Page 8 - FSUOGM Week 01 2020

FSUOGM PIPELINES & TRANSPORT FSUOGM
TAPI pipes finally arrive
TURKMENISTAN
The delivery is a rare sign of concrete progress for the decades-old project.
A Russian steel pipe manufacturer has reported completing the delivery of pipes for the Turkmen section of the Turkmenistan-Afghanistan-Paki- stan-India (TAPI) gas pipeline – a rare sign of concrete progress for the decades-old project.
ChelPipe, based in Chelyabinsk, revealed in April 2019 it had won an order from state gas company Turkmengaz for 150,000 tonnes of large-diameter pipes (LDPs) for TAPI’s con- struction in Turkmenistan. Delivery had been due to begin in the second quarter of that year.
ChelPipe confirmed in a statement on December 25 that delivery had been completed. The TAPI project is expected to transport 33bn cubic metres per year of gas along an 1,800- km route from Turkmenistan’s Galkynysh, the world’s second-biggest gas field. But the project has been held up by security concerns in Afghan-
istan and doubts over its commercial feasibility. The Turkmen stretch of the pipeline will run for 214km. ChelPipe has said its contract covers “around” 200km of pipeline, although according to Sberbank, which guaranteed a $219mn loan from Islamic Development Bank (IDB) funding the order, ChelPipe’s supplies will be enough for
the entire Turkmen section.
ChelPipe’s order announcement in April
raised eyebrows, as the formal groundbreaking
ceremony for TAPI’s Turkmen section took place way back in December 2015. In February 2018, the head of TAPI’s operating consortium even declared, erroneously, that work on the pipeline in Turkmenistan had been completed.
In another show of the project finally gain- ing momentum, Italy’s Rina in December announced it had been hired as a technical consultant for supervision and project support services for the Turkmen section’s development, under a contract worth $13mn.
TAPI still faces significant obstacles, however. A final investment decision (FID) is still not in place, with international financiers reluctant to back a pipeline through insurgency-ridden areas of eastern Afghanistan.
There are also growing signs that India and Pakistan may withdraw their support for TAPI, viewing increased LNG supply as a more realistic means of meeting their future gas needs. Both said last year they wanted to reopen price talks for Turkmen gas via TAPI.
As it stands, Turkmenistan has agreed to cover 85% of the project’s $10bn cost, with Afghanistan, Pakistan and India each pledg- ing 5%. This is an impossible task for the cash-strapped Central Asian state without inter- national assistance.™
Finland breaks Gazprom’s gas supply monopoly
FINLAND
Before the pipe’s launch on January 1, Finland got all its gas from Gazprom.
FINLAND has broken Gazprom’s monopoly over its gas supplies after the launch of gas flows from the new bi-directional Balticconnector gas pipeline between Estonia and Finland on Janu- ary 1 that draws on gas stored in Latvia.
Until the newly constructed pipeline went into operation on New Year’s Day, Finland was 100% reliant on gas supplied by Gazprom Export, the gas export arm of the Russian state- owned energy behemoth.
The Baltic states and Poland have been at pains to diversify their gas supplies away from Russia, afraid of being politically strong armed by the Kremlin using energy supplies as a weapon.
The Balticconnector between the Inkoo municipality in southern Finland and Paldiski in northern Estonia is one of several gas pipes being built in the region as the geopolitical game of chess using energy resources is played out.
The Balticconnector allows deliveries of gas to Finland via Latvia and Estonia that was
ultimately produced in Norway or draws on the EU gas distribution network. Future supplies could be sourced from LNG terminals in Poland and Lithuania.
The construction of the pipeline began in the autumn of 2018. The length of its underwater part is 77 km, the land section in Finland (from Inkoo to Siuntio) is 21 km, the land section in Estonia (Kiili-Paldiski) is 55 km. The estimated capacity of the pipeline is 7.2mn cubic metres of natural gas per day. The cost of the pipeline was €300mn of which €200mn was provided by the EU.
Natural gas has been supplied to Finland from Russia for over 40 years. In 1971, the first contract was signed to pump up to 1.4bn cubic metres (bcm) per year. As of December 31, 2018, Finland had imported a total stock of about 128bcm of Russian gas.
In December 2015, Gazprom Export and the Finnish Gazum extended the contract for the supply of gas to Finland until December 31, 2031. ™
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