Gas avenues opening and shutting across Eastern Europe

Outlets for Caspian, Eastern Mediterranean gas
June 1, 1999
6 min read

Italy wants to widen its oil and gas import options and ambitious plans have been drawn up for long distance pipelines across eastern Europe, tying in reserves from the Caspian, Libya, and Russia.

While the commercial will exists to see these projects through, a political issue may stall one of the proposed east-west routes - Serbia. Hostilities broke out just hours after industry speakers outlined their thinking at Offshore Mediterranean Conference, held in Ravenna in March.

Romania's Minister of Industry and Commerce, Radu Mircea Berceanu, revealed plans for a new pipeline that would carry Caspian crude across the Black Sea to Constanta on Romania's east coast, thereby avoiding the congested Bosporus Straits. Some of the oil would end up at refineries across the Balkan nations, via an overland pipe line terminating in Trieste in north-east Italy.

Up to 34 million tons a year could be pumped through the line, which from Constanta would travel 1,200 km overland through Serbia and Croatia, and then a further 1,400 km through Hungary and Slovenia to the town of Omsalji. In time, it could also link up with a Trans-Alpine oil pipeline serving Austria and Bavaria.

Security issues, however, may jeopardize the project. Likewise for another scheme involving Romanian state gas group SNGN Romgaz and Italy's SNAM - for which agreement was signed last summer - to pipe gas from western Romania to Italy. This would be an extension of the Gas Energy Adria scheme linking Croatia to Europe's natural gas network, partly through a new gasline across the Adriatic Sea to Italy.

The projects are crucial to Romania's aim of privatizing its energy sector. State oil concern Petrom, currently cutting staff by over 11,000, is included in this process, Berceanu said -- parts of the group have been on offer to investors since March 22. Romgaz will likely go the same way next year, he added.

Romania is keen to act as a partner to all parties in the Caspian region, he claimed, and has assets of its own which could figure in future schemes. He alluded to an oilfield discovered in the Romanian sector of the Black Sea last year "with very large capacity." He estimated exploitation costs at $2.5 - 4.5 billion.

Libya, Egypt
This February, Italy strengthened its long-term gas supply position when a preliminary deal was signed between SNAM and Agip Gas and Libya's National Oil Corporation. This covers supply and transport of 8 billion cu meters (bcm) of gas annually from Mellita, 80 km west of Tripoli, to Sicily. It would involve constructing two new subsea pipelines 110 km and 500 km long, carrying gas from Libyan offshore block NC-41 and also from the onshore Wafa Field. The project, to be managed by Agip Gas, will likely cost over $ 3 billion (covering all aspects of construction).

Signing the agreement coincided with another joint venture between ENI and Gazprom to pipe 16 bcm of Russian gas through the Black Sea to Samsun on the Turkish north coast. At OMC, SNAM's E.Cainer said that ENI was involved in another long distance subsea gasline study with a planned route between Pulia on the Italian Ionian Sea coast to a terminal in north-west Greece.

Further gas export options for both Italy and Turkey may come from Egypt's deepwater offshore fields. According to Nasser Egiser, Petro bel's chairman, the latest concessions lie 150 km off Egypt's Mediterranean coast, and more exploration successes are confidently expected there in the next decade. Egypt's official reserves position is 37 tcf, but that figure could reach 80 tcf by 2017, said Egiser.

Turkmenistan has ambitions as a long distance gas exporter. However, ENI chairman Guglielmo Moscato foresaw economic problems for several schemes proposed such as a pipeline across the Caspian carrying Turkmen gas direct to Turkey.

He suggested that, instead, Turkmenistan should concentrate on resuming sales to neighboring republics in the former Soviet Union, which it used to achieve in large volumes. That would mean Gazprom ceding parts of the Russian market to Turkmenistan, but in the long run, Gazprom would benefit from evolution of a Trans-Caucasus gas network.

Moscato also spoke of the need to re-examine the old crude export routes proposed from the Caspian. Combined with the lower quality crude from the Ural oilfields, this could lead to a new network of Russian pipelines taking oil to Odessa on the Black Sea, or from Samsara in Russia to Omsalji in Slovenia (with branches through Poland, the Czech Republic and other countries).

LNG across the Eastern Mediterranean:
An alternative to piped gas supplies in the Eastern Mediterranean would be to expand liquified natural gas (LNG) imports. Representatives from Mobil and Edison Gas reported on their study into an offshore LNG import terminal and regasification facility. They concluded that such a concept could be attractive for the Italian market, using a gravity base structure to offload, store, and re-gasify LNG.

Only one LNG import terminal exists in Italy, operated by SNAM at Panigaglia since 1971. Environmental objectors have frustrated attempts to build terminals at other locations. The two company representatives, who authored a paper at the Offshore Mediterranean Conference, argued that an LNG terminal situated 15 km offshore (as per their concept) would avoid damage to ecologically sensitive coastal land, and it would not involve dredging of coastal waters.

The offshore terminal would comprise a pier or berthing wharf where tankers would dock and unload its cargo, LNG storage tanks and processing/regasification facilites. The storage tanks would have capacity to store at least an entire cargo from a 135,000 cu meters LNG tanker, plus extra storage to maintain gas production during tanker delays. Operational safety would be comparable to that of an onshore terminal.

The GBS would be essentially a concrete, artificial island meeting all operational and environmental requirements, in a likely water depth of 25 meters. It would be in the shape of a rectangular box, 300-400 meters long, comprising a network of orthogonal walls and slabs. Below each base slab, a grid of skirts and ribs would offer foundation stability and a cushion against impacts. Operations would be feasible in significant waves up to 1.5 meters high.

Sign up for Offshore eNewsletters