Page 6 - FSUOGM Week 48 2019
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FSUOGM PIPELINES & TRANSPORT FSUOGM
ESPO boosts capacity by 10%
RUSSIA
ESPO is Russia’s main outlet for eastbound oil exports.
THE capacity of the Eastern Siberia–Pacific Ocean (ESPO) pipeline, Russia’s main channel for oil exports to Asia, has been enlarged by 10% following the commissioning of three new pumping stations.
ESPO-1, the pipeline’s first section that runs between Taishet in the Irkutsk region to Skovo- rodino, near the Chinese border, is now capable of flowing 80mn tonnes (1.6mn barrels per day) of Eastern Siberian crude. Its previous capacity was 1.45mn bpd. The expansion should enable Russia to diversify its oil exports further and spur development of its Eastern Siberian reserves.
“It’s a question of Russia’s energy security,” Russian Energy Minister Alexander Novak said at a launch ceremony for the new pumping stations on November 27. “This infrastructure allows us to diversify deliveries of Russian energy resources to new markets of the Asia-Pacific region. Experts forecast the region to develop at a greater pace than other regions, so it’s important for us to develop infrastructure in this direction.”
ESPO-1 connects at Skovorodino with
ESPO-2, which can carry up to 1mn bpd of oil to the Pacific Ocean port of Kozmino. A 600,000 bpd spur also runs from Skovorodino to Mohe in China.
Novak insisted the expansion would have no impact on Russia’s commitments under the OPEC+ agreement on output cuts.
“Regarding our relationship with OPEC and non-OPEC, we analyse overall production and not export directions,” he explained. “Devel- opment of east and west infrastructure is in accordance with our oil industry development programme. In Western Siberia output has been declining for the past several years, while new regions are being developed such as east and north Siberia, where production is on the rise. So overall, the balance is maintained.”
The largest buyer of ESPO crude is China, with the grade particularly popular among that country’s independent refiners. ESPO’s main suppliers are Russia’s state-owned Rosneft and private producers Irkutsk Oil and Surgutneft- egaz.
TurkStream gas pipeline tostartuponJan8
TURKEY
TurkStream will be opened by Putin and Erdogan in a ceremony in Turkey.
RUSSIA’S TurkStream gas pipeline to Turkey will come online on January 8, the Kremlin has con- firmed, enabling it to divert some supplies that currently flow through Ukraine.
Russian President Vladimir Putin will open the pipeline with Turkish counterpart Recep Tayyip Erdogan in a ceremony in Turkey, Krem- lin press secretary Dmitry Peskov told report- ers. The pair will also hold talks on other issues including bilateral relations and the situation in Syria, he said.
TurkStream runs from Russia for 930km along the bed of the Black Sea, terminating in Turkey’s western Thrace region. Its first string will supply up to 15.75bn cubic metres of gas per year to Turkish consumers, while its second will run through Bulgaria, Serbia and Hungary, delivering an equal volume of gas to customers in Europe.
Russia’s state-owned gas supplier Gazprom broke ground on the project in May 2017, after hiring Swiss-based Allseas to lay the pipe, and work on both strings’ offshore sections was com- pleted in November last year. It began filling the pipeline with gas in late October.
TurkStream was initially expected to start
operations before the end of this year. Its launch will enable Russia to slash gas supplies it sends to Turkey and other European countries via Ukraine. This will strengthen Russia’s hand in ongoing talks on establishing terms for gas transit through Ukraine starting next year, after their current contract expires. The two sides have held several rounds of talks, so far without any progress.
Like elsewhere in Europe, Gazprom is strug- gling with rising competition and flat demand in the Turkish market. Its supplies to the coun- try slumped 34.5% in January to September to 11.6bcm, on the back of a 8% drop in Turkish demand to 33.3 bcm and increased imports from Azerbaijan and LNG suppliers.
“The economic turmoil in Turkey [has] made consumers there particularly sensitive to the price of gas being supplied, with gas consumption pressured by alternative cheap sources such as coal,” Moscow-based VTB Capital wrote in a recent research note. “Gaz- prom’s gas is probably the most expensive on the Turkish market, so to keep its market share the company is inevitably going to have to sac- rifice the margin.”
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w w w . N E W S B A S E . c o m Week 48 04•December•2019
