iploca convention 2012, istanbul: 1 open general …...iploca convention 2012, istanbul: 1st open...

IPLOCA Convention 2012, Istanbul: 1st Open General Meeting, 13 September 2012

Trans Asia Gas Pipeline from Turkmenistan to China

Andreas Kohler, ILF MunichPrepared with the support of Dr. H. Martirosyan, ILF Beijing

Trans Asia Gas Pipeline from Turkmenistan to ChinaTable of Contents

1. Natural gas demand in China

2. China‘s gas supply options

3. Gas production in Central Asia

4.The Trans-Asia Gas Pipeline

5. The West-East Gas Pipelines

6. Project challenges

7. The role of ILF

Page 2

Trans Asia Gas Pipeline from Turkmenistan to China1. Natural gas demand in China

2000 2005 2006 2007 2008 2009 2010 2011 2012 2015 2020 2030Production 27.2 49.3 58.6 69.2 76.1 83 94.8 102.5 108 170 210 300Demand 24.5 46.8 56.1 69.5 80.7 87.45 107.6 130 150 230 350 550Import 0 0 0 0.3 4.6 4.45 12.8 27.5 42 60 140 250

0

100

200

300

400

500

600

Bcm

Historic data: official Chinese statistics; forecast: CNPC

• gas consumption increased by 22.6 % and reached130 bcm in 2011 (USA about 700 bcm, Europe/Eurasia: 1,100 bcm)

• natural gas at present only accounts for 3.9 % of primaryenergy consumption (USA: 27.6 %, Europe 33.9 %)

• natural gas will partly substitute coal (to reduce emissions)• domestic gas production increases significantly, but with lower speed than consumption

• proven gas reserves in China amount to only 2.46 tcm

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Trans Asia Gas Pipeline from Turkmenistan to China2. China’s gas supply options

BSP

Trans Asia Gas Pipeline

Russia to China Gas Pipeline Options

Myanmar-China Gas Pipeline

West-East Gas Pipeline

LNG Terminals

Trans Asia Gas Pipeline from Turkmenistan to China3. Gas production in Central Asia

Gas production in Turkmenistan

2000 2004 2005 2006 2007 2008 2009 2010 2016 2020 2030Production 42.5 52.8 57 60.4 65.4 66.1 36.4 42 95 140 230Consumption 12.2 15 16.1 18.4 21.3 20.5 19.9 17.5 34 40 50Export 30.3 36.7 38.6 42 44.1 47.1 16.6 24.5 61 100 180

Production

Local Consumption

Export

0

50

100

150

200

250

BC

M

• Turkmenistan has an enormous potential for gas production:According to Gaffney, Cline & Associates (GCA) the estimates of GIIP (gas initially in place) for the 2 largest fields are (published in autumn 2011):

Galkynysh field (South Yolotan): 13.1 tcm (low), 21.2 tcm (high)Yashlar field : 1.4 tcm (low), 5.0 tcm (high)

• However, due to various reasons it is unclear at present how muchdevelopment will really take place in future to produce gas

• Turkmenistan has long-term contracts to deliver gas to Russia (on hold), Iran (small quantities) and China

• Turkmenistan is interested to deliver gas to Europe (via Azerbaijan) andAfghanistan, Pakistan and India (TAPI Project)

Trans Asia Gas Pipeline from Turkmenistan to China3. Gas production in Central Asia

Gas supply from Kazakhstan

• from Aktobe fields (Zhanazhol): proven reserves 119-133 bcm, potential reserves up to 278 bcm; 4-5.5 bcma will be exported to China, about 2 bcma will be supplied to Eastern Kazakhstan

• China invests in other fields in Kazakhstan (Beyneu-Bozoy) in order to expand export to China

• In the near future 5-6 bcma will be transported to China

Gas supply from Uzkbekistan

• Lukoil holds PSA in Uzbekistan and declared that in 2010 that it will be able to provide 10 bcma to China from 2014

• In 2012 up to 4 bcma can be delivered to China.

Trans Asia Gas Pipeline from Turkmenistan to China4. The Trans-Asia Gas Pipeline

KAZAKHSTAN

UZBEKISTAN

TURKMENISTAN

WKC 1

WKC 2

WKC 3

CS 1

CS 2CS 3

CS 4CS 5 CS 6

CS 7

Metering Station

Line A (42“, completion 2009)Line B (42“, completion 2010)

GCS

Bozoi

Beineu

CS

CS

Line C (48“, completion 2015)Line D (data not yet specified)

Beineu-Schimkent Pipeline, 2013

Development of Trans-Asia Gas Pipeline System (internat. section) - Overview


• 2007: China signedo PSA for Bagtyyarlyk block in Eastern Turkmenistan o Gas purchase agreement with Turkmenistan Goverment for 30 bcma for 30 yearso Transit Agreements with Uzbekistan and Kazakhstan

• 2008: China o Signed agreement with Turkmenistan to

increase gas purchase from 30 to 40 bcmao Started construction of 2x42“ pipelines

(Line A+B), appr. 1,900 km, 8 compressorstations, 30 bcma

• 2009:o December: start of operation of Line A

–> first gas reached China in January 2010


• 2010:o China signed Agreement with Kazakhstan to build the Beineu-Shymkent Pipeline BSP),

for gas export to China and local Kazakh consumption (42“; 1,475 km) o China signed Agreement with Uzbekistan to deliver 10 bmcao 2nd pipeline (Line B) started operation in August 2010

• 2011:o China signed agreements to built a 48“ pipeline

(Line C) for 25 bcma from Turkmenistan (10 bcma), Uzbekistan (10 bcma), Kazakhstan (5 bcma)

o China signed agreements with Turkmenistan to incease deliveries to 65 bmca

o In December China annouces a plan toincrease pipeline capacity by 25 bcmin future (Line D)


Trans-Asia Gas Pipeline past and future transport volumes (Lines A, B and C):

2010 2011 2012 2013 2016 2020Kazakhstan(bcm) 0 0 0 0 5 5Uzbekistan(bcm) 0 0 4 5 10 10Turkmenistan(bcm) 4.38 16 20 25 45 50TOTAL (bcm) 4.38 16 24 30 60 65

0

10

20

30

40

50

60

70bcma

Trans Asia Gas Pipeline from Turkmenistan to China5. The West-East Gas Pipeline in China

Trans Asia Gas Pipeline from Turkmenistan to China5. The West-East Gas Pipeline in China

The West East Gas Pipeline System

WEGP No. 1 runs from Lunnan in Xinjiang to Shanghai (4,000 km); many branch lines; capacity 17 bmca; the pipeline transports gas from domestic production in the West of China to the big cities in the East; operation started in 2005;

WEGP No. 2 has one trunk line and several branch lines, total length 8,704 km, capacity30 bcma, it transports gas from Central Asia, but also gas produced domestically; theWestern section was put in operation in December 2009, the middle section in June 2011; gas will reach Hong Kong before end of 2012

WEGP No. 3 will run from Xinjian region to Fujian province in Southeast (5,200 km incl. branch lines); construction will start this year; capacity 30 bcma; gas will be delivered fromCentral Asia via Trans-Asia Gas Pipeline (Line C);

WEGP No. 4 and 5: still only concepts; project work shall start after 2015, capacity: 30 bcmaeach

Trans Asia Gas Pipeline from Turkmenistan to China6. Project challenges

Pipelines A+B:

• 2x42” gas pipeline system in Turkmenistan, Uzbekistan and Kazakhstan, about 1,900 km, 8 compressor stations, operating pressure 98.1 bar, design throughput 30 bcma

• Aggressive EPC execution schedule:Pipeline (linear) part of Line A: construction was completed in just 18 months - one week ahead of schedule (06.2008 – 12.2009), Line B was commissioned in August 2010; Compressor stations were put in operation stage wise (to be completed in 2012)

• Uzbekistan: 2 EPC Contracts for Pipelines – Zeromax and CPP2 EPC Contracts for Compressor stations (3) - CPECC

• Kazakhstan: 2 EPC Contracts for Pipelines - KSS and CPP2 EPC Contracts for Compressor stations - KSS (2) and CPECC (3)

Trans Asia Gas Pipeline from Turkmenistan to China6. Project challenges

Trans Asia Gas Pipeline from Turkmenistan to China7. The role of ILF

Clients of ILF:TAPLINE Headquarter in Beijing and the 2 Joint Venture Companies in Uzbekistan and Kazakhstan composed of TAPLINE (PetroChina) from the Chinese side and KazTransGaz(KTG) / Uzbekneftegas (UTG), with ILF acting as a Project Management Consultant (PMC)

Scope of ILF: - Technical Consultancy and engineering incl. system expansion / integration- Project Control (cost, time, etc.) - QA/QC and HSSE Management- Procurement, Contract and Claim Management- Management support during construction

Challenges:• Extremely tight project schedules • Design had to comply with local design norms/standards (GHOSTr/SNIPs), Chinese

standards as well as international code requirements (API/ASME) • Design by various parties in different locations and time zones – supervised by ILF • Vendors from various places all over the world • Project budget had to be kept

Trans Asia Gas Pipeline from Turkmenistan to ChinaThank you for your attention!

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