Reaching for European energy security: Part 1

Johan Desaegher, Belgium, and Mike Kirkwood, T.D. Williamson, UAE, discuss the European drive toward greater energy security and the solutions that will help the realisation of this goal.

In the US, shale development is being hailed as a way to improve energy self-sufficiency, reducing American reliance on imported oil and making the country a net exporter of natural gas in less than a decade. As it stands, the US is not the only country with a plan to increase energy security: The 28 states of the European Union are also on the road to energy independence, predominantly by diversifying their natural gas supplies and building thousands of kilometres of new pipelines.

As European natural gas operators expand their reach, their needs are also growing. More and more, they are looking to their service providers not just for tools, but for comprehensive pipeline integrity solutions.

Drive towards a more stable supply

In Poland, coal is king. Sitting on the world’s largest deposit of the combustible black rock, Poland is ranked among the top 10 coal producers on the planet.

But Poland does not run on coal alone. The country needs crude oil and natural gas to fuel its transportation and heating sectors. A net energy importer, Poland gets roughly 95% of its oil and 65% of natural gas from other countries, chiefly Russia.

Now, however, Poland is expanding its own natural gas network, both to reduce its dependence on Russian energy exports and to diversify its energy mix away from coal-fired power in order to meet EU climate change targets.

By the end of 2014, Polish national operator GAZ-SYSTEM is expected to have completed a five year, US$2.69 billion project that includes the country’s first LNG terminal, being built at winoujcie Port on the Baltic Sea to accept supplies from diversified sources, and more than 1200 km (745 miles) of new gas transmission pipelines. These lines will link the LNG terminal with the Polish natural gas network and, through its domestic grid, with Czech and German gas transmission systems.

Although it is unlikely that natural gas will dethrone coal as Poland’s energy monarch any time soon, the growth in natural gas infrastructure means the country is moving toward greater energy security and cleaner skies. At the same time, Polish operators are facing increasing demands around asset management, including pipeline integrity.

Tomasz Olma, an authority with more than 20 years of experience managing T.D. Williamson’s pigging and inline inspection businesses in Poland, has seen the nation’s oil and gas industry embrace increasingly sophisticated methods for maintaining and rehabilitating their pipelines.

Interest in turnkey solutions from service providers who bundle multiple innovations has been high because it allows for the logical, sequential delivery of products and services, which can streamline projects in terms of both time and cost.

The need is especially evident as GAZ-SYSTEM implements its plan to build new interconnections and upgrade infrastructure to enable reverse flows. And while those moves are intended to keep natural gas flowing to Polish citizens, the motivation for them began with oil.

Ensuring friendly supplies

According to the CIA World Factbook, there were 14 198 km of gas and 1374 km of oil pipelines in Poland in 2013, most of which were over 30 years old.

One of them is the Friendship Pipeline, which originates in the Russian heartland and essentially bisects Poland, traversing east to west through the country’s middle.

Despite its amicable name, however, the Friendship Pipeline has sometimes been a source of friction as well as energy.

During the winter of 2006, for example, a contract dispute with Belarus prompted Russia to halt the flow of oil over the Friendship Pipeline to Poland, Germany, Hungary, the Czech Republic and Slovakia.

Three years later, in January 2009, a disagreement with Ukraine over natural gas prices resulted in Russia ceasing nearly all of its natural gas exports from multiple pipelines to Europe.

These incidents highlighted the vulnerability of Europe’s energy flow and served as a reminder to Poland about the perils of becoming too dependent on a single energy supplier.

The Economist magazine suggests that the 2009 natural gas crisis was the reason Poland decided to fast-track the construction of the LNG terminal at winoujcie. And there is no doubt that Warsaw’s desire to reduce its energy dependence on Russia was at the root of its decision to make a portion of the Yamal (or Jamal, in Polish) gas pipeline bi-directional, capable of transporting supplies from Germany as a safeguard against fluctuating politics.

Written by Johan Desaegher, Belgium, and Mike Kirkwood, T.D. Williamson, UAE, and by Hannah Priestley-Eaton

To read the full version of this article, please download a copy of the December 2014 issue of World Pipelines.

Read the article online at: https://www.worldpipelines.com/business-news/10032015/reaching-european-energy-security-part/