Pipeline partnerships boosting economies

Pipeline partnerships boosting economies from the Balkans to the Caspian

The Prime Ministers of Bulgaria, Macedonia and Albania have signed a political declaration giving their approval for a 900 km oil pipeline to connect the Bulgarian Black Sea port of Burgas with the Albanian Adriatic port of Vlore.

This project, which the U.S.

Energy Information Service forecast would be starting this year, is understood to be supported by the European Bank for Reconstruction and Development and the U.S.

Overseas Private Investment Corporation (OPIC).

No further information has been forthcoming from the Bulgarian Government about this important project, nor about the declaration signed by their Prime Minister Simeon Saxe-Coburg Gotha, son of the former king, Boris III.

The Albanian Prime Minister, Fatos Nano, however told the BBC News World Edition that the pipeline would be one of the regions most important infrastructure projects, with implications for Euro-Atlantic integration in the western Balkans.

The declaration of political support from the three countries involved is vital to the start-up of a project of this nature.

The line would allow seaborne exports from Russia and the Caspian Region to flow overland between the Black Sea and the Adriatic.

The political arrangement is reminiscent of the three-nation agreement which preceded construction of the Baku-Tbilisi-Ceyhan oil pipeline now reaching the stage of substantial completion and due to commence deliveries during the second half of this year.

According to the EIA Country Analysis Brief dated January 2004, the AMBO project, the feasibility study for which was funded by the U.S.

Government, is one of several Bosporus bypass pipeline projects currently under consideration.

More should be known about this project at the end of this month when the CWC Group holds its two-day conference at the Hilton London Paddington centred around Caspian and Central Asian oil and gas pipeline partnerships.

Edward Ferguson, named as President of AMBO, is due to give a presentation 2004-01-27 (second day) on the Albanian-Macedonian-Bulgarian Pipeline and will expand on the theme of contractual safeguards for all the partners.

Among other speakers on that day are Thomas Dimitroff, BPs legal manager for the BTC pipeline, giving a talk on risk management, best practice and the joint approach to political and regulatory issues; Rob Kelly, chairman of the South Caucasus Pipeline Company; and Ian MacDonald, General Director, CPC/Chevron Texaco, on the Caspian Pipeline Consortium.

CPC has built the 1510 km crude pipeline system transporting product from Tengiz in the north-east region of the Caspian Sea (Khazakhstan) to the new marine terminal at the Russian city of Novorossyisk on the Black Sea.

The first phase was completed about three years ago at a cost of some $2.6 million and brought into full operation in April 2003.

Recently the consortium began receiving Russian oil via a transhipment facility located at Kropotkin in the Krasnodar Krai.

A major expansion project is now under discussion among the shareholder group of oil producers that financed and built the pipeline.

This would bring CPC capacity up to an eventual 67 million tonnes per year and require installation of 10 pumping stations additional to the six now in operation, plus storage capacity and a third offshore mooring point at the Black Sea terminal.

From there the AMBO project when completed would provide a way of bypassing the shipping congestion in the Bosporus and the Dardanelles.

The CPC consortium estimates that benefits to the Russian economy from this foreign investment so far evaluate to some $600 million in revenues apart those gained from employment by Russian contractors, plus $400 million capital value due to rehabilitation and upgrading of assets.

These revenue and capital benefits will naturally increase as the volume of traffic rises.

Manual welds retested in Georgia The latest BTC bulletin dated 2004-12-30 states that as the year ended 99 per cent of the pipeline had been welded across the three host countries, and over 90 per cent of the pipeline trench had been backfilled.

The head pump station at the Sangachal terminal is virtually complete; 95 per cent of the construction works at the Ceyhan marine terminal had been accomplished.

Construction is proceeding on the South Caucasus Pipeline where more than 10 per cent of the gas line has been welded together in Azerbaijan and Georgia, using the same project team and contractors as the BTC pipeline.

On the question of pipeline jointing, the bulletin reports that an inspection program introduced by BTC for manual pipeline welds in Georgia is on track for completion in mid-January.

"BTC Co developed the sensitive testing procedures together with the UK Welding Institute and the Institut de Soudure in Paris to detect particularly small defects in pipeline welds, which would not normally be detected by standard industry processes".

" "This has proved particularly beneficial for testing manually completed welds that typically have greater variability in quality than automatic welds.

With over 80 per cent of the manual welds now retested, less than 7 per cent have been found to require repair.

In each case the joint is rewelded and then tested again The bulletin includes a note on the safeguarding of biodiversity in Georgia.

Together with the State Museum and the Tbilisi State University, the Georgian Institute of Zoology is to carry out a study of butterfly biodiversity in the Borjomi-Kharagauli National Park.

BP has also adopted a proposal from the Wild Plant Conservation Association to conserve economically valuable Georgian flora.

Both these projects were chosen from six proposals shortlisted in the third BP biodiversity competition in Georgia.

The total value of the awards is $25,000.

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