ENI announces first completion of Blue Stream pipeline system

Mar 04, 2002 01:00 AM

Italy's ENI announced on February 19 that the first pipeline in the dual Blue Stream gas pipeline system was complete. Work got underway on the 380 km subsea portion of the pipeline between Russia and Turkey last June, and the Saipem 7000 barge began laying the pipeline in October after entering the Black Sea via the Bosphorus in August.
When entirely finished, the $ 2.3 bn pipeline system, which will consist of two 24-inch pipelines laid at depths of up to 2,150 meters, will deliver 16 bn cm of Russian natural gas to Turkey each year. The project includes a 370 km section in Russia built by Gazprom, along with a compressor station located at Beregovaya.
ENI said that another Saipem vessel, the Castoro 8, would proceed with connecting the underwater portion of the pipeline with the finished Turkish section onshore. Final testing will take place on the pipeline once that is done and gas deliveries are to begin within the coming months.

The Blue Stream Pipeline Company (BSPC) was set up byENI and Gazprom as a joint venture to build and operate the offshore section of the pipeline. Turkey's state-owned pipeline company Botas built and will operate the Turkish section, while Russia's Gazprom will operate the Russian section.
BSPC has awarded a turnkey contract for the construction of the offshore pipelines to a consortium led by ENI's Saipem. Engineering work was carried out by another member of the ENI Group, Snamprogetti.
In 1998, ENI and Gazprom formed a strategic alliance and agreed to cooperate in the exploration and production of oil and gas in the Astrakhan region of southern Russian, near the Caspian Sea. The completion of the Blue Stream project will strengthen that partnership and eventually provide ENI with an export access route to any gas discoveries it develops in the area. Completion of the Blue Stream system will also strengthen economic relations between Russian and Turkey, which is relying more and more on natural gas supplies from Russia.

Turkey and Russia signed a natural gas sales purchase agreement in December of 1997 worth $ 13.5 bn and announced their support for the Blue Stream project, which at the time appeared to be somewhat farfetched. This deal was followed by an agreement between ENI and Gazprom in early 1999 whereby the two committed themselves to the joint construction and operation of the Blue Stream project. They also agreed to equally divide the pipeline's transmission capacity.
A contract for the design, engineering, procurement and construction of the offshore portion of Blue Stream was awarded by BSPC in November of 1999 with Saipem, a Japanese consortium and France's Bouygues Offshore. In April of 2000, the Italian export credit agency SACE guaranteed loans made by Italian banks to BSPC, and further financing was arranged with Japanese institutions. Furthermore, Snam Trading and Gazexport, owned respectively by ENI and Gazprom, have transport contracts covering the supply of natural gas to Turkey via the Blue Stream.

Source: NewsBase
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