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98/99.02 - Financing small-scale investments for Regional Oil and Gas Infrastructure in Caucasus

Title of Project: "Financing small-scale investments for Regional Oil and Gas Infrastructure in Caucasus"

Project Number: 98/99.02

Reference Number: SCR-E/111428/C/SV/WW

Beneficiary Countries: Armenia, Azerbaijan, Georgia

Management contact details (Contractor and local contractors):

RENCO S.p.A.
Address:
Viale Venezia 53
61100 Pesaro,
Italy
Tel: + 30 210 3645986
Fax: + 30 210 3646533
Contact person: Mr. Agostino Gattei

Total budget of project: EUR 5,500,000.00

Equipment supplier: PIETRO FLORENTINI (Italy)

Sector of activities: Infrastructure networks

Start date of project: 30/08/2001

End date of project: 30/11/2004

Overall long term objectives:

Promoting the regional integration of the oil and gas pipeline systems
Facilitating oil and gas transport both within the region and towards the export markets of Europe.

The initial specific project objectives were as follows:

Objective No. 1: Identification and selection of priority investments that meet predefined technical operational and economical criteria.

Objective No. 2: Setting up the technical and other conditions for those investments to be implemented efficiently with the support of Tacis financing and the preparation of local counterparts, firms and experts.

Objective No. 3: Monitoring the installation of the investments optimising all components which will enhance the standardisation of selected investments in terms of operational, environmental, sustainability, safety and health conditions

Objective No. 4: Training local firms in project identifications, preparation, evaluation, supervision and more generally implementation techniques including the possibility of local assembly and manufacturing of project components and the establishing of joint ventures.

Starting from July 2003, the specific objectives were revised and defined as follows:

Objective No. 1: The successful completion and correct technical functioning of the Gweletti Metering Station.

Objective No. 2: The successful supply of mobile units/vehicles (laboratory and emergency units/vehicles) to each of the beneficiary (Armenia, Azerbaijan and Georgia).

Project brief description of activities/approaches: Initially the activities undertook by the Contractor of the project were as follows:

Monitoring of the installation of the gas fiscal metering station in Kohgb - Armenia (complete station of gas flow measurement, gas components identification and measurement, computerised laboratory for chemical analysis of the gas, power generators).
Preparation of biding documents and monitoring of the installation of the gas fiscal metering station in Gweletti - Georgia (complete station of gas flow measurement, gas components identification and measurement, computerised laboratory for chemical analysis of the gas, power generators).
Preparation of bidding documents and supply monitoring of 3 mobile emergency units, 2 mobile laboratory units and 1 NDT mobile unit, to be distributed between each of the three Beneficiaries. These vehicles shall be required for primary emergency interventions on gas pipelines. All vehicles shall be supplied with self-sustaining electrical power/water systems, air conditioning systems, and tools/instruments for gas analysis/gas leakage/NDT.

Intended results/encountered limitations:

For Objective 1: The successful completion and correct technical functioning of the Gweletti Metering Station.

For Objective 2: The successful supply of mobile units/vehicles (laboratory and emergency units) to each of the Beneficiaries.

Date of metering station launching:

Gas metering station of Kohgb was launched in January 2004.
Gas metering station of Gweletti is expected to be launched in Summer 2004.

Conclusions and summaries:

Armenia
The preparatory works for the metering station of Koghb has been completed on 10 December 2001. Gas metering station of Koghb was put into operation in September 2003. Provisional Acceptance Certificate was signed on 15 January 2004.The project's funds were used for the design, manufacturing and installation of the flow measuring, analysing and flow supervisory systems.
Georgia
The preparatory works for the metering station of Gweletti were completed on 10 December 2001. The bidding documents (with all the revision inputs from our technical team of experts) were prepared and the tender was officially launched in October of 2002. The tenderers were evaluated (in December of 2002) and, unfortunately, all the tenders were seen to be over the projected budget, thus resulting in the nullification of the tender. The Contractor was involved in the re-elaboration of the tender documents, technical/financial evaluation of the participants, follow-up on the equipment supplied and supervision to the construction/installation activities. The tender evaluation for the supply of equipment took place in Brussels on 1-5 September 2003. The time schedule for the installation activities is foreseen for Summer 2004 (due to poor accessibility and weather conditions in the area).
Armenia, Azerbaijan, Georgia
Supply of 3 mobile emergency units, 2 mobile laboratory units and 1 NDT mobile unit, to be distributed between each of the three Beneficiaries. These vehicles shall be required for primary emergency interventions on gas pipelines. All vehicles shall be supplied with self-sustaining electrical power/water systems, air conditioning systems, and tools/instruments for gas analysis/gas leakage/NDT. The evaluation of bids took place in Brussels on 25-30 September 2003.