Showing posts with label natural gas pipelines. Show all posts
Showing posts with label natural gas pipelines. Show all posts

Is The Syrian War About Gas Pipelines ?  

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I've been trying to ignore the beating of the war drums as the US, Britain and France attempt to build a pretext for attacking Syria (following the well trodden path they used to invade Iraq a decade ago), but the latest round of stories about chemical attacks in Damascus make it difficult to remain entirely silent.

In Iraq's case the motivation seemed to be a mix of a desire to control the oil, the seemingly insatiable appetite of the military industrial complex for new wars to keep the revenue flowing and pleasing the Israel lobby by keeping one of it's enemies in the middle east weak and under western control.

I've always held that the first of these was the dominant influence.

In Syria's case the country doesn't "float on a sea of oil" (as Paul Wolfowitz once accurately said of Iraq) so it's tempting to view the other 2 influences as the dominant ones in this case. Syria does, however, sit across some of the routes from the middle east to Europe that any potential gas pipelines could take if they wished to move gas from Iran and/or Iraq and/or Qatar to Europe, providing competition to Gazprom's dominant position in the European gas market.

It's this angle that some media reports are starting to look at, noting that Russia's support for Syria may have a strong economic basis (Ambrose Evans Pritchard recently came up with a story about the Saudi's trying to bribe Russia to abandon Assad).

The Guardian has an article looking at the gas pipeline angle - Syria intervention plan fueled by oil interests, not chemical weapon concern.

The 2011 uprisings, it would seem - triggered by a confluence of domestic energy shortages and climate-induced droughts which led to massive food price hikes - came at an opportune moment that was quickly exploited. Leaked emails from the private intelligence firm Stratfor including notes from a meeting with Pentagon officials confirmed US-UK training of Syrian opposition forces since 2011 aimed at eliciting "collapse" of Assad's regime "from within."

So what was this unfolding strategy to undermine Syria and Iran all about? According to retired NATO Secretary General Wesley Clark, a memo from the Office of the US Secretary of Defense just a few weeks after 9/11 revealed plans to "attack and destroy the governments in 7 countries in five years", starting with Iraq and moving on to "Syria, Lebanon, Libya, Somalia, Sudan and Iran." In a subsequent interview, Clark argues that this strategy is fundamentally about control of the region's vast oil and gas resources.

Much of the strategy currently at play was candidly described in a 2008 US Army-funded RAND report, Unfolding the Future of the Long War (pdf). The report noted that "the economies of the industrialized states will continue to rely heavily on oil, thus making it a strategically important resource." ...

The report noted especially that Syria is among several "downstream countries that are becoming increasingly water scarce as their populations grow", increasing a risk of conflict. Thus, although the RAND document fell far short of recognising the prospect of an 'Arab Spring', it illustrates that three years before the 2011 uprisings, US defence officials were alive to the region's growing instabilities, and concerned by the potential consequences for stability of Gulf oil.

These strategic concerns, motivated by fear of expanding Iranian influence, impacted Syria primarily in relation to pipeline geopolitics. In 2009 - the same year former French foreign minister Dumas alleges the British began planning operations in Syria - Assad refused to sign a proposed agreement with Qatar that would run a pipeline from the latter's North field, contiguous with Iran's South Pars field, through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets - albeit crucially bypassing Russia. Assad's rationale was "to protect the interests of [his] Russian ally, which is Europe's top supplier of natural gas."

Instead, the following year, Assad pursued negotiations for an alternative $10 billion pipeline plan with Iran, across Iraq to Syria, that would also potentially allow Iran to supply gas to Europe from its South Pars field shared with Qatar. The Memorandum of Understanding (MoU) for the project was signed in July 2012 - just as Syria's civil war was spreading to Damascus and Aleppo - and earlier this year Iraq signed a framework agreement for construction of the gas pipelines.

The Iran-Iraq-Syria pipeline plan was a "direct slap in the face" to Qatar's plans. No wonder Saudi Prince Bandar bin Sultan, in a failed attempt to bribe Russia to switch sides, told President Vladmir Putin that "whatever regime comes after" Assad, it will be "completely" in Saudi Arabia's hands and will "not sign any agreement allowing any Gulf country to transport its gas across Syria to Europe and compete with Russian gas exports", according to diplomatic sources. When Putin refused, the Prince vowed military action.

It would seem that contradictory self-serving Saudi and Qatari oil interests are pulling the strings of an equally self-serving oil-focused US policy in Syria, if not the wider region. It is this - the problem of establishing a pliable opposition which the US and its oil allies feel confident will play ball, pipeline-style, in a post-Assad Syria - that will determine the nature of any prospective intervention: not concern for Syrian life.

Looking at a map of the region many of the proposed pipelines from Iran and/or Iraq go direct from Iraq to Turkey, bypassing Syria entirely, so its not clear how much of an advantage having passage across Syria would provide - other than perhaps being more economic as the route would avoid the mountainous regions and political instability in Kurdistan.

Australia revisits transnational natural gas pipeline  

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Platts' "The Barrel" blog has an interesting post looking at the history of natural gas pipeline proposals in Asutralia, including the last plan to pipe gas from the Northern Territory to the eastern states (which face an impending shortfall now most of the coal seam gas being extracted is destined to be sent offshore in the form of LNG), which the gas potentially coming from both offshore fields and shale gas projects in the dead heart - Australia revisits transnational gas pipeline.

Australia is no stranger to the idea of transnational or even international pipelines when it comes to solving the vexed issue of getting enough gas to its eastern seaboard, home to its biggest cities.

Australia currently has two separate gas pipeline networks in the west and east of the country which supply markets of around 1 Bcf/day and 1.6 Bcf/d respectively. A much smaller, also separate, network in central Australia services the Northern Territory capital of Darwin. ...

The latest proposal for a transnational interconnection between Australia’s pipeline networks was initially aired in recent months by former Chief Minister of the Northern Territory Terry Mills, as part of his efforts to secure the future of Rio Tinto’s alumina refinery at Gove. In February, just before being ousted in a party room coup, Mills secured a deal under which Gove would be supplied with gas from Eni’s Blacktip offshore field, heralding a project which would include the construction of a A$500 million pipeline to the plant. ...

That call has now been taken up by Australia’s largest pipeline operator APA Group, manager of 14,120 km of pipeline infrastructure. One of APA’s assets is the 1,600 km Amadeus Basin to Darwin gas pipeline, which was the world’s third-longest when it was completed in 1986 at a cost of just A$380 million. ...

A raft of international oil and gas industry heavyweights have taken a foothold in northern and central Australia’s nascent shale sector over the past few years. Companies including Chevron, ConocoPhillips, Statoil, Total and BG Group have secured farm-in agreements and pledged investments of more than $1.55 billion in Australian shale, according to the US Energy Information Administration. The EIA has estimated that Australia has 437 Tcf of technically recoverable shale gas reserves, ranking the country sixth highest in the world.

China’s Pipelineistan “War”  

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TomDispatch has a new column from Pepe Escobar (the fourth in an ongoing series) on the evolving great game over Central Asian natural gas - China’s Pipelineistan “War”.

Future historians may well agree that the twenty-first century Silk Road first opened for business on December 14, 2009. That was the day a crucial stretch of pipeline officially went into operation linking the fabulously energy-rich state of Turkmenistan (via Kazakhstan and Uzbekistan) to Xinjiang Province in China’s far west. Hyperbole did not deter the spectacularly named Gurbanguly Berdymukhamedov, Turkmenistan’s president, from bragging, “This project has not only commercial or economic value. It is also political. China, through its wise and farsighted policy, has become one of the key guarantors of global security.”

The bottom line is that, by 2013, Shanghai, Guangzhou, and Hong Kong will be cruising to ever more dizzying economic heights courtesy of natural gas supplied by the 1,833-kilometer-long Central Asia Pipeline, then projected to be operating at full capacity. And to think that, in a few more years, China’s big cities will undoubtedly also be getting a taste of Iraq’s fabulous, barely tapped oil reserves, conservatively estimated at 115 billion barrels, but possibly closer to 143 billion barrels, which would put it ahead of Iran. When the Bush administration’s armchair generals launched their Global War on Terror, this was not exactly what they had in mind.

China’s economy is thirsty, and so it’s drinking deeper and planning deeper yet. It craves Iraq’s oil and Turkmenistan’s natural gas, as well as oil from Kazakhstan. Yet instead of spending more than a trillion dollars on an illegal war in Iraq or setting up military bases all over the Greater Middle East and Central Asia, China used its state oil companies to get some of the energy it needed simply by bidding for it in a perfectly legal Iraqi oil auction.

Meanwhile, in the New Great Game in Eurasia, China had the good sense not to send a soldier anywhere or get bogged down in an infinite quagmire in Afghanistan. Instead, the Chinese simply made a direct commercial deal with Turkmenistan and, profiting from that country’s disagreements with Moscow, built itself a pipeline which will provide much of the natural gas it needs.

No wonder the Obama administration’s Eurasian energy czar Richard Morningstar was forced to admit at a congressional hearing that the U.S. simply cannot compete with China when it comes to Central Asia’s energy wealth. If only he had delivered the same message to the Pentagon.

That Iranian Equation

In Beijing, they take the matter of diversifying oil supplies very, very seriously. When oil reached $150 a barrel in 2008 -- before the U.S.-unleashed global financial meltdown hit -- Chinese state media had taken to calling foreign Big Oil “international petroleum crocodiles,” with the implication that the West’s hidden agenda was ultimately to stop China’s relentless development dead in its tracks.

Twenty-eight percent of what’s left of the world’s proven oil reserves are in the Arab world. China could easily gobble it all up. Few may know that China itself is actually the world’s fifth largest oil producer, at 3.7 million barrels per day (bpd), just below Iran and slightly above Mexico. In 1980, China consumed only 3% of the world’s oil. Now, its take is around 10%, making it the planet’s second largest consumer. It has already surpassed Japan in that category, even if it’s still way behind the U.S., which eats up 27% of global oil each year. According to the International Energy Agency (IEA), China will account for over 40% of the increase in global oil demand until 2030. And that’s assuming China will grow at “only” a 6% annual rate which, based on present growth, seems unlikely.

Saudi Arabia controls 13% of world oil production. At the moment, it is the only swing producer -- one, that is, that can move the amount of oil being pumped up or down at will -- capable of substantially increasing output. It’s no accident, then, that, pumping 500,000 bpd, it has become one of Beijing’s major oil suppliers. The top three, according to China’s Ministry of Commerce, are Saudi Arabia, Iran, and Angola. By 2013-2014, if all goes well, the Chinese expect to add Iraq to that list in a big way, but first that troubled country’s oil production needs to start cranking up. In the meantime, it’s the Iranian part of the Eurasian energy equation that’s really nerve-racking for China’s leaders.

Chinese companies have invested a staggering $120 billion in Iran's energy sector over the past five years. Already Iran is China’s number two oil supplier, accounting for up to 14% of its imports; and the Chinese energy giant Sinopec has committed an additional $6.5 billion to building oil refineries there. Due to harsh U.N.-imposed and American sanctions and years of economic mismanagement, however, the country lacks the high-tech know-how to provide for itself, and its industrial structure is in a shambles. The head of the National Iranian Oil Company, Ahmad Ghalebani, has publicly admitted that machinery and parts used in Iran’s oil production still have to be imported from China. ...

Much more is to come, and Chinese leaders expect energy-rich Russia to play a significant part in China’s escape-hatch planning as well. Strategically, this represents a crucial step in regional energy integration, tightening the Russia/China partnership inside the SCO as well as at the U.N. Security Council.

When it comes to oil, the name of the game is the immense Eastern Siberia-Pacific Ocean (ESPO) pipeline. Last August, a 4,000-kilometer-long Russian section from Taishet in eastern Siberia to Nakhodka, still inside Russian territory, was begun. Russian Premier Vladimir Putin hailed ESPO as “a really comprehensive project that has strengthened our energy cooperation.” And in late September, the Russians and the Chinese inaugurated a 999-kilometer-long pipeline from Skovorodino in Russia’s Amur region to the petrochemical hub Daqing in northeast China.

Russia is currently delivering up to 130 million tons of Russian oil a year to Europe. Soon, no less than 50 million tons may be heading to China and the Pacific region as well.

There are, however, hidden tensions between the Russians and the Chinese when it comes to energy matters. The Russian leadership is understandably wary of China’s startling strides in Central Asia, the former Soviet Union’s former “near abroad.” After all, as the Chinese have been doing in Africa in their search for energy, in Central Asia, too, the Chinese are building railways and introducing high-tech trains, among other modern wonders, in exchange for oil and gas concessions.

Despite the simmering tensions between China, Russia, and the U.S., it’s too early to be sure just who is likely to emerge as the victor in the new Great Game in Central Asia, but one thing is clear enough. The Central Asian “stans” are becoming ever more powerful poker players in their own right as Russia tries not to lose its hegemony there, Washington places all its chips on pipelines meant to bypass Russia (including the Baku-Tbilisi-Ceyhan (BTC) pipeline that pumps oil from Azerbaijan to Turkey via Georgia) and China antes up big time for its Central Asian future. Whoever loses, this is a game that the “stans” cannot but profit from.

Liquid Natural Gas -- A Specious Climate Solution ?  

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TOD ANZ has a post pondering the pros and cons of LNG vs gas pipelines for exporting Australian natural gas - Liquid Natural Gas -- A Specious Climate Solution?.

Nearly US$80 billion of investment is slated for developing liquid natural gas (LNG) projects in Australia and the Timor Sea. More are planned for Southeast Asia.

The good news is that these LNG developments are aimed are replacing dirty coal-fired power in Japan, China and South Korea with a cleaner fuel: natural gas.

The bad news is that LNG's environmental benefits are potentially so illusory that Asia might be better served by a common carrier natural gas pipeline.

LNG is natural gas compressed 600 times. It is then shipped in pressurised ocean-going tankers. This front-end compression process burns up roughly 10% of the original energy. The pressurised tankers then draw off more energy for each day at sea. At the far end, regasification consumes even more energy

The cumulative losses are so great that LNG-based natural gas supplies may not be much better than coal as a future energy source, according to researchers at Carnegie Mellon University in the United States.

Worse, shipping LNG requires huge investment in expensive, inflexible, single-purpose infrastructure. It's a recipe for long-term financial waste.

With nearly a dozen LNG trains slated for development in Australia's Northwest Shelf, northern Queensland, the Timor Sea and Papua New Guinea, this infrastructure could take Asia's climate change battle backwards for decades to come.

Given the huge volumes of gas now involved in this burgeoning trade (nearly 60 billion cubic meters per year), a pipeline connecting Australia to China, Japan and South Korea may be a better deal.

Instead of insular, 'go-it-alone' buyer-seller LNG microeconomics, a common-carrier pipeline would enhance competition, lower prices and encourage development of smaller natural gas fields through increasing confidence in downstream market access.

Better yet, a pipeline could carry future fuels like hydrogen. LNG trains, tankers and regasification plants simply don't have this flexibility. They risk becoming 'stranded assets' if future carbon pricing exposes their financial shortcomings.

If the LNG industry gets entrenched, it could doom Asia to a generation of suboptimal infrastructure. This, at at a time when trillions of dollars must be spent to battle climate change. Getting poor value for investment dollars is a bad way to fight global warming.

Iran and the Pipelineistan Opera  

Posted by Big Gav in , , ,

TomDispatch has a new article from Pepe Escobar on continued manoeuvrings around central asian gas supplies - Iran and the Pipelineistan Opera.

Oil and natural gas prices may be relatively low right now, but don't be fooled. The New Great Game of the twenty-first century is always over energy and it's taking place on an immense chessboard called Eurasia. Its squares are defined by the networks of pipelines being laid across the oil heartlands of the planet. Call it Pipelineistan. If, in Asia, the stakes in this game are already impossibly high, the same applies to the "Euro" part of the great Eurasian landmass -- the richest industrial area on the planet. Think of this as the real political thriller of our time.

The movie of the week in Brussels is: When NATO Meets Pipelineistan. Though you won't find it in any headlines, at virtually every recent NATO summit Washington has been maneuvering to involve reluctant Europeans ever more deeply in the business of protecting Pipelineistan. This is already happening, of course, in Afghanistan, where a promised pipeline from Turkmenistan to Pakistan and India, the TAPI pipeline, has not even been built. And it's about to happen at the borders of Europe, again around pipelines that have not yet been built.

If you had to put that Euro part of Pipelineistan into a formula, you might do so this way: Nabucco (pushed by the U.S.) versus South Stream (pushed by Russia). Be patient. You'll understand in a moment.

At the most basic level, it's a matter of the West yet again trying, in the energy sphere, to bypass Russia. For this to happen, however -- and it wouldn't hurt if you opened the nearest atlas for a moment -- Europe desperately needs to get a handle on Central Asian energy resources, which is easy to say but has proven surprisingly hard to do. No wonder the NATO Secretary General's special representative, Robert Simmons, has been logging massive frequent-flyer miles to Central Asia over these last few years

European Gas Dependence - Better Russia Or Iraq ?  

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The Economist has an article on another stumble forward for the Nabucco gas pipleine, which I've long believed will end up transporting Iraqi gas (as opposed to Iraqi oil) to Europe - He who pays for the pipelines calls the tune.

TRAGEDY and farce have too often been the hallmarks of European efforts to improve energy security. Dependence on Russia, which supplied a third of its gas imports through Kremlin-controlled east-west pipelines, seemed to be rising inexorably and worryingly. Squabbling between Russia and Ukraine led to repeated supply cuts. The Russians exploited energy to divide and rule their Western neighbours. Big energy companies in countries such as Germany and Austria sought cosy relations with Russia’s state-controlled gas giant, Gazprom.

The overlap between politics and profit was epitomised by Gerhard Schröder, a former German chancellor. Since 2005 he has been the front man for Nord Stream, the pipeline that is planned to run under the Baltic. Along with South Stream, a sister project across the Black Sea, Nord Stream would let Russia bypass troublesome transit countries, chiefly Ukraine. West European customers could benefit, but the plans alarm countries in the east that are at greater risk of Russian bullying.

Now this gloomy picture is brightening. For a start, Europe has diversified its sources of supply: cost and unreliability have led Gazprom to lose a third of its European market to imports from Norway, Qatar and Trinidad, says Mikhail Korchemkin of East European Gas Analysis, a consultancy. Second, one of the European Union’s efforts to curb Russia’s transit monopoly is gaining traction. In a signing ceremony in Ankara on July 13th, the Nabucco pipeline, which will connect Europe to gas-rich Central Asia via the Balkans, Turkey and the Caucasus, won formal backing from the main transit countries: Austria, Hungary, Romania, Bulgaria and Turkey, as well as from Germany.

This step reflects a €200m ($283m) dollop of EU money, plus some political shifts. Turkey had earlier bargained toughly (some said destructively). The EU’s quiet expression of interest earlier this year in White Stream, a rival project across the Black Sea, may have changed Turkish minds. And Nabucco has hired Joschka Fischer, a former German foreign minister, as a consultant (see article).

Nabucco could carry some 30 billion cubic metres of gas a year. But that is only a fifth of what Russia exports to Europe; and it will not be finished until at least 2015. Moreover, the sources of that gas remain unclear. Azerbaijan has enough only for the project’s early stages, though it is exploiting new offshore gasfields. Iran would be a logical supplier, but is out of the question on political grounds. A promising newcomer is Iraq’s Kurdish region. In May a Western-backed consortium unveiled an $8 billion plan to extract gas there and sell it to Nabucco. This week Nouri al-Maliki, Iraq’s prime minister, said he could supply half the gas the pipeline needed.

But the biggest prize would be gas from Turkmenistan, a Central Asian dictatorship that claims to sit atop one of the world’s largest gas reserves. The Turkmen leadership is hesitant about annoying the Kremlin, which now buys all of the country’s exports to make up for Russia’s own flagging gas production. But an EU-backed negotiating consortium has made some progress in talks with Turkmenistan. President Gurbanguly Berdymukhammedov recently announced that his country had a surplus of natural gas “available to foreign customers, including Nabucco”.

That would, however, require a new pipeline under the Caspian Sea, which would not only be costly and slow but also subject to objections from Russia and Iran (which would like to offer a land-based route instead). Russia is the only serious naval power in the Caspian. It showed in last August’s war with Georgia that it is prepared to use military force to protect its interests in the neighbourhood.

An American delegation, including Barack Obama’s national security adviser on the region, Michael McFaul, has just been to Turkmenistan to stress the importance the West puts on making Nabucco a success. American lobbying proved crucial to the success of the Baku-Tbilisi-Ceyhan oil pipeline that runs from Azerbaijan to Turkey’s Mediterranean coast, which opened in 2005. Many thought that was a pipe dream in the beginning, but with strong political backing it came to acquire an aura of inevitability. Nabucco’s backers hope to repeat the BTC pipeline’s trick.

Other less ambitious pipelines are also moving ahead. ITGI, which aims to bring Azeri gas to Italy via Turkey and Greece, has just announced a deal to extend a spur north to Bulgaria, ending that country’s near-total reliance on Russian gas. Another EU-backed scheme, the Trans-Adriatic Pipeline, has signed up gas from Iran and expects to draw on Azerbaijan too.

Turkmenistan accuses Gazprom of causing pipeline explosion  

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The LA Times has an article on some central asian great game play that seems to be driven by Gazprom not wanting to pay for relatively expensive Turkmen gas during a supply glut - Turkmenistan accuses Gazprom of causing pipeline explosion.

Turkmenistan blamed Russia's state natural gas monopoly Friday for a pipeline blast that shut off shipments to Russia — an unusual show of tension that could help Western efforts to buy Turkmen gas directly.

Turkmenistan's Foreign Ministry said in a flurry of statements that Russia's Gazprom decided on short notice to reduce the amount of gas it takes from Turkmenistan. Gazprom's export division gave only one day's warning, which wasn't sufficient time for Turkmenistan to reduce its flow into the pipeline network, the ministry said.

The blast, which occurred late Wednesday, "was caused by a gross unilateral violation by Gazpromexport of the norms and rules of the natural gas sales agreement," the statement said. Another statement said Gazprom's actions were "rash and irresponsible" and put lives at risk.

Gazprom has not commented, but Russian Foreign Minister Sergey Lavrov suggested Gazprom was not at fault. "This accident is purely technical," Lavrov said late Friday, according to Russian news agency RIA-Novosti. "I am counting on the fact that this will all be quickly settled."

But Turkmenistan's accusatory language — and putting the accusations at the diplomatic level — raise new questions about Turkmenistan's willingness to rely on Russia as the main purchaser of its gas.

Russia has aimed to corner the market on Turkmenistan's immense gas reserves, but the country also is being courted vigorously by the West, which wants Turkmenistan to be part of a proposed trans-Caspian route that would feed into the U.S.-and EU-backed Nabucco pipeline, which has yet to get off the ground. However, many analysts are skeptical about Nabucco's prospects because there appears to be insufficient gas for the pipeline.

In 2007, Russia, Kazakhstan and Turkmenistan signed a joint declaration on the construction of a 1,100-mile (1700-kilometer) pipeline along the Caspian Sea shore that would run from Turkmenistan through Kazakhstan and into Russia's network of pipelines to Europe. Gazprom hopes the pipeline will supplement current gas deliveries from Turkmenistan by around 30 billion cubic meters.

Work on building the pipeline has yet to get started, however, and disagreements between Gazprom and Turkmenistan could further stall the project.

Two weeks ago, Turkmen President Gurbanguli Berdymukhamedov was expected to sign a protocol on a second pipeline to Russia during a visit to Russia, but the move fell through for unspecified reasons. That was seen by analysts as a significant disappointment to Gazprom.

Turkmenistan meanwhile, has signed an agreement to sell 40 billion cubic meters of gas a year to China and could be interested in further diversifying its customer base.

The explosion damage to the Turkmen pipeline was not expected to cause major disruptions. And the temporary halt of Turkmen gas could work to Gazprom's advantage. Gazprom's gas output dropped 24 percent in March, and a company senior executive said on Thursday that production would be declining by 10 percent each year within the next five years.

While desperate for cash to boost domestic production, Gazprom has to pay for expensive imports from Turkmenistan which are getting far less attractive as demand in Europe is shrinking. Pumping gas from Turkmenistan is "simply unprofitable," said Dmitry Lukashov from UBS in Moscow.

"Geo-Pressure" in gas pipelines to power London  

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Cleantech.com has an article on an unusual energy source being harnessed by a UK startup called 2OC which is working with the National Grid to generate 20 MW using wasted pressure in natural gas pipelines - Pressure in gas pipelines to power London.

Bath, England-based startup 2OC unveiled its plan today to generate electricity for London by 2010 using wasted pressure in the natural gas pipeline grid.

2OC is working with the UK National Grid on a joint venture called Blue-NG to use turbines to take advantage of the enormous pressure released when sourcing natural gas underground before it can be pumped through pipelines. 2OC proposes that 20-centimeter devices called turbo expanders can generate energy from that pressure, and is planning to install its first turbine later this year in east London to generate 20 megawatts of power by 2010.

The method—dubbed geo-pressure—is expected to be used at eight sites during the next couple years, the company said.

2OC launched in 2005 with the goal of generating 1 gigawatt of power for the UK using geo-pressure.

Similar technology has been tested in the U.S. and Europe but has been too costly to be implemented. Blue-NG plans to add a combined heat and power engine to the device to generate heat and electricity, improving efficiency to more than 70 percent. The engine could run on a variety of fuels.

2OC also says the technology could potentially provide data centers, power plants, air conditioners or refrigerators with a cheap source of cold air because the temperature of natural gas drops along with pressure.

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