Nord Stream
The first of the twin 48 in. diameter, 1,198 km long Nord Stream subsea gas pipelines in the Baltic Sea, when completed by 2010 as planned, will transport upwards of 27.5 Bcm/a of gas from Vyborg in Russia to Greifswald in northern Germany. A second – parallel – pipeline is due for completion in 2012. In February, Nord Stream awarded Snamprogetti the contract for the detailed design engineering of the pipelines.
The consortium planning the pipeline is still investigating alternate routes for the project amid concerns that construction could disrupt the environment. Sweden, in particular, has said that the pipeline could disrupt the Baltic Sea’s sensitive flora and fauna, while other Baltic Sea states, including Finland, Denmark, and Estonia, are worried that the construction work could stir-up toxic materials on the seabed and even disturb unexploded chemical weapons left over from World War II. Zurich-based Nord Stream is naturally keen to alleviate these concerns and “has decided to launch additional studies to investigate areas where the route of the pipeline through the Baltic Sea can be further optimised in a reasonable way to minimise environmental impacts.”
Nabucco
Final planning work on the Nabucco pipeline, designed to transport gas to the EU from the Caspian region, and possibly the Middle East, is underway. The pipeline will cross Turkey, Bulgaria, Romania and Hungary, to Austria, from where the gas will be distributed to France, Germany, and other EU countries via existing pipeline networks, and will cost around $US6.25 billion, which will be split between the five countries the pipeline passes through. It will have the capacity to transport 25 Bcm/a of gas.
The pipeline has important strategic and economic significance as it offers the EU an alternative source of supply to gas from Russia, and will compete with Russia’s monopoly and control over the gas supply to Romania. The 3,300 km long pipeline, including 457 km through Romania, was initiated by the European Parliament and the European Council on 26 June 2003, and is to be finished in 2010. The Nabucco Co-Pipeline Study GmbH was recently transformed into Nabucco Gas Pipeline International Ltd., a commercial partnership between Turkish state-owned company Botas, Bulgaria’s Bulgargaz, Hungary’s MOL, Austria’s OMV, and Romania’s Transgaz SA Medias in which each partners holds a 20 per cent interest. The five countries will set up local companies that will be wholly-owned by Nabucco International.
South Stream
Gazprom, Russia’s state-controlled gas monopoly, and the Italian energy company Eni, look set on their plans for a new $US15 billion pipeline under the Black Sea to Bulgaria and onto Italy. In its offshore section, the South Stream will cross the Black Sea from the Russian coast of Beregovaya to the Bulgarian coast, with a 900 km pipeline reaching a maximum water depth of more than 2,000m. For the onshore section two different routes from Bulgaria to Italy are being studied: a route towards the northwest, through Serbia and Croatia, and one towards the southwest, through Greece. Italy is Gazprom’s second-largest customer in Western Europe after Germany, and observers point out that South Stream, if it goes ahead, will be a “severe setback” for Nabucco, the western-backed alternative that will bypass Russia and bring Central Asian gas to Western Europe through Turkey.
Oil pipelines
Romania, Serbia, Croatia, Slovenia, and Italy have signed an agreement to construct an oil pipeline system that will connect the Black Sea with western and central Europe. The agreement to progress plans for the 1,400 km long, $US3 billion Pan-European Oil Pipeline (PEOP) was also signed by the EU Commissioner for Energy, Andris Piebalgs, at an April meeting in Zagreb. The pipeline will connect the Romanian port of Constanta with Trieste in Italy. Much of the pipeline is in fact already built, as the system will use existing networks in the participating countries, with some exceptions. The pipeline’s capacity is 60-90 MMt/a of crude oil, supplied from the Caspian basin to refineries in northern Italy and central Europe. The project has been delayed due to environmental concerns in Slovenia, and the transport of oil through the PEOP is planned to start in 2012 at the earliest. The first phase of the work on the PEOP will include a comprehensive study on its environmental impact.
In Athens on 15 March, Russia, Bulgaria, and Greece signed an intergovernmental agreement to set up the 300 km long Bourgas-Alexandroupolis oil pipeline after 14 years of negotiations. The agreement proposes that each country transfers its stake in the project to indigenous oil-producing companies. However, the contract for transporting the oil will be signed with Russia’s Transneft, as the company will most likely operate the oil pipeline. The Trans-Balkan project was revived because of the burgeoning oil price and a changing global market. Russia’s expanded oil exports rely even more heavily than before on transport infrastructure, and nearly one third of the country’s exports of oil and petroleum derivatives (which total over 70 MMt) pass by tanker through the Bosporus and the Dardanelles Straits, which also handle millions of tonnes of Kazakh oil. Traffic jams in the Straits, combined with tankers having to wait for permission to navigate the Straits, have caused concern as the owners of large tankers can lose up to $US25,000/d through demurrage. Oil exporters are also worried about Turkey’s intention to allow only one tanker a day through the Straits – this would mean only 365 tankers a year. A total of 52,000 ships, including 9,500 oil tankers, passed through the Turkish Straits in 2004, and Black Sea ports exported 27,103 MMt of oil in over 1,000 tankers in the first five months of this year.
The North Sea
Norway’s Statoil has contracted Ramboll Oil & Gas to provide the detailed design of a pipeline system for the Gjoa field development in the Norwegian North Sea. The contract covers design of export and in-field lines, as well as all associated pipeline structures. Statoil’s plan involves a 131 km gas export pipeline connecting Gjoa, 45 km west of Sognefjord, to the UK’s gas transmission system. A separate 55 km oil export line will run from the field’s semisubmersible platform to the Kvitebjorn pipeline that terminates in Mongstad. The in-field lines will connect five seabed templates with up to 17 wells. Ramboll is working with IKM Ocean Design and Nemo Engineering on the project.
Statoil has also completed a pipeline which will flow gas from the Statfjord field “˜late-life’ project to the UK from 1 October. The 23 km Tampen Link pipeline runs between Statfjord – currently undergoing conversion to become primarily a gasfield, rather than an oilfield – and the Flags pipeline, which runs from the Brent field in the UK North Sea to the St Fergus gas receiving terminal. Statfjord’s three platforms are being modified under a $US2.68 billion project which will extend their lifespan to 2020 by boosting recoverable reserves by an estimated 32 Bcm of gas, 25 MMbbl of oil, and 60 MMbbl of condensate. Operatorship of the Tampen Link pipe will be transferred to Norway’s gas pipeline operator Gassco when production starts up.
Langeled
More gas started flowing from Norway to the UK with the inauguration of the southern section of the Langeled pipeline in October 2006. The pipeline originates at the giant Ormen Lange gasfield, offshore Norway, and will ultimately extend for around 1,320 km via the Sleipner platform to a landfall at Easington in the UK. The 30 in., 120 km long Ormen Lange – Nyhamna section of the pipeline was ready for operation early in 2006, and the 42 in., 600 km section from Nyhamna to Sleipner is currently being completed. The 44 in., 600 km long southern section from Sleipner to Easington was completed in September 2006, and operator Hydro has been selling gas from Sleipner via Langeled to the UK since 27 September 2006.
Langeled is the second direct export pipeline to the UK from the Norwegian continental shelf, with a capacity to transport 70 MMcm/d of gas. When production from the Ormen Lange comes fully on-stream in October this year, this field in the Norwegian Sea will be able to supply the UK with 20 per cent of its gas requirement for several decades. Since 2001, Hydro has doubled gas exports from 5 to 10 Bcm/a, and it is expected that the escalation of supplies will continue and that exports will amount to approximately 16 Bcm in 2010 when Ormen Lange reaches plateau production. At that point Norway will go from being the world’s third largest gas exporter to the second largest.