SOVIET PIPELINE CONSTRUCTION SHOWS DECLINE

The U.S.S.R.'s long pipeline construction boom has fallen victim to Moscow's severe shortage of funds and the nation's overall petroleum industry decline. Soviet crews probably will lay fewer large diameter trunk lines during the early 1990s than at any time since the 1960s. That is in sharp contrast with other parts of the world that are undergoing a surge of pipeline construction sparked by rising demand for natural gas (OGJ, Sept. 9, p. 20).

Sept. 16, 1991

4 min read

The U.S.S.R.'s long pipeline construction boom has fallen victim to Moscow's severe shortage of funds and the nation's overall petroleum industry decline.

Soviet crews probably will lay fewer large diameter trunk lines during the early 1990s than at any time since the 1960s. That is in sharp contrast with other parts of the world that are undergoing a surge of pipeline construction sparked by rising demand for natural gas (OGJ, Sept. 9, p. 20).

With oil production plunging and gas flow showing meager growth, the U.S.S.R. currently has little need for added pipeline capacity to move hydrocarbons from western Siberia, its biggest producing area, across the Ural Mountains to European Russia's industrial and population centers.

Even if Soviet oil and gas consumption were surging and exports to markets in eastern and western Europe were increasing strongly, Soviet pipeline construction probably would have slacked off from the frantic pace set in the 1970s through 1987. Besides the shortage of money for new projects, the U.S.S.R.'s pipe production has dropped sharply along with imports, which have been affected by Moscow's inability to pay for some orders filled by foreign suppliers.

The downturn in U.S.S.R. pipeline building began in 1988, when oil production climbed to record levels and gas flow was continuing to register big gains. Pipelaying plummeted in 1989 and 1990 and is slated to tumble again this year.

THE PIPELINE SYSTEM

Total length of the Soviet pipeline network rose from 200,600 km (124,600 miles) at the end of 1980 to more than 300,000 km (186,300 miles) early in 1990. Length of crude pipelines peaked in 1987, but gas and petroleum products networks have grown slowly during the past several years.

According to official figures, the U.S.S.R. had 35,707 miles of crude oil pipelines at the end of 1980, 42,166 miles at the end of 1987, and 41,172 miles on Jan. 1, 1990. Length of gas pipelines grew from 81,289 miles at the end of 1980 to 132,211 miles by early 1990.

The badly neglected Soviet petroleum products pipeline network increased from 7,576 miles at the end of 1980 to 12,047 miles Jan. 1, 1990.

While the total length of Soviet pipelines jumped by 10,433 miles in 1987, the system gained only 6,396 miles in 1988 and 3,043 miles in 1989.

Only 3,664 miles of gas pipeline were completed in 1990 vs. a target of 5,183 miles. Sixteen of the planned 48 compressor stations were placed in service.

This year, the U.S.S.R. plans to lay 3,291 miles of gas trunklines and laterals, according to the official magazine Gazovaya Promyshlenost (Gas Industry). The Soviets again hope to add 48 compressor stations, most of them being facilities not finished as scheduled in 1990.

Increasing numbers of pipeline construction enterprises operated at a loss last year, while housing and other amenities for workers were not provided as promised.

Big gas pipeline projects were abruptly shut down for lack of funds, especially in western Siberia, and skilled workers were fired or quit their jobs. Besides the lag in gas pipeline and compressor station construction, completion of gas treatment facilities and additional underground gas storage capacity is far behind government goals.

ACTION AREAS

Best long term prospects for major new Soviet gas pipeline construction may be in eastern Siberia and the Far East. But proposals for building long pipelines tapping reserves found recently in remote areas of eastern Siberia's Yakut Autonomous Republic and in the Sea of Okhotsk off the northeast coast of Sakhalin Island would require huge credits from Japan and South Korea.

First pipeline from giant gas fields on western Siberia's far northern Yamal Peninsula is under construction. Underwater pipelines tapping huge gas fields north of the Arctic Circle in the Barents and Kara seas are being considered.

In the near term, the U.S.S.R. needs many laterals from domestic gas trunk lines more than it requires additional long distance transmission capacity from remote producing areas. Many Soviet towns and rural areas close to gas transmission lines are still bypassed.

Although more large diameter crude lines are not required, the U.S.S.R. urgently needs additional petroleum products lines from refineries to surrounding areas to relieve overburdened railroads and inadequate tank truck transportation.

HASTY CONSTRUCTION

Widespread deterioration of oil and gas pipelines built during the 1960s and 1970s is causing ever greater outlays for maintenance and repair. Losses of oil and gas from breaks in main lines and gathering lines have reached major proportions in the U.S.S.R.

During 1989, there were nearly 26,000 breaks reported in oil field gathering lines. This resulted in spills of 581,500 metric tons of crude and extensive environmental damage.