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Global gas pipeline projects roundup: part 3

Published by
World Pipelines,


Oil and gas prices have fallen drastically in 2015. Due to an abundance of supply and reduced consumption, global energy markets have had to find more economical ways of transporting oil and gas and put an abundance of pipeline projects on hold. Dr. Hooman Peimani seeks to summarise the major global pipeline projects and how they have been affected.

Europe

Russia

Nord Stream II

Gazprom and major European energy companies – Germany’s E.ON and BASF/Wintershall, Austria’s OMV, France’s ENGIE and Royal Dutch Shell – signed an agreement in Vladivostok on4 September 2015 to double the Nord Stream gas pipeline’s current capacity of 55 billion m3/y by constructing a new gas pipeline system (Nord Stream II), intended to be completed by 2019.

The Nord Stream II will transport gas from Russia to Germany via twin offshore pipelines – each 1200 km transporting 27.5 billion m3/y – through the Baltic Sea. The New European Pipeline AG joint venture will implement it, in which Gazprom’s share is 51%. E.ON, Shell, OMV and BASF/Wintershall each have 10%, with a 9% share for ENGIE.

Nord Stream II is a surprising project as it runs against Brussels’ policy of decreasing the EU’s dependency on Russia and, in fact, it questions the logic of building the Trans-Adriatic Pipeline in 2016 to serve that very purpose. In helping Russia to bypass Ukraine for gas exports to the EU, the pipeline project has been called by Ukrainian Prime Minister Yatsenyuk “anti-Ukrainian and anti-European”.

Czech Prime Minister Sobotka echoed this by saying the project would help Russia destabilise Ukraine. Slovak Prime Minister Fico suggested it was a betrayal, which cost Ukraine and Slovakia billions of Euros. Finally, the European Commission’s Vice-President, Maros Sefcovic, questioned how the project fits with the EU’s energy security and regulatory priorities. In reply, OMV CEO Seele stressed that the project would increase security of supply to the EU through “our trustful partnership” with Gazprom.

The Turkish Stream Gas Pipeline

The Nord Stream II has affected Russia’s Turkish Stream Gas Pipeline project, which was designed to replace the South Stream Pipeline (cancelled by Moscow in December 2014). Gazprom’s Chairman Alexey Miller and Botas Petroleum Pipeline Corporation’s Chairman Mehmet Konuk signed an MoI in December 2014 to enable Russia to increase gas exports to the EU without requiring Brussels’ approval.

In October, Gazprom announced it was reducing the project’s capacity from 63 billion m3/y to 32 billion m3/y in favour of the Nord Stream II, of which 50% would be for Turkey and the rest for exporting to Europe. Russia seemingly intends to use the South Stream’s allocated resources.

The estimated US$12.5 billon pipeline will run across the Black Sea from the currently under-construction Russkaya compressor station near Anapa on the northern coast of the Black Sea, to Kiyiköy village in the European part of Turkey. It will further run, via Luleburgaz (delivery point for the Turkish customers), to the Ipsala border checkpoint on the Turkish-Greek border, the delivery point for the European customers. Consisting of four offshore strings (each 910 km), the pipeline will pass 660 km under the Black Sea within the decided corridor of the South Stream Pipeline, followed by 250 km within a new corridor towards the European part of Turkey. The length of the Turkish onshore line is reportedly 180 km, while that of Greece is unknown.

It is unclear whether the pipeline will become operational in December 2016 as planned, given a delay in beginning its Turkish part for which Ankara and Moscow are negotiating.

Norway

Norway completed the Polarled Pipeline (482.4 km, 36 in.; 70 million m3/d) in September to increase its gas exports from the Norwegian Sea to Europe. It is the deepest pipeline (1260 m) on the Norwegian continental shelf and the first one on that shelf to cross the Arctic Circle. The pipeline (approximately US$0.9 billion) extends from Nyhamna in Møre og Romsdal, western Norway, to the Aasta Hansteen field in the Norwegian Sea.

Written by Dr Hooman Peimani and edited by Elizabeth Corner. This article was published in full in the December issue of World Pipelines. To read the full article, click here.

Click here to read part 1 and part 2.

Read the article online at: https://www.worldpipelines.com/project-news/28122015/global-gas-pipeline-projects-roundup-part-3/


 

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