INOGATE Technical Secretariat Mr. Nikos Tsakalidis Georgia gas overview Tbilisi, March 2016

Transcription

1 INOGATE Technical Secretariat Mr. Nikos Tsakalidis Georgia gas overview Tbilisi, March 2016 BUILDING PARTNERSHIPS FOR ENERGY SECURITY

2 Presentation content 1. Cross-border gas interconnections and flows 2. Georgia gas balance, supply/demand forecast and gas market structure 3. Gas infrastructure and regional strategic projects (Southern Corridor) k 4. Azerbaijan prospects k 5. EU Gas outlook k 6. Energy Community and Georgia 7. INOGATE project

3 Cross-border gas interconnections and flows Russia Georgia North Caucasus-Transcaucasus pipeline (DN1200, 132km, current max capacity 5-8bcm, 25/22 Bar Vladikavkaz Tbilisi pipeline (DN700, 232 km, current capacity 0.8 bcm, 20/18 Bar) Georgia Armenia Kazah Saguramo pipeline (DN1000, 90km, current capacity 2,8bcm., 23/21Bar) Azerbaijan Georgia Karadah Tbilisi, 2 entry pipelines, 1 out of function (DN 62 km, DN700, current capacity 1.4 bcm, 22/20 Bar) South Caucasus Pipeline (SCP), 692 km(total length), max capacity 7-8bcm Georgia - Turkey South Caucasus Pipeline (SCP), 692 km(total length), max capacity 7-8bcm Azerbaijan - Russia Gazi-Magomed-Mozdok pipeline (640km, revers operation since 2010,, capacity 5bcm) Iran Armenia Tabriz - Meghri - Sardarian pipeline ( 140km, max capacity bcm) Azerbaijan Iran Baku-Astara pipeline (1,474 kilometres, DN1020, max capacity 10bcm) Iran Turkey Tabriz Ankara gas pipeline (2,577km, max capacity 14bcm) Turkmenistan Iran Dovletabad-Sarahs- Hangeran gas pipeline (30.5 km, 9 bcm in 2012 to 12 bcm in 2035) Korpetzy-Kurt Kui gas pipeline (200km, bcm capacity)

4 Energy production/consumption Increased role of hydro resources in energy production. Energy Mix Dominated by Fossil Fuel - High dependence on imports; Significant amount of gas goes for heating (introduction of energy efficient household equipment and heating systems can reduce gas consumption)

5 Gas market structure

6 Gas balance ( )

7 Gas supply and demand forecast ( )

8 GOGC/GGTC Key Highlights GOGC Georgian Oil and Gas Corporation (GOGC) is a joint stock company with 100% of its shares owned by the state (through Partnership Fund). Holds a National Oil Company status and as a NOC it manages state interests in Production Sharing Agreements concluded with investors. Owner of the Western Route Export Pipeline (WREP) and Georgian Main Gas Pipeline System (MGPS), works on Design and Construction/Expansion of pipeline systems Involved in Imports, transits and transports of natural gas and plays a leading role in ensuring the country s energy security; GOGC monitors the operations of existing transportation infrastructure on the territory of Georgia and works on development of new transit projects, supporting diversification of supply and energy security of the EU and International Markets GOGC had a successful debut on London Stock Exchange in May 2012 GGTC (TSO) Georgian gas transportation company (GGTC) was founded on 30 December 1999 (from GRUZTRANSGAZ). 100% shares belong to the Ministry of energy of Georgia. Company is the only licensed operator of high pressure pipelines (North South and East-West) Total length of operated pipeline is KM. The total capacity of 550,000 m3 The company serves 350 metering points, which are distributed among 241 gas distribution stations. Designed capacity of the main pipeline - 20 bcm per year. Main office in Tbilisi, 3 branches and 2 regional services. The company currently employs 545 people

9 Licensing of local gas production

10 New Gas Pipeline Construction and Existing Infrastructure Rehabilitation In spring 2013 was completed Abasha-Senaki 29 km section gas pipeline construction. In November 2013 year was completed Kutaisi-Abasha 47 km section gas pipeline construction. In summer 2014 year was completed Kutaisi-Sokhumi main gas pipeline passage reconstruction. In October 2014 year was completed Zestaponi-Kutaisi section gas pipeline construction. In November 2014 year was completed Rustavi-Sagaredjo 25 km section gas pipeline construction. In December 2014 year was completed Gori-Kareli 20 km section gas pipeline construction. In summer 2015 year was completed Tsiteli Khidi-Marneuli 25 km section gas pipeline construction. Telavi-Akhmeta (25 km, diameter: 300mm): This section is one of the main segments of MGPS, namely Kakheti Gas Main Pipeline. It involves the construction of a new 25 km section of pipeline. The key deliverable of the project is increased reliability of gas supply to the Kakheti region. The project completion is planned in 2016.

11 Pipeline Infrastructure Rehabilitation/Development Projects

12 Disruption of supply due to unplanned breakdowns and seasonal misbalances The most critical situation occurs by interruption of supply from external suppliers resulting deficit up to 3-9 Mcm/d by 2020 during peak demand of Natural Gas

13 Major damages of the pipelines Emergency site Character Date Negative Impact Meneso, 224,5 km - North-South Trunk Pipeline, 1200 mm Meneso, 132 km-north-south Trunk Pipeline, 700 mm Lemshveniera, 61 km - Kazakhi- Saguramo, 1000 mm Mckheta, 122 km - North-South Trunk Pipeline, 1000 mm Goristsikhe, 78 km - Vladikavkaz-Tbilisi, 700 mm Kesalo, 55 km - Kazakhi-Saguramo, 1000 mm Naniani, 233 km - North-South Trunk Pipeline, 1200 mm Devdoraki, 143,1 km - North-South Trunk Pipeline, 1200 mm; 55,5 km - Vladikavkaz-Tbilisi, 700 mm Landslide rupture Landslide rupture Pipeline Corrosion Landslide rupture Landslide rupture Pipeline corrosion Landslide rupture Rupture caused by the flood ,8 mln.cm gas emissions, termination of supply and transit ,5 mln.cm gas emissions, termination of supply and transit ,8 mln.cm gas emissions, termination of supply and transit ,7 mln.cm gas emissions, termination of supply and transit ,5 mln.cm gas emissions, termination of supply ,6 mln.cm gas emissions, termination of supply and transit ,4 mln.cm gas emissions, termination of transit ,5 mln.cm gas emissions, termination of supply and transit during 5 days

14 Major damages of the pipelines

15 Underground Gas Storage Project Active gas volume of mcm; Withdrawal rate > 5 mcm/day; Preliminarily estimated project cost $250mn; Site used for oil exploration since 1979, thus geological setting is well-known and data is consistent; Agreement for site hand-over already in place; Feasibility Study completed; Benefits: Significantly improve Georgia s Energy Security; Manage the seasonal supply/demand misbalances; Support to earn additional commercial incomes in conditions of liberalized market relations; Support implementation of new transit (Southern Gas Corridor) projects; Prevent of supply monopolization of gas market; Create new jobs during project implementation and UGS operation periods; Timeline

16 Gardabani Thermal Power Plant First ever Combined Cycle Gas Fired Thermal Power Plant in Georgia; Actual costs $218.8mn; Annual generation million KWh; Gas consumption 221 Mm3/y; Instead of 230 MW the contractor has added 9 more MW, for just 2.7 mn USD; Implementation agreement with government guaranteeing 12.5% IRR; Guaranteed capacity fee mechanism aligning the business with GOGC financial profile; Efficiency - Gas consumption up to 40% less than existing TPPs ( m3 gas/kwh vs );

17 Southern Gas Corridor, Strategic gas transportation projects SCP-X Expansion by 2017; New 48 pipeline through Azerbaijan and 2 large compressor stations in Georgia); Capacity over 20 billion cubic metres per year; $2 billion in foreign direct investment to GE, Around 2,000 jobs to be created; Starting from the 2019 year, Georgia will receive additionally 1 bln. Cubic meters of natural gas for the preferential price; 2020 first gas to EU; TAP Designed to expand from 10 to 20 bcm/y; Built-in physical reverse flow; Connecting directly to TANAP on the Turkish- Greek border; First construction works begun; First Gas / TAP starts operations; TCP Would connect Türkmenbasy and Sangachal Terminal at the Caspian coast in Azerbaijan (300 km); Legal issues: disagreement because of the undecided legal status of the Caspian Sea; Commercial arrangements pending (EU-Turkmenistan)+ outstanding dispute between Turkmenistan and Azerbaijan on Serdar/Kyapaz; Turkmenistan builds its part of the pipeline (East-West) to the Caspian coast. Expected in 2019?. Capacity 30 bcm AGRI LNG Feasibility study by Penspen in 2014; Estimated cost: bln, capacity:2-8bcm; New regasification terminal on Romanian Coast and gas infrastructure in Romania and Hungary; June 2015, AGRI Ministerial Meeting was held in Bucharest

18 Azerbaijan prospects

19 EU gas outlook The potential development of biomethane and shale gas does not compensate the decline of European Indigenous Production: Conventional production - uncertain development of new fields (Romanian Black Sea and Cyprus); Shale gas - Public and Political opposition. Technically: First drills inconclusive Biomethane - Strong commitment. Economically viable? The decrease of European production can only be compensated by LNG or/and Russian gas; EU stress tests results: maximize capacity on interconnectors, maximize fuel switching potential, optimize use of storage, short-term energy efficiency measures, etc ; New EU regulation on security of supply Solidarity principle Shift from national approach to regional (risk Assessments, Preventive Action Plans and Emergency Plans at regional level) Transparency measures in supply contracts

20 Energy Community - Georgia Energy Community Treaty - Safeguard Measures, Monitoring of Security of Supply; Security of supply Coordination group for gas; Way forward: Full use of infrastructure on market terms Deregulation of gas and electricity prices Developing of new infrastructure, esp. small interconnectors Physical reverse flow at MS-CPs borders Regional emergency and preventive plans More involvement of ENTSOG - introduction of a system of early warning mechanisms Applying EU rules on the either side of a MS- CP border Georgia expected membership in 2016? Benefits: attraction of investments in energy/gas, energy security and sustainability; Challenges: Georgia s isolation from the Energy Community market (no borders with ECT CPs); Need for increased competition reversed flows, cross-border capacity allocation mechanisms, investment in infrastructure (rehabilitation); Implementation of EC acquis: Derogation for some EC gas regulations.

21 What is INOGATE? An EU-funded program for regional energy cooperation between the European Union and its Partner Countries in Eastern Europe, Caucasus and Central Asia 11 INOGATE Partner Countries: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

22 Targeted energy sectors Electricity & Gas Renewable Energy Energy Efficiency Infrastructure Climate Change Statistics

23 INOGATE recent projects, Gas metering and pressure regulation Support the GGTC to improve current gas metering systems and related procedures used in the gas transmission; Achieve a significant reduction in gas losses (technical and non-technical); Propose cost-effective practices and to ensure long term stability and accuracy of gas metering; Pilot area selected comprises in-line flow measurement in and out of the pilot area and offtake metering stations supplied from the pilot area gas transmission system; Metering accuracy could be improved by 2% by introducing an effective maintenance and calibration regime; Volumes of gas saved - 28,000 m3 daily Investment in this change to operating practices would provide an almost immediate pay back;

24 INOGATE recent projects, Pipeline Integrity: Corrosion assessment of old gas pipeline External Corrosion Direct Assessment (ECDA); Pilot area selected near Gardabani (11km); After assessment (casings, crossings, leakage locations)6 hellhole excavations made and at each on-site training provided for GOGC on: How to evaluate coating condition. Removal of coating; Preparation of steel surface; Wall thickness and pit depth measurements; Measurement of corrosion extent; Completion of site excavation report; Calculation of MAOP; Re-coating of exposed pipe using viscoelastic materials and overwrap; Soil resistivity measurements will be made during the pilot survey; cathodic protection system design; Based on the knowledge received from INOGATE the GOGC is able to perform the inspection (ECDA) of unpiggable old gas pipelines which leads to an increased safety and reduction of leakages;

25 Thank You for Your Attention INOGATE, Nikos Tsakalidis, Key expert for Electricity and gas EML: WWW: