Page 7 - Euroil Week 41 2019
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EurOil COMMENTARY EurOil
which accounted for 90% of national supply. The French major did so in order to initiate a three- year redevelopment programme.
While Tyra is out of action, Denmark has said it will import its gas from Germany. But in prac- tice this is likely to mean buying extra gas from Russia, Germany’s top supplier. Critics argue that Denmark would become even more reli- ant on other countries for its energy security in the long run if domestic oil and gas exploration were halted. Furthermore, by opting for oil and gas supplies from other countries instead of its own resources, Denmark could even cause emis- sions to increase. Gas supplied from Germany, for example, is likely to have travelled thousands of kilometres from fields in Siberia, adding to the carbon cost. Environmental controls on emis- sions are also laxer in Russia than in the Danish North Sea.
A trend
Denmark is not the first country to take such drastic steps. In September, Ireland’s government announced plans no longer to issue any licences for offshore oil exploration, while continuing to issue permits for gas. The announcement left the oil and gas industry scrambling for clarification, and in the weeks since, several companies have exited oil projects.
It still remains unclear how the policy will work in practice, as licences are often awarded without certainty whether the resources found, if any, will be oil or gas. It could therefore dis- rupt gas exploration, as operators will be more reluctant to invest in drilling, through fear of discovering oil.
Elsewhere, Italy has imposed a morato- rium on oil and gas exploration – a move that prompted Royal Dutch Shell and Cabot Energy to give up an onshore block last month. Scot- land, meanwhile, on October 3 extended its ban on hydraulic fracturing, confirming it would not grant permission for any new onshore drilling projects. And in England, Cuadrilla Resources has packed up its fracking gear after being forced to halt operations after a series of tremors. The company argues these tremors are still minor, blaming draconian regulations. Its owners appear to have given up hope of a change in gov- ernment policy, with reports claiming they want to sell the company.
Opposition to upstream activity across Europe is mounting. But while the goal of reduc- ing emissions may be laudable, restrictions on exploration do little as long as demand for oil and gas remains. If that demand exists it will be satisfied, if not with domestic supply then with supply from further afield.
PIPELINES & TRANSPORT
Pipe supply, build contracts signed for Bulgaria-Greece gas link
BULGARIA
The pipe will help Bulgaria wean itself off Russian gas.
BULGARIA’S energy ministry signed contracts for the supply of pipes and construction of the Gas Interconnector Greece-Bulgaria (ICGB) with Greek companies J&P-Avax and Corinth Pipeworks Industry, respectively, the project company developing the link said in a statement.
The 182-km interconnector will help diver- sify natural gas sources for Bulgaria, which at present mainly depends on Russian gas. Its con- struction has been delayed by numerous objec- tions in Bulgaria.
In May, ICGB picked Greece’s J&P-Avax to buid the gas link for €144.8mn, while Corinth Pipeworks Industry was selected to supply line pipes worth €58.2mn.
ICGB also said that the European Investment Bank would provide a €110mn loan to state- owned Bulgarian Energy Holding to fund part of the ICGB project. The European Commission has also said it will supply €33mn.
Bulgaria and Greece signed a delayed final investment decision on building the link in December 2015. J&P AVAX was supposed to complete the construction within 18 months of
the signing of the contract.
The pipeline is due to be completed and oper-
ational in 2020, in time for gas from Azerbaijan to arrive through the Southern Gas Corridor (SGC), which is currently under construction. Bulgaria has a contract to purchase 1 bcm per year of Azeri gas, one-third of the country’s annual gas consumption.
The 32-inch (813-mm) diameter pipeline will stretch from Komotini in Greece to Stara Zagora in Bulgaria and have an initial capacity to trans- port 3 bcm per year when it begins operating. This can be expanded to 5 bcm per year later. The IGB will extend from the eastern end of the Trans Adriatic Pipeline (TAP) in Greece.
The IGB is seen as a key to diversifying deliv- eries in Eastern Europe, where many countries are dependent on Russia for their gas supply. Not only will the IGB have access to Azeri gas, but a connecting pipeline from a planned floating LNG (FLNG) terminal in northern Greece, the Independent Natural Gas System (INGS), will be built to connect with TAP and IGB, allowing gas from other sources to enter the network.
Week 41 17•October•2019 w w w . N E W S B A S E . c o m P7
