inogate technical secretariat - mfa gas sector georgia … · inogate technical secretariat mr....

INOGATE Technical Secretariat Mr. Nikos Tsakalidis

Georgia gas overview Tbilisi, March 2016

BUILDING PARTNERSHIPS FOR ENERGY SECURITY

www.inogate.org

Presentation content

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

6. Energy Community and Georgia

1. Cross-border gas interconnections and flows

7. INOGATE project

5. EU Gas outlook k

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)

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

Azerbaijan - Russia

Gazi-Magomed-Mozdok

pipeline (640km, revers

operation since 2010,,

capacity 5bcm)

Azerbaijan – Iran

Baku-Astara pipeline (1,474

kilometres, DN1020, max

capacity 10bcm)

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, 11-

12 bcm capacity)

Georgia – Armenia

Kazah – Saguramo pipeline (DN1000,

90km, current capacity 2,8bcm.,

23/21Bar)

Georgia - Turkey

South Caucasus Pipeline (SCP), 692

km(total length), max capacity 7-8bcm

Iran – Armenia

Tabriz - Meghri - Sardarian

pipeline ( 140km, max

capacity 2.3-2.5 bcm)

Iran – Turkey

Tabriz – Ankara gas pipeline

(2,577km, max capacity

14bcm)

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)

Gas market structure

Gas balance (2010-15)

Gas supply and demand forecast (2016-30)

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

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 1922.496 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

GGTC (TSO)

Licensing of local gas production

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.

Pipeline Infrastructure Rehabilitation/Development Projects

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

Major damages of the pipelines

Emergency site Character Date Negative Impact

Meneso, 224,5 km - North-South Trunk

Pipeline, 1200 mm

Landslide

rupture

11.05.1993 5,8 mln.cm gas emissions, termination

of supply and transit

Meneso, 132 km-North-South Trunk

Pipeline, 700 mm

Landslide

rupture



Lemshveniera, 61 km - Kazakhi-

Saguramo, 1000 mm

Pipeline

Corrosion



Mckheta, 122 km - North-South Trunk

Pipeline, 1000 mm

Landslide

rupture



Goristsikhe, 78 km - Vladikavkaz-Tbilisi,

700 mm

Landslide

rupture


of supply

Kesalo, 55 km - Kazakhi-Saguramo, 1000

mm

Pipeline

corrosion



Naniani, 233 km - North-South Trunk

Pipeline, 1200 mm

Landslide

rupture


of transit

Devdoraki, 143,1 km - North-South Trunk

Pipeline, 1200 mm; 55,5 km -

Vladikavkaz-Tbilisi, 700 mm

Rupture

caused by

the flood


of supply and transit during 5 days

Major damages of the pipelines

Underground Gas Storage Project

Active gas volume of 200-250 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

Gardabani Thermal Power Plant

First ever Combined Cycle Gas Fired Thermal Power Plant in Georgia;

Actual costs $218.8mn;

Annual generation – 1 337 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 (0.1932 m3 gas/kWh vs 0.3126);

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;

2020 - 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: 1.2 - 4.5 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

Azerbaijan prospects

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

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.

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.

Targeted energy sectors

Electricity & Gas Renewable Energy Energy Efficiency

Infrastructure Climate Change Statistics

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;

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;

Thank You for Your Attention

INOGATE, Nikos Tsakalidis, Key expert for Electricity and gas EML: [email protected] WWW: www.inogate.org

mailto:[email protected]

http://www.inogate.org/

inogate technical secretariat - mfa gas sector georgia … · inogate technical secretariat mr....

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