Oil and Gas Pipeline Watch

Russia seeks delay in Ukrainian gas summit

Russia may try to coerce the European Union to delay a conference scheduled next week on modernization of the Ukrainian gas transit system.

Anonymous sources of the Interfax-Ukraine news agency said Russia is seeking to delay the March 23 conference in Brussels indefinitely in order to put political capital behind its planned South Stream gas pipeline to Italy and the Nord Stream gas pipeline to Germany.

About 80 percent of all Russian gas bound for European markets travels through Ukrainian territory. A January dispute between Russia and Ukraine disrupted those supplies for weeks.

The fallout from the row, and Kiev's struggles with the current economic climate, has prompted many observers to question Ukraine's viability as a transport nation.

The European Union has put diversification of its gas transit networks at the top of its agenda, prompting a renewed emphasis on several alternative pipeline routes.

The Interfax source said Russia may also be wary of the European Union increasing its influence in the regional energy sector if additional funds go to support the Ukrainian pipeline network.

Alaska lawmakers challenge pipeline

Alaska state legislators introduced a resolution calling for the review of the $26 billion TransCanada pipeline project, citing economic uncertainty.

Reps. Jay Ramras and Craig Johnson, both Republicans, introduced the measure in the state House, saying the global economic recession raised concerns over project financing, the Calgary Herald reports.

TransCanada Corp. won the exclusive rights to develop a 1,715-mile pipeline from the Alaska North Slope to Calgary in Alberta, Canada, and on to gas markets in the Lower 48.

Tony Palmer with TransCanada said the current economic crisis and low commodity prices do not impact the long-term horizon for the project, which operators hope to launch by 2018.

"In the best case, we will be in service in the fall of 2018, and then we will be in service for 25 to 50 years beyond that," he said. "It's the price of natural gas at that time that is critical, not today's price."

The pipeline, a centerpiece of Gov. Sarah Palin's administration, would offset a declining oil sector in Alaska by pushing development of the estimated 36 trillion cubic feet of natural gas in the region.

Astana demands majority share in KCTS

The government in Kazakhstan is demanding a majority share intended for an oil transit network to transport oil into the Baku-Tbilisi-Ceyhan pipeline.

Kazakh Energy Minister Sauat Mynbayev said his control would not be involved in the project for anything less than a 51 percent stake in any venture for the planned Kazakh Caspian Transportation System, reporting agency EurasiaNet said.

KCTS would include a pipeline network and port facilities to facilitate the transportation of some 1.8 million barrels of oil a day across the Caspian to Baku, Azerbaijan.

Kazakhstan expects to increase its oil transportation to 392 million barrels through BTC by 2012 using KCTS. The system, however, has experienced initial obstacles due to the ownership structure for a joint operating venture for the project.

Kazakhstan hosts one of the largest oil fields discovered in the past 30 years, Kashagan, but lacks regional export pipelines to realize the full potential there.

The $4 billion KCTS pipeline is expected to become operational by 2011.

Greece calls for haste on 173-mile pipeline

Greece is pushing for an expedited schedule for the 173-mile Burgas-Alexandroupolis oil pipeline, Greek Development Minister Kostas Hadzidakis said.

The Burgas-Alexandroupolis pipeline would transit oil from the Black Sea across Bulgaria and Greece to ports on the Aegean Sea. Hadzidakis said the project was important to boost the competitiveness in the region, Radio Bulgaria reports.

The project is met with some concerns over the environmental impact of the project and increased traffic in the Aegean. Hadzidakis said the environment, however, was a top priority.

His sentiments were echoed by Alexander Tarakanov with pipeline construction company Trans-Balkan Pipeline, who told Bulgaria's Focus news agency that the regional ecology was "a top concern."

Tarakanov also noted that shipments from the Black Sea were limited by transports through the Bosporus, saying the Burgas-Alexandroupolis route was the most attractive option in the region.

Operators expect construction to begin in October, with a launch date scheduled for 2011.

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(dgraeber@upi.com)