A Review of the Nigerian Energy Industry

Saipem lands $552m South Stream deal

South Stream deal29 April 2014 – Italy’s Saipem has scooped another lucrative contract to work on the Gazprom-led subsea section of the South Stream gas export pipeline.

The company has been handed a fresh €400 million ($552 million) deal to support the construction of the second line of the pipeline connecting Russia and Bulgaria via the Black Sea.

South Stream will consist of four parallel, 931-kilometre-long gas pipelines, running at a depth of 2200 metres below sea level. The project will have a total annual throughput capacity of 63 billion cubic metres of gas.

Japan’s Marubeni-Itochu & Sumitomo consortium will supply 40% of the pipes, while Russia’s OMK Steel will provide 35% and Izhora Pipe Mill another 25%.

Operator South Stream Transport will pay about $1.1 billion for 75,000 pipe sections for the second leg of the pipeline project.

The latest contract is set to be completed by the end of 2016 and follows on from the award to Saipem in mid-March of the deal to provide design and pipelaying services for the first leg of the project.

For the first contract, Saipem will mobilise its Castoro Sei, an S-lay vessel suitable for both shallow and deep waters, and Saipem 7000, a J-Lay vessel suitable for ultra-deepwater work.

Activities at the landfalls are planned to begin in June, with the preparations for micro-tunnel construction in Russia and then in Bulgaria, with the main offshore construction to start in September, the operator said.

Construction of the first pipeline is to continue until the third quarter of 2015, with the operator planning to take the first leg into the operations phase by the end of that year.
*Eoin O’Cinneide-Upstreamonline

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