Pipeliners

ANKARA, Turkey, July 6, 2009 - (UPI) -- Ankara has offered its proposal for moving forward on the second leg of the Blue Stream natural gas pipeline to the Middle East, Russian officials say. In 2005 Russia and Turkey proposed a second leg of the route following European moves to develop plans for the Nabucco gas pipeline from Central Asian and Middle Eastern suppliers. Planners are looking to Blue Stream to supply markets in the Middle East, including Israel. Russian Energy Minister Sergei Shmatko said following a meeting with Turkish officials that Ankara was moving forward with Blue Stream developments, Itar-Tass reports. "We have some interesting projects, including Blue Stream-2," he said. Officials expect the 754-mile Blue Stream at full capacity to transport 565 billion cubic feet of natural gas per year by 2010. "This year the Russian-Turkish intergovernmental commission will take place," the minister said. "We have to submit our gas marketing surveys to take a decision on the construction of Blue Stream's second branch." Russia last week secured agreements for gas purchases from the Shah Deniz gas field in Azerbaijan to feed the South Stream gas pipeline to southern Europe. Moscow said it was interested in including Turkey in that project as well.

July 6, 2009 - (UPI) - HELSINKI, Finland, The Nord Stream natural gas pipeline received tacit approval from the Finnish government, though a regional consortium has asked for more environmental studies. Nord Stream would travel along a dual route through the Gulf of Finland and the Baltic Sea to Germany. Littoral states in Scandinavia complain about the potential environmental impact of pipeline construction, which is complicated by World War II munitions strewn about the Baltic Sea floor. Nord Stream AG in June concluded a two-day meeting in Germany to vet public and shareholder comments on a transboundary environmental report submitted by the project consortium in March. The Uusimaa Regional Environment Center, a group representing parties along the coast of the Gulf of Finland, called environmental studies conducted by the Nord Stream AG consortium "sufficient" but has requested more information, the New Europe weekly reports. Paul Corcoran, the chief financial officer at Nord Stream AG, said construction should be completed in time for a 2011 launch date. For his part, Sebastian Sass, the head of European relations for the company, said his group would provide "necessary" clarifications after studying the Finnish complaints. Nord Stream would ultimately transport more than 1.9 trillion cubic feet of gas per year to European customers.

July 6, 2009 – (UPI) - DAWSON CREEK, British Columbia, A series of bombings of natural gas pipelines in northeastern British Columbia in Canada are "domestic terrorism," authorities said. The first attack was reported in early October. This past weekend, the Royal Canadian Mounted Police confirmed a sixth bombing caused a leak in an EnCana Corp. line south of Dawson Creek, British Columbia. No one has been injured in the bombings, but they have caused leaks that could prove hazardous, authorities said. Safety measures led to a shutting of valves once a pressure drop was noted shortly following the latest attack, an EnCana release said. "These are bombings," RCMP Cpl. Dan Moskaluk said. "It's certainly nothing short of domestic terrorism." EnCana in January offered a $500,000 reward for information leading to the prosecution of those responsible for bombings of company pipelines near Dawson Creek. "We take the bombings of our facilities very seriously. The safety of our workers and the people who live in the communities where we operate is of paramount importance. That's why we are putting up this reward to help stop these bombings and end the threat that they pose to people in the Dawson Creek area," Mike Graham, EnCana executive vice president, said in a company release. The RCMP said four bombings occurred from last October to January. There have been two attacks reported this month, with the latest occurring between 2 a.m. and 3 a.m. Saturday. It wasn't far from the site of a bombing last Wednesday. An EnCana release Saturday said repair crews working the site of the Wednesday damage about 5 miles south of Dawson Creek heard a loud noise. When they investigated they discovered a leak in a 12-inch pipeline. "The pipeline leak also appears to be have been caused by an explosion," the company release stated. "The elements of this incident thus far, are consistent with the previous blast sites and the RCMP considers this latest bombing linked to the others," Moskaluk said in a statement. "This does change the dynamics of the events in certain terms, the main being our heightened concern for public safety, given that this explosion went off in close proximity of working crews and within a couple of kilometers of a populated rural area." Moskaluk said investigators were able to reach the scene of Saturday's blast quickly, allowing for better opportunities for "fresh" evidence gathering. Before Moskaluk used the "terrorism" term, authorities had characterized the attacks as "vandalism." The attacks began about the time an anonymous letter was sent to British Columbia media demanding oil and natural gas operations cease. It referred to the companies working the resources as "terrorists" that were "endangering our families with crazy expansion of deadly gas wells." "Whoever is responsible for these bombings has to be stopped before someone gets hurt. We hope this reward will encourage anyone who has knowledge of those responsible for the bombings to come forward and help put an end to these dangerous attacks that threaten the well-being of our staff, those who work for us and the residents and communities in the Dawson Creek area," Graham said in January. Investigators said they believe the person responsible lives in the area of the attacks and other residents may know who is carrying out the bombings.

3 July 2009 - BBC - Nigeria, Niger and Algeria have signed an agreement to build a multi-billion dollar pipeline to take Nigerian gas across the Sahara to the Mediterranean. The giant project, which will cost an estimated $13bn (£8bn), aims to deliver up to 30 billion cubic metres of gas per year for the European market. France's Total, Anglo-Dutch firm Shell, and Russia's Gazprom have all expressed an interest in investing in the scheme. The pipeline will run for 2,580 miles (4,128km) through the three countries. BBC Africa analyst Richard Hamilton says that when built, it will be one of the great feats of engineering in the world and dwarf several existing pipelines, such as the one beneath the North Sea. He says one concern is security, as a pipeline could be a target for Tuareg rebels or al-Qaeda in North Africa, both of whom are active among the unpatrolled expanses and porous borders of the Sahara.
Russian concerns: Energy analysts say there has been interest in this project for many years, but lack of investment and an unclear regulatory environment in Nigeria meant that the plans stayed firmly on the drawing board. European Union nations now hope it will enable them to diversify their gas supplies - and most pressingly, reduce their reliance upon Russian gas - but many analysts say Gazprom may have a head start in participating in the scheme. This is because only last week, Gazprom signed a separate $2.5bn deal with Nigeria's state-owned gas firm NNPC to build new gas refineries, pipelines and power stations in Nigeria. European Union states are keen to reduce their reliance upon Russian gas because of Gazprom's numerous price disputes in recent years with Ukraine. These rows have seen Gazprom temporarily cut supplies to Ukraine, which in turn has reduced Russian gas deliveries to western Europe that are piped through Russia's neighbour. "We have the expertise and I don't think there is a problem with finance in this project," said Algerian Energy Minister Chakib Khelil. Nigeria has estimated natural gas reserves of 180 trillion cubic feet, the seventh-largest in the world.

07–03–2009 – ABUJA, Nigeria (AP) — Nigeria, Algeria and Niger have signed an agreement to create a $10 billion pipeline that would ship gas across the Saharan desert to Europe, Nigeria's state oil company said Friday. The plan comes as Europe seeks new sources of gas imports as it currently depends on Russia for much of its needs. The project was approved by energy ministers from all three governments, said Mohammed Barkindo, the managing director of Nigeria state oil company, the Nigeria National Petroleum Corporation. It is expected to come on line in 2015. "The inter-governmental agreement that has been signed today between the government of Algeria, Niger and Nigeria gives this project official stamp of approval," Barkindo said. "So it is a significant milestone." Nigeria's energy minister, Rilwanu Lukmanu, said the countries are now looking for partners for the project. "We will be talking to prospective partners who might be interested," Lukmanu said. Last month, Russia's state natural gas supplier Gazprom and Nigeria's main oil company agreed to create a joint venture to explore and produce oil and gas in Africa's most populous country. Gazprom's chief in Nigeria has said the Russian firm would invest $2.5 billion in the new venture. If Gazprom should gain control over Nigeria's gas resources, that could strip European consumers of a possible alternative to Russian gas supplies. It has been a difficult time for Gazprom as production is declining and the severe financial crisis is forcing it to delay the launch of major new gas fields that would supply Europe with energy.

MOSCOW, June 26 (RIA Novosti) - The South Stream gas pipeline will account for 35% of Russian gas supplies to Europe by 2015, Gazprom CEO Alexei Miller said on Friday. "We have taken the decision to increase the pipeline's capacity to 63 billion cubic meters. This means it will account for 35% of all Russian gas supplies to Europe in 2015," Miller said at an annual meeting of Gazprom shareholders. South Stream is a rival to the Western-backed Nabucco pipeline, designed to bring gas from Central Asia and the Caspian to Europe bypassing Russia. The European Union, nervous about growing energy dependence on Russia, is backing the project despite the current economic crisis. Miller described Gazprom's pipeline as "balanced and economically efficient," and said the South Stream and Nord Stream projects were the company's "strategic investment" in improving European energy security. Intergovernmental agreements have been signed with Bulgaria, Serbia, Hungary and Greece to lay the surface pipeline. Similar agreements are currently being negotiated with Slovenia and Austria. Investment in the South Stream project has been estimated at 25 billion euros ($35 billion).

BERLIN, June 26, 2009 (UPI) - Former German Foreign Minister Joschka Fischer has been hired to lobby for the EU gas pipeline Nabucco. Fischer, a former Green Party leader, is due to sign a six-figure contract with the Nabucco pipeline consortium for a political and PR consulting job, the German Manager Magazine reports in its Friday issue. Germany's RWE and Austrian OMV will pay the salary of the former politician who has been teaching at Princeton University for the past three years. The 2,000-mile Nabucco pipeline is a key European energy project. It is intended to bring 31 billion cubic meters of gas per year from the Caspian Sea to Austria via Turkey, Bulgaria, Romania and Hungary. The EU with Nabucco wants to decrease Europe's energy dependence on Russia. Washington also backs Nabucco. Differences between the consortium and transit countries and Russia's repeated efforts to torpedo Nabucco have delayed a final agreement on the project. Nabucco is also in danger because gas supplies are not yet secured. Kazakhstan's Deputy Energy Minister Acet Magauov said at the NATO summit in Astana Friday that Kazakhstan will not have gas to supply the pipeline, Radio Free Europe reports. EU officials are nevertheless optimistic that a deal on Nabucco can be signed this year. The magazine writes that Fischer is employed first and foremost to massage Turkey, a key transit country. Ankara has been bargaining with its support for the project, linking it to a quicker EU accession process and demanding 15 percent of the pipeline's gas as transit fees. The consortium may hope that Fischer is able to drive back Turkey's demands. "Fischer is highly regarded in Turkey because he was always open to it joining the EU," Manager Magazine writes. That pretty much makes Fischer a competitor of his ex-boss and political ally, former German Chancellor Gerhard Schroeder, who is lobbying for the Russian-backed Nord Stream pipeline aimed at connecting Russia and Germany directly under the Baltic Sea. Schroeder heads the advisory board for the Nord Stream consortium, made up of Russia's state-controlled energy giant Gazprom, Germany's Eon and Dutch Gasunie. His decision to back Nord Stream for money was harshly criticized at the time, because Schroeder had signed an agreement with the Kremlin to green-light the pipeline while still in office.

June 26, 2009 - (Reuters) - MOSCOW, France's GDF Suez (GSZ.PA) will likely get a nine percent stake in the Nord Stream pipeline, running from Russia to Germany, the project leader, Russia's Gazprom (GAZP.MM), said on Friday. "The level of participation of Gaz de France (GDF Suez) will be the same as of Dutch Gasunie," said Gazprom's export chief Alexander Medvedev. Gazprom has 51 percent of the project, Gasunie has 9 percent and Germany's E.ON EONG.DE and BASF (BASF.F) share the rest.

MOSCOW, June 25 (Reuters by Simon Shuster) - The European Union is discriminating against Russian-backed gas pipelines in favour of Nabucco, the head of Gazprom's foreign department, Stanislav Tsygankov, said on Thursday. "When you look at the regulatory treatment of Russian-linked projects compared to European ones, one is reminded of the famous book by George Orwell that says all animals are equal but some are more equal than others," Tsygankov told a news conference. "Nabucco is getting the green light everywhere ... while our gas transport projects, South and North Stream, are constantly facing regulatory barriers."

06-19-2009 - Upstream OnLine - The Russia-led Nord Stream gas pipeline group said today it was upbeat about getting permits from all Baltic Sea countries, despite identifying about 50 World War II munitions dumps along the link's subsea route. "About 50 munitions (sites) in total have been identified on the route and will be handled safely in line with the existing practice...," Nord Stream spokeswoman Irina Vasilyeva told Reuters. The Nord Stream consortium aims to have the twin pipeline up and running in 2011, bringing 55 billion cubic metres of Russian gas to Germany and further to other EU countries each year across the Baltic seabed. But the timetable came under threat after several Baltic countries expressed concerns that the pipeline could damage the environment, especially as it would pass close to dumped World War II munitions. Permits to build and operate the pipeline are needed from Russia, Finland, Sweden, Denmark and Germany. Russia's Natural Resources Ministry said yesterday that Sweden and Denmark had asked to receive further documents covering the project's ecological impact. Vasilyeva said the request was a step forward rather than a step back for the project as it was taking talks on a number of outstanding unresolved issues to a national level after three months of successful multi-national consultations, which de facto cleared the project. "This step has concluded the public participation phase of the Nord Stream project," she said adding the group hopes to solve outstanding issues over the summer and start construction of the 1220 kilometre pipeline as planned in early 2010. The Nord Stream project involves Russian gas export giant Gazprom, Germany's E.ON and Dutch player Gasunie. Many European politicians want reduced dependency on Russian gas, which already supplies about one quarter of Europe's gas demand. Gazprom argues that new pipelines will lessen the continent's dependence on transit states and thus boost energy security.

BAKU, Azerbaijan, June 19, 2009 - (UPI) -- Azerbaijan is seeking to interest other Caspian producers in using its export pipelines. Since it became operational in May 2006, the Western-financed and operated $3.6 billion, 1,092-mile, 1 million-barrel-per-day Baku-Tbilisi-Ceyhan pipeline has become Azerbaijan's main export pipeline. The Azeri government has consistently sought to convince other Caspian oil-producing nations to utilize the pipeline's export capacity. Baku's efforts to acquire other nations' exports increased after the brief Georgian-Russian military confrontation last August, which completely shut in Azeri exports, costing the nation more than $1 billion in lost revenues. Beginning in October 2008, Kazakhstan began to use the BTC pipeline. Azerbaijan's Analiticheskoe I Informatsionne Agenststvo FINEKO reported June 18 that since then BTC has carried more than 1 million tons of Kazakh oil, 163,000 tons in May alone. According to the Azerbaijan State Statistics Committee, during the first five months of May 2009 Kazakh oil exports via the BTC pipeline totaled 754,800 tons. In a further sign of increased cooperation, in the wake of last year's military conflict, the State Oil Co. of the Azerbaijan Republic and Kazakhstan's KazMunaiGas last November signed an agreement on delineating principles of a joint Trans-Caspian Project oil export system.

BAKU, Azerbaijan, June 19, 2009 (UPI) -- Turkish officials delayed the signing of intergovernmental agreements for the Nabucco gas pipeline but promised a move as early as July. The Nabucco gas pipeline consortium has not set a firm date for the signing of an agreement on the $10.7 billion project. It was expected Ankara would host a signing meeting Thursday, but Turkish energy officials have delayed that for another month, the Trend news agency reports. Mihaly Bayer, the Hungarian envoy to the project company, Nabucco Gas Pipeline International, had complained over the slow process on the agreements but joined Turkish officials saying agreements would be reached soon. Applications from potential suppliers would follow the signing of the intergovernmental agreement, with financing moving ahead in 2010. Nabucco would travel 2,050 miles from the Caspian Sea through Turkey north to European markets. Europe sees the project as a means to diversify the regional energy sector, which is dependent on Russian natural resources. The project faces obstacles because of a lack of firm commitments from potential supplier nations, while Turkish demands for discounts delayed a pending meeting on the pipeline.

06-12-2009 - Financial times by Anna Fifield - Gazprom is in talks with Iran and Pakistan to build a large section of a long-awaited gas pipeline between the two countries, a senior Iranian energy official says. The participation of Russia's state-controlled energy group could kick-start the pipeline project, which has been delayed because of disagreements that have led India to pull out. "Both we and Pakistan are talking with Gazprom and we have agreed that Gazprom can be a partner [to construct] the pipeline inside Pakistan," Hojatollah Ghanimifard, vice-president for investment affairs at the National Iranian Oil Company, told the Financial Times. The proposed 2,600km gas pipeline would transport gas from Iran to Pakistan and India, providing them with 60m cubic metres of gas a day initially, eventually rising to 150m cu m a day. The project, valued at $7.6bn, has been under discussion since 1994 but has been bedevilled by delays, most recently because of disagreements between India and Pakistan over transit fees. India has now walked away from the deal. But Mr Ghanimifard said the project was making progress. "Last week I was in Russia, I had the pleasure of talking to high authorities in Gazprom and I proposed to them that this was in the interest of Pakistan and invited them to become involved," he said. He added the Pakistani portion of the pipeline would stretch about 900 km. "They liked this idea and accepted. We are going to see each other trilaterally in Tehran," he said. He said the meeting was due to take place before the end of July. Gazprom said: "We are interested in this project - but so far there have been no specific negotiations." Analysts say Gazprom is interested partly because it seeks a way to channel Iranian gas away from Russia's traditional markets in Europe. Its interest and technological expertise could also inject momentum into the delayed project, they say. India, which imports about 70 per cent of its oil and gas, would still have the option to join at a later date, Mr Ghanimifard said. "When you're talking about a long relationship that will last decades, we cannot say that even though they are out for a few years, they will be out forever," he said. About 700km of pipeline from the South Pars gas field has already been built inside Iran, and the remaining 200km to the Pakistani border is under construction, Mr Ghanimifard said.

BAKU, Azerbaijan, June 10, 2009 (UPI) -- NATO pledged its support for the Nabucco natural gas pipeline to Europe and recognized the importance of Azerbaijan as a key energy supplier, officials said. "NATO realizes the importance of the Nabucco project and backs Azerbaijan," said Michael Gaul, a top economic security official at NATO. "Undoubtedly, Azerbaijan as a supplier plays a very important role." His comments came during an energy security conference organized in Baku by the Azeri Foreign Affairs Ministry. Europe sees the $10.7 billion Nabucco project as the answer to its energy diversification needs as it moves to ease its dependence on Russia as an energy supplier. Nabucco would travel some 1,900 miles from the Caspian region through Turkey to European energy markets. Gaul said energy security in the region was a top priority for NATO as energy demand increases, the Azerbaijan Business Center reports. "In the future, by 2013 our energy needs are going to increase by 50 percent and that will create additional difficulties in the area of safety and the environment," he said. Nabucco officials say signing of intergovernmental agreements is scheduled for June 25.

PORTO CERVO, June 10 (Reuters by Stephen Jewkes) - The South Stream gas pipeline that will transport Russian gas into Europe will have no funding difficulties and will be operative by the end of 2015, Gazprom Chief Executive Alexei Miller said on Wednesday. "The current capex plans will be honoured 100 percent. There are no problems whatsoever in funding it," Miller said, speaking to reporters on the sidelines of a conference. South Stream, which will have a capacity of 63 billion cubic metres per year, will be built by Gazprom and Italy's Eni and will cross the Black Sea to reach Bulgaria, Greece, Serbia, Hungary, Italy and possibly Austria. "It is not competing with the Nabucco project," he said, adding the feasibility study for the project will be decided by mid-2010. Nabucco is a rival pipeline project backed by the European Union. Miller said that a figure had already been set for the amount of gas Eni will be able to sell in the transit countries of South Stream but refused to give the number. Miller also commented on problems with supply of gas from Ukraine and Turkmenistan. Miller said Ukraine can and should pay for the gas it receives. He acknowledged Ukraine had paid for its May gas imports, adding payment had come from reserves of the Ukraine central bank, "an unorthodox solution", he said. Moscow cut supplies to Ukraine, and later to Europe, in January during a three-week stand-off over Ukraine state energy company Naftogaz's debts and the price of gas. He said Ukraine now needed to pump in some 19.5 billion cubic metres of gas to replenish its storage sites which will cost around $4.2 billion, adding that Ukraine's daily gas offtake fell sharply this week from last week. "I will have a meeting with the Naftogaz head next week to see what's happening," he said. Miller said he hoped the European Union summit on June 18-19 would discuss the creation of a joint EU-Russian consortium to help fund EU gas supplies. Asked when and under what terms Gazprom would restart Turkmenistan gas purchases, Miller said: "I intend to visit Turkmenistan in the next few days to discuss the gas situation". Turkmenistan and Russia have been in talks since April over how to resume the flow of gas after it was severed by a gas pipeline explosion, which Turkmenistan says Russia caused. Miller said that there is more gas than necessary in Europe today, adding no shortages are foreseeable in the short or long term. He said only 5 percent of reserves in the Arctic offshore fields have been explored. Development of the giant Shtokman gas field, which has estimated reserves of 3.7 trillion cubic metres, has not been delayed, Miller said, adding "an investment decision will be taken by March 2010". The North Stream pipeline project was also on schedule and will be commissioned in 2011. "It's a very important project and the cheapest export corridor for Russian gas," he said. North Stream is planned to link Germany and Russia via the Baltic Sea. Asked about Gazprom's interest in Slovenia's Petrol company, Miller said no decision had been taken yet. "We have received an offer (to buy) it," he said.

UNECHA, June 10, 2009 (RIA Novosti) - Russia's oil pipeline monopoly launched on Wednesday the construction of the second stage of the Baltic Pipeline System, designed to diversify the country's oil exports. The official ceremony of welding the first joint of pipeline was held in the Bryansk region in western Russia. The ceremony was attended by Russian Deputy Prime Minister Igor Sechin, Transneft CEO Nikolai Tokarev, Energy Minister Sergei Shmatko and regional administration officials. The Baltic Pipeline System-2, with an estimated cost of 120-130 billion rubles ($3.9-4.2 billion), will run from the Bryansk Region to the northwest Leningrad Region port of Ust-Luga with a branch going to the Kirishi oil refinery. The project will be funded through long-term ruble-denominated bond issues by pipeline monopoly Transneft. The bonds will be placed through a private offering among state-controlled financial organizations. The construction of the BPS-2 is to be completed two years later. Oil will start to be transported in late 2012 with an initial throughput capacity of up to 30 million metric tons (220 million bbl), which will subsequently be raised to 50 million tons per year (367 million bbl). The first stage of the Baltic Pipeline System, with a capacity of 12 million tons of oil annually and designed to transport oil from both Russia's oil-rich regions and Kazakhstan, was commissioned in 2001. Its current capacity is 75 million tons. The BPS-2 project emerged during an oil dispute between Russia and Belarus in January 2007, when Russia cut off supplies to Europe for four days via the Druzhba pipeline after Belarus refused to let Russian oil pass through the country without payment of a transit duty.