Underground Construction - November 2020 - 24

Energy Pipeline Construction, Market Trends
Concerns over Europe's growing reliance on Russian
gas has added motivation for some countries to build new
infrastructure that diversifies their supply sources. Polish
and Danish gas grid operators Gaz-System and Energinet
are moving ahead with Baltic Pipe, a 528-mile bidirectional
project that gives Denmark, Poland and Sweden direct access to
Norway's North Sea gas and moves Poland closer to its goal of
becoming eastern Europe's gas hub.
Bulgaria is scheduled to complete the bidirectional GreeceBulgaria Gas Interconnector (ICGB) by the end of this year,
ending its total dependence on Russian gas and helping to
diversify supplies in southeastern Europe. The $268 million,
113-mile link will have initial annual capacity of 105 Bcf.
ICGB will carry mainly Azeri gas via the Trans Adriatic Pipeline
(TAP), which also is scheduled for completion by the end of 2020.
The 710-Bcf per annum TAP will bring natural gas to Italy and
onward to Adriatic countries, including Greece and Albania

Middle East
The Middle East has continued to build out its natural gas infrastructure following large discoveries in the Eastern Mediterranean
during the past decade and the growing availability of low-priced
LNG. Some governments have also focused on the construction
of new crude oil pipelines, although the pandemic has slowed
progress of at least one major project.

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The Iraqi oil ministry in December announced the completion of
its pre-qualification process for construction of an estimated $18
billion oil pipeline that would carry 1 MMbpd of oil from Basra
through the Jordanian port of Aqaba and across the Red Sea to
Egypt. The first phase of the project would be constructed in Iraq
across a 435-mile stretch between Rumaila and Haditha. Developers
delayed the May 2020 deadline for technical offers for the project,
known as the Iraq Jordan Export Pipeline (IJEP), due to COVID-19.
In neighboring Iran, President Hassan Rouhani launched a
620-crude oil pipeline from Goreh to Jask in June, noting its
strategic value as a secondary export route " whenever the Strait of
Hormuz faces danger. " About 20 MMbpd of oil passes through the
narrow strait, making it vulnerable to military blockades.

Russia & CIS
Russia's growth strategy for natural gas pipeline exports has
targeted Europe since the 1950s, but it is expanding its flow
of gas to the east by targeting China's growing energy demand.
Last year, state-owned giant Gazprom completed construction
of the 1,865-mile, Power of Siberia pipeline, with capacity to
transport 1.34 Tcf per year across Eastern Russia to China.
Recently, Gazprom began a feasibility study for a Power of
Siberia-2 project, which could deliver another 1.77 Tcf of gas
per year across Mongolia to China.
But Europe remains squarely in its sights, and Gazprom
is determined to overcome U.S. sanctions that have so far
prevented completion of its Nord Stream 2 pipeline across the
Baltic Sea to Germany. Those sanctions forced All Seas to halt
pipelaying in December with only 75 miles remaining. In early
July, Denmark gave permission to use pipelaying vessels with
anchors to complete the final stretch of the pipeline in Danish
waters, removing a key obstacle.
Bulgaria's prime minister said in early June that the 295-mile
Balkan Stream extension will be ready by the end of 2020 despite
construction delays due to the COVID-19 crisis. Balkan Stream
will carry up to 706 Bcf per year of mainly Russian gas from
TurkStream to Bulgaria, Serbia and Hungary.
Despite their cooperation on TurkStream, relations between
Turkey and Russia have been patchy in recent years, and that -
along with depressed LNG prices - may have encouraged Turkey
to deliberately prolong a recent maintenance outage on the
Blue Stream pipeline.

South & Central America
Proven reserves of natural gas in South and Central America represent only a tiny fraction of global reserves, but pipeline infrastructure in the region is insufficient to meet growing demand.
Brazil's state energy research office EPE said last September
that its growth projections justify construction of 16 new
pipelines, although their status is uncertain as the country faces
one of the world's most severe coronavirus outbreaks. Among the
recommended pipelines, five would be offshore; among others,
the largest would be a 563-mile project connecting Sao Carlos
to the capital city, Brasilia. Further east, the state of Bahia has
already begun construction on the final section of the 190-mile,
$100 million Southwest Gas pipeline. *

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Underground Construction - November 2020

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