is the permanent strong currents from the sea bed to the surface, making vertical connections difficult. The rugged environment calls for greater innovation and proven expertise from suppliers with experience of working in such challenging conditions. 

The trend towards subsea tiebacks and exploration in harsh environments can also be seen across Europe, albeit to a lesser degree. EICDataStream shows there are 148 projects including tie-backs in Europe.


In Norway, major projects of this nature include the future Ormen Lange Phase II expansion project valued at US$ 7.9 billion, which is also Norway’s largest pipeline project, and the active Gjøa Oil & Gas field valued at US$ 3.3 billion. Statoil is the development operator with Gaz de France scheduled to take over in the production phase when the field comes online. 


In Russia, the most notable project involving tie-backs is the Shtokman Gas Field (Phase 1) which is currently in the tendering and bidding process. The Shtokman gas condensate field is situated in the central part of the Barents Sea. The use of long distance harsh condition pipelines will help to exploit resources previously untenable and the field could be yielding 23 - 24 bcm of gas per year by 2013 and 100 bcm by 2030.  

The largest pipeline opportunity in Russia is indeed the future US$ 30 billion South Stream project to be operated by Gazprom, ENI S.p.A. and EdF International and will involve the construction of a 2200 km gas pipeline from the Russian coast of Beregovaya to the Bulgarian cost. The project will involve pipelines laid in water depths of more than 2000 m and is set to carry 63bcm/yr of gas.

The trend towards exploration of new resources in harsher environments often with sensitive environmental considerations has led to growing number of opportunities for companies with the relevant skills and technology in fields ranging from engineering, inspection and installation to corrosion protection and pigging.

As we head towards a low carbon economy we are set to see more opportunities emerging for companies operating in the pipeline market as a result of Carbon Capture and Storage (CCS) and the associated CO2 transmission pipeline infrastructure which will be required.

The EIC is committed to helping UK organisations promote their expertise in all of these areas and to capitalise on new business opportunities in the UK and overseas.

Author: Mike Major, CEO, The EIC.

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