Pipelines and Energy Security Institutions

Theresa Sabonis-Helf

Image from DOE website: SPR Pipelines

Russian Nord Stream Natural Gas Pipeline Facts

Route: Portovaya Bay, Russia to coast Germany (underwater) – Baltic Sea

Capacity: 27.5 billion cubic meters (2010); 55 bcm (2012 – 2nd pipeline)

Length: 1,200 km (World’s largest underwater natural gas pipeline – max depth: 210 meters)

Cost Estimate: 5 Billion Euros (60% Increase – 8 Billion Euros) – Cost 2.2 Billion Euros if built on land

Supply: Shtokman gas field (estimated reserves of 3.7 trillion cubic meters – 2010 available)

Shareholders: Gazprom (51%), BASF (24.5%), E.ON (24.5%)

Contracts: Wingas – German Gas Co. – 9 bcm for 25 yrsDONG – Danish Co. – 1 bcm for 20 yrsE.ON – German Co. – 4 bcmGaz de France – 2.5 bcm

Slide courtesy of Nelson Dodd, NWC Elective 5404

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Existing Soviet Oil Pipelines

“Chechen Loop”

Baku-Tbilisi-Ceyhan(BTC) Pipeline

1,000,000 B/Day

Caspian Pipeline Consortium (CPC)

1,500,000 B/Day

Iran “Swap”80,000 B/Day

Trans-Afghan Gas Pipeline (Proposed)

Baku-Supsa Oil Pipeline

200,000 B/day

Kazakhstan-China Pipeline 200,000 B/Day

Russian Oil and Gas Pipelines to Europe: Actual & Proposed

Map from US Dept of Energy EIA 2008

European Reliance on Russian Natural Gas (2006-

2007)RankRank Country Country

(bcf in 2007)(bcf in 2007)2006 % of 2006 % of

Dom. Cons.Dom. Cons.

1 Germany (1,378 bcf)

36%

2 Turkey (827 bcf) 64%

3 Italy (742 bcf) 25%

4 France (346 bcf) 20%

5 Czech Rep (247) 79%

6 Poland (247 bcf) 47%

7 Hungary (226 bcf) 54%

8 Slovakia (223 bcf) 100% Data from EIA Russia Country Report 2008

Russian Gas Sales Prices 2008($ per thousand cubic meters)

European Market priceEuropean Market price $370.00$370.00

Lithuania (~78% of supply) $280.00

Latvia (~ 78% of supply) $280.00

Estonia (~78% of supply) $280.00

Georgia (100% of supply) $230.00

Moldova $191.25

Ukraine (66% of supply) $179.50

Belarus (Q1) (98% of supply) $119.00

Armenia $110.00Data from EIA Russia Country Report May 2008

Major gas trade movements

Major trade movementsTrade flows worldwide (billion cubic metres)

Natural Gas Proven Reserves 2008 (Trillion Cubic Feet)

Country Reserves

(Tcf)

Russia 1529.2

Iran 1045.7

Qatar 899.3

Turkmenistan 280.6

Saudi Arabia 267.3

United States 237.7

UAE 227.1

Country Reserves (Tcf)

Nigeria 184.2

Venezuela 170.9

Algeria 159.1

Indonesia 112.5

Iraq 111.9

Norway 102.7

Australia 88.6

Map from Heritage Foundation website

Map from EIA Country Report: Iran 2009

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LNG Exports: A Changing Market

Year Number of Exporters

Total Volume

1993 8 Less than 3 Tcf

1997 9 Less than 4 Tcf

2002 12 5.4 Tcf

2007 15 8.3 Tcf

New Exporters since 1998: Azerbaijan, Egypt, Equatorial

Guinea, Nigeria, Norway, Oman, Trinidad & Tobago

IEA Member Countries• Australia• Austria• Belgium• Canada• Czech Republic• Denmark• European Commission• Finland• France• Germany• Greece • Hungary• Ireland • Italy• Japan• Republic of Korea

• Luxembourg• Netherlands• New Zealand• Norway• Poland• Portugal• Slovak Republic• Spain• Sweden• Switzerland• Turkey• United Kingdom• United States

The IEA and Energy Security

Members Agree:

• That there is no sustainable development without secure energy supply

• That diversification of supply and distribution (by source and type) will be pursued

• That transparency in world energy markets and effective responses to supply disruptions are critical

• To foster dialogue and data between energy producers and consumers

• 1970s-19809s: Reducing the level of imports/ managing risks associated with imports

• Contemporary: Includes risks such as accidents, terrorism, underinvestment, poorly designed markets

• Short term responses: coordinated use of energy stocks, temporary blackouts, redirected supply flows (ERMs triggered at 7%; CERMs at any level)

• Medium and long term: increase energy efficiency, diversify fuels and sources, ensure adequate reserves margins

Where does the SPR fit in?

The United States SPR is the largest supply of emergency crude oil in the world. (It currently has the capacity to hold 727 million barrels). Congress approved a decision to expand capacity to 1 billion barrels.

Decisions to withdraw oil are made by the President under the Energy Policy and Conservation act.

There have been two emergency draw-downs of the SPR: during Operation Desert Storm and after Hurricane Katrina.

IEA Member countries hold approximately 1.4 billion govt. controlled barrels of oil

Data from the US Department of Energy website