Russian gas giant Gazprom has completed construction of Phase 1 of the Yamal-Europe transcontinental gas pipeline project and is preparing to take advantage of the new revenue opportunities that will arise when the system is commissioned.
The 4,000-km pipeline will carry gas from the Yamal Peninsula region of western Siberia through Belarus and Poland and into eastern Germany, where it will connect with the Western Europe gas grid (OGJ, Feb. 15, 1999, p. 26).
The Yamal-Europe export pipeline must be distinguished from what was dubbed the Yamal pipeline during the 1980s-the last, export-oriented pipeline of a six-pipeline gas network extending from Russia's supergiant Urengoi gas field, just south of the Yamal Peninsula, to European Russia. This project was the object of a largely fruitless embargo of US equipment and technology by the administration of former US President Ronald Reagan that ended in 1982 (OGJ, Nov. 22, 1982, p. 65). Pipelaying was completed in 1984, and the pipeline started up in 1985, ultimately delivering gas from above the then-Soviet Union's Arctic Circle to continental Europe.
The new Yamal-Europe pipeline, subject of studies that began in the late 1980s, involves a separate pipeline that links vast gas reserves on the Yamal Peninsula with western Europe (see map, p. 28). Preparations for pipelaying for this latest project got under way in 1994 (OGJ, Mar. 24, 1994, Newsletter).
Yamal-Europe first phase
Last year, Gazprom began the first phase of the Yamal-Europe project by debottlenecking its existing gas pipeline network and adding new sections. The completion of the first branch of new trunkline, through Belarus and Poland, was celebrated late last month in separate ceremonies in the two countries. The system has a throughput capacity of 30 billion cu m/year (2.9 bcf/day).
At a ceremony in Poland marking completion of that country's section of the line, Gazprom Chairman Rem Vyakhirev said that a decision on laying the project's second line-parallel to the first and with a similar capacity-would be made within a month. The Polish section is expected to begin flowing in November, according to Eastern Block Research Ltd., Tadcaster, UK.
The project has been hit by delays and setbacks. But owning a new gas transport corridor to the West will boost Gazprom's profits, allowing it to rely much less on its Ukrainian corridor, which transports more than 90% of the company's European natural gas exports, according to company officials.
Ukrainian officials acknowledged that 2.5 billion cu m (bcm) of natural gas have disappeared through theft from Gazprom's Ukraine pipelines in recent years, making it a costly operation for the company.
Bolstering ties
At a groundbreaking ceremony for the pipeline's Polish section on Sept. 23, Vyakhirev said some of the Ukraine flows will be divided among four export routes, including Belarus and Poland.
At the Belarus section's completion ceremony, that country's president, Alexander Lukashenko, said the corridor would have a stimulating effect on the political rapprochement process between his nation and Russia.
Lukashenko said Belarus provides a necessary element in "a new transit route, a conduit that will link the Russian Federation to the European Union."
Gazprom is similarly strengthening its contacts with Poland. The Russian gas monopoly plans to route 14 bcm/year of gas through Poland. Gas deliveries to Poland are expected to increase two-fold in a few years. Although concerns were raised in the country about a possible fuel dependence on Russia, the fears have largely given way to pragmatism.
When asked whether Gazprom might use gas deliveries for political purposes, Vyakhirev gave his Polish audience a simple answer: "I am representing a society that wants to make money."
With the Yamal-Europe pipeline open, Gazprom will have renewed opportunities to earn hard currency and will be able to influence European gas prices. Gas delivery to Western European markets will also become more flexible and easier to direct for Gazprom, allowing it to save considerable money.
The company plans to increase gas exports by up to 45 bcm/year by 2010.
