A Priority Project of the EU and integral component of the ... · East-West Energy Corridor pipelines paved the way for Caspian Gas to Europe Sangachal Kazakh Ceyhan Erzurum Supsa

© 2010 -White Stream Pipeline Company Limited,

White Stream™

A Priority Project of the EU and integral

component of the Southern Gas Corridor

Roberto Pirani – Chairman of the Board

November 2010

Project development by the White Stream Consortium

White Stream Pipeline Company Ltd – London, UK

www.gueu-whitestream.com

A factor important for Caspian region

governments and for potential

upstream investors is the security

and continuity of demand

The concurrent development of

White Stream with Nabucco and

other Turkish loop projects offers

producers and exporters such

security of demand and security of

export.

The EU’s Southern Corridor projects

are mutually reinforcing

The important result is not only 60

Bcm/y+ of capacity, but also

dramatic reduction of perceived

transportation risks

The White Stream gas transportation project in the

context of the Southern Gas Corridor

2© 2010 -White Stream Pipeline Company Limited, the White Stream Consortium

White Stream

East-West Energy Corridor pipelines

paved the way for Caspian Gas to Europe

Sangachal

Kazakh

Ceyhan

Erzurum

Supsa

Picture from CB&I John Brown Limited

The three success

stories from the East-

west corridor prove that

market-transforming

pipelines can be

realised

3

© 2010 -White Stream Pipeline Company Limited, the White Stream Consortium

The EU needs to replace declining

production and meet new demand growth

IAE:

Demand for gas in Europe

will increase from 526 bcm/y

in 2010 to 622 bcm/y in 2030

Europe gas imports will

increase from current 232

bcm/y to 476 bcm/y

(+244 bcm/y)

http://wap.trend.az/en/page8/1722459/

There is a growing need for additional gas

from new supply routes to the EU

Data from: IEA WEO 2007-09, BP Statistical Review of World Energy, 2002-09 and other

sources


0

100

200

300

400

500

600

700

1960 1970 1980 1990 2000 2010 2020 2030 2040

Volume Bcm

Continental European production

EU27 consumption

2020 import gap yet

to be contracted

North Sea production

White Stream: 32 Bcm

IEA 2007

IEA 2008

IEA 2009

IEA 2009

3%

6%

IEA 2009



© 2010 GUEU-White Stream Pipeline Company Limited, the White Stream Consortium

3.0

Reserves and resources to supply

EU‟s Southern Corridor are huge

Main data: BP Statistical Review of World Energy, 2009 (Tcm)

45Change of PARADIGM:Caspian basin – the third „major

league‟ gas supply centre in the world.

Gaffney Cline REPORT confirms many companies‟ long-held view –

the gas is there

28

8.1..

1.3

1.9+

1.6

2.14.5

20+2.5+

3.2

© 2010 -White Stream Pipeline Company Limited, the White Stream Consortium 5


28

8.1..

3.0

1.3

1.9+

1.6

2.1

45

2.5+

4.5

The EU Southern Corridor vision will

STRENGTHEN Europe’s single gas market

20+

3.2




28

8.1..

3.0

1.3

3.2

1.9+

1.6

2.14.5

Without Southern Corridor

20+

45

2.5+



© 2010 -White Stream Pipeline Company Limited,

The EU Energy Commissioner

Günther Oettinger told the energy

forum in Ashgabat on the 14th of

April 2010:

“The Commission will continue to

strongly support the development of

the Southern Corridor”

“Several projects make up the

southern corridor, including

Nabucco, the ITGI and White Stream.

EU support the development of

the Southern Corridor

The importance of the southern corridor was explicitly

recognized by all 27 Head of States of the European

Union at the European Council in March 2009”

The European Parliament Resolution on the

need for an EU strategy for the South Caucasus

“ Recognises the significance of the region

for the EU's energy cooperation and energy

security, especially in the context of the

development of the Southern Corridor

(Nabucco and White Stream) “

European Parliament resolution of 20 May 2010 on the need

for an EU strategy for the South Caucasus (2009/2216(INI))

para.29

www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2010-0193&language=EN&ring=A7-2010-0123

The European Parliament …

A successful Caspian gas

strategy: BIG GAS offer

If Caspian countries are expected to

decide on allowing western

companies for E&P and support

westbound projects, they will need to

see that potential exports to Europe

are sufficiently high and capable of

providing a significant part of their

future revenues.

… otherwise it will be difficult for

them to get engaged in the complex process not favored

by some of the established partners

CDC – conceived by the Commission as a component of

the Southern Gas Corridor will be able to provide such

expanded opportunity.


Two key strategies

The Southern Corridor plan includes two key strategies needed to open

up Caspian gas to western investments and direct export to the European

gas market

1 BIG GAS strategy – by stressing its aim to buy large import volume

from Caspian (90 Bcm/y or more) EU reduces barriers hindering the

development.

2 Effective CORRIDOR strategy - by stressing its aim to develop all

key projects of the Southern Corridor the EU reduces the perceived

transportation risks for the Caspian producers and enables decisions

on trans-Caspian crossing and new PSAs with western companies.

Upstream investments are huge and risky.

Caspian producers will want to have a secure gas export

infrastructure to Europe

11

12

White Stream is feasible

• Market feasibility

• Demand for gas

• Supply of gas

• Economic and

commercial feasibility

• Technical feasibility

proven ultra-deep water

pipeline technology

• Legal feasibility

Our work up to date co-

funded by the European

Commission has proven:


White Stream‟s development

schedule aims to deliver first

gas shortly after Nabucco

• White Stream is already

economical with 8 bcm/y

• Capacity can be increased to

meet need by adding offshore

strings

• The volume of gas will

build-up gradually to 32 Bcm/y

• The build-up schedule is flexible

and can be ACCELERATED!

The White Stream project is commercially viable

and offers flexibility in capacity build-up

• The volume of gas will

build-up gradually to 32 Bcm/y

• Capacity can be increased to

meet need by adding offshore

strings

• The build-up schedule is

flexible and can be

ACCELERATED!

• White Stream is already

economical with 8 bcm/y

Stage 2: 16 Bcm/y

Stage 1: 8 Bcm/y

Stage 3:

32 Bcm/y


1st string: 8 Bcm/y

2nd string: 8 Bcm/y

-

8

16

24

32

2011 2016 2021 2026 2031 2036 2041 2046 2051

Bcm Volumes

4th string: 8 Bcm/y

3rd string: 8 Bcm/y

2nd string: 8 Bcm/y

1st string: 8 Bcm/y

White Stream aligns multiple interests

There are three broad sets of interests in play with respect to the

Southern Corridor:

• The EU needs diversity of routes as well as of sources.

• Caspian need a sufficiently large, guaranteed revenue stream to

warrant large, new direct gas trade deals and investment in

upstream exploration and production.

• Turkey‟s „land bridge to Europe‟ is in many ways the natural or

obvious gas pipeline route, but the prospect of a transport monopoly

slows progress on agreements, while the existence of a range of

joint interests with Russia further complicates Turkey’s decisions.


How to align these interests? (1/2)

• The Southern Corridor can align the interests of the EU, Caspian

gas producers and Turkey with much higher certainty and in much

shorter time frame if it has White Stream as an integral component.

• For Turkey, the development of White Stream concurrently with

Nabucco will neutralise concerns about a future transport monopoly.

• The three-way alignment of interests outlined above will catalyse

earlier and larger scale investment in exploration and production of

Caspian gas.

• The transported gas volumes will be larger and the timing of

developments will be sooner, leading to outcomes with greater

overall economic attractiveness and energy security for Turkey.


How to align these interests? (2/2)

• The limited production capacity that investors have developed and

the volumes of Caspian gas produced at present are a reflection of

the current lack of westward export infrastructure, and not a

reflection of the lack of reserves or the limitations of the resource

base

• Development of White Stream concurrently with Nabucco will

accelerate the development of Nabucco.

• White Stream and Nabucco together will catalyse TCGP and the

huge Caspian gas potential.

• Beyond this initial catalysing effect, the mutually reinforcing effect of

the two projects will increase as increments of capacity in each

project dove-tail with each other.


First string - Georgia to Constanta

• Length: 1100 km

(subsea to Romania)

• Depth: 2150 m

• Diameter: 28 inch

• Volume: 8

White Stream


The “Pipeline Concept” fully meets

the project’s requirements

18© 2010 White Stream Pipeline Company Limited, the White Stream Consortium

Current deep-water proven technology dictates the phased development of the White

Stream pipeline project: capacity of each separate string equals to 8bcm/year.

The option for the Black Sea crossing

using LNG tankers was also examined

but the pipeline concept was found

to have commercial advantage,

particularly for large volumes over this

relatively short distance .

More importantly, the pipeline will

provide the required security of

demand for the success of the

Southern Corridor plan.

But for the volumes availably before Shah Deniz 2 and other major fields could start production, LNG and CNG transportation can play an important bridging role and we welcome developments on using these technologies for trans-Black Sea transportation.


Route design from Sangachal to Constanta has been

accelerated due to fast developments in the Caspian

• Onshore: 650 km

(Sangachal-Black Sea)

• Diameter: 46/56 inch

• Offshore: 1100 km

(subsea to Romania)

• Offshore: 630 km

(subsea to Ukraine at one of

the next stages)

• Depth: 2150 m

• Diameter: 28 inch

(subsea to Romania)

• Volume: 8~32+ Bcm/y

(8 Bcm x № of ‘strings’)

• Completion: 2016-2017

(first ‘string’)

White Stream

19

Saipem 7000 J-laybarge

• International and National laws define the rights and obligations

• Precedent: Blue Stream pipeline has already crossed the Black Sea

Key legal issues:

• Coastal states do not have the legal

means to prevent construction and

operation of White Stream

• White Stream will enter 12 nautical

mile territorial waters only at the

landing points at either end of the route

• International Law guarantees freedom

to lay pipelines on the continental shelf

and in the Exclusive Economic Zone

• The existence of Blue Stream is not a legal obstacle to White Stream – there

are many examples of submarine pipelines that cross other pipelines and

cables

• White Stream will implement international standard EIA requirements

There are no legal barriers to White Stream


White Stream will facilitate a beneficial

balance between major gas market players

Major sourcesMajor transitMarket

European

UnionUkraine Russia

Turkey

Caspian

and

Central

Asian

states

© 2010 White Stream Pipeline Company Limited, the White Stream Consortium

Black Sea

White Stream project development update

• White Stream continues to reduce the project‟s political risk

in co-operation with the EU, governments and companies

• White Stream will deliver first gas shortly after Nabucco, with White Stream’s pro-

market role as a key team player accelerating the overall EU‟s Southern

Corridor plan

• Studies supported by TEN-E have confirmed that White Stream is feasible:

legally, technically and commercially

• The relevant legal rights and obligations are defined in international law

• Preparations are under way for the Black Sea marine reconnaissance

• This will prepare the way for the detailed route survey and ESIA

EPCFinancial

close

Permits

and

approvals

Scoping and

reconnaissance

Survey

Milestones Commercial

Operation

2010-11 2011-12 2013/14 2015-16 2017 >23© 2010 White Stream Pipeline Company Limited, the White Stream Consortium

ALIGNMENT OIF INTERESTS

Three broad sets of interests in play with respect to the

Southern Corridor: Turkey, the EU and the Caspian countries

• White Stream and Nabucco will be mutually reinforcing and will

catalyse earlier and larger scale investment in exploration and

production of Caspian gas.

• White Stream and Nabucco together will catalyse TCGP and the

huge Caspian gas potential.

• Development of White Stream concurrently with Nabucco will

accelerate the development of Nabucco.

• The transported gas volumes will be larger and the timing of

developments will be sooner.


Documents

A Priority Project of the EU and integral component of the ... · East-West Energy Corridor pipelines paved the way for Caspian Gas to Europe Sangachal Kazakh Ceyhan Erzurum Supsa