Caspian/Iraq Export Pipelines
The accompanying map was prepared exclusively for MEES by ILF Consulting Engineers (ILF Beratende Ingenieure GmbH), Werner-Eckert Strasse 7, 81829 Munich, Germany. Tel: +49 89 2555940. Website: www.ilf.com
1. Nabucco Gas Pipeline. Under study by Nabucco Gas Pipeline International: Austria’s OMV (project leader); Bulgargaz EAD of Bulgaria; SNTGN Transgaz SA of Romania; Botas Petroleum Pipeline Corporation of Turkey and MOL Natural Gas Transmission Company of Hungary (MEES, 16 January). Plans 3,300km pipeline from eastern Turkey to transport some 30bcm/year of natural gas from Caspian Sea region, Middle East and Russia and to Central Europe – final decision expected by end-2007. Work could begin in 2008, completed by 2012. Estimated cost: $5.5bn. Nabucco enjoys EU support (MEES, 3 July, 26 June).
2. AMBO – Albanian Macedonian Bulgarian Oil Corporation. Proposed as bypass to Turkey’s Bosphorus/Dardanelle Straits. Considered since mid-1990s; has US backing, but steps awaited to implement it. Pipeline would carry Russian and Caspian Sea crude oil from Black Sea port of Burgas, Bulgaria, to Albania’s Adriatic port of Vlore, running 917km across Bulgaria, Macedonia and Albania, capacity of 750,000 b/d, estimated cost: $1.2bn (MEES, 2 May 2005).
3. BAP – Burgas-Alexandroupolis Crude Oil Pipeline (BAPline). Decision to build proposed $1.3bn crude oil pipeline expected by partners Russia, Greece and Bulgaria early 2007. Designed to bypass Bosphorus/Dardanelle Straits, carrying Russian/Caspian Sea crude oil 285km from Burgas, Bulgaria, to Alexandroupolis, Greece; initial capacity 700,000 b/d, rising eventually to 1mn b/d. In September 2006, Russia, Bulgaria and Greece signed memorandum of cooperation agreeing to reach final decision (MEES, 23 October, 11 September). TransBalkan Pipeline consortium formed by Russian, Bulgarian and Greek companies; others in Caspian region may join. Project scheduled for 2009-10 start-up.
4. Samsun-Ceyhan Crude Oil Pipeline. Turkey’s own proposal to bypass Bosphorus/Dardanelle Straits; also known as Trans Anadolu Pipeline (TAP). Turkey’s Calik Enerji and Italy’s Eni formed joint venture, TAP Project Company (TAPPCO) to construct 550km pipeline from Turkey’s Black Sea port of Samsun to Ceyhan on Mediterranean, costing $1.5bn; to carry 1.5mn b/d of Caspian Sea region and possibly Russian crude oil. Samsun-Ceyhan route a competitor to proposed BAPline (see above), but Turkey says will proceed with TAP to boost Ceyhan’s status as planned eastern Mediterranean crude oil market hub (MEES, 25 September, 2 May 2005). Ceyhan is terminal for 1mn b/d BTC pipeline and Iraq-Turkey Pipeline (ITP – see below).
5. BTC – Baku-Tbilisi-Ceyhan Crude Oil Pipeline. Came into operation July 2006 (MEES, 17 July), the 1,768km BTC pipeline carries Azeri Light crude oil from onshore oil/gas processing terminal at Sangachal, Azerbaijan, to Ceyhan via Georgia; rate expected to reach 500,000 b/d by end-2006. Cost $3.9bn to build, plus added costs of financing and filling pipeline with 10mn barrels of Azeri Light. The pipeline (runs 249km in Azerbaijan, 443km Georgia and 1,076km Turkey) owned/operated by BTC Company, led by BP. BP also leads Azerbaijan International Operating Company (AIOC), the consortium holding Azerbaijan’s offshore Azeri-Chirag-Guneshli (ACG) production-sharing agreement. Crude oil production at ACG oilfields expected to reach 1mn b/d before 2010. Azerbaijan/Kazakhstan accord allows shipment of up to 500,000 b/d of Kazakh crude through BTC, beginning most likely when Kazakhstan’s offshore Kashagan oilfield comes on-stream around 2009 (MEES, 19 June). BTC expandable, contingent on demand.
6. SCP – South Caucasus Gas Pipeline. Also known as Baku-Tbilisi-Erzurum gas pipeline, first major gas pipeline exporting from former Soviet Union, due for end-2006 completion. Will carry natural gas produced at Azerbaijan’s offshore Shah Deniz gasfield parallel to the BTC as far as Turkish border, then connect with Botas-operated pipeline to Turkey’s Erzurum gas hub, to be incorporated into Turkey’s gas network, with some shipped to Greece via Turkey-Greece Interconnector (TGI), and eventually Italy via Interconnector Greece Italy (IGI) pipeline. Shah Deniz gas will also feed into proposed Nabucco pipeline to Central Europe. Condensate produced at Shah Deniz to be exported through BTC. Shah Deniz/ACG fields to use processing plant at Sangachal, Azerbaijan. SCP: 20 bcm/year design capacity, initial shipments around 8 bcm/y – expansion expected over course of 30-year life. South Caucasus Pipeline Company (SCPC) will own/operate the pipeline. BP will be technical operator, Statoil commercial operator. Cost of Deniz project estimated at $4.3bn, including SCP cost of $1.02bn.
7. East Anatolian Natural Gas Pipeline. Links Iran (Tabriz) and Turkey (gas hub at Erzurum); in operation since December 2001 (MEES, 17 December 2001) after several years of delay. Stems from 22-year, $30mn 1996 gas sales/purchase agreement between Turkey and Iran (MEES, 19 August 1996). Since pipeline opening, several disagreements between the two over price, volume of shipments and gas quality. Under original deal, shipments set for 10bcm/year by 2007. According to Botas, Turkey in 2006 received 4.5bcm of Iranian gas. Current shipments estimated 27mn cu ms/day. Through East Anatolian Pipeline Iran anticipates participation in proposed Nabucco pipeline (MEES, 9 October, 28 August).
8. Atyrau-Samara Crude Oil Pipeline. Prior to CPC pipeline coming into operation in 2001, the Atyrau-Samara pipeline was Kazakhstan’s prime crude oil export route. Part of Soviet-era system; Russian section controlled by Transneft. Russia claims the pipeline has 340,000 b/d capacity, but throughput may amount to around 150,000 b/d. Pipeline feeds into Russia’s primary crude oil export conveyor to Europe, the 1.2mn b/d Druzbha pipeline.
9. Druzbha-Wilhemshaven Crude Oil Pipeline. Proposed that northern branch of the Russian Druzbha crude oil pipeline be extended from Schwedt on Polish-German border to Germany’s North Sea port of Wilhemshaven. Proponents say this would enhance Russia’s capability to export crude to West, reduce Baltic Sea tanker traffic, and boost crude oil exports to North America by large tankers. Extension could also provide West Europe/North America outlet for crude oil shipped through proposed Odessa-Brody-Plock pipeline (see below).
10. Baku-Supsa Crude Oil Pipeline. Prime export route for Azerbaijani crude oil prior to July 2006 BTC opening; Soviet-era pipeline renovated in late-1990s, put into operation 1998 by BP-led Azerbaijan International Operating Company (AIOC) to export Azeri Light crude oil produced at Azerbaijan’s offshore Azeri-Chirag-Guneshli (ACG) oilfields. Pipeline capacity around 155,000 b/d, cost $560mn to refurbish. Closed by operator in November 2006 for routine maintenance and may be closed until early 2007 (MEES, 27 November).
11. Caspian Pipeline Consortium (CPC). Pipeline system runs 1,510km from Tengiz, western Kazakhstan to Russian Black Sea port of Novorossysk. Originally conceived in 1990s to transport oil produced at the Chevron-operated Tengiz oilfield to international markets. Phase 1 cost $2.6bn; began operations October 2001 with 560,000 b/d design capacity (MEES, 3 December 2001). Recently more shippers have joined, with throughput at times exceeding 700,000 b/d. Rising Kazakhstan oil production prompted private shareholders to propose that Phase 2 should expand capacity to 1.3mn b/d (MEES, 18 October 2004, 20 September 2004). But main shareholder Russia (24%) opposes plan for economic and political reasons; has made a number of demands to be met before endorsing expansion (MEES, 27 November). Only some have been met. Moscow’s most recent demands: an increase in tariff to $38/ton, agreement to repay CPC’s $5bn debt by 2012, changes in the management structure and participation by CPC consortium members in proposed BAPline.
12. Odessa-Brody-Plock Crude Oil Pipeline. Ukraine completed 500km Odessa-Brody pipeline in 2001 with intention of attracting Caspian Sea crude oil for transshipment to Europe – but unable to find shippers interested; after leaving pipeline idle for several years reversed its flow in 2004, allowing small volume shipments of Russian crude through Odessa. Ukraine received verbal support for pipeline and proposed extension to Plock from European countries and Caspian producer states, but Odessa-Brody pipeline yet to meet original purpose. Ukraine government still expresses intention to eventually see pipeline carry crude oil into Central Europe; drawn up plan with Poland to extend it further 600km to Plock, for transportation to European refineries or to German’s Wilhemshaven for export (MEES, 27 November).
13. Atyrau-Kenkiyak-China Crude Oil Pipeline. When complete, will run length of Kazakhstan (3,000km, Atyrau to Chinese border). Atyrau-Kenkiyak section (450km) built by KazMunaiGaz-CNPC joint venture, operational 2003 with initial 120,000 b/d capacity (MEES, 7 April 2003). In December 2005, Kazakhstan and China inaugurated Atasu-Alashankou section (1,200km), initial 200,000 b/d capacity (MEES, 7 August, 29 May, 19 December 2005). Work on the mid-section (Kenkiyak-Kumkol) set for 2011 start. Expansion to 400,000 b/d capacity likely, to meet Kazakh oil output rise.
14. Atyrau-Kuryk Crude Oil Pipeline. Kazakhstan’s KazTransOil operates domestic pipeline between Aktau – from where some crude oil exported – and Atyrau, runs north and feeds into CPC. In November 2006 Kazakhstan said it would construct on same route new pipeline from Iskene in the north to Kuryk, part of new trans-Caspian crude oil export system scheduled for 2010 start-up (MEES, 4 December). Kashagan consortium member Agip KCO expected to participate.
15. Iraq-Turkey Pipeline (ITP).Also known as the Kirkuk-Ceyhan crude oil pipeline, came into operation during 1980-88 Iran-Iraq war, providing Iraqi export route without risk to Gulf tankers. During 1990 Iraqi invasion of Kuwait and 1991 war, ITP closed, reopening when Iraqi crude oil was exported under UN-sponsored oil-for-food scheme. ITP is still export route for crude oil produced in Iraq’s northern oilfields – but subject to frequent insurgent attacks and prolonged closures. ITP figures into Turkey’s plans to transform Ceyhan into an international oil, gas, and petrochemical trading entrepot (MEES, 2 May 2005). ITP: dual 1,000km pipelines, design capacity of 1.6mn b/d. Pipeline awaits security in Iraq before needed complete refurbishment can happen. Speculation voiced that natural gas pipeline could eventually link northern Iraq and Ceyhan when security allows this.
16. Trans-Caspian Gas Pipeline(Gas from Turkmenistan). Efforts made in 2006 to resurrect idea of building natural gas pipeline across Caspian Sea, linking with Azerbaijan’s SCP gas pipeline to Turkey and then Europe. US and EU have discussed this with Kazakhstan, where gas production rise expected during next 10 years in line with that of crude oil output. In 1990s Shell led project to build 16-30bcm/year gas Turkmenistan-Azerbaijan pipeline across Caspian, but project collapsed (MEES, 3 July, 5 June, 22 May, 2 October 2000). Unclear if proposed gas pipeline can regain momentum, but recent visits to Kazakhstan by EU officials suggest that Europe is keen pursuing such a project.
17. Trans-Adriatic Pipeline (TAP). Proposed gas pipeline promoted by private Swiss company EGL to carry Russian, Caspian and Iranian gas through Balkans to southern Italy. Two routes proposed: northern, to branch from Nabucco pipeline in Bulgaria and cross Macedonia/Albania, then Adriatic Sea to Italy; and southern, branching off Interconnector Greece-Italy (IGI) pipeline. TAP: planned capacity 10bcm/year, operational by 2009-10.
18. Interconnector Greece-Italy (IGI). Will carry Caspian region natural gas, primarily from Azerbaijan’s Shah Deniz gasfield, across northern Greece to southern Italy – Greece/Italy agreement signed November 2005 (MEES, 14 November 2005). Will be extension of Turkey-Greece interconnecting pipeline, due for 2007 completion; designed with 11bcm/year capacity, extends from the Turkish gas grid at Karacabey near Bursa, across Dardanelle Strait to Komotini in northern Greece (MEES, 11 July 2005). Deliveries of Shah Deniz gas to Greece to begin in 2007 at initial 250mn cu ms/y, eventually reaching 3bcm/y. IGI: 8bcm/y capacity, 600km from Komotini-Stavrolimena, then subsea section across Ionian Sea to Oranto, Italy. Greece’s state-owned DEPA and Italy’s Edison formed a 50:50 joint venture, Poseidon Company, to construct €350mn subsea section. DEPA will build the northern Greece section for €600mn (MEES, 23 May 2005).
19. Blue Stream Gas Pipeline. Natural gas pipeline inaugurated November 2005 – in operation since February 2003, cost of $3.2bn (MEES, 21 November 2005). Designed to carry 16bcm/year of Russian gas, but Turkey takes delivery of less than half that. The Russian section: 370km, carrying gas from Stavropol to Dzhubga on Black Sea and inland compression station at Krasnodar – the section financed, built and managed by Gazprom. Black Sea section: two 390km subsea pipelines owned and operated by Gazprom-Eni joint venture, Blue Stream Pipeline Company; runs from Dzhubga compression station to Durusu on Turkey’s Black Sea coast near Samsun. Turkish section: built and financed by Botas, runs 470km from the coast to Ankara, connecting with Turkey’s natural gas grid (MEES, 3 March 2003). Likely that Blue Stream pipeline could feed into proposed Nabucco gas pipeline to carry gas into Central Europe.
20. Trans-Caspian Crude Oil Export System. Proposed subsea crude oil pipeline connecting Kazakhstan and Azerbaijan. At present there are plans for new oil terminals to handle Kazakh crude oil to be shipped by tanker to Azerbaijan for export the BTC pipeline to Ceyhan. In November 2006 Kazakhstan announced that it would build a $1.6bn system involving the construction of a new pipeline from Iskene to Kuryk, where a new loading terminal would be built. Designated tankers would be part of the system, and a new terminal in Azerbaijan to receive the Kazakh crude and transfer it to the BTC would also be built (MEES, 4 December). The new system will be operational by 2010, and is viewed as part of the infrastructure required to export production from the offshore Caspian Kashagan oilfield and surrounding structures. So a subsea pipeline across the Caspian is viewed as unfeasible until tanker shipments reach a level of 500,000 b/d.
