Changing state of play: Part 2

The Odessa-Brody oil pipeline expansion

Ukraine and Poland resumed negotiations in April on the expansion of the Odessa-Brody oil pipeline (OBOP). Built in 2002, the 674 km pipeline connects Ukraine’s cities of Odessa and Brody. The OBOP was initially meant to be used for importing Caspian oil for Poland and through that country for other parts of Europe. However, lack of progress on that project prompted Ukraine to use it for importing Russian oil for exporting to the mentioned markets requiring the reversal of the pipeline’s flow. Poland has been interested in connecting the pipeline to its oil grid for a decade to compensate for any loss of Russian oil through the operating Druzhba pipeline, should Russia decrease the flow of oil through the latter. It is unclear how this project could become a reality given the growing tension between Russia and Ukraine, which could affect in some form Russia’s oil exports to its Slavic neighbour.

Statoil pipeline projects

Statoil has taken initiative for two projects. In March, the Norwegian company contracted Fugro GEOS to provide measurements for the construction of two pipelines necessary for its route selection and reducing risks and costs. One is an oil pipeline, which will run from the Johan Sverdrup Field (west of Stavanger/Norway) to the Mongstad Terminal (near Bergen in western Norway), and the other is an export gas pipeline from the same field to be connected to Kasto/Norway. The measurements are scheduled to be completed in 15 months.In January, Statoil decided to scrap the Kristin Gas export project in the Norwegian Sea because of its unsustainable economic nature.

The Mediterranean region

Turkish-Bulgarian pipeline

In January, Turkish Energy and Natural Resources Minister Taner Yildiz and Bulgarian Economy and Energy Minister Dragomir Stoney decided to build a 144 km gas pipeline between the two countries. In March, the Bulgarian Ministry of Economy and Energy announced its full support of the gas grid interconnection and called for a swift timetable for its realisation. Construction is set for the end of 2014 and is expected to be completed in two years. The project’s specifics, including its cost, are yet to be announced.

The Trans-Anatolian pipeline

TANAP is a major planned project. Its Intergovernmental Agreement and MoU was signed in July 2012 between Azerbaijan and Turkey. Designed to be connected to the TAP, the 1841 km pipeline, also known as the Trans-Anadolu, is envisaged to initially transport 16 billion m³/yr of gas from Shah Deniz Phase 2 to Europe, passing through Georgia and Turkey, of which 6 billion m³ is meant for Turkey’s domestic use and the rest will be exported to Europe. Its capacity could be increased to 31 billion m3/yr. On 28th May, TANAP awarded Worley Parsons a five year contract for the supply of engineering, procurement and construction management services.

Israel-Turkish pipeline

In June, Turkish Company Turcase announced that it is considering to build a 500 m undersea gas pipeline from Israel’s Leviathan Field to Turkey. The field was discovered in 2010 in the eastern Mediterranean Sea areas off the cost of Israel, about 130 km west of Haifa and about 57 km south-west of the Tamar Gas Field. Having estimated gas and oil reserves of 122 trillion ft³ and 1.7 billion bbls, respectively, the field is being developed by Houston-based Nobel Energy (39.66%), Delek Drilling (22.67%), Avner Oil Exploration (22.67%) and Ratio Oil (15%). At the estimated cost of US$ 2 billion, the proposed Turkish project is expected to carry 7 - 10 billion m³/yr.

Israel-Egypt pipeline

In June, Delek Drilling, a stakeholder in the Leviathan Field, announced negotiating with British Company BG for supplying its plant in Idku/Egypt with 7 billion m³/yr of gas for 15 years. The project requires an underwater pipeline whose specifics are not known at this stage. The announcement followed a preliminary agreement in May between another field’s stakeholder, Noble Energy, for selling 2.5 trillion ft³ of gas to Union Fenosa Gas SA to feed its liquefied natural gas plant in Egypt through a pipeline whose specifics are yet to be announced. The two projects are especially important for reflecting a reversal of the Israeli-Egyptian gas ties, as Egypt was until 2012 the major gas supplier to Israel.

Written by Dr. Hooman Peimani and edited by Hannah Priestley-Eaton

This is the second part of an abridged version of the full article from Dr. Hooman Peimani, published in the August 2014 issue of World Pipelines, available for subscribers to download now.

Read the article online at: https://www.hydrocarbonengineering.com/special-reports/19082014/changing-state-of-play-part-2/