Rosneft eyes $1-bln Kurdistan pipeline deal
Rosneft is in talks with officials from the Kurdistan Regional Government to help fund and build a pipeline to export natural gas to Turkey and Europe.
A formal agreement for the pipeline, whose capacity would be up to 30 bcm (1.06 tcf) per year, is expected by the end of 2017.
Reuters later reported that the deal would be valued at more than USD 1 billion.
“The investment in the project will be on under a BOOT arrangement, to be recovered through tariff charges and an agreed rate of return basis,” Rosneft said in a statement released on Monday.
As part of Rosneft’s stepped-up investments in the Kurdistan Region of Iraq, the company is also preparing to sign a separate agreement for the expansion of the export oil pipeline infrastructure of the region, reports added.
In recent months, Rosneft has invested heavily in the Kurdistan Region’s upstream sector, securing five exploration blocks as part of a strong push to expand the company’s international presence.
The news comes a week before a referendum for the independence of the region.
Two of six DESFA bidders seen making tender’s shortlist
Two bidding formations from a starting field of six, one comprised of Italy’s Snam, Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie, and the other, Regasificadora del Noroeste, a Spanish entry bidding alone, are believed to have qualified for the second and final round of an international tender offering a 66 percent stake of DESFA, Greece’s natural gas grid operator, energypress sources informed.
TAIPED, the state privatization fund, will soon announce the second round shortlist, possibly within the day.
Qatar’s Powerglobe LLC, American entry Integrated Utility Services (INTUS), French-Romanian team GRTgaz-Transgas, and Macquarie Infrastructure and Real Assets, an Australian contestant, have failed to make the shortlist, the sources noted. The French-Romanian and Australian entries did not meet operator certification requirements, an internationally renowned Brussels law firm helped determine, as the eligibility of both bidders was unclear.
Local authorities are concerned that the qualification of just two tender entrants may subdue second-round bidding and keep the sale price low. Some officials also fear the tender’s result could develop into a one-horse race for the Snam-Enagas-Fluxys-Gasunie team, as this formidable combination is expected to overpower the bidding ability of Regasificadora del Noroeste.
Azerbaijani firm Socar’s winning bid of 400 million euros for DESFA’s 66 percent in the preceding unfinished tender has served as an unofficial standard for this latest sale effort. Any sale price below this level would represent a failure, including for the government, whose moves helped bring down the previous DESFA tender.
Investors have demanded greater clarity over DEFSA’s long-term revenue capacity, including the method through which the operator will collect a “recoverable difference” of 320 million euros over the next 18 years. Investors are pushing for terms ensuring payment of a greater amount within the first ten years.
The payment’s distribution over the 18-year period dominated a meeting yesterday hosted by RAE, the Regulatory Authority for Energy. TAIPED, ELPE (Hellenic Petroleum) and DESFA officials took part. The meeting apparently led to more disagreements than agreements. According to sources, TAIPED’s representatives backed the investor request for payment of a greater “recoverable difference” amount earlier on.
Oman-Kuwait JV finalizes contracts for grassroots refining complex
Duqm Refinery & Petrochemical Industries Co. LLC (DRPIC), Muscat, a joint venture of state-owned Oman Oil Co. and Kuwait Petroleum Corp. subsidiary Kuwait Petroleum International Ltd., has awarded the final two of three main contract packages for engineering, procurement, and construction of its long-planned 230,000-b/d refinery and petrochemical complex to be built in the Duqm Special Economic Zone (SEZAD) in Duqm, Al Wusta Governate, Oman.
DRPIC let a contract for EPC Package 3 for construction of an offsite export terminal as well as crude oil pipeline and tank farm to a consortium of Saipem SPA and CB&I BV, CB&I said.
Led by Saipem, the consortium will provide EPC, commissioning, and operation services for associated offsite facilities, including a product storage and export terminal at Duqm Port, a crude tank farm at Ras Markaz, and an 80-km crude oil pipeline from Ras Markaz to the refinery complex.
Specifically, CB&I will deliver all EPC for storage tanks at the export terminal and crude tank farm, while Saipem will perform the balance of the works under the contract package.
CB&I valued its portion of the contract at about $140 million.
While DRPIC has yet to officially confirm an overall cost of EPC Package 3, Omani local media reports estimate its value at $800-900 million.
Separately, DRPIC has awarded a JV of Tecnicas Reunidas SA 65% & Daewoo Engineering & Construction Co. Ltd. 35% the contract for EPC Package 1—the largest of the project’s three packages—which covers EPC and commissioning of all main process units at the refinery.
As part of its scope of work under the, the Tecnicas Reunidas-led JV will deliver EPCC services for the following:
• Crude distillation; 230,000 b/sd.
• Vacuum distillation; 114,000 b/sd.
• Hydrocracking; 74,000 b/sd.
• Delayed coking; 52,000 b/sd.
• Kerosine treatment; 40,500 b/sd.
• Diesel hydrodesulfurization; 83,500 b/sd.
• LPG treatment; two units, each 12,500 b/sd.
• Hydrogen production; two units, each 126,500 normal cu m/day.
• Saturated gas; 6,500 tonnes/day (tpd).
• Sour water stripping; two units, each 44 tpd.
• Amine regeneration; two units, each 415 tpd.
• Sulfur recovery; three units, each 355 tpd.
Awarded on a lump-sum turnkey basis, the 47-month contract for EPC Package 1 is worth about $2.75 billion, Tecnicas Reunidas said.
Last month, DRPIC additionally awarded a contract to Amec Foster Wheeler Engineering Consultancy LLC (AFW), a subsidiary of Amec Foster Wheeler PLC, to serve as project management consultant for the refinery’s EPC phase, the operator said.
These contracts join DRPIC’s award of a $2-billion contract for the project’s EPC Package 2—covering all utilities and off sites—to a consortium of Petrofac International Ltd. and Samsung Engineering Co. Ltd. (OGJ Online, Aug. 7, 2017).
Part of the Omani government’s plan for industrial development of SEZAD as well as to help meet rising demand for transportation fuels and petrochemicals in Oman and abroad, DRPIC has yet to confirm a definitive timeframe for when the complex will be fully commissioned.
Southeast Europe’s gas sector seen gaining broader prominence
A large number of regional gas projects will be developed and lead to an upgrade of southeast Europe’s role on a wider scale, the European Network of Transmission System Operators for Gas (ENTSOG), an association of Europe’s transmission system operators (TSOs), has noted in its latest report.
Less favorably, the ENTSOG report also notes that various other projects, such as interconnections to facilitate Europe’s north-south and east-west corridors, are currently clouded by uncertainty.
As for Greece, the new Gas Regional Investment Plan (GRIP) includes many projects that were also listed in the preceding edition, such as an LNG terminal upgrade at Revythoussa, an islet just off Athens; the TAP project; a new LNG terminal in Alexandroupoli, northeastern Greece; the East Med pipeline; and development of a south Kavala gas storage facility in the country’s north.
The GRIP list also includes new additions such as various compressor stations around the country’s network; a pipeline route to Fyrom (Former Yugoslav Republic of Macedonia); as well as Tesla, the possible continuation of the “Turkish Stream” project.
On the contrary, an older DEPA (Public Gas Corporation) plan concerning the development of Aegean LNG, a terminal in Kavala, is no longer on the GRIP list.
The ENTSOG report notes that Greece and eight regional countries represent 25 percent of gas demand in Europe. This figure is expected to increase to 27 percent over the next decade as gas market sizes and penetration levels increase, according to the report.
The association’s report also forecasts that gas-fueled electricity generation will make gains over the next ten years in southeast Europe’s energy mix.
Greece’s RES sector is expected to grow and provide 32 percent of electricity output by 2027, the ENTSOG report forecast, adding that local gas demand over the next decade will experience a decline for power generation purposes and an increase in the household, commercial and industrial sectors.