Secretary Danish Gas Technology Centre PB 308members.igu.org/old/gas-knowhow/publications/igu... ·...

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101 Secretary Mr Uwe Klaas DVGW Deutsche Vereinigung des Gas- und Wasserfaches e.V. Bereich Gasverwendung Josef-Wirmer-Str. 1 – 3 53123 Bonn Germany Tel.: +49 228 9188821 Fax: +49 228 9188996 E-mail: [email protected] Working Committee 4 Chairman Mr Jeremy Bending Network Strategy Gas Distribution/ National Grid Gallows Hill Warwick CV34 6DA England Tel: +44 1926 653309 Fax: +44 1926 656553 E-mail: [email protected]. com Vice Chair Mr Alessandro Soresina AEM S.p.A Via Balduccio da Pisa, 15 20139 Milano Italy Tel: +39 02 77205057 Fax: +39 02 77206575 E-mail: alessandro.soresina@ aem.it Secretary Mr Robert Thomas Network Strategy Gas Distribution /National Grid Gallows Hill Warwick CV34 6DA England Tel: +44 1926 655801 Fax: +44 7973 809914 E-mail: robert.m.thomas@uk. ngrid.com Working Committee 5 Chairman Mr Jean Schweitzer Danish Gas Technology Centre Dr. Neergaards Vej 5B DK-2970 Hørsholm Denmark Tel: +45 4516 9600 Fax: +45 4516 9601 E-mail: [email protected] Vice Chair Mr Tatsuo Kume Osaka Gas Co. 11-61Torishima 5 chome Konohana-ku Osaka – 554-0051 Japan Tel: +81 6 6465 2008 Fax: +81 6 6465 2021 E-mail: tatuo-kume@osakagas. co.jp Secretary Mr Aksel Hauge Pedersen DONG Energy, Renewable A.C. Meyers Vænge 9 2450 København SV Denmark Tel: +45 4031 0022 Fax: + 45 4480 6665 E-mail: [email protected] Programme Committee A Chairman Mr Knut Barland Statoil ASA PB 308 5501 Haugesund Norway Tel: +47 91 11 30 48 Fax: +47 52 77 22 10 E-mail: [email protected] Vice Chair Mr Juan Puertas Gas Natural SDG, S. A. Av. Portal de l’Àngel, 22 08002 Barcelona Spain Tel: +34 93 402 5327 Fax: +34 93 402 9300 E-mail: [email protected] Secretary Mrs Kari Lindøe Hunsbedt Statoil ASA PB 308 5501 Haugesund Norway Tel: +47 48 08 02 94 Fax: +47 52 77 25 67 E-mail: [email protected] Programme Committee B Chairman Mr Pedro Moraleda Gas Natural SDG, S. A. Avda de América, 38 28046 Madrid Spain Tel: +34 91 589 3170 Fax: +34 91 589 3476 E-mail: pmoraleda@gasnatural. com Vice Chair Dr Colin D. Lyle Gas Market Insights Ltd 30 Grove Crescent Kingston upon Thames Surrey KT1 2DG England Tel: +44 77 3856 3856 Fax +44 20 8546 4700 E-mail: [email protected] Secretary Mr Francisco Sichar SEDIGAS Edificio ENAGAS – Paseo de los Olmos, 19 28005 Madrid Spain Tel: +34 91 709 9581 Fax: +34 91 709 9583 E-mail: [email protected] Programme Committee C Chairman Mr Mohd. Farid Mohd Amin Petronas Level 75, Tower 1, Petronas Twin Towers KLCC, 50088 Kuala Lumpur Malaysia Tel: +60 3 2331 4613 Fax: +60 3 2331 2950 ANNEX – ADDRESSES

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101

SecretaryMr Uwe KlaasDVGW Deutsche Vereinigung des Gas- und Wasserfaches e.V. Bereich GasverwendungJosef-Wirmer-Str. 1 – 353123 BonnGermanyTel.: +49 228 9188821Fax: +49 228 9188996 E-mail: [email protected]

Working Committee 4

ChairmanMr Jeremy BendingNetwork Strategy Gas Distribution/ National Grid Gallows HillWarwick CV34 6DAEnglandTel: +44 1926 653309Fax: +44 1926 656553E-mail: [email protected]

Vice ChairMr Alessandro SoresinaAEM S.p.AVia Balduccio da Pisa, 1520139 MilanoItalyTel: +39 02 77205057Fax: +39 02 77206575E-mail: [email protected]

SecretaryMr Robert ThomasNetwork Strategy Gas Distribution /National Grid Gallows HillWarwick CV34 6DAEnglandTel: +44 1926 655801Fax: +44 7973 809914E-mail: [email protected]

Working Committee 5

ChairmanMr Jean Schweitzer

Danish Gas Technology CentreDr. Neergaards Vej 5BDK-2970 HørsholmDenmark Tel: +45 4516 9600Fax: +45 4516 9601E-mail: [email protected]

Vice ChairMr Tatsuo KumeOsaka Gas Co. 11-61Torishima 5 chomeKonohana-ku Osaka – 554-0051JapanTel: +81 6 6465 2008Fax: +81 6 6465 2021E-mail: [email protected]

SecretaryMr Aksel Hauge PedersenDONG Energy, RenewableA.C. Meyers Vænge 92450 København SVDenmarkTel: +45 4031 0022Fax: + 45 4480 6665E-mail: [email protected]

Programme Committee A

ChairmanMr Knut BarlandStatoil ASAPB 3085501 HaugesundNorwayTel: +47 91 11 30 48Fax: +47 52 77 22 10E-mail: [email protected]

Vice ChairMr Juan PuertasGas Natural SDG, S. A.Av. Portal de l’Àngel, 2208002 BarcelonaSpainTel: +34 93 402 5327Fax: +34 93 402 9300E-mail: [email protected]

SecretaryMrs Kari Lindøe HunsbedtStatoil ASA

PB 3085501 HaugesundNorwayTel: +47 48 08 02 94Fax: +47 52 77 25 67E-mail: [email protected]

Programme Committee B

ChairmanMr Pedro MoraledaGas Natural SDG, S. A.Avda de América, 3828046 MadridSpainTel: +34 91 589 3170 Fax: +34 91 589 3476E-mail: [email protected]

Vice ChairDr Colin D. LyleGas Market Insights Ltd30 Grove CrescentKingston upon ThamesSurrey KT1 2DGEnglandTel: +44 77 3856 3856Fax +44 20 8546 4700E-mail: [email protected]

SecretaryMr Francisco SicharSEDIGASEdificio ENAGAS – Paseo de los Olmos, 1928005 MadridSpainTel: +34 91 709 9581Fax: +34 91 709 9583E-mail: [email protected]

Programme Committee C

ChairmanMr Mohd. Farid Mohd AminPetronasLevel 75, Tower 1, Petronas Twin TowersKLCC, 50088 Kuala LumpurMalaysiaTel: +60 3 2331 4613Fax: +60 3 2331 2950

A N N E X – A D D R E S S E S

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There was a t ime when Petrobras

was just an o i l company.

Petrobras, as one of the worldʼs leading energy companies, is highly committed to the constant search for renewable

energy sources. Since the 1970s, when Brazil assumed leadership in this field by employing ethanol in cars, Petrobras

has been implementing a logistics and distribution system, and developing specifications that enable the use of this fuel.

From that time on, the Company has been investing in alternative sources such as solar power, wind power and biodiesel.

Energy sources that benefit society while protecting the environment. That is our commitment, and our responsibility.

www.petrobras.com.br

An First 420x297.indd 1 1/5/70 7:00:57 PMinternational Gas Oct 07-24198ACPL707-99 / 3153

international Gas Oct 07_102-1031 1international Gas Oct 07_102-1031 1 7/17/07 8:42:43 PM7/17/07 8:42:43 PM

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104

E-mail: [email protected]

Vice ChairMr Antonio Luiz Fernandes dos SantosPetrobrasAv. Almirante Barroso, 81 32nd Floor20031-004 Rio de Janeiro – RJBrazilTel: +55 21 3229 4589Fax: +55 21 3229 4590E-mail: [email protected]

SecretaryMr Rashdan M. RadziPetronasLevel 75, Tower 1, Petronas Twin TowersKLCC, 50088 Kuala LumpurMalaysiaTel: +60 3 2331 4655 Fax: +60 3 2331 2950 E-mail: [email protected]

Programme Committee D

ChairmanMr Seiichi UchinoTokyo Gas Co. Ltd 1-5-20, Kaigan, Minato-kuTokyo 105-8527JapanTel: +81 3 5400 7622Fax: +81 3 3578 8365E-mail: [email protected]

Vice ChairMr Alaa Abu JbaraQatargas Operating Company LtdP O Box 22666DohaQatarTel: +974 485 7556 Fax: +974 473 6122E-mail: [email protected]

SecretaryMr Yutaka ShirakawaTokyo Gas Co. Ltd1-5-20, Kaigan, Minato-ku

Tokyo 1058527JapanTel: +81 3 5400 7580 Fax: +81 3 3578 8365e-mail: [email protected]

Task Force Research and Development

ChairmanMr Marc FloretteGaz de France361, avenue du Président WilsonBP 33 93211 Saint-Denis La PlaineFranceTel: +33 1 49 22 50 59Fax: +33 1 49 22 49 49E-mail: [email protected]

Vice ChairMr Mel YdreosUnion Gas Ltd777 Bay Street, Suite 2801P. O. Box 153Toronto, ON M5G 2C8CanadaTel: +1 519 436 4597Fax: +1 519 436 5392E-mail: [email protected]

SecretaryMrs Marie-José FourniguetGaz de France361, avenue du Président WilsonBP 33 93211 Saint-Denis La PlaineFranceTel: +33 1 49 22 59 75Fax: +33 1 49 22 51 03E-mail: [email protected]

Task Force Gas Market Integration

ChairmanMr Jorge DoumanianGrupo Gas Natural-Gas Natural BAN (Argentina)Jaime Balmes N° 8 –704 Colonia Los Morales Polanco

11510 México D. F.MexicoTel: +52 55 52792401/52792402Fax: +52 55 52792400 Ext:2401E-mail :[email protected]

Vice ChairMr Dietmar SpohnStadtwerke Bochum GmbHPostfach 10 22 50D-44722 BochumGermanyTel: +49 234 960 2000Fax: +49 234 960 2009E-mail: [email protected]

SecretaryMr Javier Fernandez GonzalezGrupo Gas Natural-Gas Natural SDG, S. A. (Spain)Jaime Balmes N° 8 – 704 Colonia Los Morales Polanco 11510 México D. F.MexicoTel: +52 55 52792478 / 790446Fax: +52 55 52792400 Ext:2401E-mail: [email protected]

National Organising Committee

ChairmanMr Eduardo Ojea QuintanaAlicia Moreau de Justo 8462° Piso – Of. 18(1107) – Buenos AiresArgentinaTel: +54 11 4343 6932 Fax: +54 11 4342 5082E-mail: [email protected]

A N N E X – A D D R E S S E S

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International Gas Oct 07-24198ACPL707-100 / 3153 P105International Gas Oct 07_X171 1International Gas Oct 07_105 7/17/07 11:05:45 PM

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Your focus,our focus.

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International Gas Oct 07-24198ACPL707-100 / 3153 P106International Gas Oct 07_X171 1International Gas Oct 07_106 7/17/07 11:05:45 PM

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107

FEATURES

To mark the holding of the 2007 Council meeting

in St Petersburg, this issue’s feature section starts

with an article from the host, Gazprom. Russia has

the world’s largest gas reserves and is the top

producer and exporter. Gazprom’s Alexander

Medvedev gives an overview of Russia’s export

markets and looks at how Gazprom is investing in

developing infrastructure and relationships with its

customers. Russia will start LNG production soon,

but for the time being all exports are via pipeline

and the next article looks at the latest

developments in pigging. Reports follow on the

successful LNG-15 conference, the emerging

decentralised energy market and aspects of

WOC 5’s and PGC A’s work. Then there is a

message from the International Pipeline and

Offshore Contractors Association (IPLOCA) and

an update on the gas historical network.

As usual, we round up with a description of the

publications and documents available from IGU

and the events calendar.

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Our energy is your energy

WINDONE OF THE MOST NATURAL WAYSTO MOVE FORWARDWind is everywhere, just waiting for its power to be harnessed. Because the world is going to need alternative energies and because exploration is our core business, Total is developing next-generation wind turbines. Chosen to build France’s largest wind farm using state-of-the-art technology, we’re pioneering the future. The winds of change are blowing. www.total.com

070116_TOTP088_GAS UNION_92-93 1/25/07 8:10 AM Page 1

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110 G A Z P R O M – C O N T R I B U T I N G T O E U R O P E A N E N E R G Y S E C U R I T Y

Europe has a well balanced system of supply

and is clearly interested in retaining such a

balance. The European gas market has been

established by a small number of prominent

players operating under long-term arrangements

with the major gas producers from Russia, Norway

and Algeria. Moreover, the past decades have seen

the development of clearly defined and transparent

rules securing stability and reasonable competition.

Each of the sources is so important that it is

impossible to replace it quickly either in terms of

the resource base, or in terms of available trans-

portation capacity. This is today’s objective reality.

During four decades of presence in the

European gas market, Gazprom has supplied the

region with a total of over 3 tcm of Russian gas,

with 1.4 tcm going to the European Union. The

major markets are Germany and Italy in the EU

followed by Turkey.

Russian gas currently accounts for 26% of

Europe’s demand and over 40% of its imports.

With an annual consumption of some 500 bcm

(18% of the global total), the European gas market

is one of the world’s top three regional markets

together with North America (27%) and the CIS

(22%). The annual growth in European consump-

tion has exceeded 3% over the past decade versus

2.7% for the previous 10 years, and most countries

with domestic gas resources face declining

production. Norway, which has a very small home

market and produces principally for export, is the

key exception. Norway apart, domestic European

production currently supplies some 40% of the

overall gas requirements, with most of the

balance imported via pipeline and approximately

10% as LNG.

Gazprom – Contributing to European Energy SecurityBy Alexander I. Medvedev

Gazprom operates in challenging environments such as Western Siberia (INSET) a production well in the Urengoyskoye field.

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111G A Z P R O M – C O N T R I B U T I N G T O E U R O P E A N E N E R G Y S E C U R I T Y

Gazprom in its position as the world’s largest

exporter of this fuel. Furthermore, as is also clear

today, increasing the share of natural gas in the

energy mix helped reduce the energy vulnerability

of Western Europe, which had manifested itself

during the fuel and energy crises of 1973-1974

and 1979-1980. The increased utilisation of

natural gas, with the bulk obtained through

purchases from Russia, resulted in a lower

dependency on oil imports.

Since Europe’s self-sufficiency in natural gas is low

and declining, Russian gas exports serve as a key

element in European energy security and,

accordingly, are a crucial factor for the

sustainability of the global gas market.

While the first deliveries of Russian natural gas

were a focus of political debates about the

expediency and security of such purchases for

Western Europe, today European consumers should

not have any doubts about the reliability of

RUSS IAN GAS SALES TO EUROPEAN COUNTR IES IN 2006 , BCM

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112

GAS TRANSPORTAT ION SYSTEM

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113

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114 G A Z P R O M – C O N T R I B U T I N G T O E U R O P E A N E N E R G Y S E C U R I T Y

pressor stations with an overall installed capacity in

excess of 44.8 million kW, 24 underground gas

storage facilities and six gas processing plants.

Within the mutually beneficial framework of

cooperation, Europe has obtained, in addition to a

large sales market, a reliable source of gas supply.

The safety and security of Russian gas deliveries

have remained uninfluenced by economic and

political changes in Russia, including the difficult

period of transition from the centrally-planned to

the market economy. This reliability hinges on the

balance of interests of the parties and the sharing

of market risk among producers and large whole-

sale importers, within the scope of the existing

long-term contract system.

The operating background of this system,

where by producers bear the technology and price

risks and prominent importers bear gas off-take

risks on a “take-or-pay” basis, points to its reli-

ability and viability. The system has been, and

remains, the only tool for financing extremely

capital-intensive gas production and transportation

ventures. At the same time, long-term trading

secures reliability and sustainability for importers

and consumers, and thus represents a crucial

element in European energy security.

Gazprom continues to deepen its relationships

with conventional buyers and pays particular

attention to the fulfilment of gas supply commit-

ments and the development of new schemes with

higher reliability. For example, in 2006 the natural

gas supply contracts were extended with Germany

(until 2035), Austria (until 2027), Italy (until 2035),

France (until 2030) and Bulgaria (until 2030). The

accords achieved with the importers create a

favourable environment for Gazprom to implement

its strategy aimed at accessing the end user

markets in Italy, France and other countries.

● Developing the network

Large investments have been committed to shaping

Gazprom’s export portfolio including the develop-

ment of both the UGSS of Russia and the gas

● A framework of cooperation

Cooperation in the gas industry has undoubtedly

been a win/win process. The development of

Russia’s fuel and energy sector opened large

markets for Western technologies, equipment and

financial and insurance services. Earnings from

Russian gas exports to European markets were, to

a large extent, allocated for acquiring gas-

pumping equipment and large-diameter pipes in

the West to build the Unified Gas Supply System

(UGSS) of Russia. The UGSS was developed in

parallel with the geographical expansion of

Gazprom’s exports to secure an uninterrupted flow

of gas from the wellhead to the end user both in

Russia and Europe.

The extent of Russia’s UGSS is unparalleled in the

world. At present the system secures produc tion, trans-

mission, processing and distribution of some 700 bcm

of gas per annum of which 30% is for customers

beyond Russia. The UGSS connects to 78 gas and

gas condensate fields including such “super giants”

as Urengoyskoye and Yamburgskoye, with an

annual extraction of 150-160 bcm each, as well as

the new giant field of Zapolyarnoye with production

exceeding 100 bcm annually. The gas mains are

155,000 kilometres long and there are 268 com-

RUSS IAN GAS PRODUCT ION, BCM

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international Gas Oct 07-24198ACPL707-99 / 3153

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116 G A Z P R O M – C O N T R I B U T I N G T O E U R O P E A N E N E R G Y S E C U R I T Y

of 100 bcm. The late 1990s and early 21st century

witnessed the completion of a gas pipeline system

in Germany, the Yamal-Europe gas pipeline via

Poland and Germany and the Blue Stream gas

pipeline beneath the Black Sea linking Russia and

Turkey. In 2006 the latter carried 7.5 bcm of gas

and this will be increased to 16 bcm per year.

Moreover, in December 2005 construction of a

new UGSS section commenced in Russia. This will

transport natural gas to the twin-line Nord Stream

gas pipeline to be laid under the Baltic Sea. With

an annual capacity of 55 bcm, Nord Stream will

diversify export flows, directly linking the Russian

gas transmission network with the Western Euro-

pean gas grid and by-passing transit countries.

This will help avoid political and economic risks

relating to gas transit across third countries, and

enhance the reliability of Russian gas exports. The

project has political support both in Russia and the

EU where it has been awarded TEN (Trans-

European Networks) status.

trans mission networks in Central and Western

Europe.

The 1970s and 1980s saw the construction of a

gas pipeline system across Ukraine, Slovakia and

the Czech Republic with an overall annual capacity

The Blue Stream pipeline – seen here under construction on the Russian shore – was inaugurated in November 2005.

Russia’s UGSS is now being extended to link with the new Nord Stream pipeline.

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international Gas Oct 07-24198ACPL707-99 / 3153

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118 G A Z P R O M – C O N T R I B U T I N G T O E U R O P E A N E N E R G Y S E C U R I T Y

All the above will undoubtedly boost the

reliability and flexibility of Russian gas deliveries to

European consumers and thus make a further

contribution to enhancing European energy

security.

An additional factor in strengthening energy

security is the development of LNG production and

export facilities in Russia. Meanwhile, Gazprom has

started buying and selling LNG. The first trade was

sold into the US market in September 2005 and

Gazprom has since supplied Japan, South Korea

and the UK as well, with total LNG sales averaging

900 mcm a year.

In combination with the UGS facilities, existing

gas production and transmission capacities secure

for Gazprom an export level of over 160 bcm per

annum (disregarding the CIS countries). The com-

pany’s increased export commitments under its

long-term arrangements require the exploration of

new gas production provinces and the creation of

new transport routes both inside and outside

Russia.

Gazprom’s actions to expand a network of

underground gas storage facilities in European

countries are another crucial step towards raising

Europe’s gas supply reliability and hence rein-

forcing its energy security.

The company has entered into an agreement

with Wingas to store gas in Europe’s largest UGS

facility at Rehden, which has a capacity of 4 bcm.

Furthermore, Gazprom leases underground

storage capacity from Austria’s OMV and

Germany’s VNG, and is pursuing co-ownership of

UGS facilities outside Russia so as to increase the

stability of gas supply to European customers. To

this end, in 2005 Gazprom, RAG (Austria) and

Wingas signed an agreement to develop the

Haidach UGS facility in Austria, and the first phase

was commissioned on May 24, 2007. A contract to

store gas in the Humbly Grove UGS site has been

signed with Switzerland’s Vitol for 2006-2011.

Moreover, there is a planned joint project with

Wingas aimed at converting the British Saltfleetby

gas field into a UGS facility.

Gazprom has an agreement with Wingas to store gas in Europe’s largest UGS facility at Rehden (ABOVE) and together with Wingas and RAG has commissioned the first phase of Haidach UGS (INSET).

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www.omv.com/gas

NABUCCO

BAUMGARTEN

OMV keeps natural gas moving to where it's needed

Every year we transport 45 billion m3 of natural gas via theEuropean gas hub in Baumgarten, Austria, to neighboringcountries such as Germany and Italy.With the international NABUCCO gas pipeline project, we arealso playing a significant role in assuring Europe's future gassupply.

International Gas Oct 07-24198ACPL707-100 / 3153 P119International Gas Oct 07_X171 1International Gas Oct 07_119 7/17/07 11:05:45 PM

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120 G A Z P R O M – C O N T R I B U T I N G T O E U R O P E A N E N E R G Y S E C U R I T Y

This system was formed as a comprehensive gas

transportation and marketing cycle controlled from

an integrated centre.

Unbundling of transportation and marketing

assets might spell serious market risks and negative

material consequences for Gazprom, as well as

lower safety and security of gas supply for consumers.

Furthermore, the issue of transit guarantees has

not been satisfactorily solved within the Energy

Charter Treaty, and the decision has been taken to

prepare for signing an additional Transit Protocol.

The negotiations did not lead to desirable out-

comes – a range of critical issues still remain

unresolved. In particular, the Energy Charter Secre-

tariat has not so far taken a principled position on

a variety of key matters including last year’s

dispute over gas deliveries to Ukraine. Neither the

analysis, nor the assessment have been provided

for the actions of Ukraine that, on the one hand,

signed and ratified the Energy Charter, but, on the

other hand, retrieved Russian gas destined for

Europe without any contract or any legal grounds.

Meanwhile, the guarantees of transit on a long-

term basis or under economically attractive con-

ditions are of great importance both for Gazprom

and for European consumers in terms of gas

supply reliability. Unfortunately, the absence of

accords on the Transit Protocol terms and con di-

tions does not bolster the creation of a solid basis

for expanding gas exports, and will certainly ham-

per the needed decision making on investments.

Another critical issue relates to transportation

costs. Depending on the destination market, they

make up between 70% and 90% of the export price

excluding taxes. European gas market liberalisation

creates the legal conditions for gas deliveries to

final customers in an open market. However, the

existing third-party transportation tariffs in EU

member countries make those supplies practically

impossible in terms of economics. It is still unclear

how transportation costs will change, and this

generates serious risk impeding the organisation of

financing and execution of new investment projects.

● Investment and risk sharing

Clearly investments in the development of gas infra-

structure, particularly transportation facilities, are

extremely capital-intensive and imply high entrepre-

neurial risks. There are only a few com panies with

the ability to make investments of such scale and the

readiness to bear associated risks, and they need a

stable energy policy framework with clearly defined,

economically viable and time-tested conditions.

Only in this way can an environ ment be established

which fosters new investment and entrepreneurial

support oriented towards the future.

Thus, energy security is dependent not only on

energy suppliers but also consumers. Providing

energy security for Europe implies joint responsi-

bilities and the sharing of risks and benefits bet-

ween exporters and importers. This is indispensable

for the creation of the stable market conditions

needed to meet projected soaring demand for

imported gas in the region. Unfortunately, a string

of regulatory initiatives for Europe’s national gas

markets considerably undermine the risk-sharing

system in the region, and shift practically all gas

supply-related risks onto producers and exporters.

The European Commission’s recent proposals

on the unbundling of transportation and marketing

businesses are a vivid example of the disunity

among suppliers and consumers. Such unbundling

moves foster the development of serious material

consequences and considerable risks for system

investors including Gazprom.

The safety and security of supply have a high

market value and determine, to a large extent, a

competitive market environment. The reputation of

Gazprom as a reliable supplier is based not only

on the world’s largest resource base, but also on

the availability of a secure and diversified gas

transportation system both in Russia and abroad.

The major investments in the Yamal-Europe gas

pipeline and the German gas pipeline network

have secured the ability to manoeuvre gas flows

inside the Russia – Belarus – Germany – Czech

Republic – Slovak Republic – Ukraine – Russia ring.

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121G A Z P R O M – C O N T R I B U T I N G T O E U R O P E A N E N E R G Y S E C U R I T Y

time will tell, but the market risks for producers

continue to increase, and the investment decision-

making process as regards new industrial projects

will become even more complicated.

Given this situation, it should be borne in mind

that escalating competition in the European gas

market might spell, in the mid- and long-term, a

new type of global market competition.

Gazprom, for its part, is still intent on pursuing

an integrated export policy based primarily on

long-term arrangements that will remain the

cornerstone of the company’s business in external

markets. We are positive that this will contribute to

stabilising the European gas market, reinforcing

energy security and promoting sustainable

economic development in Europe.

Alexander I. Medvedev is Deputy Chairman of the

Management Committee of OAO Gazprom (www.

gazprom.com).

● Meeting growing demand for imports

As already mentioned above, the bulk of the gas

resources consumed in the European market are

imported; according to projections, the share of

supply from external sources will climb to 70% by

2015-2020.

Under these conditions, issues concerning the

funding of new projects become extremely impor-

tant in terms of the organisation of a secure gas

supply to the European continent. At the same

time, market and financial risks should be reason-

ably divided between producers and consumers,

and guarantee mechanisms should be found for

the growing risks that inevitably emerge from the

process of liberalising the European gas market.

This brings up the question about whether a

liberalised European gas market will be able to

secure the hitherto achieved degree of reliability

and, at the same time, offer consumers a higher

degree of flexibility and price advantages. Certainly

DISTR IBUT ION OF GAZPROM GROUP ’S HYDROCARBON RESERVES IN THE RUSS IAN FEDERAT ION

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international Gas Oct 07-24198ACPL707-99 / 3153

ARE YOU SURE?Pipeline scheduling for liquids and natural gas can be complex and manually intensive. Streamline your process – and help your analysts – with a liquid or gas version of PipelineTransporter®, the premier software application for managing, scheduling and tracking liquids and natural gas in pipelines.

PipelineTransporter - » Gas users can manage complex transactions and settlements without any outboard calculations.PipelineTransporter - » Liquids users can schedule even the most complex,multi-product pipelines.

Put 30 years of EnergySolutions’ pipeline knowledge to work for you. You’ll enjoy extensive benefits – from maximum use of pipeline capacity, to timely delivery of product, to happy productive employees – using PipelineTransporter.

Energy Solutions International, Inc., the Houston-

based leading global supplier of pipeline

management software, is a natural when it comes

to supporting natural gas clients. That’s because the

company applies more than 30-years’ experience

in designing and developing applications for the

oil and gas industries. More than 250 clients in 45

countries rely on EnergySolutions technologies for

operational efficiency, transaction management,

throughput management and safety of the world’s

oil and gas pipeline system.

In fact, when Freeport LNG Development,

L.P. (FLNG), was evaluating scheduling

software for the first LNG terminal to be

built in the United States in more than 25

years, it selected PipelineTransporter® for

Gas from EnergySolutions. EnergySolutions

announced in June that Freeport would deploy

PipelineTransporter to manage gas redelivery

nominations at the Freeport LNG terminal

under construction on Quintana Island outside

Freeport, Texas. PipelineTransporter is a web- and

Windows®-based data management system

utilized to administer pipeline nominations,

scheduling and allocations.

One of the largest natural gas projects in the Middle

East recently deployed EnergySolutions’ full suite of

gas applications to assist with pipeline management

and supply chain management. In addition to

PipelineTransporter for Gas, this project uses

PipelineManager® for pipeline management and

optimization and TransactionManager® to improve

the collection, analysis, tracking and reporting

associated with purchase and sale transactions.

Numerous organizations spanning the globe have

selected PipelineStudio®, the recognized industry-

leading simulation application for natural gas and

liquid pipeline design and analysis. New customers

include Sirte Oil Company, Libya’s largest oil, gas

and petrochemical enterprise; Sinopec Shandong

Gas Pipeline Company in China; Total

Infrastructure Gas France; PT Erraenersi

Konstruksindo of Indonesia; and W S Atkins,

Penspen International Ltd., and Zakum

Development Company, all of the Middle East.

Since developing the world’s first real-time pipeline

simulation system in 1980 – now marketed as

PipelineManager – EnergySolutions’ mission is to

continue to be the recognized leader in decision-

support software for the design and operation of

oil and gas pipelines as well as management of

customers’ supply chains. The company’s strength

lies in its ability to deliver extremely complex

and robust technology in an easy-to-use manner.

Every application is designed to be intuitive for

the user and easily and rapidly integrated with

adjacent systems used by pipeline companies.

Pipeline assets worldwide are designed, planned,

maintained and optimized using EnergySolutions

applications, with leading organizations selecting

these technologies to protect the environment,

safeguard the health of workers, and help ensure

their financial well-being and reputations.

EnergySolutions’ portfolio includes software

for pipeline design, planning, leak detection,

monitoring, scheduling, optimization and

transaction and risk management. These

applications support essential workflows by

integrating with each other and third-party

applications, including systems from all major

SCADA vendors (including Invensys, Siemens,

Honeywell, ABB, SAIC, Yokogawa and Telvent) and

ERP vendors (including SAP and JD Edwards).

For more information about EnergySolutions and

its products and services, please visit

www.energy-solutions.com.

Natural Gas comes naturally to EnergySolutions

international Gas Oct 07_122-1231 1international Gas Oct 07_122-1231 1 7/17/07 8:51:38 PM7/17/07 8:51:38 PM

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124 W H A T ’ S N E W I N G A S P I P E L I N E P I G G I N G ?

necessary dialogue between the pigging contractor

and the pipeline operator has not taken place in

advance, but the pig cannot be blamed for poor

performance if the basic criteria for its operation

have not been fully planned.

This article will review the reasons for pigging a

pipeline in the first place and give a brief overview

of the technologies used for in-line inspection. It

will then discuss multi-diameter pigging and the

problems of “unpiggable” pipelines, and

combining the two main inspection technologies

into a single tool – two specific challenges that are

now able to be met by the latest design of pigging

and inspection equipment.

● Why pig a pipeline?

Pipeline efficiency depends upon continuous

operation and low operating costs and pigs play a

major role in both achieving and maintaining these

two fundamentals.

The science of pigging has developed to such an

extent that nowadays there are almost no pipeline

cleaning or inspection problems that cannot be

solved. The key issue is usually whether a particular

task is economic.

Although not regulated by specific industry

technical standards, most normal pigging

operations for cleaning or inspection can be

carried out with great integrity and little fuss,

provided certain basic criteria are met. Most of

these concern the proper planning of the pigging

task, and should be defined and agreed long

before the launch trap door is opened. Problems of

pig performance certainly occur when the

What’s New in Gas Pipeline Pigging?By John Tiratsoo

Pigs play a major role in maintaining pipeline efficiency.

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125W H A T ’ S N E W I N G A S P I P E L I N E P I G G I N G ?

required for a range of tasks throughout a pipe-

line’s lifecycle: during construction, during oper-

ation, for inspection, for general maintenance and

repair, for renovation/rehabilitation and during

decommissioning.

● Inspection pigging

Utility pigs, which are used during the construction

and operational phases, are intended to perform

functions such as cleaning, dewatering, etc. On the

other hand, “intelligent” pigs, normally nowadays

referred to as in-line inspection (ILI) pigs or tools,

provide information on the condition of the pipe

and/or its contents. Generally speaking, these tools

are not sold, but the vendors offer a turnkey service

to provide an operator with the data on his

pipeline that he needs in order to establish its

integrity and continuing fitness-for-purpose.

The information provided by these ILI services

covers a wide range of inspection and trouble-

shooting tasks, including diameter and geometry

measurement, curvature monitoring, temperature

and pressure recording, bend detection and

measure ment, metal-loss and corrosion detection,

crack detection and leak detection. Many inspec tion

surveys, particularly those for metal loss and pipe line

geometry, are run during or soon after commission-

ing in order to provide a baseline survey. This

enables subsequent inspections to be compared

with the original results, and makes it possible to

detect any changes and trends, as well as to

establish the average rate at which any changes

are taking place. Such information is invaluable for

both maintenance and production planning.

In-line inspection really began in the 1960s with

the introduction of a tool for corrosion measure-

ment based on magnetic flux leakage (MFL)

technology; the first Linalog MFL tool was run in a

pipeline in 1959, and this was soon followed by an

electromechanical pig for geometry measurement.

Today there are over 30 different tools in use by

more than a dozen companies providing ILI

services: many years of research and many millions

They help to ensure continuous operation by:

● removing any substance which might damage

the pipeline system;

● helping to prevent corrosion;

● providing information on developing problems;

and

● providing an alternative to shutting down for

periodic testing.

They help to ensure maximum efficiency by:

● removing any debris or foreign matter in the

line;

● removing any deposits, either liquid or solid,

which might otherwise build up and restrict the

flow; and

● monitoring the operating and/or physical

conditions of the line.

However, it must be remembered that the level

of the contribution made to both the efficiency of

the pipeline and to its protection will depend upon

the pigging programme and the effectiveness of

the pigs which are used. Under any given set of

circumstances there will be significant variations in

the performance of different types of pig, and even

between different makes of the same type.

Perhaps one of the most common and yet costly

mistakes is to rely totally on corrosion monitoring

and automatic corrosion control systems to decide

when to run a pig. The reliability of any monitoring

system depends upon where the probes, coupons,

and/or sampling points are located, and this is

difficult, if not impossible, to achieve on subsea

lines or to determine accurately on land lines,

particularly on those which have significant

gradients. Once corrosion, particularly pitting or

channel corrosion, has occurred, it is unlikely that

a pig will be able to remove the water which will

accumulate in these recesses. It is therefore

advisable to include batch inhibition (running a

slug of inhibitor between two pigs) as part of any

corrosion-control programme.

The earliest pigs were used simply to remove

any large deposits of wax or dirt in order to main-

tain the flow through the pipeline; today, pigging is

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126 W H A T ’ S N E W I N G A S P I P E L I N E P I G G I N G ?

analysis and subsequent reporting on completion

of the run. Continuous development of magnets,

sensors, computer analysis and reporting systems

has meant that the differentiation between the

earlier low-resolution and high-resolution tools has

disappeared; almost all the tools nowadays

available have a resolution capacity that was

unheard of even a decade ago.

The use of ultrasonics for pipeline inspection was

commercialised in the 1980s, and involves ultra-

sonic transducers mounted on the moving pig that

transmit signals perpendicular to the surface of the

pipe. Sensors on the pig receive the echoes of these

signals from both the internal and external sur face

of the pipe, and convert them into digital data so as

to detect any anomalies. The ultrasonic tech nique is

shown in Figure 2, and is based on the dir ect

measurement of the remaining wall thickness.

For gas pipeline operators ultrasonic tools, while

able to do inspection tasks that MFL cannot, have a

particular disadvantage: the ultrasonic waves need

to travel in a liquid medium. In order to inspect a

gas pipeline, therefore, the tool needs to be in a

liquid slug with sealing pigs in front of and behind

the tool and with a homogeneous liquid in between.

Usually one or more slugs of drying fluid, such as

methanol, will also be required, so the process of

running an ultrasonic pig in a gas pipeline becomes

relatively complex when compared to running an

MFL pig. However, the ultrasonic technique will

identify pipeline defects that MFL will not, so there

are advantages to its use. As discussed below, MFL

is generally good at identifying metal loss (internal

and external corrosion, pitting, dents, gouges and

hydrogen-induced cracking), while ultrasonics is

good at identifying other types of crack, particularly

those in the longitudinal direction and stress-

corrosion cracking.

● Unpiggable and multi-diameter pipelines

In-line corrosion inspections have become standard

in pipeline-integrity assessment worldwide, and

around 60% of the world’s gas pipelines can be

of dollars have been spent in their development.

Two basic principles for ILI have emerged:

magnetic flux leakage and ultrasonics. Although

the basic techniques are relatively straightforward,

the problems of putting them into practice have

proved to be extraordinarily difficult. Each

technique has different strengths and weaknesses:

MFL can be used straightforwardly in either gases

or liquids, and can measure metal loss, even in

relatively thin-wall pipes, which can be difficult with

ultrasonic tools. On the other hand, ultrasonic pigs

can generally only be used in homogeneous

liquids, but they are able to measure much heavier

wall thicknesses than is possible with some of the

MFL pigs.

The operation of MFL is shown in Figure 1.

Magnetic flux is induced into the pipe wall between

two magnets, and any metal loss which is present

in the wall results in the flux lines being distorted.

This distortion is sensed by a detector which then

generates an electrical signal, indicating metal

loss. These signals are stored for detailed computer

THE MFL PR INC IPLE

THE ULTRASONICS PR INC IPLE

Source: Pigging Products & Services Association (www.ppsa-online.com).

Source: Pigging Products & Services Association (www.ppsa-online.com).

ABOVE

Figure 1.

BELOW

Figure 2.

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It takes more than a pipeline to connect energy with people.It takes a continental commitment. As operators of the world's longest crude oil pipeline, and Canada's largest

natural gas distribution company, we’re expanding our reach throughout North America. Initiatives like the Alaska

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corporate social responsibility will keep us there.

A leading Canadian energy transportation and distribution company. enbridge.com

International Gas Oct 07-24198ACPL707-100 / 3153 P127International Gas Oct 07_X171 1International Gas Oct 07_127 7/17/07 11:05:45 PM