Overview on Transmission pipeline of gas over the world and the transnational pipelines fro India Includes many countries pipelines such as Russia , Europe , China , Pakistan , India , Gulf Nations , Iran , Iraq and issues and challenges faced foe these pipelines by diffrent nations, both origin nation , destination and the mediator nations Good Overalling total slides = 46 pressented in year 2015

1. - A N O V E R V I E W O F W O R L D
Transmission and Transnational Gas
Pipelines

2. Why ‘Transnational’ Pipelines Exist?

3. Natural Gas as Upcoming Fuel Advantages of Pipeline
 The Clean Fuel of 21st Century
 Mainly used in Power Sector; but also in
Refining Industry and Domestic
Consumption
 Key to Economic growth
 Not enough gas reserves are available in all
parts of country
 Main source of Natural Gas?
 Russian Part of Asia- 27% of world’s
reserves
 Over 70% gas reserves are in Northern
Central Asia and the Gulf Countries
 First Pipeline?
 Constructed by Soviet Union in 1970
 Supply Natural Gas to West Germany &
Parts of Western Europe
 Cheapest Mode
 Out of 3 available ways (LNG; Deep Sea
Pipeline; Gas Pipelines on Land),
its is the cheapest
 Doesn’t entail any loss of energy in conversion
 Increase Stability in Region
 Transit countries which have internal
insurgency problem;
will benefit as it’ll guarantee a source of
income
 Effect on Economic Relations
 Widen and Deepen Economic Relations in other
parts of World
 Overcome Security Risks
 Bind through close economic ties
 Security risk minimized by gains of economic
prosperity
Basis of Existence

4. Risk Involved
 Security Risk
 On shore pipelines are insecure (can be blown by militants)
 Given the history of Indo-Pak relations; the Vision of Friendship is a Gamble
 Gas Supplying Nations (Iran, Turkmenistan, etc..) are not stable democracies.
 Political Tools
 Energy Rich countries are using TransNational Pipelines as Political Leverage
 To forge Political Alliances, Extract Concessions
 High Economic Cost
 Energy rich countries demand a higher cost for supply of gas.
 Eg: ‘IPI’ is unable to proceed due to Iran’s high demand for price.

5. - A N O V E R V I E W
Major Gas Pipelines OF WORLD

6. Major Pipelines
Major 6 Pipelines of World:
1. Langeled Pipeline
2. Medgaz Pipeline
3. Russia to Europe Pipeline
4. Turkmenistan-Afghanistan-Pakistan-India (TAPI)
5. Power of Siberia Pipeline
6. Iran-Pakistan-India (IPI)

7. A SUBSEA NATURAL GAS PIPELINE
BETWEEN NORWAY AND BRITAIN
Langeled

8. Location
 Country: Norway and UK
 Direction: East-South-West
 From: Nyhamna, Norway
 To: Easington, UK
 Through: Sleipner Riser Platform
 Country: Norway
 Region: North Sea
 Operator: StatOil (Norwegian Multinational Oil and Gas)
 Discovery: 1974

9. Overview
 The pipeline construction began in 2004,
and it was opened in two stages :
 Southern Part
 Sleipner Riser Platform to Easington
 Started : October 1, 2006
 Northern Part
 Area : Nyhamna to Sleipner Rise
 Started : October, 2007
TECH SPECS
 Total Length: 1166 km
 Maximum Discharge: 25.5 bcm/year
 Project Cost: 1.7 billion pounds
 Funding by: ABN AMRO, Barclay’s Bank, RBS,
Defoe Fournier
PROJECT HANDLING
 Owner: Gassled
 Tech Service Provider: StatOil
 Operator: Gassco
 Partner:
 Petoro (Petro company multinational Oil & Gas Co.)
 StatOil
 Norkse Shell (Anglo Dutch multinational Oil & Gas
Co.)
 DONG Energy (Denmark’s Energy Co.) (Dansk Olie
og Naturgas)
 Exxon Mobile (American Multinational Oil & Gas
Co.)
 Conoco Philips (American Multinational Energy
Coorporation)
 Gassco (Norwegian state owned company of
Petroleum Industry)
Easington Terminal of Langeled

10. A SUBMARINE NATURAL GAS
PIPELINE
BETWEEN ALGERIA AND SPAIN
Medgaz

11. Location
 Country: Algeria and Spain
 General Direction: South to North
 From: Hassi R’mel, Algeria
 To: Almeria, Spain
 Passing Through: Mediterranean Sea

12. Overview
HISTORY
 Idea arose in 1970 ; but couldn’t be
implemented due to technical
limitations.
 Preparation started in 2001
 Feasibility study carried out in 2002-
2003
 Construction :
 Started – March 7, 2008
 Started at – Almeria
 Ended in – December, 2008
 Inaugurated on March 1, 2011
TECH SPECS
 Total Length: 757km
 On Shore: 547km
 Off Shore: 210km
 Diameter of Pipeline:
 On Shore: 48 inch
 Off Shore: 24 inch
 Maximum Discharge: 8 bcm/year
 Total Cost: 900 million euro
 On Shore: 270 million euro
 Off Shore: 630 million euro

14. Project Handling
Partner Companies with Share %
 Sonatrach- 43%
 State owned Algerian Oil & Gas Company
 CEPSA- 42%
 International Petroleum investment company
 Gas Natural Fenosa- 15%
43%
42%
15%
SonaTrach
CEPSA
Gas Natural Fenosa

15. THE TRANSNATIONAL YAMAL – EUROPE GAS
PIPELINE RUNS ACROSS FOUR COUNTRIES:
RUSSIA, BELARUS, POLAND AND GERMANY.
Russia – Europe
Pipeline

16. Tech Specs
 CAPACITY: 33 billion cubic meters per annum.
 DIAMETER: 1,420 millimetres (56 in).
 This new export corridor increased flexibility and reliability of Russian gas supply to Western
Europe.
 The gas pipeline construction started in 1994 and finished in 2006.
Economics of Yamal-Europe pipeline
 Russia offering discounted price on natural gas in lieu of full control of natural gas pipeline to
Europe.
 Poland’s apprehension of being heavily dependent on Russia.
Future Plans
 Yamal – Europe-2

17. Ownership
 Gazprom:
 Russian section(402 kms) and
Belarusian section(575 kms) of the
pipeline is owned and operated by
Gazprom.
 EuRoPolGaz:
 A joint venture of Gazprom and Polish
PGNiG owns the Polish section of the
pipeline which is about 683 km long.
 WINGAZ:
 A joint venture of Gazprom and
Wintershall Holding GmbH owns and
operates the German section of the
pipeline.

18. NORD Stream Pipeline
 Nord Stream (North Trans Gas and North
European Gas Pipeline)
 Offshore natural gas pipeline from Vyborg in the
Russian federation to Greifswald in Germany.
 It is owned and operated by Nord stream
AG.
 CAPACITY: 55 billion cubic meters per
annum.
 DIAMETER: 1,220 mm(48in)
 The project includes two parallel lines.
1. First line of the pipeline was laid by May
2011 and was inaugurated on 8
November 2011.
2. The second line was laid in 2011–2012
and was inaugurated on 8 October 2012.

19. Analysis
Costing
 According to Gazprom the costs of the onshore
pipelines in Russia and Germany are around €6
billion.
 The offshore section of the project is expected to
cost €8.8 billion.
Political aspects
 Move by Russia to bypass traditional transit
nations.
 To exert political influence on some of the
transit countries.
 Europe could dangerously depend on Russia for
its gas supply.
Security and military aspects
 Security threat to Sweden.
 Espionage.
Economic Aspects
 Economic Savings in transits.
 But higher maintenance costs.
Environmental Aspects
 Sea-bed being disturbed.
 Baltic marine habitat being disturbed.
Expansion Plan
 Two additional lines doubling the
capacity.

20. Northern Lights Pipeline
 Northern Lights Pipeline(built in the Soviet Union from the 1960s to
1980s) is a natural gas pipeline system in Russia and Belarus.
 It is one of the main pipelines supplying north-western Russia and is an
important transit route for Russian gas to Europe.
 The Northern Lights pipeline system was built in the Soviet Union from
the 1960s to 1980s
 The Northern Lights pipeline system has a total length of 7,377
kilometres.
 Around 2,500 kilometres of 7,377 is used to transport Russian gas to
Europe.
Owners
 Gazprom
 Beltransgaz

21. South Stream
 South Stream pipeline is an abandoned pipeline project to transport natural gas of the Russian Federation.
ROUTES
 Through the Black Sea to Bulgaria and through Serbia, Hungary and Slovenia further to Austria.
 Diameter: Diameter of pipeline is 32 inches(810mm)
 Discharge: Designed discharge capacity of pipeline is 63 billion cubic meters per annum.
REASON FOR ABONDONING THE PROJECT
 Non-compliance with European Union’s condition.
 Russia’s focus on Asia and Turkish market.
 Lack of proper funds due to sanctions imposed.
 Legal problems.
IMPLICATION
 Conflict with Ukraine.
 Nabucco Pipeline Project.

22. T.A.P.I
Turkmenistan – AFGHANISTAN – PAKISTAN –
INDIA

23. Route
Main Route
 The 1,735 kilometres (1,078 mi)-long pipeline will run from gas fields in Turkmenistan
through Afghanistan and Pakistan to India.
 Dauletabad Gas fiels while more recent reports indicate that it will start from
the lolatan(Galkynsh) gas field (Reserves of 16 trillion cubic feet).
 Afghanistan, TAPI pipeline will be constructed alongside the Kandahar-Heart
highways in western Afghanistan.
 Pakistan via Quetta and Multan in Pakistan.
 India the Indian town of Fazilka, near the border between Pakistan and India
Alternative Route
 Taskepri in Turkmenistan to Faryab followed by Balkh, Samangan, Kabul
and Nangarhar Province of Afghanistan, and from there
to Peshawar, Nowshera, Attock, Islamabad and Lahore in Pakistan to India

24. Peace Pipeline
Turkmenistan Perspective
 Reached out to Turkey, Japan, and South
Korea.
 To develop projects in Turkmenistan for
LNG, Gas-to-Liquids.
 The manufacture of fertilizers from
natural gas.
 Chance to market its gas to deficit south
Asian countries.
Afghanistan Perspective
 Critical source of employment and
revenue spinner
 Contributing to the country's energy
security and thus boosting Afghan
development
Pakistan Perspective
 Economic development
 Rising energy demand will be catered to
an extent.
 Improve relations with India &
Afghanistan
 Create pressure to Iran as it is an
alternative to IPI/
India Perspective
 A growing power crisis
 The steady drop in Krishna Godavari
basin (KG-D6) natural gas production
 Lessen the dependence on petrol
 First joint pipeline between India-
Pakistan
 Economic development

25. Overview
HISTORY
 MoU between the governments of Turkmenistan
and Pakistan for a pipeline project was signed.
 Chose CentGas- Unocal withdrew from the
consortium .
 Pakistan, India and Afghanistan signed a
framework agreement to buy natural gas from
Turkmenistan.
 India and Afghanistan failed to agree on transit
fee for gas passing through Afghan territory &
Pakistan.
 GAIL to sign the Gas Sale and Purchase
Agreement (GSPA) with TurkmenGaz,
Turkmenistan’s national oil company.
TECH SPECS
 Total Capacity:1,078 millimetres pipeline
 Working pressure :100 standard atmospheres
(10,000 kPa).
 Initial capacity: 27 billion cubic metres
(950 billion cubic feet) of natural gas per year.
 Afghanistan: 2 billion cubic metres (71 billion
cubic feet)
 Pakistan:12.5 billion cubic metres (440 billion
cubic feet)
 India: 12.5 billion cubic metres(440 billion
cubic feet)
 Future Development: 33 billion cubic metres
(1.2 trillion cubic feet).
 Six compressor stations would be constructed
along the pipeline.
 The pipeline was expected to be operational by
2014.

26. Challenges
Key Challenges
 The seller’s willingness to sell gas at a price
feasible for the ultimate buyer.
 Volume off-take assurance by end-consumers.
 Funding of the pipeline.
 Geopolitical risks associated with the
construction and operation of the 1,735km long
pipeline.
Commercial Challenges
 Cost Implication- Inability to find financing.
 Selection of commercial consortium.
Geopolitical Challenges
 Security Issues in Afghanistan
 Tribal areas in Pakistan
 Issues between Washington, Iran and Pakistan
 India has concerns regarding project security
after the 2014 withdrawal of US forces from
Afghanistan.
 Iran keen on alternative to TAPI- (IPI)
 Iran-American & Russian American factors
 China factor

27. Analysis
Size of TAPI Pipeline
 Length : 1735 km
 Turkmenistan: 200 Km
 Afghanistan : 735 km
 Pakistan- India : 800 km
 Diameter : 1420 mm (56 inch)
Capital Spending
 $7-$10 billion
 Asian Development Bank is the Transaction
Advisor for the project.
Start & End of the Project
 Proposed Project : In 1990s (almost 20
years ago)
 Original Project Start Date : 15th
March 1995 (Turkmenistan-Pakistan)
 TAPI Agreement Date : 24th April
2008
 Implementation Start Date:
December 2015 (Tentatively)
 Project End Year : 2018 (Tentatively)
Owners of the Pipeline
 Land Ownership : Turkmenistan
 Leader of Consortium: To be decided
in September 2015
 Contenders : Total S.A &
PETRONAS
Financing of the Project
 Total S.A to be consortium leader
constructing the pipeline. (Tentatively)
Companies with Equal Stake
 Turkmengaz
 Afghan Gas Enterprise
 Inter State Gas Systems (Private) Limited
 GAIL (India) Limited

28. Risks
Geopolitical Risk
 India-Pakistan Relations
 Security Issues
Environmental Risk
 Displacement of communities and individuals
 Devastation of traditional livelihoods from pollution
 Environmental accidents.
 The lack of transparency in the dissemination of the findings of environmental
impact assessments (EIAs) is of major concern.
Commercial Risk
 Expected price of Natural gas will 10-12 millimeters/unit which is very high for
energy companies.

29. A NATURAL GAS PIPELINE
BETWEEN RUSSIA AND CHINA
Power of Siberia

30. Tech Specs
Technical Specifications
 Length – about 4,000 kilometers
 (Yakutat – Khabarovsk – Vladivostok –
3,200kms)
 (Irkutsk Region – Yakutat – nearly 800kms)
 Working pressure – 9.8 MPa (100 Ata);
 Annual output – 38 billion cubic meters.
 30 billion cubic meters from Kovyktin
 8 billion cubic meters from Chayandin
Size and Capacity
 Diameter – 1,420 mm or 55.9 inches
 68 billion cubic meters annually
Owners and the Users
 Gazprom (Owned by Russian Government)
 CNPC (China National Petroleum Corporation)
 Beijing-Tianjin-Hebei metropolitan area in the
north of China
 Yangtze River Delta in the east.
Time Period
 30 years (2018-2047)

31. Geo Political Implications
For Russia
 The deal provides alternative market
for Russian gas
 Russian gas supplies as a result will
be least affected by diversification of
European gas supplies
 Russia hardened its stand in Ukraine
 Ukraine as a result has the highest
gas prices in Europe
 The deal paves the way for Russia in
the Asian markets of the “pivot to
Asia” initiative
 The current pipeline will also
facilitate
For China
 Provides the Chinese players an entry in
the Russian gas industry
 Reduces the reliability of China’s
demands on U.S LNG imports
 China will rely comparatively less on
U.S dominated sea routes
 Gas supplied will also nullify the
pollution tensions which may result in
political instability
 Both Russia and China coupled could
challenge U.S supremacy

32. Strategic & Commercial Implications
 Gas deal viewed as a facet of maturing
economic ties between China and Russia
 30 commercial deals signed between two
countries
 Included long term strategic implications like:
 Currency Swaps
 Partnering on rail, power and port projects
 Joint development of a wide body long haul
passenger aircraft
 Chinese automotive assembly in Russia
 A Maturing Energy Partnership
 Doublilng of oil exports from Rosneft since July
2014
 Yamal LNG Project
 Rosneft-CNPC deal
 Shanjhai Chemical Industry Park
 Tainjin Oil refinery
 Acquisition of technology from China for shale
gas Extraction
For China
 East Siberian gas can only be
developed with china as a customer
 China would pay around $10/mbtu
For Russia
 The size of the entire deal is estimated
to be $400 billion
 Russia can leverage this liquidity in a
time when it is sighting sanctions
from European markets
 This would enable Russia to be a
“Swing Supplier”
 This will be Gazprom’s most
profitable endeavor

33. Analysis
FINANCIAL ANALYSIS
 Russia to invest a pre-payment capital of $50
billion
 China to invest a pre-payment capital of $25
billion
 Proposal to finance the pipeline through an
equity stake of CNPC in Gazprom
 Laying of the pipeline to cost around $
5billion which will be bared by gazprom
 This increses the capital spending by Russia
to $55 billlion
RISK ANALYSIS
Technical
 Corrosion (both internal and external)
 Pressure handling capacity
 Maintenance
 Other environmental factors which
could affect the
Financial
 Pricing
• Formula based on the basket of crude
oil products
• Take-or-pay contractual obligation

34. - P R E L I M I N A R Y A G R E E M E N T
B E T W E E N I R A N A N D P A K I S T A N 1 9 9 5
A N D B E T W E E N I R A N A N D I N D I A I N 1 9 9 8
Iran-Pakistan-India
Pipeline
(IPI)

35. Tech Specs
• Type of pipeline - Natural gas
• Route – from Asaluyeh in Iran
to Multan and Karachi in
Pakistan to Delhi in India
• Length – 2700 km
• Diameter – 42 inch
• Capacity – 110 million cubic
metres of gas a day
• Maximum discharge – 40
billion cubic metres per year

36. Challenges Risks
 Sanctions on Iran by the U.S and
other world powers
 Pressure of U.S on Pakistan and to
abandon the project due to its political
relations
 Disagreement between pricing
 Security reasons – the social unrest in
Iran and political unrest
 Financial constraints for Pakistan
 Unrest in Baluchistan
 Weak Transit negotiations
resulting in high transit fees to
Pakistan
 China bagging the project if over
India due to failing negotiations
More Analysis

37. Financial Implications
 Total cost-$ 7.5 billion
 Pipeline in Iran costs $700m
 Pipeline in Pakistan -$2.5billion
 Iran’s loan to Pakistan -$500m
 Russia’s aid to Pakistan
 China’s aid to Pakistan to build Pakistan side of pipeline
costing $2billion

38. Uses of Pipeline
 Fulfilment of domestic gas needs
 Generation of revenue for Iran as an exporter and Pakistan as
a transit country
 Increase Investment opportunities
 Indirect benefits like employment avalibility of clean fuel and
industrial growth
 Building of cooperation and peace for the affected countries
 Shift towards gas driven and environment friendly economies

39. - A N I N D I A N P E R S P E C T I V E
Natural Gas Pipelines in India

40. Gas Pipeline Network in India
 There are presently three major pipeline entities in gas transportation
across the country i.e. GAIL, RGTIL and GSPCL
 Reason for under utilization: Acute domestic gas shortage
 Improvement solution : Government proposal on national gas grid.
 Problem :
 Not economically viable
 Lack of Funding.
Transporter (in KM) (in %)
1 GAIL 10841 70.67%
2 RGTIL 1469 9.57%
3 GSPL 1874 12.22%

41. Challenges
Following are the main Challenges of pipeline transport:
1. It is not flexible, i.e., it can be used only for a few fixed points.
2. Its capacity cannot be increased once it is laid.
3. It is difficult to make security arrangements for pipelines.
4. Underground pipelines cannot be easily repaired and detection of leakage
is also difficult.

42. Financing
• Finance comes from the project sponsors (which fund directly, or fully guarantee the
debt), through project finance, or (most often) through a combination of the two.
• Finance is such a crucial element that the pipeline project needs to be structured from
the beginning with the ultimate financing mechanism in mind.
• Pipeline fees:
• Should be set to match the currency of funding
• Throughput reliability:
• The shipping agreements should be with strong companies, and be of a longer term than the
project loans
• Supply risk:
• A key risk to a pipeline financing is that there are either insufficient supplies to take up the
pipeline’s capacity, or inadequate infrastructure to bring the gas to the pipeline’s entry point.

43. GAIL India
• GAIL (India) Limited is the largest state-owned natural gas processing and
distribution company in India
• GAIL (India) Limited was incorporated in August 1984 as a Central Public Sector
Undertaking (PSU) under the Ministry of Petroleum & Natural Gas (MoP&NG)
• It has following business segments: Natural Gas, Liquid Hydrocarbon, Liquified
Petroleum Gas , Transmission, Petrochemical, City Gas Distribution, Exploration
and Production, GAILTEL and Electricity Generation
• GAIL commissioned Hazira-Vijaipur-Jagdishpur (HVJ) pipeline in 1991
• It was one of the largest cross-country natural gas pipeline projects in the world.
This 1800-kilometre-long pipeline was built at a cost of INR 17 billion and it laid
the foundation for development of market for natural gas in India

44. Challenges of GAIL
0
200
400
600
800
1000
1200
1400
2012-13 2016-17 2021-22 2026-27 2031-32
Demand
Supply
1. There is a great potential in the market but supply of natural gas is not meeting the demand.
2. Gail should search for more alternatives ie is more than Ras gas
3. Land Accusation
 Gail Plans to buy US shale Asset for Rs 9500 crore
• We are searching for an asset that can produce about 3 million tones per annum. That will help
cover the pricing risk of about 50 % of LNG we have contracted to buy

45. GSPL
 GSPL a GSPC group company in in developing energy transportation infrastructure
and connecting natural gas supply basin and energy terminals to growing markets .
• It is the second largest gas transporter in the country
• GSPL plans to connect all 25 districts of Gujarat with 2200 km of high pressure gas
pipe line.
• It is the only pipeline infrastructure company operating on an open access basis.
• Currently , GSPL operates a medium to high pressure gas transmission grid
comprising approximately 1666 km of natural gas pipeline .
• GSPL has won the bid for two cross country pipelines Mallavaram – Bhillwara
(1600 km) , Mehasana – Bhatinda (1670 km)

46. GSPL Finance
 Gujarat State Petronet Ltd (GSPL) is likely to see better performance over the next
two years.
 First, its city gas distribution (CGD) business is expected to be merged with four
companies of Gujarat State Petroleum Corporation (GSPC), a sister company. The
merged entity will be named GSPC Distribution Networks (GDNL). The merger,
likely to be completed in the June quarter, will boost GSPL's consolidated
earnings per share (EPS) in 2015-16. The combined entity will be India's largest
CGD company
 Second, the company management expects the Petroleum and Natural Gas
Regulatory Board (PNGRB) to raise rates by 8-10 per cent.
 Third, softening LNG prices and higher offtake from Essar Steel, Essar Oil and
ONGC Petro additions Ltd, among others, could boost transmission volumes