Gazprom Upbeat about South Stream Pipeline Success

By MarEx 2014-02-19 19:42:00

Despite the numerous opponents of Gazprom’s South Stream and the opinions of European skeptics doubting the success of the project aimed at constructing a new gas trunkline from Russia to Southern and Central Europe, it is progressing at a fast pace. The gas pipeline commissioning and the start of supplies are scheduled for December 2015. In 2018 South Stream will reach its full design capacity of 63 billion cubic meters a year.

The South Stream project involves the construction of four 32-inch (812.8 millimeter) diameter gas pipeline strings under the Black Sea at the maximum depth of up to 2,250 meters. They will be laid from the Russkaya main compressor station that will be constructed on the Russian coast to the Pasha Dere receiving terminal on the Bulgarian coast near Varna. The total length of pipes to be laid will be 3,700 kilometers. 

Then the gas pipeline will run through Bulgaria, Serbia, Hungary and Slovenia to northern Italy. Gas pipeline branches will be constructed from Serbia to Croatia and Republika Srpska (within Bosnia and Herzegovina). In addition, the possibility of constructing a gas pipeline branch to Macedonia is being considered. The total length of the onshore gas main made of 1,200 to 1,400 millimeter pipes will be some 1,455 kilometers in Central and Southern Europe.

The system will supply 15.75 billion cubic meters of Russian natural gas to Europe starting from 2016, 47.25 billion cubic meters – from 2017 and in 2018 it will reach the full design capacity of 63 billion cubic meters annually.

On the Order of Russian President Vladimir Putin to speed up the South Stream project and transition to the construction stage, Gazprom and its foreign partners adopted final investment decisions for the offshore and onshore gas pipeline sections in Bulgaria, Serbia, Hungary and Slovenia in 2012 

Last December the first seam of the offshore gas pipeline was welded at the Russkaya compressor station site (on the Black Sea coast in the Krasnodar Territory near Anapa). Early this year a program of activities was approved. It outlined the construction stages and deadlines for the offshore and onshore sections of South Stream. The action plans were signed for the gas pipeline construction in Bulgaria, Serbia, Hungary, Slovenia and Croatia, as well as the roadmap for implementing energy projects in Republika Srpska within the South Stream project.

In addition, this year the headquarters of South Stream Transport opened in Amsterdam. The basic FEED project was outlined and the final technical concept of the offshore gas pipeline was defined. A contracting strategy was developed for bidding procedures concerning the purchase of pipe products and offshore pipeline laying operations. The preparation of bidding documents started and the competitive procedures launched to choose the contractor for deep-water pipe laying and supplying pipes for the first two string of the gas pipeline. 

“Taking into account the project’s complexity and scale, only the companies which have already proved themselves in other major international projects and which have a vast experience are chosen for the South Stream project. For instance, following the bidding results, Dutch INTECSEA was chosen as the general designer of the offshore gas pipeline section. The offers for laying the offshore pipeline were received from Italian Saipem and Dutch Allseas. German Europipe, Japanese Nippon Steel and Sumitomo, Russian Severstal, Vyksa Metallurgical Plant, Chelyabinsk Pipe-Rolling Plant, Izhora Pipe Mill and others are competing for the right to supply the gas pipes,” project head Leonid Chugunov said. 

The start of laying the first string of the South Stream offshore section is scheduled for the mid-2014. It is planned to conclude the relevant agreements with suppliers and contractors in the first quarter of 2014.

Adapted from an article published in corporate Gazprom Magazine Issue 11 by Denis Kirillov.