You are here

Mega-pipes in the pipeline

06th August 2013

OGT rounds up some of this year’s most important developments in the oil and gas industry’s thriving pipeline sector

Mega-pipes in the pipeline
It is anticipated that in 2013 Gazprom might supply Europe with 152 bcm of natural gas. The South Stream pipeline is of crucial significance to reach this target

Major projects in Europe, Russia and China are all coming to the fore, bringing further competition into the energy suppliers’ arena. It is undeniable that they are a symptom of ever increasing global energy demands, but, more importantly, they point to important changes to come in the technology landscape, for these invariably change as new challenges arise.

GDF acquires stake in Nabucco West gas pipeline
Major gas player GDF SUEZ has signed an agreement with Austrian energy group OMV Gas and Power to purchase a 9 per cent share in the EU-backed Nabucco West gas pipeline project, which will connect Turkey and Austria. The aim of the project is to secure and diversify gas supplies to European markets over the long run.

Nabucco West, which is approximately 1,300 km long, consists in the final leg of the gas pipeline from Azerbaijan to Austria. It will enable gas to be delivered from Turkey’s western border to the Baumgarten gas hub in Austria and will supply, among others, Romania and Hungary.

The project may enter into service towards 2020 and will transport approximately 10 billion cubic meters (bcm) of gas from Azerbaijan. Up to 13 bcm of capacity may be added at a later stage, to enable additional imports from new gas fields in the Caspian Sea region.

When the agreement was signed, Jean-François Cirelli, vice-chairman and president of GDF SUEZ, commented: “With this commitment to the Nabucco West project, GDF SUEZ brings its full support to this strategic project and re-asserts its position as a key player in European natural gas… This agreement will also give the group access to new resources in the Caspian sea region”.

GDF SUEZ is Europe’s 2nd largest buyer of natural gas in Europe with up to 67 bcm of gas and the Trans/Caspian pipeline is expected to help reduce the EU’s reliance on gas imports from Russia.

Gazprom gas exports to Europe reach 138 bcm
However, Russia is seeking to play an even bigger role as Europe’s main supplier of the blue fuel.

In 2012, the total volume of Gazprom's natural gas supplies to Europe amounted to 138.8 billion cubic meters (bcm), the company announced during a press conference at Gazprom’s headquarters which brought together some of the company’s top executives.

More than 8 per cent of gas exports to Europe were delivered via the Nord Stream gas pipeline last year. Today, the major purchasers of the Russian blue fuel are Germany, Turkey and Italy. Some 64.4 bcm of natural gas was supplied to the CIS and the Baltic states in 2012. The proceeds from gas supplies to Europe amounted in 2012 to USD 55.9bn, to the CIS and the Baltic states – USD 19.86bn.

It is anticipated that in 2013 Gazprom might supply Europe with 152 bcm of natural gas, and the CIS and the Baltic states – with 74.8 bcm.

By 2025 the gap between domestic production and consumption in Europe will amount to 145 bcm, Gazprom said in a written statement, and by 2030 it will surpass 200 bcm. The South Stream project, unlike the Trans/Caspian pipeline, will go a long way towards maintaining Russia’s position as Europe’s top gas supplier.

To that effect, high profile members of Gazprom, the Serbian energy ministry and Serbian state-owned natural gas transmission, distribution and storage company Srbijagas recently convened in a meeting to discuss the progress of the South Stream pipeline project.

The meeting took place between Alexey Miller, chairman of the Gazprom Management Committee; Milan Bacevic, minister of natural resources, mining and spatial planning of the Republic of Serbia; and Dusan Bajatovic, director general of Srbijagas.

Special attention was paid to the progress of the South Stream project. The meeting participants highlighted the mutual interest in completing the project as soon as possible and confirmed that the gas pipeline construction in Serbia would start in line with the agreements reached in late 2013.

Gazprom is implementing the South Stream gas pipeline project in order to diversify its natural gas export routes to Europe. The pipeline will run under the Black Sea to countries in Southern and Central Europe. Intergovernmental agreements were signed with Bulgaria, Serbia, Hungary, Greece, Slovenia and Croatia in order to implement the onshore gas pipeline section.

“In this respect, Gazprom is obviously set to play an even bigger role as the lead supplier of natural gas to Europe and the holder of immense resources with proven records of reliable gas supplies for over 40 years,” the gas giant said.

Gazprom is attempting to diversify its natural gas export routes with South Stream. The commissioning of the gas pipeline as well as the startup of commercial gas supplies are slated for late 2015.

China-Myanmar gas pipeline to come online this year and spark growth
China is, as much as Europe and Russia, hungry for big projects that will satisfy its energy demands. The Shew gas pipeline is set to come online this year. As the project nears completion, two Chinese firms with a stake in the Shwe gas pipeline development project held a press conference to highlight the socio-economic benefits of the USD 4bn Chinese mega project for Myanmar, the country’s The Irrawaddy reported.

Major stakeholders Southeast Asia Gas Pipeline Company and Southeast Asia Crude Oil Pipeline Company met with press in Rangoon to focus on the advantages of the project for the country.

“The project has a positive significance for the economy and society of both countries and obtains wide support and affirmation across Myanmar,” both companies said in a document presented at the event.

The document highlighted community support projects that the firms have built near the pipeline. Some USD 20m have been set aside for the construction of local schools, health clinics and government buildings, the companies also said.

The nation's central government will earn approximately USD 29bn from the project over the next three decades, according to estimates.

The oil and gas pipeline runs from Kyaukpyu Township on the Arakan State coast to Kunming, southern China. The pipeline crosses 21 townships, spans 800 km and will give the region strategic access to Burma’s offshore Shwe gas field.

The Shwe Gas project is a joint venture between Chinese state-owned China National Petroleum Corporation and the Myanmar Oil & Gas Enterprise. China signed an agreement with Burma in 2008 to build the pipeline.