Gazprom pipelines and export capacity

Газопроводы Газпрома и экспортные мощности

Gas pipelines of West Siberia

Газопроводы Западной Сибири

Export flows of Gazprom

Экспортные потоки

Spot, Gazprom, Brent

Цены на нефть и газ

End-use price of gas

Russia and USA

Daily gas production

Суточная добыча


Record High Pipeline Construction Costs of Gazprom


Gazprom shows extraordinary high pipeline construction costs. According to Alexei Miller, the construction of the Dzhubga Lazarevskoye Sochi (DLS) gas pipeline along the Black Sea shore will cost RUR 25 billion or EUR 583 million. In my view, this is a way too much for 177 km of 21-in pipe.

Table 1. Specifications of DLS, TAP and Langeled Pipelines

Pipeline 

Capacity,

Length, km:

Pipe:

Cost, EUR million:

Pipe price,

Number

Cost as

bcm/yr

Land

Sea

Total

D, mm

Wall, mm

ton/km

Total

Per 1 km

1 km of pipe

EUR/ton

of CS

of year

DLS

3.8

18

160

177

530

15.9

202

583

3.3

0.3

1500

-

2009

TAP

10.0

405

115

520

1220

25-36

600

1500

2.9

0.9

1500

2

2008

Langeled

25.0

-

1200

1200

1016-1066

23.3-34.1

735

2500

2.1

0.6

750

-

2006

The table compares the costs of DLS, Trans-Adriatic Pipeline (TAP) and Langeled projects. Note that DLS runs 4.5 km off the shore line at the depth less than 100 m. There is a railway along the shore that reduces transportation costs. On the other hand, the construction of TAP will require pipe and material transportation by trucks. Note that two compressor stations are included into the cost of TAP.

Brokers and contractors must be extremely pleased by the spending habits of Gazprom. I am not so sure about the minority shareholders of the Russian gas monopoly.

Mikhail Korchemkin

November 18, 2009

Malvern, Pennsylvania, USA

ADDENDUM OF NOVEMBER 19, 2009

Actually, the Sochi pipeline is more expensive than Nord Stream! Note that the combined length of the two Nord Stream lines is 2400 km.

Table 2. Specifications of DLS and Nord Stream Pipelines

Pipeline 

Capacity,

Length, km:

Pipe:

Cost, EUR million:

Pipe price,

Number

Cost as

bcm/yr

Land

Sea

Total

D, mm

Wall, mm

ton/km

Total

Per 1 km

1 km of pipe

EUR/ton

of CS

of year

DLS

3.8

18

160

177

530

15.9

202

583

3.3

0.3

1500

-

2009

Nord Stream

27.5

-

2400

2400

1153

26.8-41.0

992

7400

3.1

1.5

1500

-

2009

This is a good indicator of the cost of feeding pipelines of the Nord Stream and South Stream projects. 

ADDENDUM OF NOVEMBER 30, 2009

In March 2008, OOO "Piter Gaz Engineering" estimated the cost of the Sochi pipeline at RUR 8-10 billion, or EUR 1.2 million per 1 km. Somehow, the economic crisis has caused nearly a threefold increase of the investment cost.


Last modified: 12/07/14                    East European Gas Analysis 2006-2014                                           Email: info@eegas.com
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