7 oil & gas projects to watch in 2016
1.Construction of the fourth leg of the Uzbekistan-China natural gas pipeline
A fresh injection of investment from the China Development Bank will pay for the fourth and final leg of the Central Asia-China gas pipeline. Construction on the pipeline began in 2007, and once it is finished it will reach an annual deliverability of 85 billion cubic metres – making it the largest gas transportation system in Asia.
2.Third-stage development of Galkynysh field, Turkmenistan
Turkmenistan has announced it will begin work expanding the Galkynysh gas fields in 2016, following on from the second stage of development that began in 2014. The Galkynysh field sits upon the second largest reserves of natural gas in the world. Approximately 21.1 tcm of gas is situated below the field, located in four areas in Turkmenistan – Yeloten, Osman, Yashlar and Minara.Total investments in the Galkynysh field since its first discovery in 2006 have totalled $9.8 billion to date. Significant contributors include Petrofac and CNPC. With further investment, the chairman of state-owned Turkmengas Ashirguly Begliyev is confident the field’s output could reach 95 bcm once this development stage is complete. This would be a major step forward, as previous estimates suggest that the field was producing 30 bcm of marketable gas since the first stages of development were completed in 2013.
3.Ichthys off-shore LNG project, North-West Australia
The Ichthys offshore LNG development could be one of the world’s biggest projects in any sector, let alone the oil and gas industry. Spearheaded by Japanese oil and gas company INPEX, with 30% of investment coming from French energy titans Total, this project seeks to exploit one of Australia’s biggest deposits of natural gas.
The project’s scale is huge. Situated nearly 890km from the chosen processing site of Darwin, which will receive gas via the Southern Hemisphere’s biggest pipeline, Ichthys will involve the construction of various structures, including a central processing rig and boat-shaped floating production, storage and offloading facility, with the end goal of producing 8.9 million tonnes of LNG and 1.9 million tonnes of LPG each year.
4.Repairs to Kashagan, Kazakhstan
The Kashagan field is the largest oil field outside of the Middle East. The development has frequently been cited as the most expensive energy project ever with total costs having run well over $50 billion.
The facility has been plagued by leaks causing production, which started in 2013, to be disrupted several times. Italian oil service company Saipem won a $1.8 billion contract to supply Kashagan with upgraded, leak-free pipes. The new pipes will be used to update 95 kilometres of pipeline, which had suffered from stress fractures resulting from prolonged exposure to hydrogen sulphide. With the new pipes in place, production is expected to resume in 2017.
5. Yamal LNG Plant, Russia
The Yamal plant in the north of the country will become Russia’s second LNG production facility if the project stays on track. At peak, the plant is projected to produce up to 5.5 million tonnes of liquefied natural gas each year.
Finding funding for the project has not been easy – not least due to sanctions on various areas of Russian oil and gas exploration and production. However, the development, and prime stakeholder Novatek, has received a big boost after China Insurance Investment Ltd. put a further $6 billion into the Yamal plant.
6.ENI/Anadarko joint export project, Mozambique
Mozambique’s economy received a major boost when Anadarko discovered huge offshore natural gas reserves in 2010. Italian player ENI also discovered gas fields, their biggest ever, close by and the decision has been made to launch a joint export project between ENI and Anadarko. Potentially enough natural gas to supply the UK, France, Germany and Italy for two decades can be found in Mozambique, so the joint deal could proof extremely lucrative.
The financial outlines of the deal, including initial investments, have yet to be decided but the end results could change the fortunes of Mozambique and the global gas market as a whole.
7.TAPI, Multiple locations
After the groundbreaking ceremony in late 2015, Turkmenistan has begun construction on its section of the TAPI pipeline, which will transport Turkmen gas through Afghanistan and Pakistan before reaching massive net-importer India.
The project, which is due for completion in 2019, is of major importance for all nations involved. India is hoping to source a more cost-effective supply of gas, whereas Turkmenistan is looking to expand its markets for its most abundant natural resource. The USA, meanwhile, believes that efficient energy supplies will provide a stabilising effect on Afghanistan.