Russia steps on the gas, competitors look old.

Time and again, the media sets its sites on pipelines. Nord Stream, which now is in operation, provided a score of headlines. Construction of South Stream has also started, a triumph for Russia. The USA is experiencing a gas boom, yet exports are trailing behind – at least for the moment. Whatever the case, valve makers always are in the winning team.

In the south of Yemen, terrorists bombed an oil pipeline, whereas Kurdish guerillas attacked a pipeline in Turkey and another oil pipeline was bombed in northern Iraq. Events not only pipeline companies can do without. Russia, on the other hand, has no such problems. Far from it, the country has reason to celebrate its 1,224 kilometre long Nord Stream pipeline, which cost around 7.4 billion euro. Both lines are in operation and have a max capacity of 55 billion cubic metres of gas a year. The media, which is conveyed from the  Jamnortal peninsula and from the Schtokman gas field in the Barents sea, can supply 26 million households in the EU. An impressive number.

Big project, big media
Valve makers have been involved right from the start. Italian manufacturer  Petrovalves shipped four shut-off valves weighing 102 tons to Nord Stream. Each of the huge valves is 10.4 metres high and 4.1 metres wide. They were installed at the landfall sites in Russia and Germany. The shut-off valves are located in front of the pig traps, in order to cut the gas off  from the pig traps when they are not in service. “The pigs, intelligent inspection gear, are routinely used to look for corrosion or leakage from inside of the pipeline“, states Nord Stream AG.

Artec AIS was also happy to receive an order for the Baltic Sea pipeline project. The German company built ten class 1.500/ 250 bar ball valves for Wingas, for use at the landfall site in Greifswald, Germany. The all-metal seated valves feature highly efficient wear protection. Compact electro-hydraulic drives with very high positioning precision are utilise, states artec AIS. They ensure „that even in the case of prolonged power outages previously defined switching operations can proceed securely, thanks to energy stored in bladder accumulators“. The order wasn't the largest artec AIS had ever received in terms of valve size and turnover, but it was nonetheless a milestone. „Media coverage was strong, as it was a well-known project“, explained CEO Christopher Schroeder.

Russian happiness
Valve makers can hope for future opportunities related to pipeline construction. South Stream is one promising example. Russian gas giant Gazprom is behind the project and has reached another milestone it can celebrate. Construction of South Stream has already commenced and by 2015/16, the pipelines shall transport Russian gas from the eastern region of the Black Sea to Hungary, Austria, Greece and Italy. By 2018, the max capacity will grow to 63 billion cubic metres. Estimates for the four lines, which cover 2.446 kilometres, sum up to around 16 billion euro.
South Stream will also pose a challenge for valve makers. The pipeline will run along the bed of the Black Sea for 900 kilometres, at depths of over 2000 metres. As a consequence, pressure levels in long sub-sea sectors will be high. This requires high wall thicknesses and valves that can handle high pressure levels.

Nabucco or TAP?
Russia seems to be triumphant with its Nord and South Stream pipelines, as both are set to cover the entire demand from Western Europe. In contrast, the EU's Nabucco pipeline project is hanging on a string. The project was designed to transport gas from the Caspian Sea to Europe, leaving Russia out of the loop. Various experts believe the project is dead. South Stream is way ahead, whereas Nabucco doesn't even have enough contracts with gas companies.  German power company RWE doesn't see a future anymore for Nabucco and exited the project.

The large Nabucco route from Turkey to Austria, covering 3,300 kilometres, has no chance left. It was supposed to go online by 2017. “The original version of the classic Nabucco pipeline is out of the question,“ explains Conn, a BP manager and spokesperson of the Shah Deniz Consortiums. Instead, talks are being held concerning a far shorter route, starting at the Turkish border and covering around 1.300 kilometres. It is claimed the large-scale Nabucco version was too large and too expensive, costs were estimated to be 15 billion euro. Demand in the European market amounts to 10 billion cubic metres of gas – compared to the 31 billion cubic metres originally envisaged. In order to realise the large-scale Nabucco version, the EU would have to subsidise the remaining 21 billion cubic metres.

Yet things are not going well for Nabucco. Competition to the shorter Nabucco pipeline is coming from the TAP (transadriatic pipeline), which will run via Greece through the Adria to Italy. A decision will be made in June 2013, with one of the projects landing in the bin.

Should either Nabucco or TAP go ahead, there would be further orders for the valve sector. These orders however would be rather different from the major-scale projects from Russia. Valves made for Nabucco would be less demanding than those constructed for Nord and South Stream, as the pipeline, named after an opera composed by Verdi, will only run across land, and not under the sea.

Russian oil for China and the USA
Russia doesn't have to concern itself with such problems, not only thanks to both Nord and South stream. The country is also pumping oil to China, Japan and the USA. The last part of the 4,700 kilometre long East Siberian-Pacific Pipeline (Espo), with a volume of 20 billion euro, has been finalised. It is the world's largest pipeline and has a capacity of 50 million tons of oil per year. China stressed it wanted to receive 22 to 30 million tons annually, compared to the current 15 million tons. The USA will receive the remaining 35 per cent. Russia can thus enter the US market in a major fashion.

In terms of crude oil exports, the USA is an island. A law passed in the 1970s banned the export of crude oil, except in cases concerning the national interest. Only mineral oil products may be exported.

Yet the USA haven't been singing the blues. Thanks to fracking, which allows the exploitation of previously inaccessible oil and gas reservoirs, the USA is experiencing a comeback. According to a study by the IEA, the USA will become the largest oil producing country by 2020 and will dethrone Russia as the largest gas producer by 2015. It can be expected things will change. The first US companies have filed for licences allowing them to export LNG. Valve makers have reason to be happy, as flow and transport of LNG through terminals, in liquefaction plants and to storage tanks is controlled by valves. Shut-off and safety valves make sure gas flows to and fro. Transport via LNG tankers also requires valves, for instance to maintain pressure and temperature levels. Pressure and temperature requirements are high. Terminals and tankers can not do without fire safe valves.

US gas exports – a sleeping giant
Natural gas is very cheap in the USA, making it attractive for other countries. Thanks to LNG, the USA could start exporting gas to Europe and Asia, without being concerned with missing pipelines. Nonetheless, it will still take some time. Russia's predominance as the major gas supplier is not in question, at least for the moment. Currently, the country is only concerned with the success of Nord and South Stream.