05.07.2009

Gas field production equipment does not always work well at very low levels. It is therefore customary in a natural gas sales agreement for there to be a minimum quantity that the buyer can nominate for delivery on any day. Although most GSAs allow the buyer to nominate zero, he will not be allowed to nominate quantities between zero and the minimum nomination level.

Thus, the minimum aggregate of all nominations is often either zero or greater than 50 mmcfd. The seller however can be asked to use reasonable endeavours to deliver at rates less than this minimum of 50 mmscfd.

There is often also a delivery tolerance in the range of +/- 2% in a day and +/- 1% in a month. If a Seller fails on any day to make available the Properly Nominated Gas other than because of Force Majeure or because of scheduled maintenance, then this same quantity of natural gas will become part of an “aggregated shortfall quantity”, which the buyer can take at the beginning of the following month at the agreed upon discounted price prior to taking any other gas.

Opening in the hull of a drillship to allow for the passage of operational equipment

Largest Israeli tube manufacturing company. Manufacture steel pipes for various uses, including water and sewage pipelines, oil and gas pipe for onshore and offshore pipelines, and pipes for general uses in construction, agriculture, and civil engineering

A term sometimes used to refer to those industry activities that fall between exploration and production (upstream) and refining and marketing (downstream). The term is most often applied to pipeline transportation of crude oil and natural gas and is thus mostly the sector comprising all those activities relating to the construction and management of the oil transport infrastructure

An oil-recovery technique or process in which a fluid, capable of mixing completely with the oil it contacts, is injected into an oil reservoir to increase recovery. Fluids miscible with the reservoir oil are introduced into the reservoir through an injection well to displace the oil from the pores of the reservoir and drive it to a production well. The miscible fluid is introduced into the injection well at a sufficiently high pressure to drive the body of fluid through the reservoir where it collects and drives the reservoir oil to the production well.

Process of cutting away material through rotary movement from equipment located in the borehole

The pipeline length is to be 3,300 km and the project is due to be completed in 2013, starting at the Georgian/Turkish and/or Iranian/Turkish border respectively, leading to Baumgarten in Austria. It connects the Caspian region, Middle East and Egypt via Turkey, Bulgaria, Romania, Hungary with Austria and further on with the Central and Western European gas markets and has been designed to transport a maximum amount of 31 bcm/y. Estimated investment costs has risen to $12.3 billion and the project is aimed at enhancing Europe’s energy security and reducing its dependence on Russian gas supplies.

It is at serious risk from the South Stream pipeline project and needs to retain strong EU backing on the grounds of security of supply in the hope of signing up additional users. Nabucco will also enable Turkmenistan to sell directly to Europe. Currently it is selling 50 out of the 70 bcm it supplies annually via Gazprom that sells it on at a more expensive price. The gas from Central Asia to Nabucco may be delivered via the planned Tran-Caspian pipeline. The Trans-Caspian gas pipeline will extend to Azerbaijan, where the gas reserves are expected to comprise 6trln cu m, from the Caspian coast of Kazakhstan or Turkmenistan. The Mediterranean gas from Azerbaijan to the end of the Nabucco pipeline is delivered via the currently existing South Caucasus gas pipeline (Baku-Tbilisi-Erzurum). In June 2008 Nabucco received its first supply order, namely from Bulgaria to Azerbaijan for the supply of 1 bcm of natural gas p.a. The crisis between Russia and Georgia however that erupted in the summer of 2008 could be the final blow to the pipeline since entities will now be loath to finance the project and put gas in it. The energy companies in Nabucco are OMV of Austria, Bulgargaz of Bulgaria, RWE of Germany, MOL of Hungary, Transgaz of Romania and Botas of Turkey.

Both Nabucco and South Stream pipelines would deliver gas to Europe and both are political. South Stream keeps Gazprom in control while Nabucco seeks to diversify supply so as to lessen European dependence on Russian gas. South Stream could be twice as expensive as Nabucco, which in turn, may face difficulty securing supply to fill the pipe.