Page 6 - Euroil Week 31 2019

EurOil PIPELINES & TRANSPORT EurOil
France’s Total offloads stake in domestic pipeline
FRANCE
Total wants to use pipelines but not own them.
FRENCH oil major Total has o oaded a 30% stake in a domestic fuel pipeline system to local midstream player Pisto for €260mn ($291mn), as part of an ongoing asset disposal plan.
e Trapil network was rst established in the 1950s to transport petroleum products between the Basse-Seine and Paris regions. Since then it has been expanded to carry fuels from as far north as Dunkerque to the southern port of Fos-sur-mer, consisting of 4,700 km of pipeline, 850,000 cubic metres of tank storage and 160 pumping and delivery systems.
Pending regulatory approval, the deal will see Total’s stake in the system reduced to 5.55%, while Pisto’s share will rise to 74%. Total will con- tinue using Trapil’s pipelines to pump fuel from its re neries in Normandy and Grandpuits to markets under current conditions.
“ e sale of Total’s interest in this infrastruc- ture reflects its active portfolio management strategy,” company CFO Jean-Pierre Sbraire said
in a statement. “Rather than own infrastructure assets, the group’s aim is to hold contracts to use infrastructure when needed to manage its indus- trial assets.”
Total planning to shed a total of $5bn of assets this year to streamline its portfolio and focus more on low breakeven projects less vulnera- ble to changes in oil prices. e bulk of planned divestments are expected to be made in the group’s exploration and production business. It recently sold o a package of assets in the North Sea – where many assets are comparatively small in scale with high operating costs – to Oman- based Petrogas for $635mn.
Total su ered a 19% year on year decline in net pro ts to $2.9bn a er being stung by low prices for gas, which now accounts for the bulk of the company’s output. It is maintaining its focus on gas in the long term, however, continuing its move into LNG with the purchase of US-based Anadarko’s African assets. ™
TAP’s onshore section nears completion
SOUTH EUROPE
The offshore section is yet to be built.
ENGINEERS have welded into place 99% of the Trans-Adriatic Pipeline (TAP)’s onshore section, the project’s operators said on Twitter on July 31.
e pipeline, which runs across Greece, Alba- nia and the Adriatic Sea before terminating in Italy, is due to start transporting Azeri gas next year.
While onshore construction is almost n- ished, TAP is yet to make signi cant progress o shore. Work began preparing the seabed for the 105-km Adriatic section in October last year. But it was not until April this year that Italy’s Saipem lowered the rst of TAP’s o shore pipes into place.
TAP is slated to ow 10bn cubic metres per year of gas at peak capacity, receiving these supplies from Azerbaijan via the South Cau- casus Pipeline (SCP) through Georgia and the Trans-Anatolian Pipeline (TANAP) across Turkey.
TAP’s investors – which include BP, Snam, Azerbaijan’s SOCAR, Belgium’s Fluxys, Spain’s Enagas and Swiss-based Axpo – are currently weighing up a potential expansion that could see the pipeline supply up to 20 bcm of gas.
e group launched market tests last month to gauge interest in this expansion. The first phase of the tests, currently underway, allows
operators to place non-binding bids for the extra capacity. During the second phase, set to begin in the second quarter of next year, o ers will be binding.
e market tests will help pave the way for the TAP group to take a nal investment decision (FID) on the expansion. But they will also need to ensure that enough gas supply is available to ll the pipeline.
e second stage of Azerbaijan’s Shah Deniz gas project is set to provide all the required gas to ll TAP’s initial 10 bcm per year capacity. Were the pipeline to be expanded further, new sources of gas would need to be sought out.
Azerbaijan could potentially provide this gas, but only if a third stage at Shah Deniz is approved, which could take years, or if other new gas elds are exploited. So far, the only other major new Azeri gas eld to have moved beyond the exploration phase is Absheron, although its start-up has been repeatedly delayed.
Outside Azerbaijan, the only country that could realistically provide the extra gas would be Russia. But EU authorities are unlikely to accept this option, as one of the main rationales for TAP and the rest of the Southern Gas Corridor (SGC) pipeline network is to diversify the bloc’s import mix. ™
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w w w . N E W S B A S E . c o m Week 31 08•August•2019