AUGUST 2015
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World Pipelines
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IP pipe receives boost as sanctions
end
The Iran-Pakistan (IP) pipeline may benefit from
the recent nuclear deal, in which Iran agreed
with world powers to curb its nuclear
programme. As a result, Iran is preparing for the
unwinding of sanctions, which is expected within
the next six months.
The ‘peace pipeline’ has been on the drawing
board for years and may now move forward
given Iran’s re-entry into the international
community.
Iran has been eager to build a natural gas
pipeline to Pakistan and India, a project that
would benefit all three countries.
The removal of economic sanctions on Iran
will clear the way for Pakistan to pursue the
ambitious gas pipeline, which is designed to import
up to US$2.5 billion/yr worth of Iranian gas.
Iran completed its section of the pipeline on
its territory in 2013, but the remaining route
through Pakistan has been blocked due to
international pressure.
The US has always backed an alternative
route, which would run from gas fields in
Turkmenistan through Afghanistan, connecting to
Pakistan and India (the Trans Afghanistan pipeline:
TAPI).
Pakistan’s Petroleum Minister Shahid Khaqan
Abbasi stated to press: “We need gas. Iran has the
world’s second-largest gas reserves.” He said the
Iranian pipeline will eventually provide a peak of
750 million ft
3
/d of gas once it is fully operational
by 2020.
In the meantime, energy-starved Pakistan has
started construction work on its 700 km pipeline
to import LNG from China.
The project will be jointly funded by Pakistan
and China.
Chinese funds will benefit Pakistan and allow
it to complete its Iran-Pakistan gas pipeline
project, Abbasi said. Abbasi stated mid July that
the Chinese-funded LNG terminal at Gwadar and
the 700 km long pipeline linked to it as part of
the China-Pakistan Economic Corridor (CPEC),
which is expected to be ready by the end of 2017,
can actually double up as well and become the
Iran-Pakistan gas pipeline as well.
Analysts surmise that the China pipeline was
designed with the clear intent that it could
eventually be dovetailed into the Iran-Pakistan
pipeline project once the sanctions against Iran
were lifted.
Turkish Stream update
Amidst Greece’s economic travails, the country has committed to working
with Russia on the proposed Turkish Stream pipeline.
The 1100 km pipeline will comprise four lines, with a capacity of up to
63 billion m
3
/yr of gas. Approximately 16 billion m
3
/yr will be supplied to
Turkey, while the remaining 47 billion m
3
/yr will go to a hub on the Greek-
Turkish border to be transported onwards to Europe.
Turkish Stream will replace the South Stream project, which Russia
suspended in December.
Greek Prime Minister Alexis Tsipras reshuffled his Cabinet following
bailout negotiations, replacing government members who voted against
further austerity. Energy Minister Panagiotis Lafazanis was replaced with Labor
Policy chief Panos Skourletis.
Skourletis backs Lafazanis’ position, saying that Greece supports the joint
construction of a pipeline with Russia which will be part of Turkish Stream in
Greek territory.
“We support the plan for the construction of the Greek-Russian gas
pipeline on our territory. It opens new opportunities for us, which should be
used,” Skourletis said.
Lafazanis had repeatedly said that Greece would support the Russian gas
pipeline.
In related news, Russia’s South Stream Transport BV, wholly owned by
state energy firm Gazprom, has cancelled contract with Italian engineer
Saipem to lay the subsea pipes for Turkish Stream.
In March 2014, Saipem won a US$2.2 billion contract to build the first line
of the 931 km South Stream pipeline, and it secured another US$440 million
contract for supporting work the following month. In May 2015, amid the
negotiations between Gazprom and Botas over the price of the gas to be
supplied through Turkish stream, Gazprom instructed Saipem to begin
construction, and the
Castoro Sei
was towed from Bulgaria towards Anapa, on
Russia’s Black Sea coast. Saipem is reported to be owed US$300 million for
the time the
Castoro Sei
and another vessel lay idle during the South Stream
suspension.
Russia accused of annexing part of BP pipeline
Georgia has accused Russia of violating international law following the
erection of a new ‘border’ in the disputed South Ossetia region, which brings
a part of a BP-operated oil pipeline under Russian rule.
The annexation means that Russia has grabbed a 1.5 km long section of a
critical oil export pipeline in Georgia for the separatist territory of South
Ossetia.
Stretching from Azerbaijan’s Caspian Sea shore to Georgia’s Black Sea coast,
the Western Route Export pipeline has a capacity of 100 000 bpd of oil. It is
second in size to the Baku-Tbilisi-Ceyhan (BTC) pipeline.
Russia recognised South Ossetia’s independence from Georgia back in 2008
and Russian troops have been putting up fences and demarcation signage in the
area. Tbilisi has protested against the continued ‘creeping annexation.’
British Petroleum Georgia told press that it plans to reroute the fenced-in
section of the pipeline as part of routine maintenance. “The situation is not
new and we have effectively had it since 2008,” said spokesperson Tamila
Chantladze. She said BP has yet to experience any obstacles when operating
the pipeline.
