Pipeline & Gas Journal's 2009 international pipeline construction report.
Current figures show pipelines in the engineering and design phase rose 15,979 miles over the past year, from 51,156 to 67,135. Conversely, the number of actual pipeline miles under construction fell from 19,015 to 17,941 miles in the same period.
Despite the fall in new pipeline construction miles, the international sector could see a record number of new pipeline miles constructed in the coming years. Construction of many long-planned projects is expected to be driven by higher energy prices and growing energy consumption.
Supporting this is the Energy Information Administration's International Energy Outlook 2009 (IEO 2009) which notes that the economic downturn will dampen world energy demand in the near term, as manufacturing and consumer demand for goods and services slows. With recovery anticipated to begin within the next 12-24 months, most nations are expected to see energy consumption growth at rates anticipated prior to the recession.
According to the reference case projections in the report, energy consumption is projected to grow by 44% between 2006-2030, driven by strong long-term economic growth in developing nations. The report projects strong economic growth to continue in China and India over the projection period, with their combined energy use increasing nearly twofold and making up 28% of the world's energy consumption by 2030.
The report also notes that non-OECD Asia shows the most robust growth of all the non-OECD regions, with energy use rising by 104% from 2006-2030. Energy consumption in other non-OECD regions also grows strongly over the projection period, with increases of 60% forecast for the Middle East and Central and South American and 50% for Africa. A smaller increase, about 25%, is expected for non-OECD Europe and Eurasia (including Russia and the other former Soviet Republics), as declining populations and substantial gains in energy efficiency result from the replacement of inefficient Soviet-era capital equipment.
P&GJ's construction report provides details on many of the major pipeline projects under construction and planned. In defining areas with high levels of activity, the following reflects new and planned pipeline miles in the six basic geopolitical grouping in this article (see accompanying map): South/Central America and Caribbean 13,526: Africa 6,253; Asia Pacific 36,133: Former Soviet Union and Eastern Europe 18,797; Middle East 6,232; Western Europe and European Union 4,135. More information is provided in P&GJ's sister publication Pipeline News.
With demand for energy growing faster in the Asia Pacific sector than anywhere else, it is no surprise the region accounts for the most new and planned pipeline projects totaling 36,133 miles. Of these, 26,848 miles represent projects in the engineering and design phase while 9,285 miles account for pipelines in various stages of construction.
After placing the first West-East gas pipeline into service to deliver 12 Bcm/a from the Tarim Basin, China National Petroleum Corporation (CNPC) launched a second WestEast pipeline in February 2008 to carry natural gas from Turkmenistan and China's Xinjiang Uygur Autonomous Region to the Yangtze and Pearl River deltas, China's two most-developed regions. The $20 billion, 4,785-mile pipeline, with annual gas transmission capacity of 30 Bcm/a, should be online in 2011.
A third West-East pipeline is in the planning phase and a fourth is being considered. The third project will require investment of more than $14.6 billion. It will have an annual transmission capacity of 20-30 Bcm of gas sourced from Central Asia. The route is expected to start in the northwest region of Xinjiang and run parallel with the second West-East pipeline as far a Jiangxi province in eastern China, from here it will take a different route to its final destination, most likely to the coastal province of Shandong.
CNPC will start construction soon on the $2 billion oil and natural gas pipelines linking Myanmar and China. The pipelines will transport oil from the Middle East and Africa to China and gas from Southeast Asia to Chinese users.
Work is also under way on the China section of the China-Russia oil pipeline that is expected to be put into service by the end of 2010. The 640-mile pipeline is designed to transport 15 MMt/a of crude from Russia to China between 2011 and 2030.
In addition to cross-border pipelines, China is building a string of LNG-receiving terminals along its coastline to receive cargoes from Australia, Qatar and Malaysia as well as spot supplies.
Elsewhere in the region, the Russian contractor Stroytransgaz is building the Dadri-BawanaNangal gas pipeline for Gail (India) Ltd. The 380-mile pipeline will supply gas to the Bawana Power project in Delhi and connect into the Hazira-Vijaipur-Jagdishpur pipeline.
A consortium led by Punj Lloyd has been awarded Malaysia's largest pipeline project valued at $500 million. The contract for the Sabah Sarawak gas pipeline was awarded by Petronas Carigali Sdn Bdh, a subsidiary company of Petronas, the state oil and gas major in Malaysia. Work includes the 318-mile, 36-inch onshore pipeline and associated facilities from the proposed Sabah oil and gas terminal in Kimanis, Sabah to the Petronas LNG complex in Bintulu, Sarawak. The project is expected to take 36 months to complete and is scheduled to begin service in March 2011.
The Asia Pacific region accounts for Reliance Gas Transportation Infrastucture Ltd.'s newly completed 850-mile Kakinada (East-West) pipeline linking West Begal with India's east coast. In May, BJ Services completed pipeline pre-commissioning and commissioning operations on the pipeline, which is designed for a capacity of 80 MMscm/d.
In an effort to lead Australia out of its first recession since 1991, oil and gas producers propose projects valued in excess of A$161 billion. Actual construction remains low.
As to projects which are likely to go ahead, Nacap Australia expects to start installation by mid-2010 on Epic Energy's QSN3 project. The project incorporates looping construction of 584-mile of 18-inch gas pipeline from Wallumbilla in South East Queensland to Moomba in South Australia.
Hunter Gas Pipeline Pty Ltd., a private company, plans to build the 516-mile Queensland Hunter gas pipeline that will run between the Wallumbilla Gas Hub in Queensland and Newcastle in New South Wales. Construction of the $A850 million pipeline is planned for 2010 with first gas deliveries in 2011.
Countries in the Middle East are building and planning just over 6,200 miles of pipelines. One of the region's most notable construction projects is in the UAE where China Petroleum Engineering and Construction Corp. is charged with building the 487-mile Abu Dhabi Crude Oil Pipeline (ADCOP) for the International Petroleum Investment Company (IPIC). The importance of the ADCOP project cannot be overestimated since it will connect Abu Dhabi's largest onshore oilfields at Habshan to storage and export facilities on Fujairah's coast and allow up to 1.5 MMbop/d of UAE exports to bypass a chokepoint for international shipping at the Strait of Hormuz. The pipeline is due to become fully operational in August 2011.
In Saudi Arabia, Dutch contractor Nacap-Suedrohrbau is working with Saudi Aramco to develop a 315-mile, 30-inch multi-products pipeline from refineries in RasTanura to Riyadh and also to Dhahran and Al-Hasa along the way. Project completion is slated in December 2011.
Still on the drawing boards is the long-planned Iran-Pakistan-India gas pipeline project. After India refrained from signing an agreement to move the 1,298-mile project forward because of security concerns, Iran is looking at alternative plans, including possibly exporting gas to the UAE, Kuwait, Bahrain and Syria. Pakistan has proposed a feasibility study on constructing the Iran-Pakistan pipeline project along a sea route which could save $US2 billion and reduce the pipeline's length by 93 miles.
Instability in the Niger Delta has caused significant amounts of shut-in production and several companies declaring force majeure on oil shipments. EIA estimates Nigeria's effective oil production capacity to be around 2.7 MMbop/d but as a result of attacks on oil infrastructure, 2008 monthly oil production ranged between 1.8 MMbop/d and 2.1 MMbop/d. Additional supply disruptions resulted from worker strikes that shut-in 800,000 bpd of ExxonMobil's production in late April and early May.
Despite the challenges, Dubai Natural Resources World is teaming with the state-run Nigerian energy company to bankroll $16 billion worth of oil and gas projects and build at least 1,000 MW of gas-fired power generation. The deal envisages building pipelines to distribute gas and possible investments in LNG facilities.
As to area activity, Algeria accounts for several significant projects including the 120-mile Medgaz project that will link Beni Saf, Algeria to Almeria, Spain, with an eventual extension to France. The $1.2 billion project will have initial capacity of 390 MMcf/d, increasing to 1.55 Bcf/d.
Italy's Snam Rete Gas and the Galsi Consortium have committed to build the 560-mile Galsi pipeline to transport Algerian gas to Italy. The pipeline will have initial capacity of 770-990 MMcf/d and is expected to be completed by 2012.
Saipem has construction under way on Sonatrach's $580 million GK3-Lot 2 gas pipeline that will run for 220 miles. The project will allow Sonatrach to expand its gas transport capacity to 9 Bcm/y.
Work is also under way off Ghana where Kosmos Energy, Anadarko and Tullow Oil and Gas expect to begin first production from the deepwater Jubilee oil field by mid 2010.
In southwestern Chad, China National Petroleum Corp. began work in July on a major oil pipeline due for completion in 2011. The pipeline will transport crude some 185 miles to a refinery north of the capital.
Energy ministers from Nigeria, Niger and Algeria approved construction of the 2,800-mile Trans-Saharan natural gas pipeline that will connect all three countries and come on line in 2015. While the immense length of the pipeline and the possibility for sabotage are considered major deterrents to the project, Gazprom and Total have expressed interest in participating in the project that would send up to 30 Bcm/y of gas to Europe from Nigeria via Niger and Algeria. Officials estimate the Trans-Saharan pipeline will cost at least $13 billion.
Western Europe/EU Countries
Although this region accounts for just over 4,100 miles of new and planned pipelines, this could soon change. Last January, Gazprom turned off gas flowing into Ukraine for transit into Europe for three weeks. Almost 20% of the EU's total gas supplies were cut off and half the EU was directly or indirectly affected.
European Commission President Jose Manuel Barroso is promoting projects to diversify sources and routes of gas supply. In a recent statement he singled out strategic projects in the southern corridor, such as the 2,051-mile Nabucco pipeline to bring gas from the Caspian region; and projects such as Nordstream to link Germany and its neighbors to new gas sources in northern Russia.
A number of those interconnections and supply routes will be able to get financial support from the EU budget, he said. One project expected to see approval this year is the Trans-Adriatic Pipeline (TAP) to import gas directly into Europe from the Caspian and Middle East, which has never reached Europe through pipelines. As proposed, the $2.2 billion, 325-mile pipeline will have a gas transport capacity of around 10 Bcm/a with the option to expand to 20 Bcm/a.
As the world's largest exporter of natural gas and second-largest oil exporter, it is no surprise Russia accounts for an increasing number of projects to increase oil and gas exports to Europe, Africa and the Asia Pacific region. Again, however, the FSU and Eastern Europe account for more planned pipeline miles than actual miles under construction. Of the 18,797 miles of new and planned pipelines, just over 4,000 miles represent work in progress.
A significant event this year was the first oil flow through the completed portion of the 2,500-mile Eastern Siberia Pacific Ocean (ESPO) pipeline that will connect reserves from Western Siberia to Asian-Pacific markets. The first-phase extends from Taishet in Irkutsk province to Skovorodino in Amur province. The second phase will extend the line to the Pacific coast port of Nakhodka.
One project aimed at increasing Russia's export capacities is the 550-mile South Stream pipeline planned by Gazprom and Eni. Russia and Italy would be connected via a pipeline under the Black Sea and pass through Central European states, including Bulgaria, Greece, Hungary and Serbia. Estimates to construct the project that will have a peak capacity of 31 Bcm/a are approaching $20 billion.
A second major project for gas transmission is the 745-mile Nord Stream pipeline which will run along the bottom of the Baltic Sea, mostly in Finnish waters, from Wyborg, Russia to Greifswald, Germany. Nord Stream is majority owned by Gazprom, which is building it with Germany's BASF, E.ON, and Dutch Gasunie and has plans to build two parallel gas-pipeline legs of 745 miles each. Once completed, it will have a 27.5 Bcm gas capacity. Work on the second leg of the project is expected to start in 2013.
The third project being planned, the EU-supported Nabucco pipeline run by a consortium led by the Austrian OMV, will carry gas from Caspian Sea fields to the EU. Construction is planned to begin in 2011 and would reach full capacity of 31 Bcm in 2020. The project may be delayed as EU ministers have refused to grant financing.
By year's end, Turkmenistan is scheduled to complete construction of its 120-mile segment of the Turkmenistan-China natural gas pipeline that will transport gas from eastern Turkmen fields and traverse Uzbek and Kazakh territory before reaching Xinjiang in eastern China. More than 745 miles of the 4,350-mile pipeline have already been laid in Kazakhstan and Uzbekistan. The pipeline is expected to be fully operational by 2011. The $9.5 billion pipeline may be extended to Japan.
Oil flowed for the first time through a pipeline that gives China access to Caspian Sea oil fields in Kazakhstan, as part of the expansion of the 1,865-mile Kazakhstan-China pipeline. With a designed transportation capacity of 10 MMt/a, the new section runs 475 miles from the Kenkiyak oil field--operated by CNPC--to Kumkol, close to the Chinese border. Work is winding down on the 280-mile Atyrau-Kenkiyak section, which would extend the pipeline west and has a planned transmission capacity of 6 MMt/a.
South/Central America And The Caribbean
The global economic crisis and stringent nationalistic reforms imposed by Venezuela, Colombia, Bolivia and Ecuador are likely to continue to depress pipeline construction in much of this region. The number of projects waiting to be implemented in South/Central American and the Caribbean account for a far greater number of miles than actual construction.
Despite the challenges, Canada-based Pacific Rubiales plans to build an oil pipeline in Colombia with an initial capacity of 60,000 bpd. The 145-mile pipeline will carry crude from fields the company jointly operates with state oil company Ecopetrol in Rubiales, in the central province of Meta, to a pumping station in the eastern province of Casnare. The $530 million pipeline is part of Pacific Rubiales' planned $1.6 billion investment in Colombia from 2008-2012.
In Trinidad, Technip has been awarded contracts by the National Gas Company (NGC) of Trinidad to install two pipelines off the islands of Trinidad & Tobago in the Caribbean. The contract covers subsea and land surveying services, environmental, project management and construction management for a large-diameter pipeline that will connect the BHP Billiton facility in Block 2C off Trinidad to NGC's existing pipeline network. The second pipeline will connect BHP Billiton's facility to the south coast of Tobago to supply gas for a power generation plant under construction by NGC. The pipelines are scheduled to be completed by year end.
Trinidad says a proposal for a natural gas pipeline between Port of Spain and Barbados remains on the table even as it presses ahead with plans to spend $155 million to construct a gas link with its sister island Tobago. The Tobago pipeline is expected to be operating in the first quarter of 2011. However, Trinidad is awaiting word from Barbados on a proposal to extend the pipeline to service the needs of Bridgetown.
This region is also seeing a significant upturn in LNG projects. Moreover, new pipeline projects are under consideration. Kuntur Transportadora de Gas President Samuel Gomez, said development of the Gasoducto Andino del Sur (South Andean Pipeline) is under way and construction is expected to begin next year. The expected route of the $1 billion pipeline will start at the Camisea gas fields in Cusco and proceed south. The company projects first gas will be available to customers in 2012 or 2013.
Brazil's Petrobras has outlined projects in its Strategic & Business Plan 2009-2013. In the projects in progress portfolio, the 2009-2013 plan includes completion of 10 gas pipeline construction jobs (1,580 miles in length), installation of compression stations and points of delivery, and enhancement of the capacity of the Bolivia-Brazil gas pipeline (Gasbol) between Sao Paulo and Parana by means of new compression stations. The company is expected to invest $4.52 billion in these projects.
Among the main projects in progress is the third and last section of the Southeast-Northeast Gas Pipeline (Gasene), the Cacimbas (ES)--Catu (BA), measuring 588 miles. In total, 53% of the construction and assembly are complete and the project should wrap-up early in 2010.
By Rita Tubb, Managing Editor
South & Central America 13,526 Western Europe & EU 4,135 Africa 6,253 Middle East 6,232 FSU Eastern Europe 18,797 Asia Pacific 36,133 U/Construction 17,941 miles Planned 67,135 miles UC & Planned 85,076
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|Publication:||Pipeline & Gas Journal|
|Date:||Aug 1, 2009|
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