Page 9 - FSUOGM Week 02 2020

FSUOGM PIPELINES & TRANSPORT FSUOGM
Nord Stream 2 launch pushed back to early 2021
RUSSIA
Following sanctions, Russia’s hopes rest on a pipelaying vessel it bought from China in 2016.
RUSSIAN President Vladimir Putin has said the Nord Stream 2 pipeline may not start working until the first quarter of 2021 – over a year later than its original launch date.
“Completion of the construction [of Nord Stream 2] will be delayed by several months,” Putin said at a Moscow press conference, posted on the Kremlin’s website. “But I hope that by the end of this year, or in the first quarter of next year, work will be completed and the pipeline will begin to work.”
Nord Stream 2 initially faced delays because of Denmark’s slowness in issuing necessary per- mits for its construction through Danish waters. Then in December, Washington passed sanc- tions prohibiting international companies from helping Russia lay the pipe.
Swiss-based Allseas prompted suspended work on the pipe and recalled its pipelaying ves- sel, causing construction to grind to a halt.
Only 160 km of the 2,460-km two-string pipe- line is left to build. Russia has said it can finish the remainder on its own without foreign assistance, Gazprom CEO Alexei Miller told the press on
January 12, as cited by Kommersant daily. Moscow has its own pipelaying vessel, Gaz- prom’s Academic Chersky, for the task, the news-
paper reported last month.
Russia has always outsourced construction
of major subsea pipelines such as Blue Stream, Nord Stream 1 and more recently TurkStream, to foreign contractors. But in 2016, it acquired a pipelaying vessel built by Jiangsu Hantong Ship Heavy Industry in China, apparently for the specific purpose of completing Nord Stream 2 if sanctions were imposed. NewsBase understands that the vessel has not been used since being acquired by Gazprom.
Nord Stream 2 will pump up to 55bn cubic metres of Russian gas to Germany and other European countries once operational. Sanc- tions are not the only obstacle the project faces. In September the EU Court of Justice also imposed a 50% cap on Gazprom’s use of the 36bn cubic metre per year OPAL pipe- line in Germany, limiting future gas flows via Nord Stream 2 pipeline. German regulators are appealing the decision.™
PERFORMANCE
Kazakh oil output levels off in 2019
KAZAKHSTAN
Kazakhstan expects output to be flat at around 1.81mn bpd for the next two to three years.
KAZAKH oil production was virtually unchanged in 2019, after rising dramatically in the previous two years as a result of the giant Kashagan oilfield’s launch in late 2016.
The country pumped out 90.5mn tonnes (1.82mn barrels per day (bpd)) of oil and con- densate last year, only 0.1% more than in 2018. In contrast, output climbed 5% in 2017 and then 11.6% in 2018.
The slowdown was caused by extensive planned maintenance at Kashagan and Kazakh- stan’s other two top producers, the Tengiz and Karachaganak fields. Kashagan also had to undergo unscheduled repairs towards the end of the year after a compressor station malfunc- tioned, initially causing output to halve.
The Tengiz field produced 29.8mn tonnes (598,400 bpd) last year, while another 14.1mn tonnes (283,000 bpd) was lifted at Kasha- gan and 11.3mn tonnes (227,000 bpd) at Karachaganak.
Kazakh authorities have recently said they expect output to be flat at around 90mn tpy (1.81mn bpd) for the next two to three years.
The international consortium operating
Kashagan has suggested before that the field could flow 470,000 bpd of oil under its current development phase. But output at the Caspian Sea site remains highly unstable. Production at Tengiz, meanwhile, is slated to reach as high as 39mn tpy (783,000 bpd) in a few years under a $37bn expansion sanctioned in 2016. But this gain will be partly offset by declining contribu- tions from smaller, more mature fields in west- ern Kazakhstan.
Kazakhstan sells most of its oil in Europe and other western markets via the Caspian Pipeline Consortium (CPC) that runs through Russia. CPC shipped 63.2mn tonnes (1.27mn bpd) of mostly Kazakh but also some Russian crude last year, up 3.6% year on year.
Moving forward, though, authorities want to ramp up oil supplies to China. Last July, Kazakh Energy Minister Aset Magauov announced plans to ship 140,000 bpd of oil to China alone, up from 26,000 bpd that was sent in 2018. The flow of the Atyrau-Kenkiyak oil pipeline is due to be reversed in the second half of 2020, enabling Kazakhstan to pump an extra 80,000-100,000 bpd of oil to its eastern neighbour.™
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