International Pipeline Construction Report

By Rita Tubb, Managing Editor | November 2010, Vol. 65 No. 11

Asia Pacific
With the Asia Pacific region fast becoming the world’s most significant oil and gas consumer, it is not surprising that the region accounts for the highest number of new and planned pipeline miles. Of 35,546 miles, 18,594 represent pipelines in the engineering and design phase, while 16,952 miles reflect projects in various stages of construction.

As to activity, China, India and Australia continue to be the most active nations in the Asia Pacific region in terms of construction.

Much of the activity in China is driven by state-owned China National Petroleum Corp. (CNPC), the country’s largest natural gas company in upstream and downstream sectors. Earlier this year, CNPC began pre-build activity in preparation for Phase II of the 920- mile Central Asia-China Natural Gas pipeline from Kazakhstan’s Beyneu to Shymmkent. Construction is slated to begin before year-end.

Shortly after placing the second West-East Pipeline in commercial operation, CNPC announced plans to build a third West-East Pipeline to run parallel to the second West-East line terminating in Shandong. CNPC estimates that it will invest $14.6 billion in the project that will have an annual transmission capacity of 30 Bcm/a. There have been proposals for fourth and fifth West-East pipelines which are in pre-feasibility stages.

Analysts also expect India’s natural gas import demand will increase. Several import schemes, including LNG and pipeline projects, have either been implemented or considered.

In northern India, Tractebel Engineering is constructing the $168 million Jagdishpur-Haldia gas pipeline for GAIL (India) Ltd. The 1,274-mile pipeline will carry gas from the Mahanadi and KG basin to the four Indian states of Uttar Pradesh, West Bengal, Jharkhand and Bihar. Completion of the entire project is slated in 2013.

Much of the activity in Australia is closely tied to the eight new LNG terminals that are expected to begin operation by 2015. One project is by Australia Pacific LNG (APLNG), a 50-50 joint venture between Origin Energy and ConocoPhillips, to deliver coal seam gas (CSG) to an LNG plant in Gladstone with processing capacity of up to 18 MMt/a.

Plans call for construction of a 280-mile pipeline from the CSG field to the LNG plant. Construction will start in 2011 with completion in 2013.