gas for energy IGRC 2014 (Vorschau)

03–2014 

www.gas-for-energy.com 

ISSN 2192-158X 

energy 

gasfor 

Magazine for Smart Gas Technologies, 

Infrastructure and Utilisation 

IGRC 2014 

DIV Deutscher Industrieverlag GmbH 

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The Gas Engineer’s 

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Supply Infrastructure from A to Z 

The Gas Engineer’s Dictionary will be a standard work for all aspects of construction, 

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points like the following: 

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Editors: Klaus Homann, Rainer Reimert, Bernhard Klocke 

1 st edition 2013 

452 pages, 165 x 230 mm 

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PATGED2014

EDITORIAL 

Dear Readers, 

Technological innovation is the lifeblood of the energy industry. 

Continuing commercial pressures following the global 

economic downturn coupled with the imperative of meeting 

rigorous environmental standards mean that all fuels, including 

all forms of natural gas, need to develop new technologies and 

push the bounds of best practice. Energy prices are a serious 

issue for the viability of industrial and commercial projects, 

affordability for residential customers, the fuel choice for power 

generators, the next phase of low emission transportation 

vehicles and other energy uses. In these days of pressure on 

fuel costs, an efficiency improvement of a few percent or the 

reduction of emissions can make the difference between economic 

failure and commercial success. 

The whole gas chain is involved in this process, and sufficient 

R&D funding is needed from ‘drill bit to burner tip’ to keep gas 

technologies and industry best practices at the forefront of a 

highly competitive energy market. In addition, more demanding 

social and regulatory requirements have increased the challenges 

on market participants throughout the gas industry. 

Conventional natural gas is the backbone of the gas business 

and I expect that on a global basis it will remain so for many 

years to come. In several national situations or local applications 

however, unconventional natural gas from tight or shale 

rock formation, methane from coal beds or even gas produced 

as a biofuel can become a significant energy source and in 

some local cases the dominant fuel. There are both similarities 

and differences in the technologies that we need as the gas 

family expands to embrace these new relatives. 

Gas innovations are already inspiring the development and 

implementation of a wide range of clean energy applications. 

For the International Gas Union, sharing information on best 

practices and encouraging technology transfer are important 

objectives. The gas industry has already developed a wide 

range of well-proven technology that provides efficient 

energy solutions that would deliver significant economic and 

environmental benefits if widely applied throughout the 

world. But even as the least polluting fossil fuel gas cannot be 

complacent about its position in the energy mix. The economic 

challenge is ever present and it is only by investing in 

efficiently focussed Research, Development and Technology 

Application that the gas industry will enhance its position in 

the future as a perfect partner of a wide range of renewable 

energy sources and a sustainable part of the global energy 

solution. 

I would commend to you both this publication and the IGRC in 

Copenhagen. These exemplify the exciting prospects for natural 

gas as the industry takes clean energy innovation to new 

heights. There are many challenges ahead to ensure that technology 

is developed and knowledge transfer can take place 

throughout the world. With sufficient investment now I believe 

that natural gas, and indeed the whole gas industry, will be 

well placed and ready for the decades to come. 

Yours sincerely, 

The energy business is dynamic and increasingly gas is an information 

business. Vast amounts of data are gathered and processed 

in finding and exploiting new sources of gas supply, in 

transporting and trading gas to optimise deliveries to customers 

and in enabling consumers themselves to have access to 

smart meter technology, social information systems and 

increasingly rapid customer switching processes. 

Torstein Indrebø 

Secretary General 

International Gas Union

TABLE OF CONTENTS 3 – 2014 

6 TRADE AND INDUSTRY 

Pipe supply starts for Power of 

Siberia GTS construction 

16 INTERVIEW 

with Soren Juel Hansen, head of 

development Energinet.dk 

© Tivoli Congress Center. 

18 I G R C 

The IGU invites the global gas society 

to the IGRC2014 in Copenhagen 

Reports 

GAS PIPELINE 

22 Doability of Trans-Caspian Pipeline and deliverability 

of Turkmen gas to Turkey & EU 

by O. Akyener 

GAS PIPELINE 

30 Stress with buried gas pipelines in subsidence areas 

by Z. Chen, Ch. Qin and Y. Zhang 

LNG 

38 Onshore LNG receiving terminal – risk analysis 

by B. Majcen and M. Valiak 

MICRO-CHP 

44 Practical experience in the placement of mCHP 

by M. Opačak 

GAS MARKET 

48 Flexibility prices in Germany 

by A. Pustišek and M. Karasz 

GAS MARKET 

54 The Austrian Gas Market Model 

by W. Ziehengraser 

2 gas for energy Issue 3/2014

3 – 2014 TABLE OF CONTENTS 

22 R E P O R T 

Doability of Trans-Caspian Pipeline 

and deliverability of Turkmen gas 

38 R E P O R T 

Onshore LNG receiving terminal – 

risk analysis 

60 PROFILE 

Danish Gas Technology Centre 

– for a greener energy future 

Interview 

16 Gas for energy has interviewed Soren Juel Hansen, head of 

development and former head of infrastructure, 

preparedness and tariffs in Energinet.dk 

Pro fil e 

60 Danish Gas Technology Centre 

visit us at our website: 


News 

6 Trade & Industry 

11 Personal 

13 Events 

18 IGRC Special 

62 Associations 

64 Products & Services 

Columns 

1 Editorial 

4 Hot Shot 

21 Diary 

Issue 3/2014 gas for energy 3

HOT SHOT

HOT SHOT 

The combined heat and power station 

Avedøre utilises up to 94 % of 

the energy in the fuels and provides 

voltage to the power grid, which is 

needed to transmit power from wind 

turbines to the customers. 

Source: Dong Energy A/S

TRADE & INDUSTRY 

Growing number of TSOs at PRISMA attracts new 

platform participants 

The rising number of TSOs participating in the European 

capacity platform PRISMA has attracted a number 

of new gas trading companies to the platform over 

the past year. PRISMA had a total of 376 registered gas 

trading companies in July 2014, up 49 % compared to 

the number of shippers registered at the launch of its 

platform in April 2013. This translates into a total of 123 

new trading companies that have registered to the 

PRISMA platform over the period. Out of the 376 registered 

trading companies, 81 % have been actively trading 

on the platform. The rise in the number of participants 

at PRISMA comes as a result of the market’s constantly 

growing interest towards the services offered 

which enable users, amongst other things, to easily 

acquire interconnection capacity between the main 

European hubs. 

British Gas chooses Elster as partner for advanced 

gas metering to support their business customers 

Elster announced today that British Gas Business (BGB), 

the UK’s largest non-domestic gas supplier, has 

selected the metering firm as its primary partner for the 

provision of advanced gas metering. The agreement sees 

Elster, Europe’s largest provider of non-domestic meters, 

supplying up to 100,000 advanced Commercial and 

Industrial gas meters over the next three years to a significant 

proportion of BGB’s UK customer base. 

Under this arrangement Elster will provide its next 

generation range of themis diaphragm gas meters, with 

flexible embedded GPRS communications and Zone 0 

ATEX accreditation. Elster will also supply its RABO range 

of rotary meters with encoder communications. Both of 

these technologies are aimed at improving the accuracy 

and frequency of data which BGB is able to provide to its 

business customers, enabling them to more easily understand 

and manage their energy. 

This extensive deployment programme will be undertaken 

on behalf of BGB by its chosen Meter Asset Management 

(MAM) partners, Energy Assets Plc and Smart 

Metering Systems Plc, both of whom have long and 

proven working relationships with Elster. 

EnBW to buy Eni stake in the gas joint venture 

EnBW Energie Baden-Württemberg AG acquires the 

50 %stake owned by Eni group, Rome, in EnBW Eni 

Verwaltungsgesellschaft mbH, Stuttgart, and thus indirectly 

50 % of Gasversorgung Süddeutschland GmbH 

(GVS) and 50 % of terranets bw GmbH. EnBW and Eni 

established the joint venture in 2002. GVS supplies distributors 

and industrial customers 

in Germany, Austria and Switzerland. 

In 2013 the company generated 

sales of € 1.6 billion on a gas 

sales volume of 56 TWh with a 

workforce of 88 employees. 

Terranets bw is an independent 

transmission system operator 

(ITO) which ensures non-discriminatory 

transportation of natural gas through its nearly 

2,000 kilometer network and guarantees technically reliable 

supply for its customers. More than two-thirds of all 

cities and communities in Baden-Württemberg and parts 

of Switzerland, Vorarlberg and the Principality of Liechtenstein 

are connected to terranets bw’s network. Additionally 

the northern Black Forest gas pipeline is under 

construction since the beginning of the year. Moreover 

terranets bw owns a 2,000 kilometer telecommunication 

network and offers a variety of technical services. In 2013, 

the company generated sales of € 105 million with a 

workforce of 190 employees. 

The acquisition is subject to approval by the relevant 

antitrust authorities. Both parties agreed contractually 

not to disclose the purchase price. 


product 

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Enagás-Odebrecht consortium to build 1,000-km 

South Peru Gas Pipeline 

The consortium made up of Enagás (25 %) and Odebrecht 

(75 %) has been awarded the project for the 

South Peru Gas Pipeline put out to tender by the Peruvian 

government. 

The award covers the construction and subsequent 

operation and maintenance of a 1,000-km-long gas pipeline, 

which is key for safeguarding supply in Peru. The 

pipeline is scheduled to be brought on stream for commercial 

use in 56 months and the concession is for 34 

years. This transaction is in line with the criteria laid out in 

Enagás’ Strategic Update for 2013-2015, as well as with the 

company’s core business and its target profitability and 

debt-level figures. During the construction, Enagás will 

invest around $ 250 Mn in the project, which will be 

funded through a project finance structure. The take-orpay 

contracts of the infrastructure enable revenue stability 

to be ensured. 

Map of the South Peru Gas Pipeline project. 

© 2014 Enagás. 

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Gate terminal to build new facilities for distribution 

of LNG via vessels and barges 

Gasunie and Royal Vopak announced that their joint 

venture, Gate terminal, has taken the final investment 

decision to add LNG break bulk infrastructure and 

services to the terminal. The new facility in the port of 

Rotterdam is expected to boost the use of liquefied natural 

gas (LNG) as a transportation fuel in the Netherlands 

and Northwest Europe. 

Highlights 

■■ 

■■ 

■■ 

Construction is scheduled to start this year; commissioning 

and commencement of the first services are 

scheduled for H1 2016 

Terminal will be expanded with an additional harbour 

basin to enable LNG distribution for small scale 

use with a maximum capacity of 280 berthing slots 

per year 

Shell has been contracted as launching customer 

Open Grid Europe to boost north-to-south 

gas transmission capacity in Bavaria 

Open Grid Europe started preparations including 

surveying work for a new natural gas transmission 

pipeline from Schwandorf to Forchheim. The 

work is needed to include details of the proposed 

pipeline route in the planning permission documents. 

The regional planning process is due to start in early 

June. The documents will then be made available for 

public inspection in the towns and municipalities 

affected. 

■■ 

New infrastructure enables distribution of low emission 

fuel alternative to transporters all over Europe 

Break bulk (or small-scale) services aim to split up largescale 

LNG shipments into smaller quantities. This enables 

the distribution of LNG as a fuel for maritime vessels, ferries, 

trucks and industrial applications. The use of LNG as a fuel 

is expected to grow substantially following the introduction 

of stringent new emission regulations (SECA) for the 

marine sector in the North Sea and in the Baltic Sea from 

2015. By using LNG as a fuel, barges, coasters, ferries, as well 

as heavy trucks, can reduce their carbon dioxide (CO 2) 

emissions by up to 20 %, their nitrogen oxide (NOx) emissions 

by up to 85 %, while reducing sulphur and particle 

emissions to almost zero. For these reasons, the Dutch 

government and the European Union encourage the 

development of LNG as a transportation fuel. 

Following the completion of the regional planning 

process and the planning permission procedure in the 

next two years, construction will start from 2016 onwards. 

Commissioning of the 62 km pipeline with a diameter of 

one metre is scheduled for 2017. 

The need for this large gas pipeline was identified as 

part of the 2013 gas network development plan (NDP). It 

will increase transmission capacity in Bavaria from the 

north to the south to meet tomorrow’s demand. 

Report of Gassco on new gas transport and 

processing facilities 

Resources in the Barents Sea could play a key role in 

maintaining Norwegian gas output in the 2020s and 

beyond, according to a Gassco report on new gas transport 

and processing facilities. 

Planned exploration activity up to 2017 is expected to 

double the resource base in Norway’s Barents Sea sector, 

and the study shows that developing gas discoveries 

there could provide substantial value from a socioeconomic 

perspective. However, getting started on developing 

gas infrastructure from the region will be a 

demanding business. No single licence is likely to be able 

to bear the necessary cost alone – either for new liquefaction 

capacity or for a pipeline solution. 

Gassco concludes that feasibility studies must be 

launched as early as next year if new gas infrastructure is 

to be operational from 2022. The coming 12 months will 

be important for updating analyses based on discoveries 

and for looking at the organisation of transport and processing 

facilities from the Barents Sea in order to underpin 

decision-taking by the players. 



Pipe supply starts for Power of Siberia GTS construction 

First pipes for the Power of Siberia gas transmission 

system (GTS) were delivered to Lensk (Yakutia). The 

first batch consists of 260 1,420-mm pipes with a 21.7 mm 

wall thickness and the total weight of some 2.4 thousand 

tons. The pipes are currently stocked at the temporary 

storage; they will be used for constructing the GTS section 

from the Chayandinskoye field to Lensk. All in all, 

in 2014 it is planned to deliver over 120.000 t of pipe products. 

The domestically manufactured pipes are delivered 

to Ust-Kut (Irkutsk Region) via the railway and further 

to Lensk by barge. In order to arrange and manage the 

goods traffic, a united logistic center was set up in Ust- 

Kut. Between 2014 and 2018 it is planned to deliver over 

1,700 t of pipes. 

Wintershall selects 8over8’s ProCon 

to support its capital deployment strategy 

Wintershall Holding GmbH, has selected 8over8® 

Limited’s contract management platform to 

underpin its global capital development strategy. Wintershall 

has recently acquired a number of licences and 

fields in the Norwegian North Sea. The company currently 

invests half of its global exploration budget in the 

Total signs a long-term agreement 

to supply LNG to Pavilion Energy 

Total signed a 10-year LNG sale and purchase agreement 

with Pavilion Gas, a subsidiary of Pavilion Energy, for the 

supply of 0.7 million tonnes per year of liquefied natural gas 

to Asia, including Singapore, starting in 2018. In addition, 

several LNG cargoes will be supplied prior to 2018. This LNG 

will be sourced from Total’s global LNG Portfolio. 

region, making it one of the Norway’s largest licence 

holders. Wintershall is implementing 8over8’s industry 

leading solution ProCon, which drives recognised 

commercial discipline into major capital projects by 

ensuring standardisation and increasing internal and 

external collaboration. 

Total is active in most of the major LNG producing 

regions as well as in the main LNG markets and continues 

to develop LNG as a key component of its growth strategy. 

The Group is involved in LNG plants in Indonesia, 

Nigeria, Norway, Oman, Qatar, the United Arab Emirates, 

Yemen, Angola, Australia and Russia. 



Norwegian prime minister Erna Solberg 

and Statoil CEO Helge Lund were 

greeted by Gudrun platform manager 

Ole Martin Bakken. Photo: Harald Pettersen. 

Gudrun officially opened 

Norwegian prime minister Erna Solberg officially opened 

the Gudrun platform in the North Sea. This is the first new 

Statoil-operated platform on the Norwegian continental 

shelf (NCS) since Kristin in 2005. Gudrun is the first in a 

long line of new field developments operated by Statoil, 

and therefore it represents a new era on the NCS. The 

next in line is Valemon, which is scheduled for start-up 

later this year. Gina Krog and Johan Sverdrup on the Utsira 

High are next in the North Sea. 

Gudrun is the result of a global development strategy. 

The jacket has been delivered by Kværner Værdal in mid- 

Norway, and the living quarters by Apply Leirvik at Stord in 

western Norway. The topside was provided by Aibel with 

sub-supplies from Thailand, Poland and from Haugesund 

in Western Norway. The helideck was constructed in China. 

Gudrun has been put on stream on time and below the 

cost estimate of the plan for development and operation 

(PDO). The global puzzle has helped keep the costs down. 

E.ON and RasGas agree supply contract 

E 

.ON and Qatar’s RasGas have signed a three-year deal 

for the supply of LNG to the UK. The medium-term 

flexible contract could potentially supply up to two billion 

cubic metres (bcm) over its term, according to both 

firms. The LNG from Qatar will be transported by ship to 

the Isle of Grain in the UK. E.ON sees Qatar, which has the 

world’s third largest gas reserve, as a pivotal player in the 

growth of its LNG business model, including short and 

long-term supply agreements. RasGas currently exports 

to countries across Asia, Europe and the Americas with a 

total LNG production capacity of approximately 37 million 

t per annum. 

German government supports advancement 

of clean and efficient fuel cells 

FuelCell Energy Solutions GmbH (FCES), which manufactures, 

sells, operates and services reliable fuel cell power 

plants, announced the issuance of nearly € 5 million in 

awards by Germany’s Federal Ministry for Economic Affairs 

and Energy to support a three year research and development 

project between FCES and joint venture partner 

Fraunhofer IKTS. The project targets further enhancements 

to the Direct FuelCell®(DFC®) technology by increasing 

power density and operating life of the fuel cells, leading to 

lower costs. The research is being performed in Germany 

by FCES at an existing facility in Ottobrunn and by Fraunhofer 

IKTS at a facility located in Dresden. 


PERSONAL 

NDT Global appoints Gunther H. Blitz as 

new Chief Executive Officer 

NDT Global, a leading supplier of ultrasonic pipeline 

inspection and integrity services, announced 

Gunther H. Blitz as Chief Executive Officer of NDT 

Global Europe. Mr. Blitz has held various positions in 

the pipeline and plastics industry and has worked in 

several senior management positions. NDT Global has 

embarked on a steady growth course with significant 

investments in inspection tools, engineering capacity 

and skilled workforce. The company’s 

focus on long-term strategic 

development and international 

expansion has already 

resulted in framework contracts 

with major oil and gas companies 

and new offices in 

Malaysia and Russia. 

GasTerra CEO Gertjan Lankhorst is President of Eurogas 

The General Assembly of the European branch 

organisation Eurogas, meeting in Venice, has 

elected Gertjan Lankhorst, CEO of GasTerra, as its 

new President. He succeeds Frenchman Jean-François 

Cirelli who has headed Eurogas for the last four 

years. The Eurogas Presidency is an ancillary position, 

Mr Lankhorst will continue in his post as CEO of Gas- 

Terra. 

Eurogas brings together a total of 45 gas sector companies 

and organisations, dealing in gas trading, distribution 

and retail, from 25 different countries. It is responsible for 

protecting the sector’s common interests in Brussels. 

Messe 

NetworkiNg 

koNgress 

FACHForeN 

europAs FüHreNde eNergieFACHMesse 

e-world eNergy & wAter 

10. - 12.2.2015 

esseN, gerMANy 

www.e-world-essen.com 


PERSONAL 

New Vice-President of GAZ-SYSTEM S.A. 

he General Meeting of GAZ-SYSTEM S.A. 

Tappointed Mr. Dariusz Bogdan to the post of 

Vice-President of the company’s Management 

Board. Mr. Dariusz Bogdan graduated from the 

Faculty of Mechatronics at the Warsaw Univer- 

sity of Technology, followed by postgraduate 

studies in Telecommunications, Computer 

Science and Management at the Faculty 

of Electronics and Information 

Technology at the Warsaw University of 

Technology. From December 2007 to June 2014, he was 

Undersecretary of State at the Ministry of the Economy. 

He has also held the post of Chairperson of the Offset 

Agreements Committee, Chairperson of the Supervisory 

Board of the Polish Agency for Enterprise Development, 

member of the Council for Computerization of 

the State and of the Committee of the Council of Ministers 

on Information Technology and Communications. 

He was previously the Director of the IT Office in 

the Agricultural Market Agency. 

Personnel changes at Wintershall 

Wintershall’s strategy is to expand exploration and 

production of oil and gas. To reflect this strategic 

orientation more strongly, the following organizational 

changes will be made effective September 1, 2014: 

■ Mario Mehren, who has been in charge of Wintershall’s 

Russian business, will also assume responsibility 

for the core regions of South America and North 

Africa. 

■ Martin Bachmann will manage the core business in 

Europe, with the production regions Germany, the 

Netherlands and Norway. Bachmann will also build 

our operations in the development region of the Middle 

East. 

■ Chief Financial Officer Ties Tiessen will take over 

responsibility for natural gas transport and transit 

pipelines, including the Nord Stream, South Stream 

and OPAL/NEL projects. 

Dr. Gerhard König, Dr. Ties Tiessen, Dr. Rainer Seele, 

Martin Bachmann, Mario Mehren (from left). 

■ 

Rainer Seele will remain Chairman of the Board of 

Executive Directors. 

As part of the asset swap agreed between BASF and 

Gazprom in December 2013, Wintershall will exit the natural 

gas trading and storage business the two have jointly 

run for many years. When the transaction is completed, 

the responsible board member, Gerhard König, will join 

the Gazprom Group and continues as chairman of WIN- 

GAS. It is expected to be completed in the fall of 2014. 

There will also be changes at the top of some operating 

companies (OPCOs) of Wintershall effective September 

1, 2014: 

■ Andreas Scheck, up to now Head of the Operations 

department in Germany, will take charge of Wintershall 

Deutschland in Barnstorf. Joachim Pünnel will 

take over management of a new division at headquarters 

in Kassel. 

■ Robert Frimpong, previously Vice President Technology, 

will assume responsibility for the Business Unit 

Netherlands in Rijswijk. His predecessor Gilbert van 

den Brink stays Managing Director of Wintershall Nederland 

B.V. 

■ Thilo Wieland, up to now Vice President Strategy and 

Portfolio Management, will become General Manager 

of Wintershall Libya. He succeeds Uwe Salge, who will 

move to Abu Dhabi as Head of Wintershall Middle 

East. Klaus Langemann, to date General Manager in 

Middle East, will take charge of a new unit at headquarters 

in Kassel. 


EVENTS 

29 th European Autumn Gas Conference 

World of Energy Solutions 

The World of Energy Solutions Conference will attract 

experts from industry, research and practice to Stuttgart 

from October 6 to 8, 2014. The over 100 speakers will 

provide insights into their daily work, business models, 

technologies and long-term trends. A total of more than 

800 delegates from Asia, North America and Europe are 

European energy industry leaders are due to attend 

and debate the future for European natural gas at a 

major summit this October, being held in St Paul’s, central 

London. With the Russian-Ukrainian crisis having dramatically 

underlined the fragility of Europe’s strategic bargaining 

position with Russia due to energy dependency, the 

summit will examine the diversification of, and continued 

security of supply issues relating to the future use for 

natural gas within the union. 

Leading industry figures including Jean-Francois Cirelli, 

President of the world’s largest utility company, GDF 

SUEZ, will debate Europe’s energy future at the 29 th 

annual European Autumn Gas Conference with other key 

consumers, suppliers and regulators of gas. As European 

utilities continue to struggle to keep costs of energy for 

their customers down, the critical role for natural gas in 

the face of increasingly-demanding carbon emissions 

tightening by the EU, means decisions made now about 

energy diversity will impact on all member states over 

the coming decades. As Europe faces growing competition 

for fuels such as gas and coal from 

rapidly-expanding consumer regions 

such as Asia, the race is on to secure 

long-term stability, fair pricing and 

diversity of supply to ensure Europe’s 

energy demands continue to be met. 

Many Chief Executives and board-level members of 

key organisations will be present and making their contributions 

to the energy debate, including Phillippe Sauquet, 

President of Total Gas & Power, Marcelino Oreja 

Arburúa, Chief Executive Officer of ENAGAS, Sean Waring, 

Managing Director of Interconnector, Jean-Marc Leroy, 

Chief Executive Officer of Storengy, and Jogchum Brinksma, 

Managing Director of Citigroup Global Commodities. 

The 29 th European Autumn Gas Conference takes 

place between 28-30 October at the Grange St Paul’s 

Hotel, City of London. 

www.theeagc.com 

expected to attend the Conference. The focal points of 

the Conference will be technological and economic 

aspects of international future-oriented developments of 

integrated energy, storage and mobility solutions. 

www.world-of-energy-solutions.de 

PTC 2015 - Call for Papers 

Interested speakers are invited to submit an abstract 

(max. 300 words) describing the main ideas of their 

paper together with the presenter’s CV (max. 200 words). 

Abstracts should not focus on company presentation but 

on technical/managerial classifications, R&D, new technologies 

or recent case studies. Joint presentations 

between pipeline operators and technology providers 

are welcome. 

Each speaker gets a presentation time of 20 minutes. 

The presented papers will be published in the conference 

proceedings and distributed to the conference attendees. 

All abstracts and papers will also be published 

in the abstract database. Speakers from 

the private industry are requested to register as 

normal delegate. All other confirmed speakers 

attend free-of-charge. Conference language is 

English. 

■■ 

Deadline for abstract submission: 30 November 2014 

■■ 

Notification of abstract acceptance: 15 January 2015 

■■ 

Final conference paper due: 31 March 2015 

www.pipeline-conference.com/call-for-papers 


EVENTS 

7 th International Gas Turbine Conference – 

“The Future of Gas Turbine Technology” 

The International Gas Turbine Conference, organised 

biennially, aims to highlight the role that gas turbine 

technology could play in the future and raise the awareness 

of gas turbine (GT) technology development needs 

– from both oil & gas and power generation operators’ 

perspectives. The conference will also provide the opportunity 

to meet and exchange ideas with policy makers, 

high level executives and GT experts from the whole 

value chain attending from Europe, North and South 

America, Middle East, and Asia. The conference will highlight 

and discuss the energy market outlook in Europe 

and globally, as well as to present recent developments 

and on-going R&D activities for flexible, efficient and 

environmentally sound gas turbines. 

The 7 th International Gas Turbine Conference (IGTC-14) 

take place October 14-15 in Brussels Belgium and will will 

focus on the required future GT technology developments 

from a user’s and a political point of view. 

www.etn-gasturbine.eu 

3 rd annual Gas Asia Summit 

Across Europe and Asia, many pose the question – 

what role will natural gas play in the future energy 

mix in relation to coal, oil, natural gas, renewables and 

nuclear? In the recent years, natural gas has slowly started 

to increase its share in the energy mix within many countries. 

It has become a favoured fossil fuel choice over coal 

and oil due to its lower carbon emissions and also higher 

fuel efficiency - but at what price point does natural gas 

become a less attractive option? 

These concerns will be addressed at the 3 rd annual 

Gas Asia Summit (GAS) in Singapore this October. 

Mr Varro will join Dr Anthony Barker, General Manager 

for BG Singapore Gas Marketing, and Ken Koyama, Managing 

Director and Chief Economist, Charge of Strategy 

Research Unit for the Institute of Energy Economics, 

Japan (IEEJ) to discuss whether gas is displacing coal in 

the energy mix, the drive towards cleaner fuels, and the 

role nuclear will play in the coming decade. 

The agenda for this year’s Summit has been developed 

around the theme “Multilateral Cooperation to Connect 

Gas Markets”. 

GAS will be held from 29 to 31 October as part of the 

annual Singapore International 

Energy Week (SIEW) 

organised by the Energy 

Market Authority (EMA) of 

Singapore. Over 250 international 

and regional VIPs and 

C-level executives attend 

the Summit each year. 

www.gasasiasummit.com 

South East Europe Oil & Gas Exhibition and 

Conference 

Officially supported by the Ministry of Environment, 

Energy and Climate Change, the South East Europe Oil & 

Gas Exhibition and Conference will take place on 25 - 27 

November 2014 at the Metropolitan Expo in Athens, 

Greece. This event will focus on developments in Albania, 

Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Cyprus, 

Hungary, Moldova, Montenegro, Romania, Serbia, Slovakia, 

Fyrom, Israel, Italy and Turkey, all which will be connected 

to the host country, Greece, via existing and 

planned pipeline projects. 

www.oilgas-seeurope.com 


EVENTS 

LNG Roadmap - LNG as a driving force for crossborder 

cooperation within the EU 

Gas- und Wärme-Institut Essen e. V. (GWI) as an institute 

for applied research in the area of fuel gas technologies 

provides scientific and technical support for the introduction 

of LNG into the German markets. For this purpose, GWI can 

draw from its own experience as well as that of its German 

and international partners and the respective industries. 

A favorable geographic location offers an advantage 

to both the state of North Rhine-Westphalia as well as 

Germany as a whole to implement a LNG infrastructure 

which underlines the crucial role of the cross-border 

cooperation for this process. 

To further discussions as well as an exchange of experience, 

GWI and EnergieAgentur.NRW jointly hosted the 

workshop “LNG Roadmap - LNG as a driving force for 

cross-border cooperation within the EU”, which took 

place on July 3 rd , 2014 in the Maritim Hotel Dusseldorf. 

Among the Dutch partners were the Netherlands 

Organization for Applied Scientific Research TNO, the 

Energy Valley Foundation and the Arnhem Nijmegen City 

Region. The Development Centre for Ship Technology 

and Transport Systems at the University of Duisburg- 

Essen was a German event partner. 

Source: GWI 

About 100 experts from Germany, the Netherlands, 

Great Britain, Norway, Switzerland, Austria, France and 

Belgium attended the workshop and discussed the 

launch of the LNG as a fuel gas. Amongst the participants 

were relevant parties from gas trading, plant and appliance 

manufacturers and operators, shipping companies, 

shipyards, consulting companies and political and municipal 

representatives. 

The workshop “LNG Roadmap” enjoyed a very high 

interest of the German and European energy and transport 

economy sectors. This event constitutes a forum in 

which an exchange of views and experiences in the area 

of the cross-border LNG infrastructure development can 

be discussed. Gas- and Wärme-Institut Essen e. V. and the 

EnergieAgentur.NRW announced a follow-up workshop 

for the first half of 2015. 


INTERVIEW 

Søren Juel Hansen 

Natural gas as part of a 

future more renewable EU 

energy solution 

“gas for energy” has interviewed Søren Juel Hansen, head of development 

and former head of infrastructure, preparedness and tariffs in Energinet.dk. 

The European gas market has become more dynamic 

in recent years. Do you have a vision for the future of 

the European gas market? 

Hansen: I would like to see the gas system and the European 

gas market as backbone for European clean growth. 

Energy planners, researchers, demonstrators and producers 

of biogas, regas and power2gas all over Europe have 

shown us that it is possible to make gas based on renewables 

and electricity and thus to convert the gas system and 

the gas market from fossil to renewable. The electricity system 

is allready a long way down the renewable path with 

sun and wind but it needs transport 

capacity, flexibility and storage 

capacity. Gas on the other 

hand is flexible and has huge 

transport capacities, flexibility 

and storage capacities several 

times larger than e.g. the transport 

capacity of the current electricity 

grid and the capacity of the EU hydro power storages. 

I therefore see gas as an obvious partner for a future more 

renewable and electricity based European energy market. I 

thus see gas as the current cleanest fossil and the future 

renewable backbone fuel and system for a more renewable 

and electricity based energy system. 

What do you think are the main challenges to the gas 

industry / gas infrastructure? 

Hansen: Ohhh ... We have several. 

First and biggest challenge is to wake up and understand 

the surrounding society's needs: Until around 2005, 

the European gas industry got its growth all by it selves. 

Therefore, the gas industry just focused on supplying the 

ever increasing demand with of shelf solutions and did not 

pay sufficient attention to the current and future needs of 

the surrounding society and energy systems. Accordingly, 

“Challenges for the gas 

industry are therefore to 

listen carefully to the 

society’s needs.” 

the gas industry's ability to position it selves and develop 

the gas sector to serve the current and future energy Market 

is weak. Challenges for the gas industry are therefore to 

listen carefully to the society’s needs and set sail for further 

market integration and renewable gas and to provide flexibility 

and storage for other renewables and clean solutions 

for the transport sector. In basic, we have to listen to society’s 

needs and provide the solutions society request. 

Second, under the previous Ukraine crisis, we learned of 

the need for Security of Supply in all of Europe and not just 

Northwest Europe. We have now secured a robust EU preparedness 

set-up and many 

reverse flow capacities but we 

still have not integrated the markets 

in Southern and Eastern 

Europe well enough with the 

now super liquid Northwest 

European spot gas Market and 

we still need some liquidity on 

the forward market. This is especially a pity for the regional 

markets still suffering from local domination but also for the 

decoupling of gas prices from oil prices and for the common 

European purchasing power towards Russia and other big 

suppliers. So we still have a market integration job to do! 

Another and just as important market integration challenge 

is to secure a European green gas market. We have 

access for biogas, regas and power2gas in some national 

markets and biogas certificates are also in place or under 

development some places but it is not coordinated nor 

positioned as a tool to reach e.g. EU renewable transport 

targets. I therefore see a huge challenge in facilitating this 

and making gas, the gas system and the gas market part of 

a future more renewable EU energy solution. 

Good news is that gas is needed for flexibility and gas 

can be converted to economic, clean and energy effi- 

cient renewable solutions. 


Søren Juel Hansen 

INTERVIEW 

Establishing a 100% carbon-neutral gas supply in 

Denmark to 2050, what are the main measures to 

succeed in this plans? 

Hansen: Danish politicians have picked wind as the prime 

solution towards 2020 to reach a 2050 fully renewable 

Danish energy supply. Like sun, wind means electricity. 

Well functioning electricity systems and markets and 

a variety of other flexible renewable supply sources are 

therefore keys in the Danish plan. 

Wind and other renewables are available as the wind 

blows, sun shines, pigs … and the electricity system has 

to balance every second. The electricity system therefore 

needs increased capacity and flexibility to absorb this. 

New electricity infrastructure, flexible producers and 

consumers and electricity connections to Norway, Sweden, 

Germany and more coming up and can add some 

further flexibility. But still the capacity of e.g. all Denmark’s 

current electricity connections to Germany, Sweden and 

Norway together only corresponds to the capacity of our 

recently upgraded gas connection to Germany. The huge 

transport capacity muscle of the gas system which can 

transport huge volumes of energy over long distances 

without energy loss can thus help with transport capacity. 

Biogas is right now developing all over Denmark 

and the government wants this to cover 3% of the sup- 

ply within few years. Regasification of e.g. biomass and 

power2gas are still technologies to be further 

matured but the government also 

have an eye on these as the possibility 

to turn renewable power 

in to gas is highly needed to 

absorb the increasing volumes 

of wind power. 

Other elements in the 

Danish vision are better utilisation 

of excess heat. 

Although some district heating 

systems loose 20 % or more 

of the energy in transport, district 

heating is a sure winner in 

all the cases where you have 

excess heat from e.g. production 

of goods, electricity or conversion 

from e.g. electricity to gas. 

Efficent integration of renewables, 

energy usage, electricity, gas 

and heat systems is thus a key element 

in the Danish plans and visions. 

What could the position of gas be in a Danish 2050 

renewable scenario? 

Hansen: Gas has the potential to become the renewable 

backbone of the future fully renewable and more electricity 

based Danish Energy system. Gas is thus a key element. 

Moreover, gas can also contribute in shipping and 

heavy transport where it can reduce current large emissions 

of both CO 2 and particles. 

What will your company´s most important 

innovation/project be? (concerning this scenario) 

Hansen: Being a transmission system operator, we are 

just a facilitator. I therefore do not expect the innovation 

to come from us - but rather that we support the 

innovators with: 

■ vision, technical and commercial sparring 

■ liquid easy accessible markets and flexibility 

■ EU recognised green certificates to secure the green 

value can be traded 

Having said this, creating one European gas market with 

sufficient security of supply for all and promoting a European 

recognised and tradeable green gas certificate is 

our current prime project. 

Mr. Hansen, thank you very much for the interview. 

INFO 

Søren Juel Hansen is head of development 

and former head of infrastructure, 

preparedness and tariffs in Energinet.dk. 

Søren is responsible for new business 

development and public affairs activities. 

In his past 13 years with the gas sector 

Søren has been responsible for Energinet. 

dk’s Open Season 2009 and the EU-recovery 

programme funded investment decisions 

for the German-Danish interconnection 

point in Ellund, the Danish preparedness-setup 

for both electricity and gas 

and the rules for the 2004 liberalisation of 

the Danish gas market. Current focus is on 

securing the role of green gas in the 

energy mix and on integrating the upmid- 

and downstream gas value chain.

IGRC 2014 in Copenhagen 

Every three years the International Gas Union (IGU) invites 

the global gas society to the worlds most recognized gas 

R&D conference – the IGRC. 

This years conference – IGRC2014 - takes place in 

Copenhagen, Denmark, 17-19 September, 2014 in the 

state-of-the-art Tivoli Congress Center centrally located in 

the city. The conference is hosted by the Danish Gas 

Technology Center. The conference theme is Gas Innovations 

Inspiring Clean Energy. 

■■ 

■■ 

■■ 

■■ 

Jérôme Ferrier, President of IGU will give the Opening 

Speech on “The Importance of R&D and Innovation”. 

Rasmus Helveg Petersen, Danish Minister for Climate, 

Energy- and Building will welcome the delegates to 

“Green Denmark”. 

Peder Ø. Andreasen, CEO, Energinet.dk will talk about 

“Gas and power synergies in a clean energy future”. 

Ulco Vermeulen, Managing Director, Gasunie will chair a 

panel debate on “How innovations change the gas market”. 

Jérôme Ferrier. 

Rasmus Helveg Petersen. 

© Tivoli Congress Center. 

CALL FOR PAPERS SETS NEW 

ALL-TIME RECORD 

IGRC2014 received a total of 771 abstracts from 44 countries. 

These are all-time records in the history of IGRC 

starting in 1980. 

Such impressive figures of course reflect the current 

high interest in gas technology; and the understanding 

that gas will play an increasing role in the future energy 

mix, and that technology will be the key to the future 

business model for gas growth. 

All the abstracts have been reviewed by members of 

the International Paper Committee established under the 

auspices of IGU. 

It has been a tough job for the committee members 

to score all abstracts and select the 400 papers that will 

constitute the IGRC2014 programme. Out of these, approx. 

100 papers will be presented in oral sessions/workshop sessions 

and 300 in poster sessions. 

TOP ENERGY PEOPLE OPEN IGRC2014 

The IGRC2014 Opening Plenary Wednesday, September 

17, 2014 will feature key energy executives from the Danish 

and global energy world: 

Peder Ø. Andreasen. 

Gerald Linke. 

Marc Florette. 

Ulco Vermeulen. 

Jack Lewnard. 

David Carroll. 


The Opening Plenary will offer the delegates a cultural 

experience when Harlequin and Columbine from the 

Tivoli Pantomime Theatre will perform the pantomime 

“Gas Innovations Inspiring Clean Energy”. The pantomime 

will be specially created for the IGRC2014 and will not be 

shown again elsewhere. 

TECHNOLOGY IS THE KEY TO A 

GROWING GAS MARKET 

In addition to the opening plenary, IGRC2014 features three 

exciting plenaries discussing different aspects of the role of 

technology in the development of the future gas market: 

What is the business case for R&D? 

Chaired by Gerald Linke, Senior Managing Director, 

DVGW, GERMANY 

What could be the important technology game changers? 

Chaired by Jack Lewnard, Vice President, Chesapeake Utility, 

USA 

Important messages from the world of gas technology 

Chaired by Marc Florette, Digital Director, GDF Suez 

Research and Innovation, FRANCE and including a presentation 

by IGU Vice President David Carroll 

28 TECHNICAL SESSIONS 

The technical programme comprises 28 oral and workshop 

sessions and 10 poster sessions covering the entire 

gas chain from wll-head to burner-tip. 

Session titles are: 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

Will gas heat pumps find their place in the market? 

The expansion of the gas market with advanced 

technologies 

Domestic fuel cells - latest developments 

Gas quality - implications for gas use 

From appliances to a system of prosumers 

Advanced syngas technology and environmental 

awareness 

Towards lowest emissions 

Efficiency increase through heat recovery 

Optimizing industrial processes 

Future Mobility - driven by natural gas 

Improving the pipeline integrity of your gas 

infrastructure by monitoring and detection 

Optimize the use and replacement of your assets to 

reduce costs 

Monitoring and tracking of gas quality 

Evaluation of Polyethylene and Polyamide gas pipes 

Maintenaince and replacement technologies 

Diversifaction of LNG in the transportation sector 

Production mangement and optimisation 

■■ 

■■ 

■■ 

Underground gas storage in the modern energy 

market 

Performance improvements of natural gas dehydration 

processes 

Improvements in shale gas productivity 

■■ 

New frontiers in the removal of CO 2 

■■ 

Biogas as part of the renewable future 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

Reducing carbon footprint of natural gas 

Power to gas - the next revolution 

Advances in gas processing 

How new gas resources impact national energy 

systems 

Power-to-Gas - national or European topic 

Green Gas - economics and integration 

ENERGY BATTLE COPENHAGEN 

The NRG Battle Copenhagen will be part of IGRC2014. 

International teams of talents will gather from all over the 

world to work jointly on real-life energy cases under the 

supervision of leading energy executives. 

The NRG Battle - World Edition will take place on the 

premises of the Tivoli Congress Center, and teams will 

pitch the solutions to a jury of CEOs and experts who will 

determine the winner. The teams will be working on 

cases relating to the gas and energy industry overall, and 

the winners, as always, will get the tickets to travel around 

the world! 

GERG ACADEMIC NETWORK 

The European Gas Research Group (GERG) has decided to 

hold its annual Academic network event in conjunction 

with IGRC2014. 

Some 20 young researchers have been selected to 

present their research as posters at IGRC2014. 

PRESTEGIOUS AWARDS 

The conference organisers are pleased to offer two prestigious 

IGRC2014 awards: 

■■ 

The Dan Dolenc Award (10.000 €) will be given to an 

outstanding paper selected amongst all presented 

papers. (Dan Dolenc was a dedicated IGRC pioneer 

who organised a series of very successful IGRC conferences 

for the Gas Research Institute (GRI) in USA.) 

■■ 

The Young Researchers Prize (3.500 €) will be given to 

a high quality paper by an author under the age of 35 

in 2014. 

The award winners are selected by the Paper Committee 

Chairmanship and the IGU Presidency. Both awards are 

handed over to the winners at the IGRC2014 Closing Plenary 

Friday, September 19 at 12.30 hrs. 



Order now! 

A close up view of 

the international 

gas business 

This magazine for smart gas technologies, infrastructure and 

utilisation features technical reports on the European natural 

gas industry as well as results of research programmes and innovative 

technologies. Find out more about markets, enterprises, 

associations and products of device manufacturers. 

Each edition is completed by interviews with major company 

leaders and interesting portraits of key players in the European 

business. 

READ MORE ABOUT 

Gas applications Grid infrastructure Measurement 

Gas quality issues Pipeline construction Regulation 

Biogas injection Corrosion protection Smart metering 

EXHIBITION 

In addition to the technical conference programme, 

IGRC2014 will feature an exhibition of gas technology 

equipment and services from gas companies and manufacturers 

around the world. 

TECHNICAL TOURS 

IGRC2014 offers 3 alternative technical tours in the Copenhagen 

area in addition to the conference programme. 

Avedøre Power Station – One of the top power stations 

in the world 

Avedøre Power Station is situated less than 10 km from 

the centre of Copenhagen and is one of the best Combined 

Heat and Power Plants in the world. Avedøre 

Power Station has a total capacity of about 825 MW and 

supplies 200,000 households with heat. It produces about 

30% of the total electricity use in Zealand, which is about 

1.3 million household’s yearly electricity consumption. 

Copenhagen Gasworks which produces 30 % 

CO 2-neutral gas 

Kløvermarken Gasworks uses natural gas, biogas 

and air to produce towngas to the city of Copenhagen. 

The visit to the gasworks will also include a visit 

to the wastewater treatment plant Lynetten where 

the production and treatment of the biogas takes 

place. 

gas for energy is published by DIV Deutscher Industrieverlag GmbH, Arnulfstr. 124, 80636 München, Germany 

The future heating system – gas-fired heat pump 

At the art gallery “Gl. Holtegaard”, situated north of 

Copenhagen, there is a heating system consisting of a 

stand-alone ground-source gas-fired heat pump for heating 

the indoor areas. The tour will include a technical part 

(gas heat pump installation) and a cultural part (visit to 

the art gallery, www.holtegaard.org). 

ATTRACTIVE PROGRAMME FOR 

ACCOMPANYING PERSONS 

Copenhagen – the capital of Denmark - is safe, pleasant 

and reliable. It is easy to get to from all over the 

world and easy to move around in. And Copenhagen is 

the ideal hub for visiting other parts of Scandinavia. 

IGRC2014 offers a very attractive programme dedicated 

to accompanying persons including meals, special 

sessions and tours. 

See the detailed programme on 

www.igrc2014.com 


FUTURE 


DIARY 

• IGRC International Gas Union Research Conference 

17.–19.9.2014, Copenhagen, Denmark 

www.igrc2014.com 

• gat/wat 2014 

29.9.–1.10.2014, Karlsruhe, Germany 

www.dvgw.de 

• InOGE 

7.–9.10.2014 

www.inoge-expo.com 

• Renexpo 

9.–12.10.2014, Augsburg 

www.renexpo.de 

• 3 rd Annual Small Scale LNG Forum 

5.–6.11.2014, Rotterdam, Netherlands 

http://oilgas.flemingeurope.com/small-scale-lng-forum 

• KIOGE 2014 

7.–11.10.2014, Almaty, Kazakstan 

www.kioge.com 

• EAGC European Autumn Gas Conference 

28.–30.10.2014, London, U.K. 


• South East Europe Oil & Gas Exhibition and Conference 

25.–27.11.2014, Athen, Greece 


• European Gas Conference 

27.–29.1.2015, Vienna, Austria 

www.europeangas-conference.com 

• E-world of energy & water 

10.–12.2.2015, Essen, Germany 

www.e-world-essen.com 

• Gas Transport and Storage Summit 

23.–24.3.2015, Munich, Germany 

www.gtsevent.com 


REPORTS 

Gas pipeline 

Doability of Trans-Caspian 

Pipeline and deliverability of 

Turkmen gas to Turkey & EU 

by Oğuzhan Akyener 

Due to increasing demand, gas supply is one of the most strategic energy security issues for huge importers. By 

taking this into consideration, Caspian region -where important gas supply potentials exist- is directly related with 

the huge importers’ energy security issues, mainly which are EU, China, India and Turkey. As an important gas supplier 

country locating in Caspian Region, Turkmenistan and her future gas supplies are becoming more important 

for the importers mentioned above. As a result, each importer is preparing long term plans and developing new 

projects to import the gas resources from Turkmenistan. One of the most popular projects -related with Turkmen 

gas resources- is Trans Caspian gas pipeline, which is planned to transport Turkmen gas through Caspian Sea to 

Azerbaijan and then with other available pipelines to Turkey and Europe. Naturally, this pipeline is an important 

energy security issue for Turkey-Azerbaijan and EU. However, there are important political, technical and economic 

challenges to overcome. In this study, after a short outlook into the gas politics in the Caspian Region -mainly Turkmenistan 

related issues-; importance of Trans Caspian gas pipeline project will be described. Then, doability of this 

popular project will be evaluated from the technical-political and economic perspectives. Additionally, Iran’s claim 

to transport Turkmen gas through Iran to Turkey instead of Trans Caspian project will economically be compared. 

1. CASPIAN REGION GAS POLITICS & 

IMPORTANCE OF TURKMENISTAN 

After oil and coal, natural gas is the most important 

energy resource in the world. Moreover, since being clean 

& easy to use and shale gas effect on prices, natural gas is 

expected to be the second world’s leading consumed 

fuel in the future. 

Caspian, involving Russia-Turkmenistan-Kazakhstan- 

Uzbekistan-Azerbaijan-Iran, is the most important 

region according to her proved gas reserves potential 

in the world (% 46,7 of world share [1]). Moreover, due 

to the geographical properties (locating in the middle 

of the important consumers; China-India-EU & 

Turkey), importance of Caspian region for world gas 

politics is increasing. 

Table 1. Energy statistics of the main energy players in Caspian region. 

Proved Gas 

Reserves 

Azerbaijan 

Turkmenistan 

Uzbekistan 

Kazakhstan 

Iran Russia India China EU TR 

tcm 0,9 17,5 1,1 1,3 33,6 32,9 1,3 3,1 1,9 0,006 

Gas Production bcma 15,6 64,4 56,9 19,7 160,5 592,3 40,2 107,2 153 0,6 

Gas 

Consumption 

Demand 

Volume 

1 year prod/ 

Reserves 

bcma 8,5 23,3 47,9 9,5 156,1 416,2 54,6 146,6 456 39 

-7,1 -41,1 -9 -10,2 -4,4 -176,1 14,4 39,4 303 38,4 

0,017 0,004 0,052 0,015 0,005 0,018 0,031 0,035 0,081 0,100 

RESULT SUPPLY SUPPLY SUPPLY SUPPLY SUPPLY SUPPLY DEMAND DEMAND DEMAND DEMAND 


Gas pipeline 

REPORTS 

Table 2. 2035 Gas supply-demand potentials of main energy players in Caspian region. 

Azerbaijan Turkmenistan Uzbekistan Kazakhstan Iran Russia India China EU TR 

Gas Supply bcma 40 140 80 60 No Est. 350 

Gas Demand bcma 250 650 640 85 

Table 1 below gives numerical information about the 

reserves-production & consumption values of Caspian 

and Caspian gas demanding countries. 

From the table above, it is observed that; there is an 

important volume of gas supply potential (such as 

250 bcma) in Caspian region and an important demand 

volume (such as 400 bcma) in nearby areas. 

Due to difficulties faced during transportation, storage 

and marketing procedures of natural gas, long term 

plans and forecasts are much more important than any 

other energy resource. That’s why, for coherent gas politics, 

long term estimations are very important. Forecasts 

for the 2035 supply and demand potentials of these 

countries are given in the table above (table 2). 

In this scenario to focus on Turkmenistan; she has the 

3 rd important gas reserves and 2 nd (except Iran-no logical 

estimations due to sanctions) supply potential for the 

demand markets. Besides, India-China-Turkey and EU are 

the possible future buyers. 

A brief insight into the Turkmenistan energy market: 

■■ 

An important gas exporter in the region (2 nd ). 

■■ 

■■ 

■■ 

■■ 

■■ 

Today has an oil exporting capacity more than 

100 000 bbld. 

Today has a gas exporting capacity more than 

40 bcma. 

Lacks of sufficient foreign investment. 

Locating too far from the important markets (China- 

India-EU-TR). 

Lacks of sufficient oil export pipeline infrastructure. 

■■ 

■■ 

■■ 

■■ 

Majority of gas is exported to Russia and some portion 

of gas is exported to China and Iran. 

Important portion of gas reservoirs are high pressure 

and temperature reservoirs and have high percentages 

of H2S and CO 2; means not easy to develop due 

to economical & technical aspects. 

Due to important gas reserves attract all other players 

in the region. 

Main energy security targets are 

■■ 

To get attraction of new foreign investors and 

develop more gas fields. 

■■ 

To continue to securely access to Russia, Iran and 

China gas markets. 

■■ 

To increase the capacity of transportation to access 

China gas markets. 

■■ 

To access Pakistan, India and European gas markets 

via planned pipelines. 

■■ 

To complete the construction of these relevant pipelines 

(TAPI & Trans Caspian). 

■■ 

To reach gas export capacity of 230 bcma in 2035 

(expected to be more than 140 bcma). 

■■ 

To reach oil export capacity over 1 million bbld in 

2035 (expected to be more than 250 000 bbld (due to 

expected increasing condensate production; but 

new infrastructures for transportation will be needed). 

■■ 

To complete East-West pipeline inside Turkmenistan 

and have the ability to transport South East resources 

to the Caspian Sea markets (Then from Trans Caspian 

to EU). 

Table 3. Gas export pipelines of Turkmenistan. 

GAS EXPORT PIPELINES 

Name of Pipeline 

From 

(Supply Country) 

Through 

(Countries) 

To (Markets) 

CAC TURKMENISTAN TURK-UZB-KAZ RUSSIA 100 

Capacity 

(bcma) 

TURKMENISTAN 

EXISTING 

FUTURE 

KORPEZHE KK TURKMENISTAN TURK IRAN 13 

DAULETABAT-KANGIRAN TURKMENISTAN TURK IRAN 6 

CENTRAL ASIA-CHINA TURKMENISTAN TURK-UZB-KAZ CHINA 40 

BUKHARA-URALS TURKMENISTAN TURK-UZB-KAZ RUSSIA 20 

EAST-WEST TURKMENISTAN TURK CASPIAN 30 

TAPI TURKMENISTAN TURK-AFG-PAK INDIA 34 

TRANSCASPIAN TURKMENISTAN AZ TURKEY-EU 30 

CENTRAL ASIA-CHINA X UZBEKISTAN UZB CHINA +18 


REPORTS 

Gas pipeline 

■■ 

To solve conflicting claims over the maritime and seabed 

boundaries of Caspian Sea with Iran & Azerbaijan. 

Note that, items 4-5-8 & 9 are directly related with the 

trans caspian pipeline project. 

2. GAS EXPORT INFRASTRUCTURE OF 

TURKMENISTAN 

Table 3 summarizes existing and planned gas export 

infrastructure of Turkmenistan. As highlighted with yellow, 

Trans-Caspian gas pipeline project is the planned 

infrastructure to transport Turkmen gas to TR and EU. 

3. TRANS-CASPIAN GAS PIPELINE 

PROJECT 

3.1 Introduction 

The idea to transport Turkmen gas to Europe continues to 

be popular since the independence days of Turkmenistan. 

This idea has developed as the Trans-Caspian gas 

pipeline project. Many changes in the structure and strategies 

of this pipeline occurred. For instance, the plan 

used to include NABUCCO and SCPX pipeline however 

political and commercial decision makers have changed 

the roots and projects. 

With the last updates, Trans-Caspian gas pipeline is planned 

to run under the Caspian Sea from Türkmenbaşy to the Sangachal 

Terminal (see Figure 1), then to connect to EU and Turkey 

via SCPFX and TANAPX and will carry 30 bcma gas annually. 

Figure 1. Proposed Trans-Caspian pipeline [2]. 

3.2 Milestones of the project 

Before the investment decision of Trans-Caspian pipeline 

project, there are important milestones and risks to be 

considered. If these milestones cannot be overcomed 

then this project will not be realized. 

3.2.1 Political 

The sea border conflict between Caspian countries negatively 

affects the investment possibilities in the region. As 

seen from the map below Turkmenistan has disagreements 

with both Azerbaijan and Iran. But Trans-Caspian 

pipeline project is directly affected by the conflicts 

between Azerbaijan and Turkmenistan. This is the first 

issue that has to be overcomed (Figure 2). 

This issue is also related with the sharing of some 

important oil and gas fields around the borders such as 

ACG & Kepez, therefore the solution will not be easy (also 

EU & US supports to have a solution). 

3.2.2 Commercial 

Commercial milestones may be the most difficult steps to 

overcome. Hence, the commerciality of a pipeline is 

directly related with the commerciality of gas production 

projects. Not increasing or decreasing gas prices (due to 

the changes in agreement types and shale gas affects); 

huge tariffs are the main elements for gas development 

projects to be commercial. 

Trans Caspian gas pipeline is planning to transport 

Turkmen gas to EU & TR markets. For this pipeline to be 

reasonable, production costs of the fields, tariffs of the 

related pipelines, EU & TR gas market prices are important. 

If a more economical way is found for transportation 

of Turkmen gas (such as India-china or Russia) then there 

will be no way for Trans-Caspian pipeline project. 

3.2.3 Market related 

Hence gas and pipeline projects needs long term plans 

and projections before development investment decision, 

for evaluation of Trans-Caspian pipeline’s referred markets 

(TR & EU) earliest 2035 projections have to be studied. 

Figure 3 shows extra gas supply & demand potentials 

of the related countries in 2035. According to these estimations 

there seems enough market potential in EU & TR for 

30 bcma (max. capacity of Trans-Caspian) gas of Turkmenistan. 

However, market potential can change due to other 

supply possibilities such as Russia – Iran – Iraq and Western 

Mediterranean. The most deterministic factor in the market 

share will be the gas prices. Naturally, Azeri gas is one 

step forward than the Turkmen gas in the struggle due to 

less tariff costs. Moreover, if the political situations and 

sanctions in Iran changes, then due to average gas production 

unit costs and gas quality para meters; Iran and Iraq will 

be one step forward than the Turkmen gas in TR & EU markets. 

As a result, market is another risky milestone for the 

doability of Trans Caspian pipeline project. 

3.2.4 Financial 

The owner of the project will probably be Turkmenistan and 

the project is supported by EU-US. This shows that both Turkmenistan 

can finance such an investment with her own 


Gas pipeline 

REPORTS 

resources or easily find credit from western funds. As a result, 

financial milestones do not contain risk for the project. 

Note: Azerbaijan may possibly be a partner of this 

project but this is a weak probability due to SOCAR’s 

investment projections around the region 

3.2.5 Technical 

Technical milestones are not too crucial to overcome. Caspian 

Sea and the planned Trans-Caspian pipeline root’s water depth 

is not so much (i.e. maximum 300 meter in the deepest point). 

Also the geographical structures and climate effects are not so 

difficult to overcome. As a result, there are no important technical 

and technological milestones to overcome. 

After the Azerbaijan/Shangachal Terminal point, the 

transportation of Turkmenistan gas will be another question 

and will technically and commercially be evaluated again. 

Hence, SCPX, which is going to transport SD2 gas to TR, and 

TANAP (through Turkey to EU) capacities and extension possibilities 

have to be technically and commercially studied. 

Figure 2. Caspian sea border problems. 

3.3 Evaluation of these milestones 

As described in the previous chapter, financial and technical 

milestones of the project are not obstacles for the 

doability of Trans Caspian gas pipeline project. 

To evaluate the political & commercial and market 

issues, initially some technical aspects of the pipeline and 

the other possible roots those will be used to reach TR & 

EU markets have to be studied. 

3.3.1 Technical properties of transcaspian 

(estimation) 

■ Start Point: Turkmenbasy / Turkmenistan 

■ End Point: Shangachal Terminal / Baku / Azerbaijan 

■ Total Length: 338 km 

■ Max. Water Depth: 300 m 

■ Operating Capacity: 30 bcma 

■ Inlet Pressure: 10 bar 

■ Outlet Pressure: 90 bar 

■ Pipe Diameter: 60” 

■ Thermal Isolation Material Quality: Middle Quality 

■ Estimated CAPEX (MOD): 7 billion USD 

■ Estimated Tariff (MOD) (%10 IRR based): 75 USD/1000 m 3 

3.3.2 Possible roots for turkmen gas after 

shangachal terminal 

3.3.2.1 From az to tr 

Hence Azerbaijan is not a market for Turkmen gas and all gas 

will have to be transported to TR and then some portion to 

EU, 30 bcma gas will directly be transported to Turkish border. 

Figure 3. EU-TR-Caspian-Middle East 2035 gas supply & demand potentials. 

The only gas transportation facility from Azerbaijan to 

Turkey is SCP and new extended looped version SCPX 

pipeline. Total capacity of SCP & SCPX is around 26 bcma 

and with some extension works capacity can be 

increased. However, for 30 bcma gas transportation, a 

new standalone pipeline will be a better solution. Moreover, 

Azerbaijan estimated to have extra gas supply potential 

for SCPX after 2025. So, for any SCPFX option, Azerbaijan 

is going to use that capacity. 

From Shangachal Terminal to Turkish border a new 

standalone gas pipeline is planned to be constructed. 

With technical properties; 

■ Start Point: Shangachal Terminal 

■ End Point: Turkish Border 

■ Total Length: 690 km 

■ Operating Capacity: 30 bcma 

■ Inlet Pressure: 90 bar 







REPORTS 

Gas pipeline 

3.3.2.1 From TR to EU 

In the Turkish border there are 2 options; 

First: due to commercial and political issues %40 

of 30 bcma gas is sold in Turkey and %60 is 

transported to EU. 

Second: all gas sold in TR market or transported and 

sold in EU market. 

3.3.2.1.1 TR to EU option 1 

12 bcma is transported & distributed inside TR market via 

BOTAŞ’s own facilities and other 18 bcma is transported to 

EU via looped TANAPFX. (However, today BOTAŞ do not have 

enough capacity to accept 12 bcma gas in the eastern border 

of Turkey, so BOTAŞ also has to make an investment for such an 

option. Moreover, TANAP is going to be constructed with an 

operating capacity of 23 bcma. Then in 2026 this capacity is 

planned to be extended (TANAPX) up to 31 bcma. And this 

extra volume will be devoted for extra Azerbaijan gas supply 

potential. So, this option will not be the most probable choice.) 

■■ 

Start Point: Western Turkish Border 

■■ 

End Point: Eastern Turkish Border 

■■ 

Total Length: 1000 km 

■■ 

Operating Capacity: 18 bcma 

■■ 

Inlet Pressure: 90 bar 

■■ 

Outlet Pressure: 10 bar 

■■ 

Loop Pipe Diameter: 54” 

■■ 

Thermal Isolation Material Quality: Middle Quality 

■■ 

Estimated CAPEX (MOD): 10 billion USD 

■■ 

Estimated Tariff (MOD) (% 10 IRR based): 110 USD/1000 m 3 


Similar to TANAP a new 30 bcma capacity standalone gas 

pipeline is constructed and TR’s portion is transported to 

the western Turkey and EU’s portion is transported to western 

Turkish border. This seems the most probable scenario. 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 







■■ 

Pipe Diameter: 48” 

■■ 


■■ 


■■ 



All gas is sold to Turkey. For this option all gas is planned 

to be sold to BOTAS in the Turkish border and all inside 

Turkey transportation investments will belong to Turkey. 

However, situation of Turkish market, demand potential 

and BOTAŞ’s infrastructure are other unknowns those 

make this choice non-probable. 


All gas is sold to EU. Similar to TANAP a new 30 bcma 

capacity standalone gas pipeline will be constructed all gas 

is transported to EU. Technically this option is similar with 

the second option, only the average tariff is estimated as 

5 USD less (due to transportation all volume up to the western 

point of Turkey) 

■■ 


■■ 


■■ 


■■ 


■■ 


■■ 


■■ 

Pipe Diameter: 48” 

■■ 


■■ 


■■ 


3.3.3 Evaluation 

3.3.3.1 Political evaluation 

While transportation of Turkmen gas to EU contains market 

and commercial risks and this volume of gas is not a 

vital issue for EU energy security strategies, political border 

conflict between Azerbaijan and Turkmenistan cannot 

be solved only for Trans-Caspian pipeline project. 

Azerbaijan’s aim to be a gas transit country is understandable. 

However, hence the solution of the border 

Table 4. Evaluation of commerciality – netback prices of the scenarios. 

TRANSCASPIAN AZ-TR PIPELINE 

OPTIONS 

OPTION 1 OPTION 2 OPTION 3 OPTION 4 

75 85 110 130 0 125 

REVENUE 420 420 450 400 

NETBACK 0 -55 60 -5 

* All values are USD/1000m 3 MOD prices 


Gas pipeline 

REPORTS 

Table 5. Evaluation of commerciality – netback prices of the scenarios (more optimistic scenario). 

TRANSCASPIAN AZ-TR PIPELINE 

OPTIONS 

OPTION 1 OPTION 2 OPTION 3 OPTION 4 

75 85 110 130 0 125 

REVENUE 432 432 450 420 

NETBACK 42 -13 90 45 

* All values are USD/1000m 3 MOD prices 

conflict affects the share of the offshore oil & gas fields 

such as ACG and Kepez, this aim (being a gas transit 

country) will not be so much exciting for Azerbaijan. 

Moreover, Turkmenistan may have other more commercial 

options to sell her own gas (as India & China) 

Russia - Iran’s effect for the solution of this border 

problem in the Caspian Sea is also important. They may 

not let such a solution which will be in favor of EU. 

3.3.3.2 Market evaluation 

Due to higher estimated tariff and unit production costs, 

Turkmen gas cannot compete with other gas suppliers in 

Turkish and EU gas markets. All Azeri – Russia – Iraq – Iran 

gas supplies will be cheaper for those markets. And the 

supply potentials of these countries are estimated to 

meet the demand in these markets. 

3.3.3.3 Commercial evaluation 

To start the commercial evaluation, an average gas production 

cost for western Turkmenistan region has to be 

estimated. Hence important portion of gas reservoirs are 

in western Turkmenistan are high pressure and temperature 

reservoirs and have high percentages of H 2S and 

CO 2; the unit costs to develop and produce the fields will 

be high. That’s why an average of 150 USD / 1000 m 3 will 

be taken as the unit cost. 

Condensate & gas ratios and condensate sales will not 

be included into the estimations. Hence usually in condensate 

rich gas reservoirs, condensate sales are more 

profitable then gas and sometimes it may be better to 

inject gas to produce more condensate, so this issue is 

not included into the scenarios. 

For average commercial evaluations, all values are MOD. 

For average market prices; for EU: 400 USD /1000 m 3 

and for TR 450 USD / 1000 m 3 is estimated. 

The calculated netback prices for only gas sales are 

given in the table below; 

As seen from the Table 4 the only commercial option is 

option 3 which will not be possible due to Turkish market 

demand profiles. The most probable scenario’s, which is 

option 2, net back value is -55 USD/1000 m 3 gas sales. This 

means it is better to inject gas for more condensate production 

or to find another market or not to make any investment. 

A more optimistic scenario: 

If the average gas prices for EU is taken as 420 USD / 1000 m 3 

and the unit gas production cost for western Turkmenistan 

is taken as 120 USD / 1000m 3 , without changing the 

tariffs (hence the total investment costs of each pipeline 

are already optimistic values); then the new commercial 

summary table is given above. According to the results 

given in the Table 5, netback values are better than the 

previous scenario however, for an investor it seems better 

to take part in a pipeline project instead of an E&P project. 

Moreover, for the most probable option (option 2), 

again netback is minus. This means no positive decision 

for investment of Trans-Caspian. 

3.3.3.4 Results of the evaluation 

As a result the doability of Trans Caspian pipeline is not 

possible while the gas prices and EU demand will increase 

unexpected levels. 

4. TRANS-CASPIAN VS. TRANS-IRAN 

PIPELINE 

As seen in the chapter above, doability of Trans Caspian 

gas pipeline project is not possible due to commercialpolitical 

and market related obstacles in the current projections 

(Figure 4). However, some Iranian specialists claim 

that transportation of Turkmen gas through Iran to Turkey 

instead of Trans Caspian project will have better economics. 

In this chapter this claim will briefly be evaluated. 

4.1 Technical properties of trans-iran pipeline 

(estimation) 

■■ 

■■ 

■■ 

■■ 

■■ 

Start Point: Turkmenbasy / Turkmenistan 

End Point: Agrı / Turkey 





REPORTS 

Gas pipeline 

Figure 4. Trans Caspian and Trans Iran pipelines from Turkmenistan. 






4.2. Commercial comparison 

Hence the unit gas production prices in Turkmenistan 

and scenarios after the eastern border of Turkey are the 

same, total tariff values and total investments will be 

enough for comparison. 

As the calculation shown in the Table 6, Iranian transit 

of Turkmenistan gas will not be the economic choice. 

4.3 Political-market-technical-finacial 

comparisons 

On the other side, due to sanctions on Iran all political, 

financial and market related issues will be more risky and 

problematic than the trans-Caspian scenario. Only the 

technical milestones may be easier. 

SUMMARY 

As described in the related chapters, gas politics and Caspian 

gas resources are very important energy security issues 

for huge consumers around the region. Turkmenistan by 

having the 3 rd reserves potential and 2 nd supply potential is 

the shining star of the region. That’s why all huge consumers 

are planning and developing projects to meet some 

part of their gas demand from Turkmenistan resources. 

Such as extension of CAC Pipeline Project of China, TAPI 

Pipeline Project of India and Trans-Caspian Project of EU. 

For such huge pipeline project investments, long 

term projections, commerciality, politics, market views, 

and etc. are very important items to consider. 

There may be gas resources; however, if those resources 

cannot be transported to the market via a safe, sustainable 

and commercial way then, those resources do not mean 

anything up to the changes in the current conditions. 

That’s why in this paper, with the risks and milestones, 

doability of the popular Trans-Caspian pipeline project is 

evaluated and as well as an alternative route to transport 

Turkmen gas to TR and EU through Iran is also compared. 

As a result, for the current situation, Trans Caspian pipeline 

project does not seem to be a logical choice for investment. 

REFERENCES 

[1] BP Statistical Review of World Energy 2013 

[2] Wikipedia 

ABBREVATIONS 

TR Turkey 

EU European Union 

CAC Central Asia China 

TAPI Turkmenistan Afghanistan Pakistan India 

CAPEX Capital Expenditures 

IRR Internal Rate of Return 

ACG Azeri Chirag Guneshli Oil Field 

MOD Money of the Day 

TANAP Trans Anatolia Pipeline 

TANAPX Trans Anatolia Pipeline Extension 

TANAPFX Trans Anatolia Pipeline Forward Extension 

SCP South Caucasus Pipeline 

SCPX South Caucasus Pipeline Extension 

SCPFX South Caucasus Pipeline Forward Extension 

First published in ptj pipeline technology journal May 2014 

Table 6. Evaluation of commerciality – netback prices of the scenarios. 

Tariff @ TR Eastern Border 

(USD/1000m 3 ) 

Total CAPEX @ TR Eastern 

Border (bUSD) 

TRANS-Iran Pipeline 

Trans-Caspian + 

AZ-TR Pipeline 

180 75+85=160 

16 7+8=15 

AUTHOR 

Oğuzhan Akyener 

Technical Manager 

TPAO Azerbaijan 

Baku | Azerbaijan 

Email: oakyener@tpao.gov.tr 


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PAGFE2014

REPORTS 

Gas pipeline 

Stress within buried gas 

pipelines in subsidence areas 

by Zhiguang Chen, Chaokui Qin and Yangjun Zhang 

Ground subsidence resulting from high-rise buildings became a potential risk to buried natural gas pipelines. 

When a 130m-long gas pipeline in the neighborhood of the tallest building in China was replaced, a series of 

strain-foils was installed to monitor stresses within pipelines. The stress was calculated from subsidence data 

through elastic foundation beam approach. The calculated stresses at different times and locations were compared 

with measured values directly read from installed monitoring equipment and good agreement was found. 

1. INTRODUCTION 

Figure 1. Road crevice in the neighbor of 

Shanghai Center. 

Shanghai is located in the estuary of Yangze River and the 

city originated from an alluvial plain. One of its geological 

features is soft soil. In recent years ground subsidence 

resulting from high-rise buildings (both the construction 

process and the building itself) becomes more and more 

serious, especially accompanied with rapid urban constructions. 

Statistics showed that high-rise buildings 

(taller than 24 m) in Shanghai increased to more than 

25,000 by the end of 2012[1]. The densely distributed 

high-rise buildings caused road surface to subside to various 

extent. Correspondingly the concern as whether 

buried gas pipeline would be influenced became urgent. 

On the other hand Shanghai was one of the earliest cities 

where gas was supplied through pipes, and by 2012 there 

are more 24,000 kms of distribution pipelines, 21,000 kms 

of which distribute natural gas[1]. 

In the financial center of Shanghai (Lujiazui area), there 

are more than 40 buildings (taller than 100 m) within 

1.7 km 2 and the average ground subsidence amounted 

up to 15 mm per year. The will-be tallest building in 

China, Shanghai Center, with 124 floors above ground 

and 632 m height, had a huge foundation pit 34,960 m 2 

with depth of 31.2 m. During the construction of Shanghai 

Center serious ground subsidence had been observed 

and reported (as shown in Figure 1). In order to ensure 

safe operation of neighboring gas networks, it was 

decided that a DN300 gas pipe located to the west of its 

foundation pit should be renovated in the middle of 2011. 

With sponsorship of Shanghai Gas Pudong Sales Corp., a 

research project was initiated to measure stresses within 

buried gas pipelines. Another initiative was to establish a 

technical approach as how to calculate stress by means 

of subsidence measurement. Since there are so many 

pipelines buried in similar environment, it would be 

highly essential to validate the feasibility of proposed 

approach. 

A set of monitoring system composed of strain-foils, 

battery, remote communications was established to provide 

reliable readings of stresses at different locations and 

times. Some subsidence markers tightly attached to the 


Gas pipeline 

REPORTS 

Figure 2. Layout of stress and subsidence monitoring system. 

(a) (b) (c) 

Figure 3. Strain-foils: (a) illustration, (b) wiring connections, (c) anti-corrosion windings. 

gas pipe were added to provide subsidence data by 

human labour periodically. A theoretical model in which 

buried gas pipe was treated as an elastic foundation 

beam was established. The subsidence data was input 

into the numeric model to predict stresses. Comparison 

between measured stress and predicted values revealed 

quite good agreement, suggesting it is technically feasible 

to determine stresses by means of subsidence measurement. 

2. ON-SITE FACILITIES INVOLVED 

The tested gas pipe was of 8 mm-thick Q235 steel pipe 

and its total length was 130 m, consisting of several 

12m-long standard pipes and 11 test sections inserted. 

The 11 test sections (labelled as 1#~6#, and 8#~12# in 

Figure 2) were equipped with strain-foils, with interval of 

about 12 m from one another. Meanwhile 14 subsidence 

markers were arranged, labelled as RR1~RR14 in Figure 2. 

The burial depth of the pipe was 1 m. All the welded 

connections were nondestructively examined and anticorrosion 

protection measures were carried according to 

related standards. 50 cm thick layer of sand were backfilled 

under and above the gas pipes, respectively. 

In order to correctly measure the stresses within gas 

pipes, strain-foils must be directly fixed onto the pipe 

surface. For buried pipelines two additional issues had to 

be taken into consideration, namely corrosion from 

underground water, and high temperature resulting from 

on-site welding. After some calculations, it was finally 

decided the test sections would be first finished in the 

laboratory to ensure that strain-foils were fixed onto the 

surface freely and firmly. For each test section 4 sets of 

strain-foils were uniformly arranged along circumference 

to record stress on left, right, top and bottom side of the 

pipe (as shown in Figure 3). A stainless steel sleeve was 

designed to protect against underground water. Furthermore 

an enough thick layer of inorganic anti-corrosion 

material was tightly packaged outside the sleeve, by 

winding plastic film. All measured data from strain-foils 

were transmitted to on-site stations first, and then to central 

station through GPRS. The transmission frequency 

was set to once a day to save electricity power. 

Prior to on-site installation a piece of test section was 

calibrated in laboratory to achieve coefficient between 

installed strain-foils and standard foil. A 200-ton hydraulic 

jack was used to compress test section axially. The incremental 

loading was 30kN and the total loading force was 

600kN. On the surface of test section the standard strainfoil 

were arranged at the same location as the installed 

foils. Illustrated in Figure 4 were calibration process and 

relationship between installed foils and standard foil. 

Almost linear relationship suggested that coefficient can 

be taken as 0.5636. Then the stress can be directly calculated 

according to calibration formula and theoretical 

analysis. 

In gas pipeline engineering a common practice to estimate 

subsidence is to directly measure road subsidence. 

In this research the subsidence of buried gas pipe (rather 

than ground subsidence) at different locations was 


REPORTS 

Gas pipeline 

direct contact with these structures. For example there 

was a bending point between RR9 and RR10 test section 

(Figure 2). 

3. MEASUREMENT RESULTS 

3.1 Gas pipe subsidence data 

Figure 4. Calibration of installed strain-foils in Lab. 

Figure 5. Subsidence marker. 

measured in order to understand the shape of gas pipe 

more accurately. 14 subsidence markers were installed 

during gas pipe renovation process. The subsidence 

marker consisted of annular collar, stainless steel pillar, 

protection sleeve and on-road cover (Figure 5). The 

annular collar was tightly fixed onto pipe surface and 

asphalt layer was pasted onto its outer surface. The 

stainless steel pillar for subsidence measurement was 

firmly welded to annular collar and extended upwards 

to the road level. The subsidence pillar was located in 

the center of protection sleeve, and the clearance 

between pillar and sleeve was filled with sand and 

wooden meal. Theoretically the more number of subsidence 

markers the better to know actual state of gas 

pipe. Unfortunately too many subsidence markers 

would make it difficult to finish road construction. Finally 

14 markers were installed. The installation was finished 

on 15 th of November, 2011. 

It must be pointed out that the gas pipe did not take a 

straight line due to limitation from underground environment. 

The vertical clearance from underground structure 

even deceased to 5cm at certain points, leading to a possibility 

that subsidence monitoring maybe influence by 

Shown in Figure 6 are subsidence data of 14 markers 

until August 2013. In this paper all subsidence data were 

taken with respect to the original position exactly after 

finish of construction, and the negative means subsidence 

downwards and positive means float upwards. 

Apparent subsidence could be found. Basically the subsidence 

of gas pipe can be classified into three stages: 

foundation pit construction, soil rebound, and stable 

subsidence. Before February 2012, the foundation pit of 

Shanghai Center was closed to finish, the gas pipe was 

proved to subside rapidly as a result of pit operation and 

water drainage. From February 2012 to April 2012, the 

construction within pit finished and level of underground 

water increased. The gas pipe was found to 

float to some extent, and subsidence decreased. 

Some monitored points even gave positive values, 

suggesting that the gas pipe rose to a taller position 

than finished. From April 2012 on, the subsidence were 

found to decrease gradually since only impact of 

building load remained. In addition, the gas pipe was 

found to float a little bit during July-September, 2012, 

the rainy days. By August 2013, the deepest subsidence 

was 17 mm. 

3.2 Stress data 

As mentioned above, at each monitoring section 4 sets 

of strain-foils were uniformly arranged along circumference 

to record stress on left, right, top and bottom side 

of the pipe. Suffix -a, -b, -c, -d was designated to 

describe the following location: “-a” denotes top, “-b” 

denotes close to Shanghai Center, “-c” denotes bottom, 

and “-d” denotes away from Shanghai Center. The 

measured stress data at “-a” and “-b” directions were 

illustrated in Figure 7. 

From Figure 7a it can be found that measured 

stresses along gas pipe changes in a regular pattern. 

From December 2011 the measured stresses were found 

to increase gradually and reached the maximum values 

(12 MPa) in March, 2012. Afterwards the stresses 

decreased to negative values and reached -35 MPa. 

Compared with allowable maximum 235 MPa, the gas 

pipe can be considered as safe and sound up to 

now. The Figure 7b suggested that horizontal 

movement appeared to be more radical than vertical 

subsidence, leading to quite appreciable stresses. 


Gas pipeline 

REPORTS 

Figure 6. Subsidence data by 10-Aug-2013. 

(a) Position "-a" 

Figure 7. Measured time-dependent stress data at different positions. 

(b) Position "-b" 

3.3 Theoretical approaches 

3.3.1 Mechanics subjected by gas pipe 

The shape change of gas pipe subjected to ground 

subsidence is a combination of axial stretching (or 

compressing) and bending effect. If axial force and 

flexural moment can be deduced the stress at any 

longitudinal location can be calculated. Most of force 

and stress analysis for buried pipes available are based 

upon elastic foundation beam [5, 6], taking into consideration 

the interaction between pipe and soil. With 

reference to Winkler’s model [7], the flexural moment 

and forces can be calculated from change of pipe 

shape. Theoretically the pipe was treated as a foundation 

beam supported by a serial of springs attached 

4 

to rigid anchors. When a force exerted EI upon yd + ky a = certain ( )xq 

4 

dx 

point on the pipe, subsidence happens only within this 

point. 

The buried gas pipe can be considered as a beam within 

elastic foundations. Therefore following equation which 

describes relationship between displacement and load can 

be deduced under elastic foundation beam theory [8]: 

4 

EI yd + ky = ( )xq 

4 

dx 

M 

Q = 

2 

−= EI 

θ −= EI 

2 

dx dx 

(1) 

3 

yd 

−= EI 

3 

dx 

d 4 y 

EI ky q 

4 

( x) 

dM 

dx 

d 

yd 

Where: EI---bending rigidity of beam cross-section; 

k---foundation coefficient; y--- displacement of the 

dx + pipe 

(namely, subsidence); q--- load applied to the pipe. = 

If the shape of beam can be achieved, following equation 

Where: can be EI---bending used to determine rigidity flexural of moment beam and cross-section; k---foundat 

shearing 

displacement 

force at 

of 

any 

the 

location: 

pipe (namely, subsidence); q --- load applied to the pipe. 

2 

If the shape d of beam yd can be achieved, following equation can be used 

M −= EI 

θ −= EI 

2 

moment and dx shearing dx force at any location: (2) 

3 

dM yd 

Q = −= EI 

2 

3 

dθ 

d y⎫ 

dx dx 

M =− EI =−EI 

2 

dx dx 

⎪ ⎪⎬⎪ 

3 

dM d y 

d 4 y Issue 3/2014 Q = gas for energy =−EI 

33 3 

EI ky q ( x 

4 

) dx dx ⎪⎭ 

dx + = (1) 

From Eqn(2) it can been that if displacement (e.g. subsidence) at different

REPORTS 

Gas pipeline 

(a) 2011/12/19 (b) 2012/05/09 

(c) 2012/12/04 (d) 2013/05/20 

Figure 8. Subsidence data and fitting curves. 

From Eqn(2) it can been that if displacement (e.g. subsidence) 

at different locations can be input to determine the 

shape of buried pipe, flexural moment and shearing can 

also be derived from derivatives. Therefore stress can be 

determined as well. 

3.3.2 Subsidence data fitting 

The discreteness of pipe subsidence data from on-site 

measurement cannot represent the actual shape of buried 

pipe. In addition Eqn(2) requires that input shape 

curve should be mathematically smooth and continuous. 

According to Ref [9] 6-order polynomial was fitted from 

discrete subsidence data, and stresses were calculated. 

Given in Figure 8 are comparison between measured 

subsidence data (solid dot) and fitted curve (blue curve) 

for 19-December-2011, 09-May-2012, 04-December-2013, 

20-May-2013, respectively. 

Figure 8 reveals that much bigger subsidence happen 

to the left sections (50-60m) compared with both ends. In 

fact the left section located exactly close to edge of the 

foundation pit. Furthermore the bending section 

between RR9 and RR10 contributed to the discrepancy to 

some extent. 

3.3.3 Comparison of calculated and measured 

stresses 

To input fitted curve into Eqn(2) can give stress along 

longitudinal axis. Shown in Figure 9 are comparison 

between calculated stresses and measured stress (from 

monitoring system) at different locations, for some specific 

dates. 

Quite good agreement can be found from the comparisons, 

suggesting the technical approach that determines 

stress from subsidence measurement seem feasible 

enough. However the calculated stresses were a bit 

smaller than measured values. This can be attributed to 

traffic load, soil frictions, etc, all of which had been 

neglected in above model. Furthermore the bending 

section between RR9 and RR10 has some impact upon 

the prediction accuracy in the neighboring area. 


Gas pipeline 

REPORTS 

Figure 9. Comparison of calculated stresses with measured stresses. 

The technical approach which determines stress 

within buried gas pipe from least square regressive 

curve can give quite reasonable agreement with 

measured values. Because measured subsidence data 

contain errors inevitably the regressed curve cannot 

represent the shape of buried pipe completely. In 

particular more discrepancy was found to exist at both 

ends. 

4. RESULTS AND CONCLUSIONS 

The impact of soil subsidence resulting from high-rise 

buildings upon buried gas pipes was investigated. An 

on-site measurement system was established in the 

neighborhood of Shanghai Center to directly supervise 

pipe stress by means of telecommunications. A theoretical 

model based upon elastic foundation beam was 

incorporated to calculate stress at different locations. The 

calculated stresses were compared with measured data. 

1. The on-site measurement data showed that test 

section was seriously influenced by the construction 

of Shanghai Center. Three stages, namely construction 

of foundation pit, soil rebound, and stable subsidence, 

can be observed. During the last stage the gas pipe 

were found to subside gradually, but some float were 

observed due to underground water movement. 

2. The measured stress values are found to be increased 

gradually. Analysis of four strain-foil at the same 

cross-sections suggested that gas pipe was subjected 

to both axis force and bending effect. Meanwhile 

horizontal displacement happens together with 

vertical subsidence. 

3. The measured subsidence data were input to fit the 

pipe curve, then to calculate stress according to elastic 

foundation beam. Good agreement between calculated 

stresses and measured stresses suggested the 

feasibility of proposed approach. But the number of 

subsidence markers should be increased to minimize 

error resulting from polynomial fitting processes 

The subsidence of buried pipeline is an essentially threedimensional 

movement. For the measurement of specific 

locations and time, horizontal movement seemed to be 

more critical than vertical subsidence. In this paper only a 

two dimensional model was established for the sake of 

simplicity. Although good agreement was found between 

calculated stress and measured stress, a more appropriate 

measure is to take a three dimensional model for 

prediction. In addition soil subsidence resulting from 

high-rise buildings has been proved to be a long, slow 

effect. Up to now subsidence data and stress data show 

that it is just at the beginning stage of gradual subsidence. 

The absolute values for stress were much lower 

than maximum allowable. The calculation method proposed 

remains to be checked and validated in the long 

run. 


REPORTS 

Gas pipeline 

REFERENCES 

[1] Shanghai Municipal Statistics Bureau. Shanghai Statistics 

Annual 2013 [M]. Beijing: China statistics press. 

[2] Ministry of Housing and Urban-Rural Development of 

PRC. Technical Specification for Retaining and Protection 

of Building Foundation Excavations (JGJ 120-99) 

[S]. Beijing: China architecture & building press, 1999. 

[3] Wu Bo, Gao Bo: 3D numerical simulation on effect of 

tunnel construction on adjacent pipeline [J].Chinese 

Journal of Rock Mechanics and Engineering, 2002, 

21(S2): 2451-2456 

[4] Wu Bo, Gao Bo, Suo Xiaoming,etc.: Study on influence 

of metro tunnel excavation on buried pipelines [J]. 

Rock and Soil Mechanics, 2004, 25(4): 657-662. 

[5] Liu Shi’ao, Pu Hongyu, Liu Shuwen, et al.: Stress analysis 

method of buried pipeline [J]. Oil& Gas Storage and 

Transportation, 2012(4): 274-278 

[6] Yang Zhao, Xu Jiancong, Yu Jun: Application of Elastic Foundation 

Timoshenko Beam Element in ABAQUS [J]. Journal 

of Huaqiao University(Natural Science), 2010(4): 448-452. 

[7] Long Yuqiu: Calculation of elastic foundation beam[M]. 

People’s Education Press, 1981. 

[8] Zhang Tuqiao, Wu Xiaogang: Initial analysis of 

longitudinal stress in pipeline under vertical load [J]. 

China Municipal Engineering, 2001(4): 43-47 

[9] Mao Chaohui: Study on Back Analysis for Bending 

Moment of Retaining Wall and Safety Evaluation Based 

on Monitoring Data[D]. Shanghai: Tongji University, 2006. 

AUTHORS 

Assistant Professor Zhiguang Chen 

School of Mechanical Engineering, Tongji 

University 

Shanghai | PR China 

Phone: +86 69 58 38 02 

E-mail: czg05_1999@126.com 

Professor, Dr. Eng. Chaokui Qin 


University 


Phone: +86 69 58 38 02 

E-mail: chkqin@tongji.edu.cn 

Ph.D Candidate Yangjun Zhang 


University 


Phone: +86 69 58 38 02 

E-mail: zyjtongji@163.com 

MEDIA 

Book review 

Natural Gas Engineering and Safety Challenges 

Downstream Process, Analysis, Utilization and Safety 

Providing a critical and extensive compilation of the 

downstream processes of natural gas that involve the 

principle of gas processing, transmission and distribution, 

gas flow and network analysis, instrumentation and 

measurement systems and its utilisation, this book also 

serves to enrich readers understanding of the business 

and management aspects of natural gas and highlights 

some of the recent research and innovations in the field. 

Featuring extensive coverage of the design and pipeline 

failures and safety challenges in terms of fire and 

explosions relating to the downstream of natural gas technology, 

the book covers the needs of practising engineers 

from different disciplines, who may include project and 

operations managers, planning and design engineers as 

well as undergraduate and postgraduate students in the 

field of gas, petroleum and chemical engineering. 

This book also includes several case studies to illustrate 

the analysis of the downstream process in the gas 

and oil industry. Of interest to researchers is the field of 

flame and mitigation of explosion: the fundamental processes 

involved are also discussed, including outlines of 

contemporary and possible future research and challenges 

in the different fields. 

Nasr, G.G., Connor, N.E., 

Springer 2014, XXVIII, 402 p. 

239 illus., 28 illus. in color. 

Hardcover: 169,99 €, 

eBook: 142,79 € 

ISBN 978-3-319-08948-5 


The Gas Engineer’s 

Dictionary 

Supply Infrastructure from A to Z 

The Gas Engineer’s Dictionary will be a standard work for all aspects of construction, 

operation and maintenance of gas grids. 

This dictionary is an entirely new designed reference book for both engineers with 

professional experience and students of supply engineering. The opus contains the world 

of supply infrastructure in a series of detailed professional articles dealing with main 

points like the following: 

• biogas • compressor stations • conditioning 

• corrosion protection • dispatching • gas properties 

• grid layout • LNG • odorization 

• metering • pressure regulation • safety devices 

• storages 

Editors: Klaus Homann, Rainer Reimert, Bernhard Klocke 

1 st edition 2013 

452 pages, 165 x 230 mm 

hardcover with interactive eBook (read-online access) 

ISBN: 978-3-8356-3214-1 

Price: € 160,– 

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PATGED2014

REPORTS 

LNG 

Onshore LNG receiving terminal 

- risk analysis 

by Boris Majcen and Marino Valjak 

European Union member countries were obliged to harmonize their national legal framework with the “Directive 

of the EU Council no. 2008/114/EC on the identification and designation of European critical infrastructures 

and the assessment of the need to improve their protection”. Among these critical infrastructures are onshore 

LNG receiving terminals, involving specific LNG-related hazards. Properly identified hazards represent a basis for 

risk analysis, and for subsequent determination of risk reduction measures to ensure safe and reliable operation 

of the terminal. This report gives an overview of relevant hazards, risks and risk management strategy for the 

planned onshore LNG receiving terminal “Adria LNG” in Omišalj, on Krk island, Croatia. 


Industrial risks are managed trough a systematic 

approach to design, production, construction, operation 

and maintenance, within the framework of EU law and 

harmonized standards. In the designing of any complex 

industrial facility, risk management is a comprehensive 

challenge, given the large number of different systems 

contained within the facility, each involving specific 

demands, as well as the interactions of these systems. 

The size of such a facility implies potentially severe consequences 

in case of accident realization. This report gives 

an overview of relevant hazards, risks and risk management 

strategy for the planned onshore LNG receiving 

terminal “Adria LNG” in Omišalj, on Krk island, Croatia [1], 

[2] (Figure 1). 

F igure 1. Planned onshore LNG receiving terminal. “Adria LNG” - 

Omišalj, Croatia. 

2. LEGAL FRAMEWORK 

European Union member states determine and manage 

their critical infrastructures in accordance with the Directive 

of the EU Council no. 2008/114/EC [3]. Critical infrastructures 

according to [4], are systems, networks and 

objects of national importance, whose shutdown or disruption 

of functioning can seriously affect national security, 

health and life quality of the population, damage 

property or the environment, affect economic stability and 

the uninterrupted functioning of government. Among 

these critical infrastructures are onshore LNG receiving terminals. 

Owners i.e. operators of such infrastructures are 

responsible for their proper functioning in all circumstances, 

including the obligatory development of an Operational 

Risk Analysis and a Safety Plan based thereupon. 

LNG terminals also belong in the scope of the Seveso 

Directives [5], [6], [7], which determine operator obligations 

regarding major industrial accidents: risk reduction, 

prevention of major accidents, and limitation of their 

impact on people, property and the environment. The 

directive also stipulates detailed procedures of responding 

to a major accident, reducing its impacts, as well as 

procedures for internal and external communication. 

Risk management is addressed by standard ISO 31000 

- Risk Management [8], [9], [10], which provides general 

guidance for the design, implementation and maintenance 

of risk management systems within a company. 

The main standard related to onshore LNG facilities is 

EN 1473:2007 [11], which includes requirements for the 

design, construction and operation of all onshore LNG 

facilities, including liquefaction, storage, evaporation, and 


LNG 

REPORTS 

processing plants. This standard also addresses the subject 

of risk management specific to onshore LNG facilities. 

3. MAIN RISKS ON THE LNG RECEIVING 

TERMINAL 

The term risk indicates a degree to which a particular 

event is undesirable. Risk is a resultant of two components: 

the probability of the event to occur, and the 

severity of the event’s consequences. 

Risk analysis begins with the process of identifying 

hazards - potential causes of damage. Various accident 

scenarios are then developed based on the identified 

hazards. For each scenario the probability of its occurrence 

and the severity of its consequences is assessed, 

resulting in the risk level of that particular scenario. Each 

risk is then evaluated as either acceptable, or unacceptable. 

An unacceptable risk leads to the introduction of risk 

reduction measures and repeated analysis of all scenarios 

affected by these measures. 

Hazards are very numerous and versatile, and mainly 

related either to natural phenomena or to human activity 

– the latter including technological hazards. Technological 

hazards essentially emerge from systems, devices or 

equipment, which contain significant energy and/or dangerous 

substances, but human error could also be 

regarded as a technological hazard itself. 

The standard EN 1473:2008 [11] provides a basis for 

hazard identification. It contains, inter alia, a list of all 

external initial events that could cause dangerous events 

within an LNG terminal. Individual external initial events 

are eliminated from this comprehensive list if they are found 

to be impossible at the specific location of the project. 

3.1 External hazards 

According to the standard [11], the main groups of external 

initial events with select examples are as follows: 

External hazards related to natural causes: 

■■ 

■■ 

Hazards related to the loss of utilities: 

–– 

Electricity – shutdown of terminal – pressure rise 

due to LNG warming; 

–– 

Sea water – LNG downstream of evaporators; 

–– 

Instrument & service air – actuators of control 

valves inoperable; 

–– 

Nitrogen – inability to purge LNG tanker unloading 

arms; 

–– 

Communication network – human errors, alerting 

not possible; 

–– 

Rainwater drainage clogging – local flooding. 

Hazards related to exceptional climatic conditions and 

atmosphere phenomena: 

–– 

Strong winds (location specific) – structural damage, 

flying debris, power outage; 

■■ 

■■ 

■■ 

–– 

Solar radiation and high temperatures – increased 

boil-off, storage tank pressure rise, equipment failure, 

damage or deterioration of certain materials; 

–– 

Extremely low temperature – buildup of snow or 

ice (such occurrences have been recorded on 

Island Krk) – additional loads on structures and 

equipment, power lines short-circuit; 

–– 

Lightning – ignition source, electromagnetic interference. 

Hazards related to earthquakes – the Omišalj LNG terminal 

location is in the vicinity of a regional fault line, 

with high seismic activity. Earthquakes are addressed 

according to standard EN 1473:2008 [11], as well as 

“Eurocode” structural design standards. 

Hazards related to sea proximity: 

– Intense corrosion in salty atmosphere; 

– Unloading LNG tanker during extreme tides or 

waves; 

– Tsunami caused by an undersea earthquake or a 

large landslide into the sea – locally this is 

extremely unlikely. 

Hazards related to forest fire: 

–– 

Heat radiation on personnel and equipment / 

structures; 

–– 

Wind-driven burning particles – ignition source; 

–– 

Smoke – loss of visibility; 

–– 

Impact of forest fires is dependent on local vegetation 

and climate (temperature, humidity, winds). 

External hazards not related to natural causes: 

■■ 

Main hazards emerging from the neighboring DINA 

petrochemical plant – necessary analysis of interaction 

with LNG terminal in case of toxic chemicals 

release, major fire and/or explosion (thermal radiation 

and possible projectiles). 

■■ 

■■ 

■■ 

Main hazards emerging from the JANAF oil terminal 

at a distance of 2 km – necessary analysis of interaction 

with LNG terminal in case of major fire or 

explosion at crude oil and oil product tanks, pumping 

facilities (thermal radiation and possible projectiles). 

Hazards related to malicious human action - sabotage, 

theft and similar actions are addressed according to 

valid security standards and are not part of the technological 

risk analysis. 

Hazards related to traffic: 

–– 

Public roads in proximity of the terminal - access 

restriction to be considered; 

–– 

Rijeka international airport is located 3 km northeast 

of the LNG terminal. Air corridors for takeoff 

and landing do not go over the terminal, no-fly 

zone above the industrial facilities; 

–– 

Maritime transport – tanker collision/grounding 

during approach and berthing - route through 


REPORTS 

LNG 

Figure 2. LNG flash fire and pool fire. 

narrow passage between island Cres and the 

Istrian peninsula, ship traffic in the bay of Rijeka; 

–– 

Internal traffic – vehicle impact into storage tanks 

or equipment under pressure, traffic accident with 

fire – ignition source. 

3.2 Technological hazards 

Technological hazards associated with the processes on 

the terminal arise from: 

■■ 

Substances used at the terminal (e. g. flammability, 

low temperature…); 

■■ 

Equipment and machinery used at the terminal (e. g. 

rotating parts, leaks from equipment under pressure …); 

■■ 

Operations that are carried out with substances and 

equipment. 

The main substance within the LNG terminal – liquefied 

natural gas - is by far more significant than all other substances 

(e. g. lubricating oil, nitrogen) in terms of quantity, 

specific energy and complexity of handling. All the main 

risks are therefore associated with LNG. 

Due to its characteristics (cryogenic temperature, 

composition etc.), LNG involves a series of specific hazardous 

phenomena: 

■■ 

Leakage and spreading of LNG from pipelines or 

equipment. 

–– 

As LNG draws heat from the environment, part of 

the discharged liquid instantly turns to vapor, 

■■ 

while the rest falls to the ground, with possible 

formation of an LNG pool. Evaporation from an 

LNG pool has a constant rate which depends on 

environmental temperature and type of ground. 

–– 

“Rapid phase transition” can occur if LNG is poured 

into water (e. g. sea water), Water temperature is 

above the LNG superheating temperature, heat 

exchange is very intense so LNG is rapidly superheated 

and evaporates abruptly causing overpressure 

similar to an explosion, but without ignition 

(cold explosion). 

Dispersion of LNG vapor 

–– 

Evaporating LNG forms a cloud of cold vapor, 

which grows in volume while remaining close to 

the ground or water surface. Over time, the vapor 

cloud absorbs heat from the ambient air, becomes 

lighter and disperses. The dispersion process is 

accelerated in windy conditions. 

–– 

Condensation of air moisture due to low temperature 

of LNG vapor makes the vapor cloud visible. 

With relative air humidity above 55 % (which is 

typical for coastal areas), both the upper and lower 

flammability limits are within the visible cloud, 

making the cloud a reliable indicator of the location 

of flammable LNG vapors. 

■■ 

Ignition of LNG vapor (Figure 2). 

■■ 

■■ 

–– 

Ignition of LNG vapors can occur within a certain 

range of concentrations in the air, i.e. it can occur 

only at a certain distance from the LNG leak. The 

flame front creates a flash fire. by spreading 

through the vapor cloud at an average speed of 4 

m/s towards the source of the cloud - the LNG 

pool. 

–– 

Ignition of the vapor above the pool increases its 

evaporation rate, providing additional fuel to the 

fire. Air is drawn into the fire sideways due to a funnel 

effect. LNG pool fires are a source of very high 

thermal radiation, up to 200 kW/m 2 in immediate 

vicinity of the fire. 

–– 

Jet fires can occur in case leaks from high pressure 

equipment are ignited, forming a several meters 

long jet of flame. 

LNG vapor explosion 

–– 

Due to slow flame propagation, vapor cloud explosions 

are possible only in confined or congested 

spaces where obstacles build up pressure and 

accelerate the flame front. Explosions occur in the 

form of a deflagration, i. e. with subsonic flame 

propagation and moderate pressure surge up to 7 

bar(g). Detonations, explosions with supersonic 

flame propagation and a high pressure shock, are 

unlikely to occur. 

Boiling Liquid Expanding Vapor Explosion (BLEVE) 

(Figure 3). 


LNG 

REPORTS 

■■ 

–– 

If LNG is boiled inside a pressure vessel to a supercritical 

temperature, as the vessel ruptures the 

pressure abruptly drops causing intense evaporation 

and expansion within milliseconds. The 

release of energy is intense, causing high pressure 

shocks and possibly projectiles (high speed pressure 

vessel fragments). 

Other LNG related hazards 

–– 

LNG vapors are non toxic but can cause anoxia 

and suffocation. 

–– 

The low temperature of LNG or its vapors can 

cause frostbite and brittle fracture to structures. 

–– 

LNG roll-over is a specific phenomenon during 

which a sudden mixing of different density LNG 

layers occurs within a storage tank, releasing large 

amounts of boil-off gas. Preventing the formation 

of layers inside tanks prevents LNG roll-over. 

3.3 Preliminary risk assessment 

Most hazards specific for the LNG terminal revolve around 

leakage of LNG or NG. Accident scenarios are elaborated 

for various locations, intensities and types of leakage, taking 

into account environmental conditions, type of 

ground, nearby structures and equipment, foreseen mitigation 

measures and safety systems, etc. 

In general, each accident scenario includes the following 

elements: 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

Identification of critical events (points of no return), 

their preceding events (causes) and subsequent events; 

Identification of preventive, limiting and reducing 

measures for any hazardous event, as well as protective 

measures for surrounding objects; 

Probability assessment based on industry records; 

Consideration of the kinetics of events (e. g., discharge 

quantity through a leak and its duration, fire spreading 

rate and similar.); 

Determining of possible damages to objects, given 

the envisaged protection measures; 

Risk assessment based on findings from the previous 

steps. 

Figure 3. Boiling Liquid Expanding Vapor Explosion - BLEVE. 

The probabilities of hazardous events are typically 

divided into categories, as well as the consequences of 

events, regarding expected casualties or material damage. 

For example, the standard [6] defines seven classes 

of occurrence frequency and five classes of consequence 

severity. Events for which the frequency and severity is 

determined are places in the “risk matrix” (Table 1). 

Unacceptable risks require measures that reduce the 

probability of the associated hazardous event (preventive 

measures), and/or reduce the severity of its consequences 

(mitigation and protection measures). The aim of these 

measures is reduce risk to As Low As Reasonably Possible 

(“ALARP”) meaning that the implementation of all practical 

and economically feasible measures have been considered, 

and this has lead to a satisfyingly low risk. 

Risk reduction strategies give priority to preventive 

measures, especially inherently safe design – attempting 

to eliminate or reduce potential hazards at their source 

Table 1. Typical risk matrix. 

Probability 

"Likely 

(>10 -2 /year)" 

"Unlikely 

(10 -4

REPORTS 

LNG 

(e. g. distance between tanks and equipment, buried 

tanks). If preventive measures are inapplicable or insufficient, 

measures are introduced to prevent the start of a 

sequence of events leading to a critical event, followed 

by mitigation measures to prevent a dangerous escalation 

of the critical event (e. g. pressure relief valves, bund 

walls, foam generators to cover spilled LNG for controlled 

pool fire burnout). Finally, the least preferred are protective 

measures to reduce damage to surrounding objects 

(e. g. water screens). 

4. CONCLUSION 

Risk management is a complex field with constant progress 

and ever increasing demands. Nevertheless, one 

should always keep in mind that risk management takes 

place in an economic context. Within this context arises 

the concept of “acceptable risk”, the risk for which the 

price of its further reduction is too large compared to the 

price of its acceptance. The question when exactly the 

cost of further risk reduction is too big has no arbitrary 

answer. Instead, the answer lies in the hands of legislators 

to set the standards, in the hands of experts that design 

the plants and operate them to apply the standards and 

surpass them. But ultimately the answer lies in the hands 

of the individual and his morals. As risk management 

essentially implies uncertainty, even perfect implementation 

of all safety measures is no guarantee of absolute 

safety; it merely means the risks are not higher than 

planned. 

With hazards that could occur regularly, the approach 

is rather clear, and revolves around the discipline of consistently 

implementing well-known safety measures and 

optimizing them. However, some robustness should 

always be retained, keeping in mind the sensitivity of any 

highly optimized system – any discrepancy between 

design and practice could render the whole system useless. 

As it is unacceptable for a major accident to occur 

even once, engineers have another task more contrary to 

intuition – to address such hazards whose likelihood is 

very small, if they have potentially serious consequences. 

An occurrence frequency of “once in a million years” does 

not mean that such an event will not happen tomorrow. 

It rather means that safety measures associated with such 

an event should be especially carefully thought trough to 

balance cost and effectiveness. 

With LNG facilities the key risks arise from the large 

amount of energy they contain, and mainly from its sudden 

release in the form of a catastrophic fire. The LNG 

industry so far has an above average safety record with 

only a few major accidents. However, keeping it this way 

is no small challenge. 

REFERENCES 

[1] Elektroprojekt Consulting Engineers, Adria LNG terminal 

conceptual design, Y2-K79.00.01-S01.1, revision 

1, Zagreb, 2010. 

[2] Ekonerg d.d. and partners - Environmental Impact 

Study for the Adria LNG terminal on the Island of Krk, 

Zagreb, 2010 

[3] Council Directive 2008/114/EC of 8 December 2008 

on the identification and designation of European 

critical infrastructures and the assessment of the 

need to improve their protection (OJ L 345 of 

23.12.2008) 

[4] Croatian Law on critical infrastructures, OG 56/13 

[5] Seveso I: Council Directive 82/501/EEC on the majoraccident 

hazards of certain industrial activities (OJ No 

L 230 of 5 August 1982) 

[6] Seveso II: Council Directive 96/82/EC and 2003/105/ 

EC on the control of major-accident hazards involving 

dangerous substances 

[7] Seveso III: Directive 2012/18/EU of the European Parliament 

and of the Council of 4 July 2012 on the control 

of major-accident hazards involving dangerous 

substances, amending and subsequently repealing 

Council Directive 96/82/EC Text with EEA relevance 

[8] ISO 31000:2009 - Risk Management - Principles and 

guidelines 

[9] IEC/ISO 31010:2009/ EN 31010:2010 - Risk management 

- Risk assessment techniques 

[10] ISO/IEC Guide 73:2002 - Risk management -- Vocabulary 

-- Guidelines for use in standards 

[11] EN 1473:2007 Installation and equipment for liquefied 

natural gas – Design of onshore installations 

AUTHORS 

Boris Majcen, mag.ing.mech. 

Design engineer 

Elektroprojekt Consulting Engineers 

Zagreb | Croatia 

Phone: + 385(0)1 63 07 866 

E-mail: boris.majcen@elektroprojekt.hr 

Marino Valjak, mag.ing.mech. 

Design engineer 

Elektroprojekt Consulting Engineers 

Zagreb | Croatia 

Phone: + 385(0)1 63 07 867 

E-mail: marino.valjak@elektroprojekt.hr 


South East Europe 

Oil & Gas 

Forum 

25-27 

November 

2014 

Athens • Greece 


SECURING AND DIVERSIFYING 

EUROPE’S ENERGY SUPPLY 

Tel: +44 (0) 20 7596 5004 Email: og@ite-events.com 

London • Moscow • Almaty • Baku • Tashkent • Atyrau • Aktau • Istanbul • Hamburg • Beijing • Poznan • Dubai

REPORTS 

Micro-CHP 

Practical experience in the 

placement of mCHP 

Micro combined heat and power appliances (mCHP) on 

the Slovenian and Croatian market 

by Mario Opačak 

Micro combined heat and power appliances represent the next step in increasing the energy efficiency and 

rational energy production and consumption. This distributed mode of electricity production brings many 

advantages for the entire society. However, for the mass deployment of these appliances, the key is financial and 

economic interest of investors. What are the experiences of Vaillant Company in this field exemplified by sales of 

ecoPOWER appliances on the Slovenian and Croatian market? 

1. GENERAL INFORMATION ABOUT THE 

MCHP APPLIANCES 

The topic of mCHP appliances is relatively unknown in 

the markets of Slovenia and Croatia, but that does not 

mean that the very principle is unknown. For quite some 

time now there are a number larger facilities with installed 

CHP appliances, but the application of appliances with 

less power – mCHP started only recently. 

The reason is not only the fact that the investors are 

insufficiently informed, but also many obstacles that have 

impeded and obstruct the realization of such projects. 

First of all, this refers to a complex administrative procedure 

that made the installation and connection of these 

appliances to the distribution network complicated to 

the extent that the most of potential investors eventually 

gave up on the idea. Due to the situation of getting permits 

and approvals, the height of feed-in tariff was totally 

irrelevant, and the offer of mCHP appliances on these 

markets was very limited. 

In the last two years, the number of necessary approvals 

and permits has been substantially reduced and the 

process of obtaining them extremely simplified. This fact 

almost overnight awoke interest of the investors and the 

offer of mCHP appliances on the market started to grow. 

The Vaillant Company also got included into the process 

and last August offered on these two markets its 

appliance called the ecoPOWER. 

It is a gas engine with variable number of revolutions 

powered by natural or liquefied gas, producing 12.5 kW 

of heat and 4.7 kW of electricity in an hour. Like all CHP 

appliances, the ecoPOWER also primarily produces heat, 

while the produced electricity in fact is a by-product. 

This operation principle also represents a significant 

limiting factor in the selection of the facility for installation. 

Namely, if we want to achieve the maximum efficiency, 

it is necessary to enable the largest possible number 

of operating hours. In the winter period almost each 

facility can consume the produced 12 kW/h, but a problem 

arises in the part of the year when there is no need 

for central heating. Therefore, optimal facilities for the 

installation of mCHP appliances are those with a constant 

and increasing demand for hot water. Smaller hotels, restaurants, 

car washes and similar commercial buildings 

have proven to ideal facilities for the installation, while 

among facilities for private purposes the most appropriate 

are the ones with a pool heated throughout the year. 

Guided by the aforesaid, the ecoPOWER appliance was 

offered at the same time and price on the Slovenian and 

Croatian market, but with completely different results. 

2. PRACTICAL EXPERIENCE IN 

SLOVENIA AND CROATIA 

In the first six months in Slovenia were sold and installed 

8 ecoPOWER appliances. The units were installed in a dif- 


Micro-CHP 

REPORTS 

ferent type of facilities, from hotels, restaurants and office 

buildings to tourist facilities with apartments. Interest and 

response of investors was equal on the entire territory of 

Slovenia, that is, in parts of the market with the gas network. 

All eight cases involved the modernization of the old 

boiler rooms. Taking into consideration the fact that the 

ecoPOWER is designed for basic heat load and that the 

peak heat load requires the installation of backup appliances, 

the experts from Vaillant designed these systems 

with the application of ecoPOWER unit, wall mounted 

high-power condensing appliances and mandatory use 

of a buffer storage which makes an indispensable part of 

the system and guarantees its proper and high quality 

operation (see Figure 1). 

The example of first installed ecoPOWER appliance 

used at Tabor Hotel in Maribor shows the terms of 

re ference and the way the solution was carried out (see 

Figure 2). 

Tabor Hotel was built in the mid-60s and has a capacity 

of 125 beds in 55 rooms. The hotel heating consisted 

in a heating oil-powered boiler with the power of 130 kW, 

carrying out as well the preparation of hot sanitary water 

through two 500 liter storages. The terms of reference of 

the investors were to modernize the existing heating system 

and switch to gas as a cheaper and more ecofriendly 

energy source. 

The experts from Vaillant designed the system with 

mCHP appliance ecoPOWER 4.7, wall mounted highpower 

condensing appliance of 120 kW - ecoTEC Plus 

VU 1206/5-5 and domestic hot water storage of 1000 

liters - allSTOR VPS 1000/3-5, while the management of 

the overall system was entrusted to Vaillant’s control 

VRS 620/3. The scheme of this system is shown in 

(Figure 3). 

Figure 1. ecoPOWER unit and buffer storage allSTOR. 

Figure 2. Hotel Tabor in Maribor. 

3. RESULTS OF THE SYSTEM 

OPERATION 

This system was installed during the August of 2013 and 

commissioned on August 30, 2013. 

For the purpose of analysis, the results of system 

operation were collected on February 11, 2014, i.e., after 

little less than 5 and half months of its operation. 

In this period of 165 days, the ecoPOWER achieved 

2.650 operating hours, which is a high 67% of the total 

possible number. 

In this period, the system generated 32.3 MWh of 

thermal energy and 11.4 MWh of electricity, consuming 

4,770 m 3 of gas. With the gas price of 49 cents per m 3 , for 

the production of 32.3 MWh of thermal energy and 

11.4 MWh of electricity was spent € 2,337, while the produced 

electricity was delivered to the distribution network 

and charged according to the feed-in tariff of € 0.21/kWh in 

the amount of € 2,394. Simple math shows that for investors 

the total thermal energy of 32.3 MWh was free and 

accompanied with the profit of € 57. 

If we assume that 32.2 kWh of the obtained thermal 

energy was produced using the condensing appliance, 

for that purpose would have been spent approximately 

3,620 m 3 of gas which, combined with the listed price of 

0.49 €/ m 3 , would have amounted € 1,774. Therefore, 

applying the ecoPOWER only in 165 days the investor 

saved € 1,831. With these results it is easy to make a calculation 

according to which the investor will realize a return 

on investment in less than four years. 

Similar results, although due to the shorter time 

period between commissioning and reading the results 

for the analysis, were achieved in other implemented 


REPORTS 

Micro-CHP 

Figure 3. Hotel Tabor system sheme. 

projects like the restaurant “Ruski Car” in Ljubljana (see 

Figure 4), or the business building “Tames” in Ptuj (see 

Figure 5). 

4. ANALYSIS OF SUCCESS AND FAILURE 

FACTORS 

Figure 4. Restaurant “Ruski car”. 

At the same time in Croatia was not implemented a single 

project, despite being offered on the market in the 

same manner and at the same price. This fact has initiated 

a more detailed analysis of environmental factors 

in order to identify the causes of such differences in 

sales results. The analysis showed that the difference in 

amount of feed-in tariff is the key and deciding factor 

that makes the installation of mCHP more or less attractive 

to investors. 

In order to illustrate, we shall use the comparison 

made in (Table 1). 

We have already shown that the Slovenian investor 

made a profit of € 57 for 32.3 MWh of obtained thermal 

energy. 


Micro-CHP 

REPORTS 

Table 1. Comparison of success and failure factors. 

Data on the operation of the ecoPOWER appliance: 

Time period: August 30, 2013 – November 2, 2014 

Generated thermal energy: 32.300 kWh 

Generated electricity: 11.400 kWh 

Gas consumption: 4,770 m 3 Slovenia Croatia 

Electricity price 0.164 €/kWh 0.14 €/kWh 

Electricity purchase price (feed-in tariff) 0.21 €/kWh 0.07 €/kWh 

Gas price 0.49 €/m 3 0.48 €/m 3 

Price of consumed gas 2,337 € 2,290 € 

Purchased electricity 2,394 € 798 € 

Cost of the appliance operation -57 € 1,492 € 

Assuming that the same appliance operated for the 

same time period and with an equivalent effect somewhere 

in Croatia, with current gas prices and purchase 

price of electricity in Croatia, the same amount of thermal 

energy would represent a cost of € 1,492. 

Using the same methodology can be made a comparison 

in terms of savings achieved by installing the 

ecoPOWER in relation to the use of condensing appliance 

only. The example from Slovenia showed that the savings 

in the first 165 days amounted € 1,831, while in the 

Croatian example the savings would be only € 236, or 

7.75 times lower. Consequently, the return on investment 

which in the Slovenian case was less than four years, in 

Croatia would be extended to 30 years. 

5. CONCLUSION 

In order to successfully place mCHP appliances on the 

market, the right choice of the facility or proper system 

sizing are not enough, and also the price of appliance is 

not crucial. The key factor for successful placement is 

the expected payback period which highly and directly 

depends on the purchase price of electricity - feed in 

tariff. 

Figure 5. “Tames” business building. 

AUTHOR 

Mario Opačak 

Country Manager | 

Vaillant d.o.o. | 

HR - Zagreb | 

Phone +385 1 6064 387 | 

E-mail: mario.opacak@vaillant.hr 


REPORTS 

Gas market 

Flexibility prices in Germany 

by Andrej Pustišek and Michael Karasz 

Neither the term “flexibility” itself nor its pricing principles are well defined and commonly accepted. Flexibility 

shall be defined by using the hourly, daily, monthly, quarterly, seasonal and annual quantity restrictions defined 

in supply or storage contracts. 

The flexibility prices can currently be only deducted from other market prices/indicators. Both of them 

decreased during the last years. This is confirmed by analysis of results of storage capacity auctions. 

Assuming an increase of the European natural gas markets’ liquidity the quotation of derivatives, particularly 

options, on natural gas is recommended – plugging the gap and putting a price tag on flexibility. 


1.1 Motivation and Definition 

■■ 

■■ 

facilitate and ensure comparability of different flexibility 

tools, and 

comply with intuition. 

The title may suggest that the term “flexibility” itself and 

its pricing principles are well defined in a clearly defined 

region, i.e. the German natural gas market. Neither of 

these assumptions holds. 

In addition, also the tools, the elements, the value 

drivers and even the unit of flexibility or its price(s) require 

further investigation. 

As a starting point and by focusing subsequently on 

volume flexibility, it is assumed that what shall be defined 

as flexibility shall be “assembled” from hourly, daily, 

monthly, quarterly, seasonal and annual quantity restrictions 

defined in supply or storage contracts, subsequently 

called “elements” of flexibility. Such contractual 

restrictions are clearly defined minimum and maximum 

quantities for each of the periods mentioned 1 . 

The elements have to be distinguished from tools, 

which provide flexibility and the parameters influencing 

the value of flexibility, the “value drivers”. In addition, it 

has to be observed that flexibility is a distinctly different 

concept from capacity, structure of deliveries or load. 

However, just by identifying the elements of flexibility 

the concept is not yet defined. Any definition of 

flexibility shall: 

■■ 

■■ 

■■ 

■■ 

take into consideration all flexibility elements, 

be operational and unambiguous, 

help quantifying flexibility, 

aggregate the numbers of single flexibility components 

to one single measure, 

1 E.g. the hourly flexibility component shall be the difference between the 

maximum hourly quantity and the minimum hourly quantity. Others are 

defined analogously. 

Under due consideration of these requirements a “flexibility 

index” is defined in order to provide such “measure” for volume 

flexibility. This index describes essentially the cumulated 

degrees of freedom provided by a flexibility tool. In 

other words, the flexibility index is the sum of the differences 

of the maximal and the minimal supply- or storage utilization 

patterns 2 divided by the total supply volumes. 

The flexibility index can be visualized as the entire 

area between the outer boundary functions (which in 

turn depend on the inner ones) shown in Figure 1. 

Hence, all elements and, equally important, their interdependencies 

are included 3 . 

1.2 Tools 

Sources of flexibility, i.e. tools, are “devices” for the “production” 

of flexibility. These include: 

■■ 

natural gas production 4 , 

■■ 

short-, mid- and long-term storage; including 

–– 

caverns, 

–– 

depleted fields, 

–– 

aquifers, 

2 More general, any flexibility tool’s utilization pattern. The ‘maximal supplyor 

storage utilization pattern’ shall be the pattern describing the off-take or 

withdrawal resulting in the maximum cumulated quantities at each point 

in time during the period. The ‘minimal supply- or storage utilization pattern’ 

shall be the pattern describing the off-take or injection resulting in 

the minimum cumulated quantities at each point in time during the 

period. 

3 For further explanation and a more rigorous definition see [1]. 

4 The distinction between long distance production and short distance production 

applied by some authors shall not be adapted in this study; see e.g. [2]. 


Gas market 

REPORTS 

F igure 1. Example for the definition of the flexibility index. 

– LNG storage, 

– small scale compressed natural gas and 

– line-pack, 

and 

■ utilization of other energy sources. 

This implies that contractual tools require a physical back 

up. Therefore, contracts cannot be regarded as sources or 

sinks of flexibility. In this context “utilization of other energy 

sources” is reflected by interruptible delivery contracts. 

Flexibility is provided by other sources of energy, different 

from natural gas. This also implies that natural gas hubs are 

not flexibility tools, even if prices quoted at hubs are and 

will be indispensable for the valuation of flexibility 5 . 

2. PRICING FLEXIBILITY 

There is no generally accepted market place where a 

“price for flexibility” is quoted. A fortiori, there is not even a 

commonly accepted unit for the price of flexibility. Hence, 

such price has to be deducted, preferably by choosing 

appropriate, necessarily market based indicators in units 

used in the market. Currently available indicators are: 

■ Published tariffs of storage system operators (SSOs) 6 

■ By considering flexibility to be an option: 

– Summer/winter-spreads of forward prices of natural 

gas at hubs indicate the intrinsic value and 

– The development of the volatility of such prices 

may indicate the time value of the option. 

■ Other market-based approaches may use results of 

storage capacity auctions. 

These approaches are (at least partly) independent of 

costs for the supply of flexibility. Hence such costs are not 

considered. 

Flexibility prices are commonly expressed in [€/MWh]. 

Even if a more appropriate unit would be of the form 

[€/(kWh/h)/a=€/kW/a], as flexibility is time dependent, 

the subsequent description will use the commonly 

accepted unit [€/MWh]. 

5 See also: “Note that we do not consider the Dutch gas market (TTF) as an 

additional source of physical flexibility. At the point of delivery, a purchase 

of gas on the TTF must always be provided by one of the underlying physical 

sources of gas flexibility listed above. While the TTF helps allocate flexibility 

sources among buyers in an efficient way, it does not provide a net 

contribution to flexibility supply.”[3]. 

6 Other than some neighbouring countries in the EU storage tariffs are not 

regulated in Germany. On the one hand, this results in a wide range of 

available products and tariffs. On the other hand, a transparent (albeit 

regulated) indication of the value of flexibility is missing. 


REPORTS 

Gas market 

10,00 

8,00 

4,00 

2,00 

0,00 

-2,00 

realize due to future movements of prices. The total 

option value is the sum of the intrinsic and time value. 

In cases where the option is part of a portfolio a (positive) 

portfolio effect might occur, i.e. the overall value of a 

portfolio consisting of (contractual or physical) options 

might be higher than the sum of the values of the individual 

options. This portfolio value refers to and reflects 

the individual company’s overall asset position. 

Such option based methods for the valuation of flexibility 

can, however, only be applied under the following, 

restrictive assumptions 7 

■ there is a perfectly liquid not distorted traded market 8 , 

■ there are no transaction costs, 

■ there is non-discriminatory access to this market, and 

■ players maximize profits and show rational behaviour. 

2008/09 SW-Spread 





2014/15 SW-Spread 



2.1.1 Intrinsic Value 

F igure 2. Development of the Summer-Winter-Spread at Germany´s 

NCG Market Area (Data based on [16]). 

60% 

50% 

40% 

30% 

0% 

2009 2010 2011 2012 2013 2014 2015 2016 2017 

F igure 3. Development of Volatility (Annual EEX-Futures). 

2.1 Option-Based Valuation Approaches 

Valuation of flexibility is based on the idea that flexible 

contracts (storage or delivery) or flexibility tools are 

equivalent to options. The intrinsic value is the value of 

such an asset that can readily be realized at a given point 

in time. Hence, it is the price differential the contract 

owner can realize given the forward prices at a certain 

point in time, i.e. principally the spread between winter 

and summer gas prices. The (positive) time value is the 

potential additional value the contract owner expects to 

The differential between forward prices for summer and 

winter delivery is one of the fundamental drivers of the 

value of flexibility, determining the intrinsic value of a flexibility 

tool 9 . 

Hence, comparing forward prices for the six-month 

summer period with the six-month winter period is used 

to determine the intrinsic value of a (physical or contractual 

storage) asset that allows for one (ideally six-month 

lasting) injection period and one (ideally six-month lasting) 

withdrawal period. As soon as the storage asset 

allows for faster injection or withdrawal other (differently 

defined) spreads might be more appropriate. 

Figure 2 shows the development of summer/winter 

spreads in the German Net Connect Germany (NCG) market 

area since summer/winter 2008/09 based on the European 

Energy Exchange’s (EEX) quarterly and seasonal futures 10 . 

Obviously, a clear trend is visible. Spreads decreased from 

nearly 8 €/MWh down to nearly 1 €/MWh. They have fallen to 

historical lows in 2013, but increased again starting in late 2013. 

2.1.2 Time Value 11 

The time value is the positive value of a contractual or 

physical asset that might be realized in future. Such time 

value is always positive during the time to expiration of 

the option as there is always a (positive) likelihood of the 

option going (deeper) into the money. 

7 See e.g. [5], p. 2. For an overview of valuation methods see [1]. 

8 One example discussing explicitly illiquidity is: [6]. See also similar reference 

in the USA market at the beginning of the 2000s: [7]. 

9 In this context, the question arises: What is the ‘summer’ and ‘winter’? The 

commonly applied definition of winter = October to March and summer = 

April to September is used here, too. Nevertheless, others may be reasonable 

in a different context. 

10 The summer/winter spreads have been calculated as difference of the future 

prices between Q4 and Q1 and the future prices of the preceding Q2 and Q3. 

11 Sometimes also referred to as “extrinsic” value. 


Gas market 

REPORTS 

The time value primarily depends on the volatility of 

commodity prices in the market 12 , giving customers the 

opportunity to create additional value. In connection with 

storages, the use of short-term flexibility components is 

facilitated by higher cycling rates in cavern storages and 

therefore, their time values are higher than time values of 

aquifers and depleted fields. 

In European natural gas markets, often contrary to 

market participants’ expectations, the volatility decreased 

during the last years 13 . As depicted in Figure 3 the historical 

volatility of the annual EEX-NCG futures shows a 

clear downward trend 14 . One of the reasons is assumed 

to be the existence of oil-product-indexed prices agreed 

upon in long-term natural gas delivery contracts, acting 

as a ceiling on market prices. 

2.2 Published Storage Tariffs/Prices 

€/MWh (WGC) 

10 

9 

8 

7 

6 

5 

4 

3 

2 

1 

- 

0 

F igure 4. Merit Order Curve (working gas capacity based prices) for 

Germany NCG (incl. Haidach and 7 Fields). 

Despite the value of flexibility being determined by the 

optionality of the commodity, storage tariffs still play a 

vital role in the European and German natural gas market. 

At least they can serve as a marker, i.e. a first indication of 

the magnitude of the flexibility price. 

Published storage prices are primarily defined by the 

following three components 15 : 

■ injection rate, 

■ withdrawal rate, and 

■ working gas capacity, 

€/MWh 

4,60 

2,91 

5,85 

3,21 

2,26 

Hence, any storage price can be regarded as a threedimensional 

quantity. 

Storage system operators, however, do not offer 

unbundled products only, i.e. each of the above mentioned 

components “separately”, but also storage bundles 

(standard bundled units = SBUs), i.e. products 

where the three components and consequently the 

relations between them are fixed for predefined absolute 

prices. 

Notwithstanding the European guidelines 16 , tariffs 

for storage vary considerably throughout and sometimes 

even within the different natural gas markets in 

12 Volatility shall be defined as normalized standard deviation of the relations 

of logarithmic values of a parameter in equidistant successive periods. 

See for a formal definition e.g. [8]. 

13 See [9], p. 4 (following). 

14 A similar trend applies for monthly, quarterly, or seasonal futures as well 

as for other European hubs. 

15 Further elements of storage prices include: 

service fees, 

penalties, 

annual, seasonal, quarterly or monthly discounts or adjustment factors, 

cycling rates, 

minimum flow requirements, or 

interruptibility discounts. 

The diversity and number of these elements complicates or even hinders 

comparability of tariffs (see e.g. [2], p. 35 following). 

16 According to Article 19 of the European Union Gas Directive the Member 

States can implement negotiated or regulated access to storage capacity. 

January-12 March-12 March-12 December-12 February-13 November-13 December-13 

Figure 5. Selected Storage Auction Results – Prices based on working 

gas capacity. 

the European Union 17 . For Germany (NCG market area) 

the wide spread of published tariffs is shown in Figure 4 

where the minimal price offered by different storage 

system operators for a seasonal product with a working 

gas capacity of 10 million Nm³, a withdrawal rate of 

2500 Nm³/h and an injection rate of as well 2500 Nm³/h 

is illustrated in a merit order curve 18 . 

17 For an overview see e.g. [2]. 

18 This merit order curve is sketched by reducing the three-dimensional tariff 

to the working gas component. Similar ones could be shown with reference 

to the withdrawal rate or the injection rate. For further analysis see [1]. 

0,99 

1,15 


REPORTS 

Gas market 

2.3 Capacity Charges in Delivery Contracts 

Some delivery contracts include clauses for capacity 

charges 19 which can be regarded as an alternative to purchasing 

storage capacity. They are paid for the maximum 

20 hourly (or daily) gas volume taken or expected to 

be taken under the contract during a contract year. As 

such, they reflect a payment for the volume flexibility. 

Similar to storage prices, capacity charges are usually 

quoted in [€/(kWh/h)/a=€/kW/a] and they are applied to a 

maximum (hourly) delivery volume. As relevant capacity 

charges are not published, they are not suited to be 

included in the analysis of the flexibility price in the market. 

2.4 Auctions 

Trivially, the value of any good is determined by the price 

actually paid for in the market. In recent years auctions of 

storage capacity have been conducted in several European 

markets 21 . The products and SBUs sold in auction 

procedures are in many cases similar to the products 

offered directly by SSOs. Yet, only the minority of auction 

results is published. 

Prices recently found in auctions are geared to summer 

/ winter price spreads and therefore quite low compared to 

the ones published. Some auctions resulted in prices below 

1 €/MWh and others even failed due to too low prices 22 . 

In summary the analysis of auctions, the development 

of summer-winter-spreads as well as the development of 

volatility during the last years reveals that the value of 

flexibility in the German market for the seasonal product 

described above was slightly below 2 €/MWh at the 

beginning of 2014. Trivially, if the elements of flexibility, as 

e.g. hourly, monthly or seasonal restrictions are modified, 

such value of flexibility will, of course, alter. 

3. CONCLUSION 

The transparent and fairly liquid commodity market for 

natural gas is certainly an important constituent for the 

competitiveness. Nonetheless, no natural gas delivery 

can be valued properly without putting a price tag on 

flexibility, too. To this, market participants seem to rely 

increasingly on option based approaches. The intrinsic 

value serves as starting point defining the minimum 

minimorum, but a comprehensive and complete flexibility 

valuation requires an estimate of future volatility. This 

can be deducted from the analysis of traded options. The 

19 In the past, these contracts have been by far more common than today. 

20 In order to avoid too high capacity payments some delivery contracts stipulate 

for flattening these maximum volumes by e.g. using rolling averages. 

21 For auctioning storage capacities mostly English auctions are applied. 

22 See e.g.: [10], [11], [12], [13], or [14]. 

options’ price helps to determine the implicit volatility. 

Such options on natural gas are currently traded in the US 

market but not in Continental Europe. Liquidity of natural 

gas options is quite high at CME 23 and often exceeds the 

one of crude oil options 24 – signalling a high reliability of 

these option prices. 

In theory, auction results should reflect the sum of 

intrinsic and extrinsic values at a given point in time, but 

auction procedures and conditions as well as lack of 

“liquidity” might bias results. 

As a consequence of the above, it is proposed that not 

only trading of commodity options but also of capacity is 

introduced in the market. This would foster the transparent 

and market based valuation of flexibility. 

REFERENCES 

[1] Karasz, M.; Pustišek, A.: Flexibility – Germany and Austria 

– A multi-client study, 2 nd edition, May 2014, for 

further reference: www.flexibility-study.com 

[2] Energy Charter Secretariat (2010): The Role of Underground 

Gas Storage for Security of Supply and Gas 

Markets, published at: http://www.encharter.org/fileadmin/user_upload/Publications/Gas_Storage_ENG. 

pdf, access: May 2013 

[3] Harris, D.; García, J. A.; Popescu, I.: Research into Gas Flexibility 

Services –Method Decision Flexibility Services, 

Public Version, The Brattle Group, 2011 United Kingdom 

[4] Leroy, J.-M.: Underground Gas Storage: What are the 

latest developments? Is it a resilient business?, Presentation 

held during FLAME 2011 Conference, 

Amsterdam, 11 May 2011 

[5] Barbieri, A.; Garman, M. B.: Understanding the Valuation 

of Swing Contracts; Financial Engineering and 

Associates, Inc., published at: http://www.fea.com/ 

resources/a_understanding_valuation_swing.pdf, 

access: February 2013 

[6] Felix, B.; Woll, O.; Weber, Ch.: Gas Storage valuation 

under limited market liquidity: an application in Germany, 

EWL Working Paper No. 5, Chair for Management 

Sciences and Energy Economics, 2009 University 

of Duisburg-Essen 

[7] Gray, J.; Khandelwal, P.: Towards a Realistic Gas Storage 

Model, Commodities Now, June 2004 

[8] Hull, J.: Introduction to futures and options markets, 

2 nd edition. Prentice Hall International Editions, 1995 

Englewood Cliffs, NJ 

[9] Alterman, S.: Natural Gas Price Volatility in the UK and 

North America, The Oxford Institute for Energy Stud- 

23 The New York Mercantile Exchange (NYMEX) is part of CME Group. 

24 See [16]. Prerequisite for such high liquidity of natural gas options is a 

high liquidity in the underlying market – natural gas commodity prices 

quoted at Henry Hub. 


Gas market 

REPORTS 

ies, NG 60, published at: http://www.oxfordenergy. 

org/wpcms/wp-content/uploads/2012/02/NG_60. 

pdf, access: August 2013 

[10] Energate (2012-12-18): Eon Gas Storage vermarktet 

Speicher Kraak 

[11] Energate (2013-02-19): Gasspeicher: Eon Ruhrgas 

erzielt Preise von 1,90 Euro/MWh 

[12] Energate (2013-02-20): Gazprom mit zweiter Speicherauktion 

erfolglos 

[13] Energate (2013-03-22): Eon vermarktet 7 Fields erfolgreich 

[14] Energate (2013-03-26): Stadtwerke München versteigern 

Speicher 

[15] Energate (2014): Marktdaten Gas, EEX NCG, published at: 

http://www.energate.de/markt/preise, access: July 2014 

[16] CME Group (2014): Monthly Energy Review, A Global 

Trading Summary of Energy Markets, May 2014 

AUTHORS 

Dr. Dr. Andrej Pustišek 

2Pi-Energy GmbH | 

Stuttgart | Germany | 

Email: andrej.pustisek@2pi-energy.com 

Hochschule für Technik | 

Stuttgart | Germany | 

Email: andrej.pustisek@hft-stuttgart-de 

Michael Karasz 

THE ENERGY HOUSE GmbH | 

Munich | Germany | 

Email: karasz@the-energy-house.eu 

20 EUROFORUM–Annual Conference 

4 to 6 November 2014 

Pullman Berlin Schweizerhof, Berlin [Germany] 

gas 2014 

Meet the decision makers of the European gas industry! 

A selection of the experts panel … 

The European Gas Market 

4 November 2014 

The German Gas Market 

5 and 6 November 2014 [Conference Language: German] 

Ali Arif Aktürk, 

NaturGaz Natural 

Gas Import & 

Export Co. Inc. 

Ton Floors, 

Vopak LNG 

Holding B.V. 

Stephan Kamphues, 

ENTSO-G 

Thor Otto Lohne, 

GASSCO 

Presentations planned from the 

following countries: 

Jayesh Parmar, 

Baringa Partners 

Dr. Wolfgang Peters, 

RWE Supply & 

Trading CZ 

Beate Raabe, 

eurogas 

Jens Schumann, 

Gasunie Deutschland 

www.erdgas-forum.com/programme 

Issue 3/2014 gas for energy 53 

Infoline: +49 (0) 2 11/96 86–35 96 [Murat Öncü]

REPORTS 

Gas market 

The Austrian Gas Market Model 

Design and Operation 

by Wolfgang Ziehengraser 

The third Energy Package was implemented in Austria on January 1 st , 2013, through an amendment to the Gas 

Act 2011, a consequent Market Model Ordinance, various so-called market rules and the General Terms and Conditions 

of various market actors. The new Market Model unifies the domestic and the transit system and introduces 

– in addition to the “balancing zone manager” - new „system administrators“ at transmission system level. 

The transport regime changed from transports along contracted paths to an Entry-Exit-System. Corresponding 

to this change, the calculation of grid tariffs had to be adapted. Entry and exit capacity can be booked separately. 

Entry from any point gives access to the Virtual Trading Point, from which in turn any exit point can be 

supplied. The balance group regime is now effective on the transmission system level. Balancing happens in 

two stages: At the market-area-level (interconnected transmission and distribution networks), the market area 

manager (MAM) balances the system ex ante based on nominations and transport schedules (“Fahrplan”). These 

must match (“ex ante balancing”) on a daily basis. On the DSO-level, the distribution area manager (DAM) balances 

all distribution system(s) in a market area on an hourly basis. The new Gas Market Model has been operative 

for more than one year. Results are mixed. 

Since the beginning of 2013 a new market model has 

been in force for the Austrian gas market. The market 

model pre-empts many features of a European model for 

the internal gas market favoured by regulators. 

1. LEGAL FRAMEWORK 

The third energy package of 2009 1 and in particular the 

provisions relating to the gas market were transposed into 

Austrian law in the Gas Act of 2011 (GWG 2011 and amendments), 

in the Gas Market Model bye-law (GMMO-VO 2012 

as amended), other bye-laws and so-called Market Rules. 2 

2. ENTRY-EXIT: DESIGN AND CAPACITY 

ALLOCATION 

Austria comprises three market areas, East (MA-E), the 

Tyrol, and Vorarlberg (MA-TV). The areas in the west form 

1 Directive 2009/72/EC 13 July 2009 concerning common rules for the internal market 

in electricity and repealing Directive 2003/54/EC, Directive 2009/73/EC of 

13 July 2009 concerning common rules for the internal market in natural gas and 

repealing Directive 2003/55/EC , Regulation (EC) No 713/2009 of 13 July 2009 establishing 

an Agency for the Cooperation of Energy Regulators, Regulation (EC) No 

714/2009 of 13 July 2009 on conditions for access to the network for cross-border 

exchanges in electricity and repealing Regulation (EC) No 1228/2003, Regulation 

(EC) No 715/2009 of 13 July 2009 on conditions for access to the natural gas transmission 

networks and repealing Regulation (EC) No 1775/2005 

2 The relevant laws, bye-laws etc. can be found on the homepage of the 

regulator: www.e-control.at 

a market area with the adjoining market area Net Connect 

Germany (NCG). (Figure 1). The following remarks 

refer to the Market Area East only. A short description of 

the operation of the other two market areas follows in 

section 4.3. 

The major change from the previous to the current 

system has been to replace the point-to-point transport 

regime with an entry-exit system. Entry and exit capacities 

can be booked and traded independently of each 

other. Suppliers and traders have to book capacity at 

the entry points to be able to transport gas in a transmission 

system of a market-area to the Virtual Trading 

Point (VTP). Transporting gas from the VTP to customers 

(in the distribution grid) or into storage requires availability 

of exit capacity from the transmission system. The 

VTP is not allocated to any specific entry or exit point. At 

the VTP, gas can be traded without booking entry or 

exit capacities. 

The Executive Board of E-Control Austria has 

approved the below entry and exit points (“relevant 

points” according to Annex 1 of Regulation (EC) No 

715/2009). In future, all information relevant for bookings 

in the market area pursuant to that regulation will 

be made available through the market area manager’s 

online platform in accordance with section 39 Natural 

Gas Act 2011. Relevant points of Gas Connect Austria 

GmbH: 


Gas market 

REPORTS 

Figure 1. Market areas. 

■ 

■ 

Entry points: 

– Baumgarten GCA 

– Überackern ABG 

– Überackern SUDAL 

Exit points: 

– Mosonmagyaróvár 

– Murfeld 

– Petrzalka 

– Überackern ABG 

– Überackern SUDAL 

Relevant points of BOG GmbH: 

■ Entry points: 

– Baumgarten BOG 

– Oberkappel 

■ Exit points: 

– Baumgarten BOG 

– Oberkappel 

Relevant points of TAG GmbH: 

■ Entry points: 

– Baumgarten TAG 

– Arnoldstein 

■ Exit points: 

– Arnoldstein 

Suppliers and buyers can contract capacity for each of 

these points and pay a specific tariff in relation to the 

contracted capacity. Only the DAM (distribution area 

manager) may book (and pays for) exit-capacity into the 

distribution grid. Furthermore, only storage system operators 

managing natural gas storage facilities may book 

capacity on lines that connect storage facilities to the 

transmission grid. Because of that, these connection 

points do not constitute “relevant points” as defined in 

Annex 1 (Guidelines) of Regulation (EC) No 715/2009. 

For relevant points, Transmission System Operators 

(TSOs) have to offer firm and interruptible capacity. The 

rights to capacity acquired by system users are tradable, 

either on an on-line capacity platform, or in the secondary 

market on the exchange. Since April 1 st , 2013, capacity 

at entry and exit points is allocated by auction. Capacity 

products and lead times have to conform to those specified 

by the ENTSOG Capacity Allocation Mechanism network 

code (CAM code) 3 . Gas Connect Austria, TAG and 

BOG are members of PRISMA, a European capacity auction 

platform that started operations in April 2013. 4 

3. MARKET AREA AND MARKET 

PLAYERS 

The main actors in the market are the Balance Group Representative, 

the Market Area Manager, the Distribution 

Area Manager, and the Balance Group Coordinator 

3 ACER, Framework Guidelines on Capacity Allocation Mechanisms for the 

European Gas Transmission Network, FG-2011-G-001, 3 August 2011 

4 https://www.prisma-capacity.eu/web/start/ 


REPORTS 

Gas market 

3.1 Market Area Manager (MAM) 

Monitors and maintains system balance in the market 

area based on schedules and nominations. Responsibilities 

and competences comprise: 

■ Monitoring and balancing nominations on the transmission 

system, organisation of the settlement of 

imbalances 

■ Formation of, securing access to and cooperation 

with the VTP 

■ Formal administration of the Balancing Groups (BGs) 

operating in the market area 

■ Maintaining the technical stability of the transmission 

system, in particular through utilisation of line-pack 

with a view to keeping the level of physical balancing 

energy at a minimum. 

■ Compiling a uniform method for the determination of 

capacities at entry and exit points and the presentation 

thereof, as well as organising an online-platform 

for the trading of these capacities. 

■ Forecasting demand for transport capacity and infrastructure 

requirements in cooperation with other market 

players – coordinated network development plan. 

3.2 Distribution Area Manager (DAM) 

Monitors and balances flows in the distribution grid(s). 

Responsibilities and competences comprise: 

■ Exclusively holds exit capacity from transmission system 

to distribution grids. 

■ Manages all entry and exit capacities between distribution 

and transmission grid as well as capacity in the 

high-pressure distribution grid. 

■ Dealing with requests for and organising access to the 

grid. 

■ 

■ 

■ 

■ 

Administration of nominations at the exit points from 

transmission to distribution grid. 

Processing transport schedules. 

Maintaining the technical stability of the distribution 

system with a view to keeping the level of physical 

balancing energy at a minimum. Buying and selling 

balancing energy in the name and for the account of 

the Balance Group Coordinator primarily at the VTP. 

Forecasting demand for transport capacity and infrastructure 

requirements in cooperation with other 

market players and drawing up corresponding longterm 

plans. 

3.3 Balance Group Coordinator (BGC) 

The main responsibilities of the BGC are 1) the calculation, 

allocation, and settlement of balancing energy in distribution 

grids (focus on end consumers) and 2) the administration 

of balancing groups with access to end consumers 

in organisational and clearing matters. This requires a 

considerable amount of data and correspondingly necessitates 

entering into a large number of contracts with 

various market participants. 

3.4 Balancing Group (BG) 

All users of the grid have to be members of a BG. A Balance 

Group Representative (BGR) forms and changes a 

BG acting on behalf of the BG members. Responsibilities 

and competences comprise: 

■ Preparing schedules and communicating these to 

MAM, DAM and BGC. 

■ Nominations at the entry and exit points of the transmission 

grids – except nominations at the exit points 

to the distribution grids – and the nomination of trade 

transactions at the VTP. 

■ Balancing injections and withdrawals of their BG. 

■ Commercial responsibility 

4. NETWORK ACCESS 

4.1 Distribution Network – Market Area East 

Figure 2. The access process for producers and storage operators is 

analogous. 

Access to the distribution network for customers, producers 

or storage operators is organised according to the 

same general pattern: the prospective network user concludes 

a Network Access Contract with the distribution 

system operator (DSO) to whose system the consumption, 

production or storage site is connected. This contract 

defines the terms and conditions of service as well 

as the maximum capacity at the disposal of the network 

user. The DSO in turn has concluded a Network Operator 

contract with the DAM, which defines in particular the 

information and data flows between the entities. Based 


Gas market 

REPORTS 

Figure 3. Contractual relations eastern market area. 

on the results of the Long Term Plan the DAM books 

maximum firm capacities on the exit points from the 

transmission to the distribution system with the relevant 

TSOs. 

Differences in the access regime between consumers 

and other network users exist with regard to portability 

of the contracted capacity. If an end-user / consumer 

switches supplier the capacity contracted at the connection 

point – and extending to the VTP – moves with the 

contract (so-called “rucksack” / “backpack”). (Figure 2). 

Figure 3 depicts the contractual relations in the MA-E 

between the various market participants. 

4.3 COSIMA - Market area Tyrol and Vorarlberg 

Austrian legislation in certain circumstances provides for 

the possibility to form market areas comprising networks 

in different member states. The COSIMA area (“Cross-border 

Operating Strongly Integrated Market Area”) interlinks 

the market areas in the Tyrol and Vorarlberg with the Ger- 

4.2 Transmission Network 

As already mentioned above, TSOs have to offer firm and 

interruptible capacity contracts. Firm contracts generally 

have to be – to the maximum extent possible - freely allocable, 

i.e. not restricted to certain entry or exit points or a 

combination thereof. The Austrian TSOs use the European 

online platform PRISMA as instrument to auction 

the available capacities on their systems in the primary 

and secondary market. As can be seen in Figure 4, the 

procedures to access the transmission network are less 

elaborate than those at the level of distribution are. 

Figure 4. Network access transmission system. 


REPORTS 

Gas market 

Figure 5. Market area Tyrol/Voralberg – market area NCG. 

man NCG market area. Suppliers do not need to book 

cross-border capacity, instead the DAM books all the 

capacity needed to supply customers in the Tyrol and 

Vorarlberg. Market players operating in COSIMA have to 

have corresponding BGs there and in the NCG market. 

Gas destined to supply the Tyrol or Vorarlberg has to be 

nominated at the VTP of the NCG area. The nominated 

volumes are allocated to the Austrian mirror BGs of the 

German BGs (Figure 5). 

5. BALANCING 

There are two types of balancing: 

■■ 

At the market-area-level the MAM balances the system 

ex ante based on nominations and transport 

schedules (“Fahrplan”). These must match on a daily 

basis. Mismatches at the end of day are settled by the 

MAM in the name and for the account of the balancing 

group (BG) concerned. For hourly intraday balances, 

the MAM levies a fee on the BG not in balance 

and balances the market area buying or selling energy 

in his own name and for his own account. 

■■ 

The parameters for the calculation of daily imbalances 

per BG are as following: 

–– 

plus/ minus hourly trades on the VTP 

–– 

plus / minus allocated nominations for Entries/Exits 

from the transmission systems into the market area 

■■ 

–– 

plus / minus inflows/off-takes to / from distribution 

area (incl. production, storage and local cross border 

trade) 

–– 

minus Declared end-consumer schedules 

–– 

plus / minus carry forward account D-2 

At the DSO-level the distribution area manager (DAM) 

balances the distribution system(s) in a market area on 

an hourly basis. If needed, the DAM enters into transactions 

on the VTP in the name and for the account of 

the Balance Group Coordinator (BGC). Users who have 

contracted more than 10.000 kWh/h per entry, exit, or 

delivery point have to be balanced on an hourly basis. 

Users metered online and with contracted capacities 

of between 10.000 and 50.000 kWh/h can opt for 

hourly or daily balancing. The BGC in turn calculates 

the imbalances between the schedules (Fahrplan) for 

the supply of end consumers and the actual consumption 

of the individual BGs on an hourly or daily 

basis for the groups mentioned above. This is done 

monthly for every day or hour, respectively (1 st clearing). 

After 14 months the whole period is rolled up 

again (2 nd clearing). 

6. CONCLUDING REMARKS 

At the current moment, it is difficult to disentangle the 

effects of the new market model on the gas market from 


Gas market 

REPORTS 

general market trends. Therefore, a few general observations 

must suffice. The system has become very elaborate 

and complicated and, in consequence, considerably 

more expensive and arguably more prone to hiccups. 

The introduction of daily instead of hourly balancing for 

small consumers seems to have attracted new suppliers 

into the market, increasing competition in the market 

place. 

Some of the consequences of the new regime seem 

to run counter to the proclaimed policies of intensifying 

competitive forces in the energy sector through unbundling 

and prices determined on the market. For example, 

the inclusion of grid charges into the commodity price 

has introduced an all-in element into the previously transparent 

separation of grid and gas costs. There are too 

many prices for balancing energy in the system (marginal 

price, synthetic prices formed through premiums and 

discounts on exchange prices, daily average price etc.), 

which do not incentivise behaviour contributing to system 

stability. 

The new system has further weakened the incentives 

for suppliers to invest into security of supply measures. 

On previous occasions, new energy legislation at EU-level 

was already discussed before the EU rules in force at the 

time had been fully transposed into national law or had 

been effective for a sufficiently long time. We hope that 

this time we will be able to gather evidence on the operation 

of the new market model long enough to enable us 

to arrive at sound conclusions with regard to future 

amendments. 

AUTHOR 

Wolfgang Ziehengraser 

Mag., Consultant, Fachverband der Gas- 

und Wärmeversogungsunternehmen, 

Wien | Austria 

Phone: +43 1 513 1588–38 

Email: ziehengraser@gaswaerme.at 

biogas 

expo & congress 

22. + 23. Oct. 2014 

Exhibition Center Offenburg 

Messe Offenburg-Ortenau GmbH · Schutterwälder Str. 3 · 77656 Offenburg 

FON +49 (0)781 9226-54 · FAX +49 (0)781 9226-77 · biogas@messe-offenburg.de · www.biogas-offenburg.de 


PROFILE 

Danish Gas Technology 

Centre – moving towards a 

greener energy future 

ABOUT DGC 

DGC is a consultancy and development company in the 

fields of energy and environment within gas and gas utilisation. 

DGC conducts analyses, measurements, laboratory 

experiments and tests, verifications, field assignments, 

and certification for the gas industry and other 

energy players. 

DGC’s laboratory is accredited under DANAK (The 

Danish Accreditation and Metrology Fund) for gas analyses 

and for environmental approvals and safety testing of 

gas equipment and installations. The Green Gas Test Centre 

conducts analyses and measurements of e. g. biogas, 

gasification gas and hydrogen. DGC is Notified Body for 

gas boilers and other gas-fired appliances. DGC carries 

out verification of CO 2 emission from cogeneration 

plants. 

DGC conducts environmental measurements for customers 

with gas engines, gas turbines and gas boilers. 

DGC’S BUSINESS AREAS 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

■■ 

Domestic boilers and small gas appliances 

Gas for transportation purposes 

CHP and large boiler plants 

CE certification 

Environment and combustion 

Gas quality and the gas grid 

Hydrogen, biogas and other renewables 

Safety 

FUTURE DEMANDS 

DGC is accredited for gas analyses, environmental 

approvals, and safety testing of gas equipment and 

installations. 

The transition to an energy system that is independent of 

fossil fuels calls for new ways of utilising technologies and 

development of new qualifications. DGC is actively taking 

part in the development and demonstration of solutions 

for coping with future demands. Energy conversion and 

storage are important areas where DGC is participating in 

projects. We analyse and test various systems and technologies 

for converting RE electricity from wind into 


PROFILE 

hydrogen, which is injected into the gas grid. In this way, 

the gas grid acts as a storage facility for renewable energy. 

In 2014 DGC is carrying out many projects related to 

biogas and other green gases. The projects involve new 

applications of gas for e. g. heavy transport and new flexible 

use of the infrastructure and the integration of electricity, 

gas and heating. Core activities, such as consultancy 

services, measurement and verification in the areas 

of gas utilisation, gas quality, gas safety and the environment, 

are still expected to constitute a significant part of 

the company’s activities – as the more service oriented 

assignments carried out by DGC’s Green Gas Test Centre 

are expected to increase with the green transition of the 

gas system. 

CE CERTIFICATION 

DGC issues CE certificates for gas appliances and 

gas/oil boilers according to the Gas Appliances 

Directive (GAD) 2009/142/EC and the Boiler Efficiency 

Directive (BED) 92/42/EEC. 

DGC’s Notified Body Number is 1506. In addition, 

DGC’s laboratory carries out CE type-examination 

of gas appliances and boilers and operates the 

Danish energy labelling scheme. 

INTERNATIONAL GAS UNION RESEARCH 

CONFERENCE 

Last, but not least, in September 2014 DGC will host the 

IGRC conference, International Gas Union Research Conference, 

in Copenhagen. IGRC2014’s mission is to facilitate a 

dialogue between leading players in the international gas 

sector on the development of the future energy system. It 

will be a unique opportunity for DGC – and for Denmark – 

to set the agenda of the discussion on new gas applications, 

new technologies, the future gas system and its 

interaction with and position in the entire energy mix. 

CEO at DGC, Thea Larsen. 

Contact: 

Danish Gas Technology Centre, 

Thea Larsen, CEO, 

Dr. Neergaards Vej 5B, 

DK – 2970 Hørsholm, Denmark, 

Phone: +45 2016 9600, 

E-mail: tla@dgc.dk, 

www.dgc.eu 


ASSOCIATIONS 

TSOs of the South-North Corridor Region publish their 

Gas Regional Investment Plan 2014 - 2023 

The TSOs of the South - North Corridor Region released 

the second edition of their Gas Regional Investment 

Plan (SC GRIP 2014-2023), in line with Art. 12 (1) of the 

Regulation (EC) No 715/2009. 

SNC GRIP provides an updated and detailed overview 

of the gas hubs in the Region as well as the existing and 

planned Regional infrastructure. The plan also assesses 

demand, supply and capacity developments and identifies 

current and future investment needs in the SNC 

Region. The Region covers five countries (Belgium, 

France, Germany, Italy and Switzerland) and involves nine 

TSOs (Fluxys Belgium S.A., GRTgaz, Fluxys Tenp GmbH, 

terranets bw GmbH and Open Grid Europe GmbH, Snam 

Rete Gas S.p.A. and Infrastrutture Trasporto Gas S.p.A., 

Swissgas and FluxSwiss Sagl). 

In this 2 nd SNC GRIP, which has been jointly coordinated 

by Fluxys Belgium S.A. and Snam Rete Gas S.p.A., 

special attention has been paid to stakeholder feedback 

on the first edition of the plan. In this edition several 

enhancements have been introduced, and in particular: 

■ A deeper study of demand components, including 

future trends, additional gas hub information, and an 

■ 

analysis of the relevant Interconnection Points in the 

Region. 

The inclusion of two completely new sections: a first 

one regarding power generation, and a second one 

related to simulations and network modeling studies 

tailored on South-North Corridor evolutions. 

The TSOs of the South – North Corridor Region are confident 

that the SNC GRIP will provide useful information to 

all stakeholders fostering awareness about the development 

of the gas infrastructure projects and the European 

gas market. The SNC GRIP is available on the websites of 

ENTSOG (link) and the Region’s TSOs. 

GIE launches security risk assessment 

methodology for gas infrastructure 

The gas infrastructure is a network without national 

boundaries, which means that a failure of one portion 

of the network could propagate to other areas, potentially 

involving several countries. Thus the European Commission 

has identified the gas Infrastructure as a critical 

infrastructure. 

GIE fully acknowledges the strategic importance of 

the gas infrastructure system for Europe. GIE takes into 

account the necessity to create standards to ensure a 

level playing field. Security risk identification helps to provide 

value across the energy infrastructure. 

The GIE Security Risk Assessment Methodology is a 

common and integrated approach amongst the European 

energy infrastructure operators. With this methodology 

a next major and important step to further increase 

security and resilience of the gas infrastructure network 

in Europe has been achieved. It is another example for 

the active participation and contribution of gas infrastructure 

operators to EPCIP, the European Program for 

Critical Infrastructure Protection. 

The GIE Security Risk Assessment Methodology is 

accessible to all GIE members, ENTSO-G (the European 

Network of Transmission System Operators for Gas) and 

all other stakeholders interested in this field. It was presented 

to representatives of the European Commission 

and introduced to ENTSO-E, the European Network of 

Transmission System Operators for Electricity. 

The GIE Security Risk Assessment Methodology is 

published on the GIE website for further spread and 

knowledge exchange. 

http://www.gie.eu/index.php/publications/gie 


ASSOCIATIONS 

OGP publishes study “Energy taxation subsidies in Europe” 

Oil and gas contribute hundreds of 

billions of euros to European government 

revenues every year, a new 

study shows, highlighting how the 

industry – far from being subsidised – 

crucially boosts public finances in the 

European Union and Norway. 

Energy taxation and subsidies in 

Europe, a study commissioned by the International Association 

of Oil & Gas Producers (OGP) and carried out by 

independent consultant NERA Economic Consulting, 

sheds new light on the financial contributions and subsidies 

in the European energy sector. 

OGP has commissioned the research in a bid to show 

the facts about European government subsidies to 

energy industries, as the issue is intensely debated, with 

conflicting numbers and complicated methodologies. 

The consumption of one barrel of oil generates $124 

(around €90) in government revenue. This contrasts with 

the consumption of an equivalent amount of energy 

generated by renewables, which in some cases can cost 

tax payers over $700 (or more than €500), the study 

shows. 

Oil and gas contributed €433 billion to the EU and 

Norwegian government treasuries in the reference year 

2011 (the latest year for which comprehensive data was 

available) and received €0.6 billion, making it a net contribution 

of €432 billion. These numbers are in contrast to 

the prevailing assertion that oil and gas received billions 

of euros in subsidies across the EU in 2011. 

Instrument for imaging paraffin wax and asphaltene 

depositions in oil and gas pipelines 

PRODUCTS & SERVICES 

Flowrox, a global leader in heavy-duty industrial valve, 

pumps and instrumentation manufacturing and service, 

is releasing to the Oil & Gas market the Flowrox Deposition 

Watch – a new instrument designed to enhance the 

monitoring of pipelines and related flow-process equipment 

affected by paraffin wax and asphaltene depositions. 

The Flowrox Deposition Watch is a predictive device 

allowing its operators to address deposition issues well 

before these reach critical levels that can cause downtime 

or costly damage. 

Crude oil contains a variety of molecular substances 

that challenge the Oil & Gas companies with the buildup 

of paraffin wax when it crystallizes into a solid deposition 

on the pipe wall – along with the accumulation of asphaletene 

– which can altogether reduce the fluid flow or 

plug pipes and valves. 

The deposition of paraffin wax and asphaltenes is a 

common reason for a major decrease in production and 

revenue in oil wells as it affects valves, pumps and pipelines, 

along with other pipeline components critical to 

the fluid control process. 

The device was developed specifically for use in the 

Oil & Gas industry since this instrument will allow customers 

to generate real-time images of any depositions 

affecting a piping system – without ever having to open 

up the pipeline and slow down production. 

The Flowrox Deposition Watch utilizes electrical capacitance 

tomography (ECT) to create real time images of the 

inside of the piping and uses electrical capacitance tomography 

to detect the differences in permittivity of the various 

substances found in the piping system. In addition, it 

utilizes a patented algorithm that creates a 3D image of the 

process fluid in the piping and generates trend data as well 

as show free volume inside the pipe and the growth rate of 

the deposition growth over time. Ultimately, the Deposition 

Watch can show its operators the deposition thickness, 

deposition profile, growth rates over time, composition, 

and free flow volume – all of which allow engineers to 

understand areas where pipes are prone to these damaging 

deposits. 

Contact: 

Flowrox 

www.flowrox.us 


PRODUCTS & SERVICES 

Modular gas analyser for the biogas market 

Eaton has launched a new ‘next generation’ MTL 

GIR6000 biogas analyser to help ensure reliable, accurate 

measurement of gases in biogas production. The 

MTL GIR6000 gas analyser is the first modular biogas 

analyser, requiring minimal maintenance and enabling 

process engineers and biogas plant managers to reduce 

downtime and improve their processes. 

The analyser uses an innovative modular concept that 

makes it user-serviceable and 

reduces lifetime service costs 

through quick and easy maintenance 

procedures that require no special 

tools or training. As a result, service 

engineer site visits are largely 

avoided with the guidance of the 

built-in self-diagnostic routines and 

pre-configured intelligent sensor 

modules. The gas sensor modules 

can be individually replaced. The 

analyser can measure up to six gases, 

including methane, oxygen and 

hydrogen sulphide, and is designed 

with dedicated sensor modules and 

long-life, established sensor technology 

to provide continuous, accurate 

and reliable readings. The integrated platform concept 

makes it easy to upgrade the MTL GIR6000 analyser to 

meet future demands as the plant’s measurement needs 

evolve. 

The MTL GIR6000 analyser is designed to be secure 

and reliable. It requires key-lock access and PIN-codes to 

change the key parameters making the data safe. Setting 

up the unit on-site is facilitated by the large bright 7-inch 

LCD display and rugged keypad as well as an intuitive 

menu-driven structure. The display provides a clear visual 

warning when there is a system fault or when a sensor is 

reaching the end of its life-cycle, allowing users to predict 

or plan maintenance requirements. Data is transmitted to 

the plant host system through a number of communication 

methods, allowing live real-time data to be monitored 

remotely. 

The MTL GIR6000 analyser is an integrated IP65 weatherproof 

solution and is ATEX approved for Zone 2 Hazardous 

Areas for installation flexibility around the biogas 

plant. 

Contact: 

Eaton 

www.eaton.com 

Comprehensive CWD instrument series 

To cope with varying gas properties 

when supplying heat to processes, a 

suitable gas measuring technology 

is needed, such as the comprehensive 

CWD instrument series (Calorimetry, 

Wobbe index, specific Density) 

offered by UNION Instruments. 

With this, calorimetric values such as 

the heating value and the Wobbe 

index of natural gas, biogas, biomethane, 

process gases, and the like 

can be determined according to the 

DVGW (German Technical and Scientific 

Association for Gas and Water) 

worksheets G 260 and G262. 

This includes direct measuring of 

the Wobbe index through the 

energy produced when a defined gas flow is combusted. 

Unknown or unexpected components in the gas are also 

detected and taken into consideration in the measurement. 

This is of utmost importance in the case of rapidly 

Contact: 

UNION Instruments GmbH 

www.union-instruments.com 

The calorimeters of the CWD2005 

series of UNION Instruments determine 

the heating value and Wobbe 

index of various gas types such as 

natural gas, biogas, biomethane, and 

process gases. 

changing gas composition of, for 

example, residual gases from chemical 

processes or substitute gases in 

the steel industry. 

The CWD2005 CT calorimeter is 

approved as a calorific value measuring 

instrument for custody transfer. 

For use in hazardous areas, the 

CWD2005 DP version is available. 


uyer’s guide 

A close-up view of the 

international gas business 

Gas transmission and distribution 

Gas-pressure control and gas 

measurement 

Gas quality and gas use 

Gas suppliers 

Trade and information technology 

DVGW-certified companies 

Please contact 

Andrea Schröder 

Phone: +49 89 2035366-77 

Fax: +49 89 2035366-99 

E-mail: schroeder@di-verlag.de 

www.gas-for-energy.com



Buyer’s Guide 

Pipe penetrations 

Pipelines and pipeline accessories 

Valves 

Please contact 

Andrea Schröder 

Phone +49 89 2035366-77 

Fax +49 89 2035366-99 

schroeder@di-verlag.de 




Active corrosion protection 

Corrosion protection 


Passive corrosion protection 



Gas quality and Gas use 


Filtration 

Gas preparation 

dVGW-certified comPanies 

Pipe and pipeline engineering 

Filters 


IMPRINT AND INDEX OF ADVERTISERS 

IMPRINT 

gas for energy 

Magazine for Smart Gas Technologies, Infrastructure and Utilisation 

Publication of 

Farecogaz – Association of European 

Manufacturers of Gas Meters, Gas 

Pressure Regulators, Safety Devices 

and Stations 

GERG – Group Europeen de 

Recherches Gazieres 

GIE – Gas Infrastructure Europe 

Marcogaz – Technical Association of 

the European Natural Gas Industry 

Editorial team: 

Managing Editor: Volker Trenkle 


Arnulfstraße 124 

80636 München 

Phone +49 89 203 53 66-56 

Fax: +49 89 203 53 66-99 

E-Mail: trenkle@di-verlag.de 

Editor: Elisabeth Terplan 

Phone +49 89 203 53 66-43 

Fax: +49 89 203 53 66-99 

E-Mail: terplan@di-verlag.de 

Office: Birgit Lenz 

Phone +49 89 203 53 66-23 

Fax: +49 89 203 53 66-99 

E-Mail: lenz@di-verlag.de 

Publishing House: 


Arnulfstraße 124 

80636 München 

Phone +49 89 203 53 66-0 

Fax: +49 89 203 53 66-99 

E-Mail: info@di-verlag.de 

Internet: www.gas-for-energy.com 

Head of Division: 

Stephan Schalm 

Managing Directors: 

Carsten Augsburger, 

Jürgen Franke 

Advertising: 

Advertising Sales: Andrea Schröder 

Phone +49 89 203 53 66-77 

Fax: +49 89 203 53 66-99 

E-Mail: schroeder@di-verlag.de 

Advertising Administration: 

Eva Feil 

Phone +49 89 203 53 66-11 

Fax: +49 89 203 53 66-99 

E-Mail: feil@di-verlag.de 

Layout: 

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INDEX OF ADVERTISERS 

Company 

Page 

DENSO GmbH, Leverkusen 7 

dmg::events (UK) Ltd., Gb - London back cover 

Elster GmbH, Mainz 

cover 

Euroforum Deutschland SE, Düsseldorf 53 

E-world energy & water GmbH, Essen 11 

ITE GROUP PLC, GB - London 21 

Messe Offenburg-Ortenau GmbH, Offenburg 59 

Buyers Guide 65 - 68

2014 Conference Programme Highlights: 

European Autumn Gas Conference 

Grange St Paul’s Hotel London UK 

28 - 30 October 2014 

EUROPE’S PREMIER EVENT FOR SENIOR GAS PROFESSIONALS 

Trading, Finance & Investment In Gas: Is There Anything Left in Europe – 

or Shall We All Just Move to Asia…? 

Global Market Outlook: Has the Context of European Security of Supply 

Totally Changed? 

Supplier Strategies: What are the Choices for Europe, and Where Will 

Supply Come From? 

Focus on LNG: All Eyes on LNG: Will Europe Remain a Key Global LNG Market? 

Policy & Regulation: An Audience With… the Politicians and the Regulators 

Demand-Side Innovation: The Changing Face of Gas Use in Europe 

Confirmed speakers include: 

Marco Alverà, 

Chief Midstream 

Officer, Eni 

Julio Castro, 

Head of Global 

Gas & Trading 

and Origination, 

Iberdrola 

Stephen Asplin, 

Chief Commercial 

Officer, Power & 

Gas, E.ON Global 

Commodities SE 

Jogchum 

Brinksma, 

Managing Director, 

Citigroup Global 

Commodities 

To find out more about delegate participation, please contact Laurence Allen, 

Marketing Manager at laurenceallen@dmgevents.com or call +44(0) 203 615 0390 


Gold Sponsor: 

Silver Sponsors: 

Bronze Sponsors: 

Associate Sponsor:

gas for energy IGRC 2014 (Vorschau)

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