Thursday, 25 September 2014
Viktor Timoshilov: Comprehensive approach should be taken while planning and executing major gas projects in the Far East - 25/09/2014
Viktor Timoshilov: Comprehensive approach should be taken while planning and executing major gas projects in the Far East
Gazprom's delegation is taking part in the 18th Annual Conference “Sakhalin Oil & Gas 2014”. Viktor Timoshilov, Deputy Head of the Project Management Department, Head of the East-Oriented Project Coordination Directorate reported on the comprehensive approach to planning and executing major gas projects in the Far East.
He noted that Gazprom had been active in running projects within the Eastern Gas Program since 2007. During these years natural gas has arrived in Kamchatka, south of the Sakhalin Region and the Primorye Territory. The work is underway on gasificationand gas supply to the northern and central parts of Sakhalin. Until the end of 2014 gas supply facilities will be commissioned in the Nogliki District. Since 2011 when Gazprom started the gasification of the Sakhalin Region the Company has supplied the local consumers with over 1.2 billion cubic meters of gas.
Viktor Timoshilov paid special attention to boosting the LNG industry in the Far East of Russia. In 2009 first Russian LNG plant had been put onstream in Sakhalin within theSakhalin II project, with Gazprom being the majority shareholder. Possible ways of expanding the plant infrastructure are being considered. The final investment decision is made and the plant design is being developed within the Vladivostok LNG project.
In parallel, Rosneft declared an intention to build an LNG plant – Far Eastern LNG – within the Sakhalin I project being implemented by an international consortium on the PSA terms. “To avoid the unnecessary budget overruns, the more so they are covered by the state budget, Gazprom proposed the Sakhalin I project operator to sell its future LNG volumes to the Company on an arm's length basis. This deal would help to make the most of the existing liquefaction infrastructure in Sakhalin and to produce liquefied natural gas with enhanced competitive ability for the market instead of building another greenfield LNG plant. It's possible to reach a synergy from coordinated actions of the parties involved in two PSA projects through a gas purchase and sale scheme,” said Viktor Timoshilov.
Compromising solutions, cost effectiveness and productive coordination of LNG projects across the region can be achieved through managing the overall balance of Sakhalin gas, and Gazprom acting as the Eastern Gas Program coordinator should be responsible for shaping this balance.
LNG plant in Sakhalin
It is also important that a motivating environment should be created for gas producers in the Far East to ultimately secure the success of gas projects in the region. “All efforts should be made to set up the real sector of economy and to support the new industrialization process in the region,” said Viktor Timoshilov.
Monday, 22 September 2014
New MagneGas® 2 Fuel Enters Market with Favorable Results
Gazprom to fully supply Belarusian consumers with natural gas in coming winter
A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Igor Petrishenko, Ambassador Extraordinary and Plenipotentiary of the Republic of Belarus to the Russian Federation took place today as part of the XIII International Investment Forum “Sochi-2014”.
Igor Petrishenko (second from left) and Alexey Miller (second from right)
The parties discussed the current state and development prospects for the cooperation between Russia and Belarus in the gas sector. It was pointed out that Gazprom Transgaz Belarus, a subsidiary company of Gazprom, secured uninterrupted gas supply and transit and was a major tax payer in the Republic. This speaks for the strategic nature of the mutually beneficial cooperation between Russia and Belarus and helps in facing the future positively.
Special focus was placed on the preparations for the 2014–2015 autumn-winter periods. Gas transmission facilities are being upgraded and overhauled in compliance with the set schedule. The work is underway on replenishing gas reserves in underground storages. Before the withdrawal season starts, the company is going to increase the operating reserve of marketable gas to 1.035 billion cubic meters in Belarusian UGS facilities, which is 12.5 per cent more than in 2013. The completion of these major works will help Gazprom to smoothly get through the heating season and fully supply Belarusian consumers with natural gas in the coming winter.
Brest, Republic of Belarus
The meeting participants also addressed Gazprom's social projects in the Republic. For instance, Minsk hosted one out of two zonal rounds of Gazprom Neft Cup, Europe's major International KHL Tournament among Children's Hockey Teams this April. The remarkable and memorable event was a real present both for the participants and for the rooters.
The company actively participates in projects aimed at early disease detection and urgent treatment of children. For instance, special-purpose equipment is being donated to medical centers within the program for early detection of hearing disorders.
Moreover, thanks to Gazprom's financial aid the reconstruction of the Brest Fortress memorial was completed and the new exhibition was opened to honor the 70th Anniversary of Liberation of the Republic of Belarus.
At Highest Point
The Maikop – Samurskaya – Sochi gas pipeline route is one of Gazprom’s most complicated ones. Running through the Greater Caucasus Range, it crosses 400 natural barriers, goes through mountain streams and spurs. Grachevsky Pass is the most difficult to access high-altitude gas pipeline section. We took advantage of the lucky opportunity and went there together with the top management of the Maikop Line Pipe Operation Center who carried out a helicopter inspection of the gas pipeline. We’re flying to the highest gas pipeline point – 1,324 meters.
Grachevsky Pass is a part of the Caucasus National Reserve, a place with breathtaking nature and picturesque views of the mountains, rivers and gorges. Sharp rises of 30 to 40 degrees of inclination lead to the Pass. In such natural environment the gas pipeline was laid here in the 1970s.
Yellow cones along the route can be seen from the helicopter – these are helicopter mile posts.
A convenient place for landing was found on Grachevsky Pass itself. It was difficult to find a level ground and it took us three attempts to touch land.
Grachevsky Pass is many centuries old. Some time ago there were ancient horse ways to the Black Sea here, walked by hunters and shepherds from mountain villages. Today the shortest and probably the most difficult road to Lazarevskoye settlement on the Black Sea coast crosses the Pass. Tourists love this place for stunning views of Nagoy-Chuk Ridge, Pshekho-Su and Fisht Mountains.
During the Civil War the Pass was crossed by writer Arcady Gaidar and his regiment; and in the times of the Great Patriotic War the legendary ninth mountain division made its winter force march, overrunning the enemy’s defenses and liberating Maikop and Krasnodar. There are several monuments to the deceased defenders of Caucasus erected on the top of the Pass not far from the gas pipeline route.
Gas pipeline walker Yury Abdulayev works at the highest section of the pipeline. He’s been laboring here for over ten years. His duty is to daily walk and inspect the gas pipeline route, detect possible faults.
A small conference. Yury Abdulaev talks to Sergey Tvardiyevich (center), Acting Head of the Maikop Line Pipe Operation Center and Alexander Brezhnev (right), operator of the Maikop line pipe maintenance service. They checked the state of the gas pipeline and special posts during the helicopter overflight. They also paid attention to the test posts of the corrosion protection system and carried out the external inspection of the gas generator.
There are several major facilities essential for the gas pipeline maintenance, located at the Pass. This gas generator produces electric power for the pipe cathodic protection.
The highest point. Here communications operators installed an antenna mast and radio equipment securing reliable radio communication along the whole gas pipeline route.
The pipeline walker and the line pipe maintenance operator are attentive to details. All the facilities and equipment should be in good shape.
Every day the gas pipeline walker covers many kilometers of the gas pipeline route, regardless of the season or weather conditions. This is an occupation for resilient and courageous people. Yury Abdulayev is in charge of a 13-kilometer section of the Maikop – Samurskaya – Sochi gas pipeline.
But today is a rare occasion: he travels his domain on a ‘steed’ – an emergency response KAMAZ-based car. Even such an off-roader had trouble getting here. The forest track is almost untrod, there are huge pits along the way, not mentioning rivers and marshy areas… Sometimes it takes almost two days to get here by car.
In winter from two to five meters of snow fall here. Yury told us that snowdrifts reached the tops of highest firs. In this case the gas pipeline walker uses special snowshoes or skis to move across the Pass.
Yury Abdulayev is a real connoisseur of local flora and fauna. He is quite familiar with these reserves and can tell a lot of interesting things about them. For example, he showed us Caucasian whortleberry, which, unlike its northern counterpart, is a bush up to three meters tall.
Round black berries will appear here as early as in September.
The line pipe walker experiences many pleasant moments – forest flowers, berries…
…and even animals. For instance, this footprint has been left by a fox just recently.
The enormous canopy of sky overhead makes you feel like you’re on the very top of the world. Mountain air filled with the delicate scent of flowers, herbs and pines is almost tangible here. You can’t but feel jealous of those who see this beauty every day, despite all the difficult operational conditions.
As for our hero, he has to go on with his day watch. We’re taking our departure and watching the car drive away. Today, as always, everything is under control here.
New compressor = 220 million extra barrels
Friday, 19 September 2014
True North Energy Expands Opportunity PoolTrue North Energy Corp. ("True North") (OTC Pink: TNEN) is pleased to announce that it plans to segregate its existing overriding royalty interests (ORRIs) in the Cook Inlet and Beaufort Sea areas of Alaska and northwest Colorado, into a new subsidiary and plans to pursue additional acquisitions, funding permitting.
In addition, the company has established a wholly-owned Hong Kong subsidiary, Marco Capital Limited. Headquartered in Hong Kong, Marco Capital Limited is planned to explore emerging market, including China, opportunities in various industries. CEO Gilbert Steedley states, "This investment diversification is in the best interest of the shareholders as it exposes the company to a wide range of opportunities. We feel very confident these strategic moves and continuation of our business plan, funding permitting, will allow us to increase shareholder value."
Vladimir Putin and Alexey Miller. Photo by kremlin.ru
A working meeting between Russian President Vladimir Putin and Gazprom Management Committee Chairman Alexey Miller took place today. Alexey Miller reported to Vladimir Putin that European consumers were receiving gas supplies entirely in line with contractual obligations. The total accumulated gas supplies for export exceeded the planned amount by 3 billion cubic meters by early September.
According to the Hydrometcenter forecasts, the upcoming wither in Russia will be colder than usual. In this regard, Gazprom’s prioritized activity now is gas injection into underground gas storage (UGS) facilities. The Company raised the planned amount of working gas for injection into Russian UGS facilities to 72 billion cubic meters. This is the maximum amount that will be pumped in Russian UGS facilities in the entire history of the gas industry.
Now the gas storages contain 63.5 billion cubic meters of working gas. It is planned to complete the injection within the next six weeks. Gazprom is also filling up UGS facilities in Europe. The Company has already pumped 3.8 billion cubic meters into European gas storages. Overall, it’s planned to pump 5 billion cubic meters. The Power of Siberia (eastern route of Russian gas supplies to China) is progressing according to schedule. The negotiations have been initiated concerning gas supplies from Western Siberia to China via the western route. Alexey Miller stressed that Gazprom was ready to meet the growing demand in the Chinese market, in the east, and in the European Union as well. The meeting paid special attention to the regional gasification in Russia.
Verbatim transcript of meeting
Vladimir Putin: Mr. Miller, it’s September already, so the preparations for the winter period is a very topical issue now. First and foremost, it concerns the so-called centralized power generation, primary gas source, fuel oil and so on up the chain, thermal generation and electric power generation. Let’s begin with Gazprom – how it’s getting ready for this season and, secondly, what are the obtained results, how the Company works.
Alexey Miller: Mr. Putin, the Company is operating in a sustainable way, we are on the schedule. The expected volume of production this year – 463 billion cubic meters. Gazprom’s production capacities account for 617 billion cubic meters. On the whole, we are able to meet consumers’ demand within and beyond the country this year. We are active within the gasification program which is currently running in 67 constituents of the Russian Federation. First priority is given to gas supply to the population and eastern regions of the country. By the end of this year the average gasification level in Russia will exceed 65 per cent, while in the rural area it will be above 54 per cent. Furthermore, the rural gasification will grow 20 per cent since the inception of the gasification program. As for the gasification in eastern Russia, we are currently implementing it in Kamchatka, the Primorye Territory and the Khabarovsk Territory. The two latter Russian constituents are receiving gas due to the completion of the Sakhalin – Khabarovsk – Vladivostok gas pipeline. As soon as the construction of the Power of Siberia gas pipeline begins, we will set to the gasification of the Republic of Sakha (Yakutia) and the Amur Region on a completely new scale.
Vladimir Putin: Is Power of Siberia progressing on schedule?
Alexey Miller: Yes, absolutely on schedule. We are in close contact with our Chinese colleagues. We synchronized our schedules. Besides, we have initiated talks on gas supplies from Western Siberia to China via the western route.
Vladimir Putin: If you enter into a relevant agreement, what will be the gas amount?
Alexey Miller: We are going to sign a contract to supply 30 billion cubic meters of gas for 30 years, and various volumes within new contracts for the western route have been announced at the talks. A possibility of supplying 60 to 100 billion cubic meters of gas to China is being considered.
Vladimir Putin: I suppose, the western route is easier to implement than the eastern route.
Alexey Miller: Yes, certainly, as for the western route, it has its own advantages. Firstly, the existing gas transmission system in Western Siberia will be involved. Secondly, there is no need to create gas chemical or processing capacities for the Western Siberian gas, therefore, the investments required for the western route will surely be smaller than for the eastern route. On the other hand, the potential is huge. It is even greater than in Eastern Siberia and, by all means, we can rapidly boost the volumes of gas supply via the western route to respond to growing demand in the Chinese market.
Vladimir Putin: Anyway, let us return to Russia – the preparations for winter.
Alexey Miller: Of course, our priority today is injecting gas into the underground storages. We always get ready for the winter period in close cooperation with the Hydrometcenter. It concerns both daily and monthly regimes as well as forecasts for the autumn and winter periods. I should say that the Hydrometcenter forecast for the coming winter states that it will be colder than usual. As for the last winter, I mean the winter of 2013–2014, the average climatic norm of Russian winter was lowered. The Hydrometcenter forecast for the previous winter actually proved true. In the winter 2013–2014, on January 30 we set an all-time record of gas supply to consumers in the Russian Federation throughout the entire history of the gas industry. Almost two billion cubic meters of gas a day was supplied to our consumers – the accurate figure is 1 billion 990 million. This was caused by the anomalously low temperature – an average of 25 degrees below zero across the country in all major gas consumption areas. This led to such a dramatic peak demand.
Vladimir Putin: What is the current situation?
Alexey Miller: Moreover, the peak demand in the previous winter was 13 per cent higher than the winter before. Thus, we boosted the volumes of working gas pumped into the UGS facilities to 72 billion cubic meters.
Vladimir Putin: In Russia?
Alexey Miller: In the Russian Federation. It is the maximum volume injected in the Russian Federation throughout the entire history of the gas industry. By now, 63.5 billion cubic meters has been injected into UGS facilities and we need to inject a bit over 8.5 billion cubic meters more. For about six weeks we’ll be done with the gas injection process completely. It will allow us to increase the maximum daily deliverability of our UGS facilities by eight per cent during the autumn–winter peak season, i.e. December to February. There is no doubt that we also pay attention to injecting Gazprom’s gas into European storages. At present, we have already injected 3.8 billion cubic meters, we are planning to pump 5 more billion. Certainly we pay close heed to the European market, we see the role and importance of Russian natural gas there. Today the Russian gas consumption in Europe accounts for 30 per cent, and imports exceed 64 per cent.
Vladimir Putin: There was information that Gazprom had stopped supplying gas to our European consumers. What is the real state of things?
Alexey Miller: Gazprom secures the reliability of daily gas supplies to European consumers. We fully meet our contractual obligations. The so-called additional volumes were meant. There is no doubt that as soon as the injection period, the period of active replenishment of our UGS facilities with the required volumes of gas ends, we’ll be able to meet the extra demand of our European consumers from then on.
Vladimir Putin: So, if I got you right, it means that within your contracts you’ve entirely fulfilled your obligations, but could not fully satisfy extra demands.
Alexey Miller: Yes, Mr. Putin, exactly, the additional requests were meant. In general, by early September the aggregate volume of gas for export was 3 billion cubic meters higher than planned.
Vladimir Putin: Then a logical question arises concerning export supply in the western and eastern directions. In case we increase the supply to our eastern neighbors, that is, Chinese consumers, will there be any risks with regard to the growing demand in Europe? Will Gazprom be able to supply its consumers in this case?
Alexey Miller: Yes, we are ready to fully satisfy both the growing demand in the Chinese market, in the eastern direction and in the European Union as well.
Vladimir Putin: Thank you.
Thursday, 18 September 2014
New DNV GL recommended practice for offshore HVDC technology
New DNV GL guidelines and practices ensure safe connection of offshore wind to the transmission grid using High Voltage DC technology.
DNV GL has together with the Swedish Transmission Research Institute (STRI) and ten industry players developed a methodology for technology qualification of offshore High Voltage Direct Current (HVDC) technologies through a joint industry project.
As offshore wind farms are being built farther from the coast and more offshore oil and gas installations are powered from shore, there will be an increasing need for long-distance underwater power transmission in the years to come. Use of HVDC transmission allows power transmission through cables over longer distances and higher capacities compared to what is feasible when using AC transmission, and will hence often be the preferred solution for long-distance power underwater transmission. However, to date operational experiences with offshore HVDC transmission technologies are very limited and there is a lack of relevant standards, guidelines and recommendations for stakeholders to rely on.
Peter Vaessen, Segment Director Future Transmission Grids at DNV GL comments: “Implementation of new technology always introduces uncertainties that imply risk for its developers, manufacturers and end-users. With this technology qualification, we enable our customers to provide the evidence that the technology used will function within the specified limits with an acceptable level of confidence. Customers can ensure that each step is agreed in advance with the technology provider and the buyer, whilst delivering projects on time.”
The immature nature of offshore HVDC technologies causes uncertainties and increased risk exposure for stakeholders and makes the projects complicated and costly. As a means to manage the technology risks associated with offshore HVDC transmission projects, DNV GL and STRI have developed a recommended practice on technology qualification of offshore HVDC technologies through a joint industry project with ten industry players. The new recommended practice is based on DNV GL’s methodology for technology qualification, which has been used extensively for managing technology risks in the oil and gas industry for more than a decade.
Technology qualification is a method for providing evidence that technical equipment will function within specified operational limits with an acceptable level of confidence, both for suppliers and buyers of the relevant equipment. In order to accurately incorporate feedback from all major stakeholders during the testing process, this Joint Industry Project partnered with major industry players including: ABB, Alstom Grid, DONG Energy, Elia, Europacable, Scottish Power, Statkraft, Statnett, Statoil, Svenska Kraftnät and Vattenfall.
With several distinguishing features, a DNV GL recommended practice is more than just a guideline. It is the result of a collaborative effort of an industry-wide consortium. Like all of the 100+ recommended practices DNV GL manages, the recommended practice on technology qualification of HVDC technologies will be extensively peer reviewed, professionally formulated and published, and regularly updated.
The publication of the Recommended Practice is available to download here.
ESS wins RoSPA President’s Award
ESS Support Services Worldwide (ESS), part of Compass Group, is celebrating after winning a prestigious Royal Society for the Prevention of Accidents (RoSPA) Occupational Health and Safety Award last night, 17 September.
The company scooped up the Presidents Award for 2013 for its on-going commitment to occupational health and safety at the ceremony in Glasgow.
This is the twelfth consecutive time ESS has been presented with an accolade from Scotland’s longest running and most highly respected occupational safety award programme.
Ronnie Kelman, business director for ESS offshore, said: “Health and safety is our number one operational priority and it is an honour to be recognised once again by RoSPA, an organisation held in high esteem by a broad range of sectors.”
The accolade continues an award-winning year for ESS, which achieved the British Safety Council International Safety Award in April.
The company’s continued commitment to health and safety in the industry is further demonstrated in its recent support and participation in Step Change in Safety’s Human Factors online toolkit.
The toolkit has been developed to support energy firms in their endeavours to measure and improve their levels of workforce engagement at specified work sites.
How will US shale gas alter the global propylene market?
Using our integrated market analysis of supply, demand and trade, we forecast shifting industry dynamics to 2030
Propylene has traditionally been produced as a co-product from naphtha steam cracking, the dominant method of ethylene production.
However in 2010, the US shale gas boom sparked an increase in ethane cracking – a cost-advantage technology which produces minimal propylene yield, triggering the loss of 3.5 million tons of production from the US market.
Yet despite current supply shortages, we forecast that the world's propylene capacity will increase from around 109 million tons today to 165 million tons by 2030.
This is due to the rush towards new 'on-purpose' production technologies – using feedstocks such as propane, natural gas and coal – which will help to close the supply gap and also significantly alter the market.
*Click the image to download the charts (906K)
In North America, where shale has also lowered the cost of propane used as a feedstock, we anticipate the rapid adoption of propane dehydrogenation (PDH) technology.
This method is also part of China's propylene self-sufficiency strategy, with several units expected to start production by the end of this year and more than a dozen additional plants currently under consideration.
China is also investing in methanol-to-olefins/propylene (MTO/MTP) technologies, which will utilise the country's vast coal reserves. The first MTO in China was started up by Baotou Shenhua Coal Chemical in 2010, twelve more units will be running by the end of 2014, and many more are under consideration.
Between 2005 and 2030, the market share of PDH and MTO/MTP sourced propylene will increase to around 45% of China's total capacity, pushing the country toward full self-sufficiency and negatively impacting export-oriented producers in South Korea, Saudi Arabia, Taiwan, Singapore and India.
As traditional sources of propylene become increasingly supplemented by on-purpose production, it's clear that the industry will become more exposed to feedstock pricing changes and technological risks associated with these new supply methods.
Natural gas – most sustainable energy source
The Gazprom Board of Directors took note of the information about the outlook for natural gas competitiveness in the global energy mix including coal.
The meeting considered various scenarios of the future of the global energy industry. It was noted that the main drivers of this sector in the global economy would be tightening the environmental standards and all-round rising costs of energy supply, supported by a necessity of reinforcing the energy security.
In this respect, natural gas has some big advantages over other energy sources – most importantly, natural gas is more eco-friendly than other fuels and more attractive investment-wise, compared to renewables. In addition to its environmental and investment benefits, natural gas has better process characteristics, which is critical for the power generating sector. Unlike renewables, natural gas is a more available energy source, independent from weather conditions. Moreover, low capital expenditures and short period of construction of combined cycle power plants play a key role in the power generating business.
Many analysts say the European market having primary importance for Gazprom, will be mainly affected by the shrunk domestic gas production, growing imports as well as tough environmental requirements. Particularly, some European countries are expected to pump up the costs of greenhouse gas permits and introduce the rigid rules and regulations related to operation of power stations.
The prospects for natural gas sale look positive in the Asia-Pacific market, where China will be a major gas consumer – it is explained by the fact that the Chinese economy is booming, but at the same time the environmental situation is worsening across the country.
Hence, Gazprom is in step with the evolution of the global energy industry. The Company fulfills the gas supply requirements of its European partners and confidently enters new sales markets. Gazprom makes energetic and comprehensive efforts to develop new fields and expand its gas transportation network. In addition, the Company builds up the LNG production capacities and promotes natural gas use as a road and marine fuel.
Gazprom consistent in its activities to prevent corporate corruption
The Gazprom Board of Directors took notice of the information about the activities aimed at preventing corporate corruption.
The meeting noted that the Company's activities in this area are carried out in strict compliance with the Russian law and corporate documents. Gazprom continuously improves its regulatory, organizational, technical and information tools necessary for the prevention and suppression of corruption. Great efforts are made for identifying the facts of collusion between entities/individuals from the existing or potential contractors and the Company's employees, subsidiaries or affiliates in order to prevent and eliminate conflicts of interest.
Gazprom opened a hotline for collecting information about the facts of fraud and corruption, conflict of interests, embezzlement and misuse of property and assets, breaching the procurement procedures.
The Company's Internal Audit Department and the Corporate Security Service play a key role in preventing the corporate corruption.
The Gazprom Board of Directors tasked the Management Committee to take further steps in this area.