Analysis: Oil and Gas Pipeline Watch

Transneft begins Kozmino end to ESPO oil pipeline

The head of Russia's pipeline monopoly says construction will begin this month on the Far East coast of Russia, where the planned East Siberia Pacific Ocean pipeline will end.

"Currently, the feasibility study for the construction of the terminal is ready," Nikolai Tokarev said, Oil & Gas Journal reports. "It has successfully gone through examination by governmental experts."

RIA Novosti reports one stage of the ESPO route has been changed to a more northern route through Yakutia and will not go through Lake Baikal.

The pipeline's plan is to send 1.6 million barrels per day from Siberia to consumers in China and other parts of Asia.

Surgutneftegas, one oil firm supplying ESPO, said it could do so starting in July, OGJ reports.

Russia's largest state oil firm Rosneft said it will prioritize the Vankor oil field to feed ESPO as well.

The first stage of ESPO will run from Taishet to Skovorodino before reaching Kozmino by rail at 603,000 bpd. The second stage, replacing the Skovorodino rail with pipeline, will add another 1 million bpd capacity.

Iraq, Turkey, U.S. hold gas pipeline talks

The three nations held a third series of energy talks, with a focus on developing Iraq's northern gas sector to feed Turkish and European energy demands via a new Kirkuk-Ceyhan pipeline.

The gas line would run along the same route as the current oil pipelines, which have been largely offline due to insurgents since 2003 but have been better protected for the past six months.

"The overall goal is to figure out how best to attract investment to stimulate gas production in Iraq, so that there's enough gas for Iraq's domestic consumption and for export," Deputy Assistant Secretary of State for European and Eurasian Affairs Matthew Bryza told United Press International before heading to Turkey. "We would hope that once there's enough gas for Iraq's domestic consumption that there will be a significant quantity that will be exported into Europe up via Turkey into the Nabucco and Turkey-Greece-Italy pipelines."

"To transport Iraqi natural gas to international markets is of great strategic importance," said Murat Karagoz, first counselor at the Turkish Embassy in Washington.

Reliance says East-West pipeline ready in three months

The Indian private major said natural gas from its Krishna-Godavari basin block will be ready to flow through the country's largest pipeline within the next three months.

The Business Standard reports a source said the second week of May is a company deadline, months ahead of the previously scheduled timeline.

"We are close to finishing the civil and mechanical work for the entire pipeline and will soon start dry runs to make it ready for gas transportation," a senior company executive said.

An earlier estimation was to time the pipeline's start with a new Reliance refinery in Jamnagar and the Krishna-Godavari basin's readiness.

Both projects are ahead of schedule, The Business Standard reports.

E.ON and Gazprom to use Nord Stream pipeline gas for new power station

Germany's E.ON and Russia's Gazprom signed a memorandum of mutual understanding to build and manage a gas turbine power station in Germany.

The companies said in a statement that the new facility is slated to be built near the future Nord Stream gas pipeline's entrance point into Germany and will use the fuel supplies from that pipeline.

The power station has an expected capacity of 1,200 megawatts and could be operational in 2011. A final investment decision on the project is expected to be made in 2009.

E.ON and Gazprom are also cooperating in the construction of Nord Stream. The two companies said they will set up a joint venture in Germany on an equal basis to carry out the project.

"The Gazprom Group will take part in all phases of the project's price chain -- from gas supplies to the sale of generated electricity," a representative for Gazprom said.

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