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98.04 - INOGATE Exceptional Assistance for Gas Supplies to Azerbaijan for Winter 2000 - Rehabilitation of Shirvanovka & Kazakh Fiscal Gas Metering Stations

Title of Project: "INOGATE Exceptional Assistance for Gas Supplies to Azerbaijan for Winter 2000 - Rehabilitation of Shirvanovka & Kazakh Fiscal Gas Metering Stations"

Project Number: 98.04

Reference Number: Project 00-0221

Beneficiary Countries: Azerbaijan

Management contact details (Contractor and local contractors):

Contractor: "Rosneftegazstroy-Azerbaijan Limited", 169, Tolstoy Street, Baku

Local contractors: "Neftegazavtomat" Research and Production Unit

Total budget of project: EUR 2 000 000

Equipment suppliers: "Emerson Process Management"

Sector of activities: Transmission of natural gas

Start date of project: 09/2000

End date of project: 09/2002

Project objectives:

The general objective of this project was to contribute to the rehabilitation of the gas infrastructure of Azerbaijan, in order to permit the governmental decisions on gas import and supplies for winter 2000 to be implemented on a timely manner.

The initial specific objective of this project was to rehabilitate and modernise, in accordance with EU standards, the cross-border gas metering stations, namely the Shirvanovka GMS at the Azeri-Russian border and the Kazakh GMS at the Azeri-Georgian border. Having studied the situation, the decision was taken to build new metering stations instead of rehabilitating the old ones. Thus, the new objectives were identified as follows:

Objective No. 1: Construction of the Shirvanovka Metering Station at the Azeri-Russian border.
Objective No. 2: Construction of the Kazakh Metering Station at the Azeri-Georgian border.

Project brief description of activities/approaches:

The project activities comprised of the execution of the following works:

Replacement of the existing metering lines
Installation of on-line gas flow computers and automation systems
Installation of gas flow analysis laboratories
Installation of supervisor computers

Upon completion of the construction works of the cross-border metering systems, both Russia and Georgia metering stations would function in accordance with EU operational standards.

Intended results:

For Objective 1: To build a new metering station
For Objective 2: To build a new metering station

The introduction of international norms and standards was one of the main targets of this Exceptional Assistance Project. Both fiscal metering stations will fully comply with the international norms of the oil and gas industry.

The new metering station in Shirvanovka will allow for a better control on the gas quality and volumes, avoiding unnecessary commercial disputes between Russia and Azerbaijan. The Shirvanovka GMS at the Azeri-Russian border should ensure a flow metering capacity of 3 to 4 BCM per year and the Kazakh metering station at the Azeri-Georgian border should ensure a flow metering capacity of 8 BCM per year (in a first phase). With regard to the Kazakh metering station, it also should be noted that Georgia has asked for importing 1 bcm of natural gas from Azerbaijan. Without an accurate metering station, the potential losses would amount to 40 million cubic meters per year.

Date of metering station launching:

The Shirvanovka metering station - May 2003;
The Kazakh metering station –upon the start of supply of gas to Georgia.

Conclusions and summaries:

For Objective 1: The Shirvanovka Metering Station was built and launched in May 2003.
For Objective 2: The construction of the Kazakh Metering Station was completed in September 2003. However, since Azerbaijan currently does not supply gas to Georgia, the GMS is in a stand-by position for the start of supply of natural gas.