Russian Review of pipeline projects
| The Soviet Union’s fall in 1991 questioned Russia’s superpower status. Ironically, the same event also put the country on the path of becoming an energy superpower unrivalled by any other energy-exporting contender - a potentially feasible scenario given Russia’s huge oil and gas deposits and export capabilities. As the Soviet bloc disintegrated and its members aligned themselves with the West in the early 1990s, Russia has since mainly failed to compensate such heavy loss by securing new markets for its non-military products. It has been left with mainly two major industries capable of competing worldwide, namely arms and energy. They have received the largest share of investment in the post-Soviet era as the main engine of growth of the Russian economy to develop into the main source of revenue for the Russian government and the largest Russian employers. Within this context, energy is the main one and the single largest income-generator for Moscow due to its large and growing oil (both crude and refined products) and natural gas exports. |
Appreciating the importance of Asia as the largest energy consumer with a growing demand for oil and gas on a steady basis, Russia has been working to increase its share in the Asian energy market.
The following is a brief account of major ongoing projects and a few future ones, reflecting Russia’s efforts to establish itself as the world’s energy superpower.
Europe
Russia is undertaking and also planning major pipeline projects in Europe. With the potential of having a long-term impact on the EU’s energy security, these projects could consolidate Russia’s position as the single largest oil and gas supplier to the EU. The projects are advancing, despite Brussels’ stated objective of lessening the EU dependency on Russia for oil and gas. The EU policy is indicative of the increasing disagreements between Brussels and Moscow over various regional and global issues that heightened following the Georgia-Russia war in August 2008.
The Nord Stream
The Nord Stream is the offshore part of the North European Pipeline (NEP), designed to export Russian gas to Germany via the Baltic Sea. The pipeline is assigned to bypass the countries in between Russia and Germany, particularly Ukraine, a neighbouring Slavic country with which Russia has had difficult relations since the Orange Revolution of 2004 that brought to power pro-American Viktor Yushenko.
The South European Pipeline
The South European Pipeline (SEP) or the South Stream is designed to export Russian gas to Italy and Austria. It will transfer Russian gas to these countries via the Black Sea to Bulgaria, to be extended to Italy and Austria respectively through Greece and Serbia and Hungary, while bypassing Ukraine. With its estimated cost varying from US$ 14.4 billion to US$ 10 - 20 billion, its construction is planned to begin in November 2010 to be completed by the end of 2015.
The Kasimovskoye UGS-Voskresensk CS gas trunkline
Finally, among the completed Russian pipelines, the Kasimovskoye UGS-Voskresensk CS gas trunkline is noteworthy. Being commissioned in the Voskresensk District, Moscow Oblast in October 2009 after approximately four years of construction, the 204 km gas pipeline has a 2.7 billion m3/yr capacity connecting the Kasimovskoye underground gas storage to the Voskresensk compressor station. With daily capacity of up to 130 million m3, the pipeline has two compressor stations located at Tuma and Voskresensk and one gas metering station at Kasimov.
Asia/Eurasia
Russia’s pipeline construction in Asia clearly indicates its recognition of the continent and its sub-regions, mainly the Asia-Pacific region, as the world’s largest long-term energy market thanks to the huge and growing Chinese and South Korean economies, and also that of Japan, despite its poor performance since the burst of Japan’s ‘Bubble Economy’ in the early 1990s.
Apart from several small-scale projects, the major Russian pipeline project in Asia is surely the East Siberia-Pacific Ocean (ESPO) Oil Pipeline, also known as VSTO. Being implemented by Transneft, once fully operational, the ESPO will link Russia’s Siberian oil reserves (Taishet in East Siberia’s Irkutsk Region) via Skovorodino in the Amur Region with terminals on the Russian Pacific Ocean coast from where Russian oil will be exported to China, South Korea and Japan by sea.
Future projects
The noteworthy Russian projects to start in 2010 include the 36 in. Burgas-Alexandropolis oil pipeline whose importance lies in its further increasing the EU dependency on Russia, despite Brussels’ stated objective to the contrary. The estimated US$ 1 billion project will connect Bulgaria’s Black Sea port of Burgas to Greece’s Aegean port of Alexandropolis for exporting Russian and also Caspian oil to Europe. Russian oil tankers will feed the pipeline at Burgas.
Finally, the Russian and the Iraqi governments’ 2009 agreements on building two gas pipelines and co-operating to operate two Iraqi thermal power plants are important, although further details are currently unknown.
The full version of this article was published in the January 2010 issue of World Pipelines.
Subscribers can access this full version here.
Read the article online at: https://www.worldpipelines.com/business-news/28012010/russian_review/
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