with Olga Kondratieva, General Director, TDW Eurasia
Globally TDW offers every type of service from plugging to the rehabilitation of pipelines. As a relatively young office in the Russia and CIS region, what is the full extent of services you aim to bring to these markets and what will be the core of your focus?
TDW Eurasia’s main goal, much like that of the company worldwide, is to provide complex pipeline solutions including turn-key solutions for pipeline operators starting with inspection and ending with repair and maintenance. The company can provide all the tools for internal pipeline inspections and cleaning, the methods for launching pigs, carrying out diagnostics. Importantly, TDW Eurasia has a complete range of equipment and innovative technologies for pipeline repair without shutdown.
Among these services, the core business is hot tapping and plugging. The company has established its base in Russia with this technology and is now branching into other areas of repair including SmartTraps™, repair clamps and other solutions for the offshore pipelines as well.
TDW Eurasia works in close partnership with Gazprom which was one of the company’s first customers in the Russian market. However TDWilliamson’s first customer in the Russian market was Transammiak who bought the company’s equipment in 1979 and became the pioneer of our technology in Russia. Transammiak remains TDW Eurasia’s client and we have since enlarged our offering to them to include diagnostic and cleaning services. This allows them to maintain their pipelines in the best possible condition so that they can concentrate on their own business. Our services have subsequently been taken up by their Ukrainian counterpart operator. A similar type of trans-border cooperation occurred with the Caspian Pipeline Consortium (CPC) who iniatially used our services in Kazakhstan and the partnership has extended to the second stage extension of their pipelines in Novorossiysk.
Which are your main focus areas for projects: export pipelines or domestic pipelines?
TDW Eurasia has an equivalent offering for both types. After all, the main feature of TDW Eurasia’s technology is to undertake all operations without shutdown. This is also our principal competitive advantage. Initially the company did however focus on Russia’s gas export pipelines and began its partnership with Gazprom.
The next step is to extend services to oil companies who cannot afford to stop output or deliveries to Transneft for example. Another key client base will be distributor companies. When a company has only one pipeline supplying gas or oil to towns or cities they cannot clearly afford shut down. Therefore TDW Eurasia works extensively companies such as MosGaz and MosOblGaz.
The second reason companies use our services is related to pollution. For a company to repair its pipelines it must decommission the content and either dispose of it or store it somewhere. Gas is often released into the atmosphere and oil has to be placed into storage or burnt. The amount of hydrocarbons contained in the section being replaced can be significant with sometimes 25km of pipeline being replaced. This environmental impact is now one of the main reasons for using TDW to minimise the section which needs to be closed. The company has solutions which do not involve draining, allowing the hydrocarbons to remain in the pipelines with methods such as Freeze plugging services.
Russia has one of the largest pipeline systems in the world with around 160,000 km of gas pipelines and 74,000 km of oil pipelines. Given that TDW has been in the pipeline services industry since the 1920s, why did it take until 2004 to establish your presence in Russia?
I believe that Russia’s industry awareness and mentality was not the same as elsewhere in the world. Russian companies did not really appreciate environmental concerns or the value of the oil and gas wasted during pipeline repairs. Cost and resource saving were not factors in their thinking. This mentality has changed in the Russian industry and resource saving is now the reason companies use our services.
In addition, Russian industry leaders are now much more open to innovation. In the past, it was difficult for TDW Eurasia to promote its services because industry leaders were used to a certain mode of operation and did not want to change. Gazprom were the one of the first companies to realise the value of this technology and we created with Gazprom a set of manuals and instructions regarding our equipment and how to implement this new technology on Gazprom’s pipelines. This experience now we use in our efforts to make hot tapping and plugging industry standard for oil companies in cooperation with them.
TDW has many international partnerships but the Russian market is controlled by two pipeline monopolies Transneft and Gazprom. How much are you restricted in being able to use your global partnerships to expand your client-base in Russia?
As you say, there are two large pipeline monopolies: Gazprom and Transneft. TDW Eurasia has been working independently with Gazprom for many years without outside assistance from the group. However, there was some benefit because it was through Gazprom’s partnerships with international majors such as Gas de France and Shell that they learned about TDW.
TDW does not currently work with Transneft although our technology would be highly applicable to their work. For every company, TDW Eurasia provides special customization of its technology and we are ready to help companies improve their business with our technology and experience.
In the case of large international companies present in Russia such as Shell or ExxonMobil, TDW works with them in Sakhalin or with BP in Kazakhstan and Azerbaijan. In fact, TDW globally now has a contract with BP which began as a result of our cooperation in Kazakhstan and Azerbaijan. Our success has therefore continued beyond the borders of Russia and CIS.
Regionally, the trend is for success in Russia to carry through to our projects in other CIS countries. For example, KazTransGaz and KazTransOil took note of our success in Russia. The other factor is that these countries are former Soviet Union republics who appreciate the fact that TDW Eurasia employs many Russian specialists and that all our documents are translated into Russian.
Given the state of Russia’s pipeline infrastructure, the vast majority of which was constructed in Soviet times, what opportunity do you see for new projects?
TDW Eurasia is involved in inspection, repairing and pipeline extensions. This is one of the main projects for the CPC and even for the Sochi Olympic games. Indeed whenever we hear of large new pipeline development projects in Russia it is satisfying to know that TDW is taking part in most of them. For example, recently TDW participated in the repositioning of a kerosene pipeline leading to Sheremetevo airport. The company is also involved in expanding Eastern Siberian gas pipeline infrastructure between Sakhalin, Khabarovsk and Vladivostok as part of the Eastern Siberian gasification project. It is an achievement to be alongside large Russian companies and involved in significant Russian events.
Both Russia’s pipeline monopolies are now targeting large increases in investment with Gazprom increasing investment 45% over the next three years and Transneft investing 79 billion roubles annually until 2017. How can TDW gear itself up to support such expansion?
TDW would like to support its main customers and one of the company’s principles is to remain local to the customer. This is why TDW has three local service centres in Russia in Moscow, in Sakhalin and in Nefteyugansk. The company is also opening a service centre in Kiev and the next one is projected to be in Krasnodar. TDW Eurasia is therefore expanding its ability to help its customers in their ambitions throughout Russia and to be there at their point of growth.
By way of example, TDW Eurasia coordinates its plans with Rosneft and when this company says it would like services in YuganskNeftegaz TDW will be there. We built a stock of inventory for them and already have local technicians in place and the same is true in Atyrau for the CPC project. TDW will provide the same for Ukrtransgaz in Kiev where they wish to repair underwater crossings.
The next step for the industry is offshore which is currently being led by Gazprom. Gazprom is increasingly focusing on offshore lines. TDW Eurasia already constructed a SmartPlug® tool for the North Stream project and it is applicable only for their pipeline meaning that it will be available for them 24 hours a day. We would like to continue this work and have made the next step to provide a tool for their onshore operations as well.
The offshore industry is very promising a distant prospect with the Stokhman field not looking to produce before 2017 for example. In the meantime, how is the company positioning itself as partner of choice for the offshore industry?
TDW would like to be partners of choice for offshore developments. For the Shtokman field TDW Eurasia works closely with engineering companies involved at the design stage and possible construction subcontractors. TDW Eurasia can for example contribute with its SmartPlug® technology or underwater hot taps for perspective tie-ins. The company would now like to cooperate with Gazprom providing equipment for the offshore bases of the Blue stream project in the Black Sea.
What would be your final message on behalf of TDWilliamson to the Russian oil and gas industry?
TDW Eurasia is focused on making the work of oil and gas companies easier. We would ask them to contact us and TDW Eurasia will be able to find a solution for them.