Document Actions

00.01 - Gas Security of Supply to Armenia in the Framework of the Closure of Medzamor Nuclear Power Plant

Title of Project: "Gas Security of Supply to Armenia in the Framework of the Closure of Medzamor Nuclear Power Plant"

Project Number: 00.01

Reference Number: EUROPEAID/112135/C/SV/Multi

Beneficiary Countries: Armenia

Management contact details (Contractor and local contractors):

EC Contactor:
SOFRECO (consortium partners)
Address:
92-98, Boulevard V. Hugo
92115 Clichy Cedex,
France
Tel: + 33 (0)1 41 27 95 95
Fax: + 33 (0)1 47 37 96 20
Contact person: Bernard Vignaux

Local Operator:
Ministry of Energy of the Republic of Armenia
Address:
Government House 2, Republic Square
375010, Yerevan
Republic of Armenia
Tel: + 3741 151 687 / 528 704
Fax: + 3741 151 687 / 528 704
Contact person: Mr. Areg Galstyan, Deputy Minister of Energy

Total budget of project: 3.000.000 Euro
(1.000.000 Euro and associated equipment budget for the demonstration projects - 2.000.000 Euro)

Equipment suppliers: Kalugaglavsnab OJSC (Lots 1-6), Russian Federation; Siemens AG, Germany (Telegyr Systems) (Lot 7 - Scada System and Satellite equipment)

Sector of activities: Natural gas sector

Start date of project: 12 July 2002

End date of project: 12 November 2004

Project objectives:

Objective No. 1:
Project wider objective is the security of energy supply to the Republic of Armenia in the framework of the closure of Medzamor NPP at an early possible date, taking into consideration the regional energy interdependence context and the energy diversification policy of the country.

Objective No. 2:
Project specific objective is to assist the Ministry of Energy of Armenia in the rehabilitation and modernisation of the gas transport infrastructure used for importing gas from the Russian Federation in order to improve the capacity of the network and reduce the risks of supply disruptions, through the definition of an updated medium-term investment plan and of specific actions for the rehabilitation and improvement of the existing import facilities and the implementation of rehabilitation projects.

Project brief description of activities/approaches:

Since independence of Armenia, one of the main concerns of the Government was to resolve the energy crisis and to avoid its reoccurrence in the future. Therefore, the policy priority is to secure alternative, diverse and secure supplies of energy resources prior to the shutdown of unit 2 of the Medzamor NPP. Thus, the project with its objective to assist the Ministry in the rehabilitation and modernisation of the gas transport infrastructure is highly relevant.

Project consist of the three following components:

Component 1 Energy Consumption forecast:
- Energy consumption forecast;
- Updated gas demand forecast and associated localization;
- Gas supply scenarios and specific actions.
Component 2 Rehabilitation of existing facilities:
- Updated medium-term investment plan;
- List of possible demonstration project(s);
- Execution plan for the implementation of the selected project(s);
- Specifications;
- List of equipment;
- Evaluation and recommendation to the EC of the offers received as a result of the tender for rehabilitation equipment;
- Delivery of equipment to site and installation;
- Monitoring of the performance tests and certification.
Component 3 Iran-Armenia gas project studies in the context of the regional infrastructures.
- Assessment of the Iran-Armenia interconnection in ensuring the gas security of supply to Armenia in the context of the existing and projected regional interstate gas pipelines.
Taking into account the time constraints and to ensure the success of the implementation of the demonstration projects both in terms of planning and budget, it has been agreed with the Beneficiary during the Inception Phase and approved by the European Commission to prepare ONE international tender with lots of diversified equipment selected items. The Demonstration Projects (DP) as approved by the Steering Committee are presented by Lot and listed below:
- Abovian Underground Gas Storage Station (UGSS)
  - LOT 1: Replacement of 3 brine pumps (DP1)
  - LOT 2: Work over of 3 gas wells with change of tubing, casing (DP2) and production tree (DP4)
  - LOT 3: Change of 50 manual gate valves (DP3)
  - LOT 4: Supply of a down hole logging equipment (DP5)
  - LOT 5: Supply of an emergency well repair equipment (DP6)
- Gas Transmission System (GTS)
  - LOT 6: Supply of a special machinery equipment for repair of damaged pipeline (DP7)
  - LOT 7: Implementation of a basic SCADA system with satellite teletransmission equipment (DP8).
ArmRusGasprom” CSJC, has been designated by the Ministry of Energy of the Republic of Armenia, Beneficiary of the project, as the Recipient and Final User of the equipment to be procured through the International Open Tender.

Intended results/encountered limitations:

The project is more than half-way into implementation. According to the last Monitoring Report, ‘the project is contributing well to achievement of the overall objective by delivery of good-quality project results. More specifically the following progress in the overall implementation has been achieved:

Component 1
"Armenia Energy Demand Forecast to 2020" has been elaborated by the Consultant and accepted by the project's Beneficiary. The main conclusion of the "Energy Demand Forecast to 2020" study is that a new pipeline capacity is urgently needed in order to reduce the supply interruption risk and to achieve energy security. According to the project recommendations, ideally, additional capacity should be in place at the latest.
Component 2
Rehabilitation of existing facilities: Equipment of the Lot No1,2,3,4 (partially) and 6 have been delivered to Armenia. Installation activity has been started by Transgaz Ltd (ArmRusgasprom's subsidiary company). Detailed planning of activity has been agreed and adopted.
Component 3
Progress on Component 3 is highly depending of the commercial ongoing negotiations (confidential) and political decisions regarding the Iran-Armenia pipeline project. In this respect Guidelines are still waited from the Beneficiary to define more precisely the activities requested.

Expected date of demonstration projects implementation:

12 November 2004

Conclusions and summaries:

The overall implementation of the project is meeting its general and specific objectives. Realisation of the demonstration projects on Abovyan Underground Gas Storage and gas transmission system will contribute to the overall efforts of the Armenian Ministry of Energy and "ArmRusgasprom" in ensuring proper level of security of gas supply to Armenia, as well as to transfer "know how" to the gas sector of Armenia.