June 2016, Vol. 243, No. 6

In The News

World News

ADB Hopes TAPI Gas Line is Completed in Next Five Years

The Asian Development Bank (ADB) said last month that despite security concerns, they hope the long-awaited $10 billion TAPI (Turkmenistan-Afghanistan-Pakistan and India) natural gas pipeline will be completed in the next five years.

“All four member countries have established a project company by contributing initial money of $200 million, which will pave the way for construction of 800-km pipeline,” said ADB’s Director General for Central and West Asia Department Sean M. O’Sullivan.

In another bid to connect the energy-rich country with energy-deficient countries in the region, the ADB is working on a transmission line from Turkmenistan to Afghanistan, which will then be connected with Pakistan under the TAP project for which the ADB will finance $600 million. O’Sullivan said even Afghanistan paid its equity share for establishing the project company for the TAPI gas pipeline. The major challenge will be ensuring regional security which will need to be resolved if international oil companies are to come in.

Revised Reserve Figures May Change Outlook For Global Gas

The eastern Mediterranean is quietly becoming one of the most important spots globally for natural gas. Recent mega-finds in Egypt and Israel hold the potential to change the supply picture for the region and beyond, according to an OilPrice report by Dave Forest. He warned of hiccups coming for development.

A story recently broke that the much-touted Leviathan offshore natural gas discovery in the Mediterranean off the coast of Israel and the Gaza Strip may not be as big as first believed. It’s also reported that Israel’s government has just received a new report assessing reserves at Leviathan and the numbers don’t add up with previous appraisals.

Reports indicated the new reserves evaluation for Leviathan, prepared by SGS, came in at 16.6 Tcf – down 24% from previous assessments on the field.

Much uncertainty swirls around this issue. Leviathan’s owners – Noble Energy, Delek Group and Ratio Oil Exploration – released a statement saying there has been no change in their assessment of its reserves. Israeli officials are reportedly conducting a second assessment with another international consulting firm.

If the reduced reserves figures do stand up, it could be a game changer for the region. The revision would reduce the amount of gas Israel could export to Europe, Turkey and Egypt.

Saipem Wins TAP Offshore Construction Contract

Trans Adriatic Pipeline AG (TAP) has awarded an EPCI contract to Saipem SpA  for the offshore section of the project. TAP’s 36-inch offshore pipeline across the Adriatic Sea – between the coastlines of Albania and southern Italy – will be 105 km in length and installed 820 meters below sea level at the deepest point.
The EPCI scope comprises associated civil works at the landfalls in Albania and Italy (including micro tunneling), offshore pipeline installation, offshore fiber-optic cable supply and installation, as well as pre-commissioning and survey activities. The coated offshore 36-inch line pipe, the anodes and the buckle arrestors will be provided by TAP.

Ian Bradshaw, Managing Director at TAP, said several contracts have been issued to date. They can be seen by visiting http://www.tap-ag.com/project-opportunities/for-companies.

Gail India Beefs Up Pipeline Surveillance

Gail India plans to use drones on a 200-km stretch of the HBJ pipeline in the Chambal Ravines in Mahya Pradesh. They will be used to detect physical abnormal activity like encroachment or intrusion of the pipeline. The company is using satellite surveillance to monitor its 13,000-km of gas pipelines.

Nigeria’s Oil Problems Deepen

Depressed oil prices, rampant corruption and pipeline vandalism are only parts of Nigeria’s oil problem. A recent article by Irina Slav for Oilprice.com said “it’s now losing a massive 400,000 bbls of  crude daily to pirates in the Gulf of Guinea, an amount equal to the entire daily export capacity of its Forcados terminal.

Overall damage from piracy, theft and fraud for Africa’s largest oil exporter is estimated at $1.5 billion a month. Attempts by local governments and the UN to stop piracy have met with some success, but the practice continues – shifting location and adapting to new security measures, so now the UN Security Council is calling for a comprehensive framework of measures aimed at eradicating it.

Helicopter Accident on Norwegian Shelf Claims 13 Lives

On, April 29, Statoil was notified of a helicopter accident on the Norwegian continental shelf and immediately mobilized its emergency response organization. Police  confirmed 13 people on board the CHC helicopter on assignment to Statoil had perished in the accident. The helicopter was en route from Gullfaks B platform to Bergen and crashed outside Turøy in Fjell municipality outside Bergen.

The 11 passengers that perished in the accident were employed by Halliburton, Aker Solutions, Schlumberger, Welltec, Karsten Moholt and Statoil. The two pilots are employed by CHC. One of the 13 is a Statoil employee.

Uganda Plans 800-Mile Crude Line to Tanzania

Uganda may build a pipeline to Tanzania to export its oil, rather than Kenya. The pipeline, expected to cost $4 billion and create 15,000 jobs, will be 800 miles long and connect Uganda’s western region with Tanzania’s port of Tanga.

The discovered oil reserves in Uganda are estimated at 6.5 billion bbls, and the country expects to start production in 2018. Kenya, which has also struck oil, had wanted the pipeline to pass through its territory. Uganda had initially signed such a deal, but Total later questioned the plan over security concerns. Uganda backed the Tanzanian route because the country’s port of Tanga is already fully operational, while Kenya’s Lamu port is still being built.

When completed, it will be East Africa’s first major oil pipeline. Meanwhile, Kenya said it will build its own pipeline from Lokichar, in the northeast, to Lamu.

Norwegian Gas Pipeline Exports to Europe in April up 40%

Norwegian natural gas exports via pipelines hit a record high for the month of April after a 40% year on year increase in exports, while flows from Russia to Northwest Europe were steady, said data from Eclipse Energy, an analytics unit of S&P Global Platts. Norwegian exports to Belgium, France, Germany, the Netherlands and the UK totaled 9.511 Bcm in April, up 40% from April 2015 and down 6% from March levels.
Gas production on the Norwegian Continental Shelf was higher year on year due to the summer maintenance surrounding the giant Troll gas field being pushed back this year. April exports from the NCS breached the previous monthly high of 8.668 Bcm from 2013 and were more than 25% above the five-year average of 7.537 Bcm.

During the first four months, Norway exported 39.624 Bcm, 12% higher year on year and the highest cumulative amount for the time of year. Conversely, Russian gas exports to Northwest Europe were up 1% year on year in April and down 10% drop from March levels.

Russian exports via the Nord Stream, Yamal, and Brotherhood pipelines combined were 9.202 Bcm in April, down from 10.244 Bcm in March and little changed from 9.109 Bcm in April 2015. Cumulative Russian gas flows to northwest Europe for the first four months was 37.531 Bcm, up 36% year on year and 11% higher than the previous record high for the time of year from 2011.