Belgium's Distrigaz has approved capital spending for pipeline construction projects in Belgium tied to the U.K. Interconnector pipeline project.
The Interconnector pipeline, currently under construction between U.K.'s Bacton terminal and Zeebrugge, Belgium, will have capacity to deliver 20 billion cu m/year of gas from Britain to continental European customers.
Spending approval hinged on conclusion of long-term transit agreements with several gas operators and further negotiations with other companies for additional transit.
Transit contracts
The long-term agreements follow from a memorandum Distrigaz sent to potential shippers in January 1996.
In the memorandum, Distrigaz published the terms and conditions under which transit and associated services are offered. The agreements have been negotiated within the framework of the European transit directive.
The total transit capacity under contract so far represents more than half of the Interconnector capacity. By comparison, in 1995 the transit volume amounted to 13 billion cu m. Added to the 12.4 billion cu m consumed in Belgium, combined transport and transit volumes totaled 25.4 billion cu m in 1995.
The total amount of transit capacity contracted so far and of volumes still under discussion accounts for more than three fourths of Interconnector capacity.
Investment decisions
Distrigaz' board approved spending of 12-15 billion Belgian francs ($360-450 million) for the so-called vTn/rTr program.
With these investments, Distrigaz will be able to transit Interconnector gas to four delivery points on the Belgian border: Blaregnies, Eynatten, Gravenvoeren, and Zelzate.
The infrastructure enhancement will allow Distrigaz to ship not only the volumes thus far under contract but also certain additional transit quantities. As disclosed in its January 1996 memorandum, terms of these additional transit agreements will reflect that Distrigaz alone takes the risk for investing in capacity for these additional volumes.
Construction will start in spring 1997. The complete vTn/rTr infrastructure will be commissioned by October 1998, when first gas is due to flow through the Interconnector.
Distrigaz said, "The vTn/rTr project figures in the trans-European networks and greatly contributes to the diversification of supplies for continental western Europe. The link with U.K. and Russian gas reserves is of great importance to the gas consumers supplied by Distrigaz and to the economic development of Belgium and its regions."
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