C.I.S. STRUGGLES TO SOLVE PROBLEMS IN PIPELINE SYSTEM

May 3, 1993
David Knott International Editor Breakup of the former Soviet Union (FSU) has created problems in oil and gas transportation. That's because political boundaries quickly appeared in a network designed to provide consistency of service across a vast area. What's more, there are increasing problems with aging equipment and poor maintenance. However, the coherence of oil and gas transportation networks survived, although much rehabilitation and new lines are needed to keep up with oil and
David Knott
International Editor

Breakup of the former Soviet Union (FSU) has created problems in oil and gas transportation.

That's because political boundaries quickly appeared in a network designed to provide consistency of service across a vast area.

What's more, there are increasing problems with aging equipment and poor maintenance. However, the coherence of oil and gas transportation networks survived, although much rehabilitation and new lines are needed to keep up with oil and gas production plans.

"The national and international importance of FSU oil and gas industries and the increased autonomy of the independent states provide great potential for western companies to participate in the domestic pipeline industry," Paul Davies, managing director of JP Kenny & Partners, Staines, U.K., told a London conference.

"Existing oil and gas pipeline systems are relatively old, are expected to become increasingly unreliable, are suffering from a lack of regular inspection and maintenance, and now require a significant level of overhaul and repair," Davies said.

"An increasing number of new oil fields needs to be brought on stream to maintain production levels, which will lead to an increase in the size of the oil trunk line system. The planned increase in gas production will be from new areas, involving onshore and offshore development, which will entail substantial pipeline construction."

Oil transportation is controlled by Transneft, a participant in Rosneftegas Corp., which reports to the Russian Ministry of Fuel and Energy. Transneft is made up of 17 regional pipeline operators in Russia and the republics.

Gas transportation is handled by Gazprom, successor to the Soviet Ministry of Gas. Gazprom is a state corporation made up of 22 regional pipeline operators in Russia and the republics, which also reports to the Russian Ministry of Fuel and Energy.

AUTONOMY

"During 1992, several regional pipeline operators appear to have sought autonomy from Transneft and Gazprom, and the exact composition of both organizations today is unclear," Davies said.

"Notwithstanding the apparent organizational confusion, the oil and gas main transportation systems were designed and built as unified systems and still function as coherent networks, controlled primarily by Transneft and Gazprom, respectively. Both systems are very large and are a critical element of the overall industry infrastructure of the former Soviet Union."

The emergence of independent states did not cut pipelines in pieces physically, said Gennadi Shmal, chairman of Rosneftegasstroi, Moscow. But it created a need for recording delivery volumes and prices.

"The new states became independent economically and by management system," said Shmal. "In connection with this, an acute need for reconstruction has arisen."

Reconstruction of main pipelines will involve repairs, relaying, construction of loops and connections, and replacement of gas compressors and oil pumping units. It also will involve installation of telemetry and automated equipment and improvement of electrochemical corrosion protection.

"It is still difficult to estimate trends and scales of this reconstruction for each of the C.I.S. members," Shmal said, "but the necessity of reconstruction is evident."

Shmal pointed out that crude oil and gas condensate production in the FSU was the largest in the world during its peak in 1988 at 4.59 billion bbl. The slide started in 1989 and has continued since then.

In 1992 the C.I.S. produced 28.3 tcf of natural gas, or about 37% of world production, of which Russia contributed 22.7 tcf.

"However the deep energy crisis in Russia and the C.I.S., which started with the fuel production decline, is no way connected with the potential of natural resources," Shmal said.

"Resources are great. Foreign experts estimated deposits of oil in the C.I.S. are 20% and gas deposits 39% of world totals."

Natural gas reserves in the Russian Federation are 1.66 quadrillion cu ft, of which 1.3 quadrillion cu ft comes from three regions: Nadym-Purtazovsky, Yamal, and Gydansky, all in western Siberia.

PRODUCTION PLAN

Shmal outlined a plan to overcome the C.I.S. oil and gas crisis, originally proposed by the Institute of Energy Problems of the Russian Academy of Sciences (Table 1).

"It should be stressed that these figures, although optimistic, are quite possible," he said. "The production volumes depend on a number of factors, the main of which is the volumes of investments in oil production and gas industry and the execution of large construction programs."

Russia's policy on oil and gas exports to C.I.S. members be considerably different from that for other countries, Shmal said.

"During the period under discussion, Russia will keep the favorable balance in the exchange of power resources with C.I.S. members."

Only Kazakhstan will export fuel to Russia, in the form of coal and oil (Table 2).

"In order to perfect the structure of exports, the share of power raw materials will be decreased along with the growth of the share of more expensive products of its processing."

Foreign countries want to use more Russian oil and gas, Shmal said, with increased reliability of supply. The effective utilization of credits for developing and reactivating projects, including main pipelines, is the most important factor in developing economic cooperation between Russia and distant foreign states.

GAS NETWORK

The C.I.S. gas supply network involves 200 gas and condensate fields, 140,000 miles of main gas pipelines, 44 underground storage sites with total capacity of 2.83 tcf, 907 compressor stations with 3,850 compressors and 50 million kw capacity, 4,500 gas distribution stations, and six gas processing plants.

The main gas pipelines have 1,339 water crossings totaling 540 miles, 2,472 railway crossings, and 5,700 road crossings.

Until 1989, about 14,000-16,000 miles/year of pipeline were built, including 6,000-10,000 miles of main lines. During 1985 90, about 28,200 miles of gas pipeline were laid.

Even in 1991, when spending for pipeline construction was cut, 2,700 miles of main pipeline were laid, including 2,200 miles of gas pipeline. Another 1,200 miles of distribution and 2,200 miles of gathering pipelines were laid.

In 1992, 3,200 miles were laid, Shmal said. In 1993 a considerable growth in pipeline construction is planned, and about 7,800 miles will be laid.

Shmal said, "Even according to world standards this program of pipeline construction is rather impressive. "

There are 78,000 miles of 40-56 in. pipelines in Russia. By 1990, 56 in. lines accounted for 83.4% of the Russian gas network. The longest 56 in. pipeline runs 2,800 miles from Urengoi via Pomary to Uzhgorod.

A system of 48 in. and 56 in. pipelines was laid from the northern fields of western Siberia: Medvezhje, Urengoi, and Yamburg. It has total capacity of 21.2 tcf/year.

In the last 20 years, about 11,000 miles of the gas supply system have been rehabilitated, with 90% of this work involving substitution of pipe by laying new sections nearby.

This testifies to the lack of diagnostic techniques to locate damaged sections and carry out repair work, Shmal said. Up to 1,600 miles of gas pipeline and 600 miles of oil pipeline are rehabilitated each year, with work considerably behind demand. However, 30-40% of all main pipelines may be in need of intrapipe diagnostics.

OIL NETWORK

More than 98% of C.I.S. crude oil moves by pipeline, along with a big volume of products. Total length of crude oil and products pipelines in the C.I.S. is 56,000 miles, Shmal said.

Davies had different figures. More than 90% of current oil production moves through the Transeft network. Total pipeline length is 43,500 miles, with about 600 pump stations and storage capacity of more than 100 million bbl.

Trunk lines make up about 40,000 miles of the network, said Davies, with an average diameter of 32 in. By far the largest system is in Russia (Table 3).

There also are 370,000 miles of field gathering and distribution lines, mainly the responsibility of regional oil producers, and 19,000 miles of product lines, largely operated by Transnefte product.

Transneft's role has changed dramatically with the move to a market economy. Its original role as buyer, seller, and transporter of oil has been replaced by that of a shipping company, charging oil producers a tariff for transportation. Ruble tariffs are charged for republic and inter-republic delivery, with hard currency required for export.

As an example of Russia's newfound cooperation with the West, the Polar Lights joint venture last winter started welding double joints of arctic grade, coated steel pipe for a 12 in. pipeline to move oil from Ardalin oil field, north of the Arctic Circle in Russia's Timan-Pechora basin, to a Komineft trunk line at Kharyaga, Russia.

Joint venture partners Conoco Timan-Pechora Ltd. and Arkhangelskgeologia this year completed slightly more than half the 40 mile, 40,000 b/d line. Pipelaying is to resume next winter, with completion of the Ardalin line expected by July 1994 in time to start moving oil during second half 1994.

RECONSTRUCTION

Planned projects flowing from breakup of the FSU include construction of 680 miles of 28-32 in. pipeline to ship oil from western Kazakhstan to Kumkol. In this way oil will reach Kazakh refineries at Chimkent and Pavlodar.

Siberian gas is to replace supplies from Turkmenistan to the southern regions of Russia. This will require a 56 in. pipeline to be laid from Cheboksary to Izobilnoye.

Large underground gas storage sites in Ukraine and other regions are now separated from the Russian pipeline system, requiring construction of underground storage units in Russia.

A major problem lies in providing enough crude oil to refineries in areas of high use of petroleum products.

REPUBLICS' PLANS

Reconstruction and development are also taking place in the opposite direction, Shmal said. Turkmenistan, Kazakhstan, and Azerbaijan are working out plans to export oil and gas.

One plan involves shipping crude oil from Tengiz to Novorossiisk for further export by tanker. The intent is to boost exports from Tengiz to 150-220 million bbl/year in the first decade of the next century.

Supply of oil from Azerbaijan's Azeri field will reach 125 million bbl/year by 2000. Talks are taking place to route Azeri oil to Novorossiisk via Grozny and Tikhoretsk or collect it in Komsomolsk or Voznesensk for joint shipment with oil from Kazakhstan and Russia. The latter plan would use today's oil pipelines with slight changes.

Turkmenistan's government plans to transport natural gas from Duletabad field to Turkey. One option is to lay a 56 in. pipeline with 990 bcf/year capacity across the Caspian Sea from north to south. The possibility of laying a gas pipeline from Turkmenistan to China also is under discussion.

"The preservation and stoppage of uncontrolled disintegration of oil and gas construction organizations is the most important task during the transitional period in pipeline transport," Shmal said.

Long term credits for oil and gas construction companies are required to build capital, even though inflation rates are high.

TECHNOLOGY GAP

R. Shakhirov, director general of Vniist, Moscow, the research and development arm of the Russian Ministry of Fuel and Energy, said that during the perestroika period, Russia and other Soviet republics bought line pipe and other material from foreign companies of "doubtful reputation" without proper quality control.

"This has already had an adverse impact on the effectiveness of pipeline construction and, regretfully, on the reliability of pipelines under construction," he said.

That and other experiences taught Vniist several lessons in completing projects faster with better quality.

First, there is a wide gap between regulatory and legislative frameworks of Russia and other countries.

"It is necessary to speedily adapt many technical and technological solutions to construction conditions in our country," he said.

Choice of material should take into account the peculiarities of Russian pipelines. Before construction, it is necessary to certify all methods proposed by companies. And it is vital to coordinate supervision of construction.

Shakhirov said preparation is under way for a number of major projects in Russia with participation of foreign companies. Those include the Tengiz-Novorossiisk oil pipeline, the Baidaratsakaya Bay crossing, and an oil and gas pipeline in Sakhalin.

"The initial review of the options for preparatory works and construction works proposed by foreign companies indicates that they will be performed without due competition among the companies and without an expert evaluation of the decisions proposed," Shakhirov said.

"As a result, we already feel some biased approach to the selection of foreign companies.

"Thus, the projects proposed to be constructed in, say, Sakhalin do not match the present day level of construction. The engineering and technological potential of Russian construction organizations is not taken into consideration at all. The quotas of the labor and specialists to be used during construction of major oil and gas projects in Russia depends on coordinated efforts of all parties interested in the work."

Shakhirov said joint projects should involve:

  • Corrosion prevention.

  • Use of reliable pipe as well as effective welding and inspection for pipelines in shelf zones.

  • Application of internal coating and protection of weld zones.

  • Automated monitoring of operational pipelines.

  • Use of duplex steels, bimetallic pipe, glass reinforced plastic pipe, and flexible pipe for high pressures.

  • Cathodic protection, including continuous flexible anodes.

  • High ecological and technical standards.

COMPRESSORS

Jim Roberts, head of marketing at Rolls-Royce Industrial & Marine Gas Turbines Ltd., Coventry, U.K., said while the C.I.S. gas industry has its problems, solutions are mainly straightforward, given enough money.

The main tasks of pipeline inspection and renovation, as well as modernization of many-probably most-gas turbine compressors, are huge, given the vast scale of the C.I.S. gas system: 140,000 miles of pipeline and 46 million kw of compression capacity.

Roberts said the Soviet gas industry was localized before discovery and development of major western Siberian gas reserves began in the 1970s. Compressors, made in the Soviet Union, typically were less than 6,000 kw capacity.

In the 1970s and 1980s, installation of long distance, large diameter pipelines took off "...probably with a haste that made short cuts a virtue in the cause of the great god of production. The extent to which today's pipeline failures are a consequence of those short cuts will continue to emerge."

EMBARGO'S IMPACT

The Soviets increasingly relied on western supplies of turbine compressors, particularly for heavy industrial gas turbines for use on the export pipeline to western Europe that supplied France, Germany, Italy and others.

"The Reagan embargo on the export of American turbines to the U.S.S.R., following the Soviet invasion of Afghanistan, brought this process to a shuddering halt," Roberts said.

"The Soviet turbine industry up to that time had made no provision for developing adequate turbines to meet the gas industry's needs. To deal with this crisis, two types of large gas turbine were hastily introduced."

GPA-C16 was a 16,000 kw compressor set based on a turbine "...developed from time expired NK8 aero engines from the Aeroflot fleet." Thermal efficiency was 26.5%, unprecedented for a Soviet machine but behind the 35% offered by the best western turbines.

GTN25 was developed at the Nevsky Turbine Works in Leningrad. A complex machine, it became a "major headache" for Gazprom. Its low reliability, vibration and demands on maintenance were such that deliveries were stopped after little more than 100 units.

Even so, those two Soviet engines were the mainstay of large turbine installations during the 1980s, supplemented later by marine gas turbine derivatives in the 10,000-16,000 kw range.

"Apart from a small percent of imported western machines, the fleet of gas pumping gas turbines on the Soviet systems consists of a myriad range of small, old, inefficient machines, together with a number of more recent large machines, some of which are more or less unacceptable, and the rest of which only marginally adequate," said Roberts.

"A major opportunity therefore lies in the gas savings that would result from installation of more efficient machinery. The average efficiency of the turbines on the Soviet system can be little more than 20%, and the resulting excess fuel burn is reported to be about 70-80 billion cu in (2.5-2.8 tcf)/year."

SYSTEM ASSESSMENT

JP Kenny is comparing Soviet and western codes and standards for oil and gas pipelines in a project funded by the European Commission. Kenny's Davies said this will lay the basis for more detailed evaluation of the functions of C.I.S. pipelines.

The oil trunk line system is comparatively old, with 65% over 15 years, suggesting that failure rates will increase in comparison with the gas trunk line system (Table 4). This is borne out by failure data (Table 5).

Failure rates per 1,000 miles/year of 0.72 for oil trunk lines and 0.53 for gas trunk lines compares favorably with published figures for onshore oil and gas pipeline failure rates in western Europe of 1.01/1,000 miles/year and 1.09/1,000 miles/year respectively.

However, "It should be emphasized that direct comparison cannot be made in the absence of more detailed information on the direct applicability of FSU data currently quoted," Davies said.

Nevertheless, corrosion related failures of 70% for oil pipelines and 32% for gas pipelines account for an abnormally high proportion of C.I.S. trunk line failures, compared with corresponding western European figures of 33% and 15%, respectively.

PLANNED PROJECTS

Most major pipelines planned in the C.I.S. will carry oil and gas exports from fields developed jointly by C.I.S. governments and western oil and gas companies, Davies pointed out.

A trans-Urals project involves replacement of an NGL pipeline from South Balyk in western Siberia to the Volga-Urals region that experienced suffered "catastrophic failure" in 1989. The new $2 billion line will be 3,100 miles long, made up of gathering, transportation, and delivery lines with diameters to 24 in.

Negotiations for trans-Caucasus pipelines to carry oil 660 miles from the Caspian Sea west via the Mediterranean Sea were completed in March by the Azerbaijani and Turkish governments. A $1.25-1.5 billion, 800,000 b/d pipeline will run from Baku to the Yumurtalik terminal via northern Iran and the Armenian enclave of Nachichevan (OGJ, Mar. 15, p. 32).

Exports of oil and gas from Kazakhstan's huge Tengiz field may be combined with oil shipments from Azerbaijan. The preferred route is from Tengiz field across the northern edge of the Caspian Sea to Grozny, then on to Novorossiisk on the Black Sea.

Options are south from Tengiz to Krasnovodsk and then west across the Caspian Sea to Baku, south to Krasnovodsk and around the southern edge of the Caspian Sea to Baku, or south through Iran to Kharg Island. Cost estimates are $1.5 billion-3 billion.

Gas from Turkmenistan currently moves into the Russian pipeline network. Options under study for direct export to Europe include new twin 56 in. pipelines from central and eastern Turkmenistan through Iran and Turkey to Bursa on the Bosporus, and on to the European grid. Cost figures are $5-7 billion.

Davies said gas from the Yakutia region of Siberia may be shipped south through North Korea to supply South Korea. This would require a 2,200 mile, 48 in. pipeline at a cost of $5 billion.

Transport of gas from Yamal Peninsula to central and western C.I.S. and western Europe is under study. Davies estimated 30,000 miles of large diameter pipeline could be required to exploit Yamal and northern Tyumen reserves.

Finally, plans for development of Sakhalin Island oil and gas reserves include a major gas export system. Options include gas shipments to Japan or Korea, requiring as much as 1,500 miles of pipeline at a cost of $3 billion.

Copyright 1993 Oil & Gas Journal. All Rights Reserved.