An Efficient and Reliable Route for the Transportation Of
Total Page:16
File Type:pdf, Size:1020Kb
AN EFFICIENT AND RELIABLE ROUTE FOR THE TRANSPORTATION OF QATARI NATURAL GAS TO EUROPE A Dissertation Presented to The Graduate Faculty of The University of Akron In Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy Muneer Althaaly December, 2016 AN EFFICIENT AND RELIABLE ROUTE FOR THE TRANSPORTATION OF QATARI NATURAL GAS TO EUROPE Muneer Althaaly Dissertation Approved: Accepted: Advisor Department Chair Dr. Ping Yi Dr. Wieslaw K. Binienda Committee Member Interim Dean of the College Dr. Yilmaz Sozer Dr. Donald J. Visco Committee Member Executive Dean of the Graduate School Dr. Zhe Luo Dr. Chand Midha Committee Member Date Dr. Ernian Pan Committee Member Dr. Li Wang ii ABSTRACT Qatar is the world’s largest producer and exporter of liquefied natural gas (LNG). Europe is dependent on natural gas as a main source its energy needs. This dis- sertation addresses the problem of the transportation of natural gas from Qatar to Euro- pean markets. Currently, LNG is transported from Qatar to Europe via LNG ocean- going vessels; the route used by these tankers passes through some of the world’s most dangerous and treacherous maritime areas. This dissertation proposes a new route, one which avoids these areas and which significantly reduces the transport time. A dual nat- ural gas pipeline – originating in Ras Laffan Industrial City in Qatar and terminating in Yanbu Industrial City in the Kingdom of Saudi Arabia – will avoid the straits of Hormuz (entrance to the Arabian Gulf) and Bab-el-Mandeb (entrance to the Red Sea), areas known for geopolitical and piracy threats. An analysis of the costs involved in the con- struction of this dual pipeline, along with the requisite compressor stations and natural gas liquefaction plant in Yanbu, is presented. In addition, this dissertation discusses the potential geopolitical and environmental impacts that may result from the proposed pro- ject. The economic benefits to Qatar and to Saudi Arabia are discussed: new job crea- tion, transit fees, efficient access to European markets, Saudi re-export of LNG. The ge- opolitical benefits of the proposed new route are the enhancement of relations between GCC member states and enhancement of relations between GCC and Europe. iii ACKNOWLEDGEMENTS I would like to state my thanks and appreciation to all of those who have assisted me throughout my pursuit of this graduate degree: my parents and all of my family, for their continued support and encouragement; the late King Abdullah and the government of Saudi Arabia, for providing the opportunity for me to study here in the United States; my advisor, Dr. Ping Yi, for his guidance and encouragement throughout my pursuit; and, finally, to all of my friends and student colleagues for their friendship and compan- ionship. iv TABLE OF CONTENTS Page LIST OF FIGURES…………………………………………………………………..…xii LIST OF TABLES…………………………………………………………………….xvii CHAPTER I. INTRODUCTION AND BACKGROUND…………………………………………1 1.1 Introduction………………………………………………………………………...1 1.1.1 Problem Statement…………………………………...………………….....3 1.1.2 Research Objectives…………...…………………………………………...3 1.2 Background………………………………………………………………………...6 1.2.1 Pipeline history…………………………………..………………………...4 1.2.2 Natural Gas in Qatar…..……………………………………………….......5 1.2.2.1 Natural gas transportation in Qatar…………...………………….8 1.2.2.2 The Dolphin project…..…………………………….....……........9 1.2.2.3 Some previously proposed Qatari Gas Pipelines………...……....9 1.2.2.3.1 The Qatar-Turkey Pipeline……………...............….....10 v 1.2.2.3.2 The Qatar-Pakistan Pipeline…………...……………...10 1.2.2.3.3 The TransAsia Pipeline System (TAPS)…………...…11 1.2.2.3.4 Discussion………………...…………………………………..11 1.3 The Proposed Pipelines…………………………………………………………...12 1.3.1 Fleet Route…………………...…………………………………………...13 1.3.2 Proposed dual pipeline route…………...…………………………………15 1.3.3 New “Hybrid” (Pipeline and Maritime) Route…………...……………….16 1.4 Methodology……………………………………………………………………...17 1.4.1 Economic analysis and impact………………………...………………….17 1.4.2 Environmental Impact………………...…………………………………..17 1.4.3 Geopolitical impacts………………………..…………………………….18 II. ENGINEERING TECHNIQUES AND ECONOMIC IMPACTS………………..19 2.1 Introduction……………………………………………………………………….19 2.2 Natural gas pipeline construction…………………………………………………20 2.2.1 Onshore pipeline construction………………………………...…………..20 2.2.1.1.1 Construction Survey……………..…………………………...20 2.2.1.1.2 Trenching……………...………………………………………20 2.2.1.1.3 Hauling and stringing (placing of pipe)………..…………….20 vi 2.2.1.1.4 Pipe bending……...…………………………………………...21 2.2.1.1.5 Pipe Welding…………………………………………...……..21 2.2.1.1.6 Pipe Coating…………………...……………………………...22 2.2.1.7 Lowering of Pipe into the trench…………...…………………...22 2.2.1.1.8 Pipe Tie-ins…………………….......………………………….22 2.2.1.1.9 Trench Backfilling………………...…………………………..23 2.2.1.1.10 Final Testing and Internal Inspections……...……………….24 2.2.1.2 Natural gas pipeline compressor stations………………...……………..24 2.2.2 Offshore pipeline construction………………………...………………….25 2.3 Cost estimation for proposed pipelines…………………………………………...25 2.3.1 Materials costs………………...…………………………………………..26 2.3.2 Labor costs…………...…………………………………………………...30 2.3.3 Miscellaneous costs…………...…………………………………………..35 2.3.4 Right-of-way (ROW) and Damage…………………………...…………..39 2.3.5 The pipeline Total Cost (without Compressor Cost)…………………...…44 2.3.6 Compressor Cost………….......…………………………………………..48 2.3.6.1 Capital Cost …………...………………………………………..48 2.3.6.2 Maintenance Cost………...…………………………………..…49 vii 2.3.6.3 Fuel Cost………………………………...………………………49 2.3.6.4 Compressor Cost Estimation………………………………...….49 2.4 Liquefied Natural Gas (LNG)………………………………………………….…52 2.4.1 LNG History……………………...…………………………………….…52 2.4.2 Composition of natural gas and LNG………………………...…………...54 2.4.3 LNG Value Chain………………………………...…………………….…55 2.4.4 Cost estimation and economics………………………………...…………57 2.4.4.1 Liquefaction Plant Costs………………………...……………...57 2.4.4.2 LNG Transportation Cost…………………...…………………..60 2.5 Results and Summary……………………………………………………………..63 2.5.1 Prediction of shipping cost savings utilizing proposed route…………......65 2.5.2 The Economic Benefits to Qatar and Saudi Arabia of the Proposed Transit Dual Gas Pipeline…………………………………………………...…………..67 2.5.2.1 Defining transit and cross-border pipelines……………...……...67 2.5.2.2 Benefits for Saudi Arabia………………………………...…..…68 2.5.2.2.1 The Transit Fee……………………...………………...68 2.5.2.2.2 LNG re-export……………...…………………………69 2.5.2.2.3 New Job Creation…………...………………………...69 2.5.2.2.4 Satisfy need for alternative fuel for electricity produc- tion................................................................................................69 viii 2.5.2.3 Benefits for Qatar ………………….......…………………….…70 2.5.2.3.1 More efficient access of LNG to European markets.....70 2.5.2.3.2 Dangerous sea routes will be avoided……….......……70 2.5.2.3.3 Saudi future demand for natural gas will be satisfied...71 III. ENVIRONMENTAL IMPACTS 3.1 Introduction……………………………………………………………………….72 3.2 A brief description of the Arabian Gulf Ecosystem………………………………72 3.2.1 Seagrass beds………………………………...……………………………73 3.2.2 Coral reefs…………………………...……………………………………73 3.2.3 Mangrove swamps……………………….......……………………………74 3.2.4 Mudflats…………………………...………………………………………74 3.3 Environmental impact of the offshore construction phase………………………..74 3.4 Environmental impact of the onshore and offshore operation phase……………..75 3.4.1 The nature of natural gas…………………...……………………………..75 3.4.2 Methane as a greenhouse gas………………………………...…………...76 3.4.3 Methane emission in the natural gas industry……….......………………..78 3.4.4 Emissions in the proposed dual pipeline project…………...……………..79 3.4.5 Emission of methane and other GHGs into the atmosphere……….......…79 ix 3.4.6 Storage………………………….......……………………………………..80 3.4.7 Possible emission during loading and unloading……………………...….80 3.4.8 Flaring…………………………………...………………………………..80 3.4.9 Shipping………………...…………………………………………………81 3.4.10 Fate of released methane in the marine environment………………........82 3.5 Summary………………………………………………………………………….83 IV. GEOPOLITICAL IMPACTS………………………………………………….…84 4.1 Introduction…………………………………………………………………….…84 4.2 Natural gas routes and geopolitical conflicts…………………………………..…85 4.2.1 Current geopolitical problems affecting trade routes for LNG...…………85 4.2.2 The Strait of Hormuz………………...……………………………………86 4.2.3 The Strait of Bab el-Mandeb……………………………...………………88 4.3 The Gulf Cooperation Council (GCC)……………………………………………89 4.3.1 The effect of the proposed new route on the political relationships of GCC members……....………………………………..………………………………..89 4.3.2 The effect of the proposed new route on the political relationships between GCC members and European countries…………………………...…………..…90 4.4 European Geopolitics of Natural Gas……………………………………………...91 4.4.1 Europe’s current reliance on Russian gas……………...…………………..91 4.4.2 Europe’s new options for gas supplies……………………...……………...93 x 4.5 Summary……………………………………………………………………….….97 V. Conclusion and Recommendations for the Future……….........………………....….99 BIBLIOGRAPHY………………………………………………………………………102 APPENDICES……………………………………………………………………….…110 APPENDIX A. PIPELINES RAW DATA..........................................................110 APPENDIX B. COMPRESSOR STATIONS RAW DATA...............................111 xi LIST OF FIGURES Figure Page 1-1 Energy infrastructure in Qatar……………………………………………………….6 1-2 Natural gas flows in Qatar from 2003 to 2013……………………………………....6 1-3 LNG Exports and Market Share by Country (in MTPA)……………………………8 1-4 Dolphin project.....................................................................................................…...9