Analysis: Oil and Gas Pipeline Watch
Nov. 5, 2007 at 6:24 PM
By SIOBHAN DEVINE
UPI Correspondent
China finishes construction of tunnel for Sichuan-Shanghai gas pipeline
On Monday, workers in China’s Hubei province completed construction of a 1,405 meter tunnel connecting the banks of the Yangtze River in Yichang City for a new gas pipeline to supply China’s energy-short east.
The proposed 2,203 kilometer gas pipeline will connect the southwestern province of Sichuan to Shanghai. It is expected to transport 12.1 billion cubic meters of natural gas annually from the Puguang field to China’s central and eastern regions.
According to the National Development and Reform Commission, the pipeline’s gas should reduce carbon dioxide emissions by tens of millions of tons annually, according to the state-owned Xinhua news service. Experts also hope that the pipeline’s approximately $8.25 billion in investment will spur economic growth in western China.
According to a NDRC proposal, China hopes to extend its network of natural gas pipelines to 44,000 kilometers by 2010.
In a related story, China Daily reports that Russian President Vladimir Putin and Chinese Premier Wen Jiabao will discuss Sino-Russian energy cooperation during their talks in Moscow this week.
Sergey Razov, Russia's ambassador to China, declined to comment on the possibility of an agreement this week between Russian and Chinese companies to build an oil pipeline from Siberia to northeast China, however.
The countries are still negotiating the price of natural gas to be imported by China through two other pipelines, he said.
TransCanada: Cost of Keystone pipeline almost double original estimates
TransCanada Corp. announced Tuesday that its proposed Keystone pipeline will cost $5.2 billion, almost twice its earlier estimate of $2.8 billion.
According to the company's Web site, the pipeline will transport crude oil from Canada's Hardisty, Alberta, to Wood River and Patoka, Ill., as well as Cushing, Okla. It will extend 2,148 miles and is expected to carry 590,000 barrels per day by 2010. Operations are planned to commence in late 2009, when Keystone will begin transporting 435,000 barrels per day to Illinois.
The spike in Keystone’s costs is a result of design changes and inflation, specifically the high prices of steel and labor, said TransCanada, according to the Globe and Mail.
“Even with the cost increases, we’re still very, very competitive,” said Russ Girling, president of the company’s pipeline business.
Opposition to the pipeline comes from the Canadian Energy and Paperworkers Union, which argues that 18,000 jobs would be lost to the United States if the project goes through.
Engineers warn Nigerian authorities against underwater oil pipeline in Apapa
The proposed underwater oil pipeline in Apapa, Nigeria, could pose serious risks to the surrounding area, according to the Nigerian branch of the Institute of Marine Engineering, Science and Technology.
Proponents of the pipeline say it will be laid deep in the seabed, beneath the port’s heavy maritime traffic. However, according to IMAREST Nigeria’s honorary secretary, Alex Peters, this will not eliminate the risk of pipes being exposed and rupturing, which in turn could result in explosions and fires in Apapa.
The Indigenous Shipowners Association of Nigeria is also opposed to the plan. “Nowhere in the world are submarine pipelines laid in a harbor. A harbor means restricted waterway. Ships passing through the harbor may need to drop anchor during emergency. Can you imagine dropping anchor on top of a petroleum laden pipeline?” said ISAN’s secretary, Dada Labinjo, Africa News reported.
IMAREST and ISAN have registered their opposition with both the federal government and the Nigerian Ports Authority.
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