CJSC Stroytransgaz: our goal is to be among the leaders of world oil and gas construction
Business, International magazine
November, 2013
In August the Russian Government ratified the territorial planning framework for pipelines to 2030. Developing the system of gas trunklines envisions the completion of 14 projects, including the transcontinental South Stream system. Speaking about the prospects for Russian contractors on this project in an interview with Business magazine is Anton Rae, general director at CJSC Stroytransgaz, a juggernaut in oil and gas construction.
- South Stream, with total cost exceeding $20bn, is one of the most topical issues for oil and gas contractors. The entire market is brimming with anticipation of the tenders for the pipeline’s European section. What is your opinion: how strong are the Russian side’s chances of securing major orders and contracts on the European sections of South Stream? After all, the relationship between Gazprom and the European Union is hardly blissful…
A.R. It is difficult for me to comment on the relationship between Gazprom and the European regulators, although it is no secret that Russia has many questions for the EU regarding anti-monopoly regulation and the Third Energy Package. Yet I do not believe that this will affect the South Stream tenders. Russia’s pipe suppliers evenly match their German and Japanese competitors. The same is true for construction companies – major Russian players have vast experience of implementing projects in anomalous weather conditions, in territories with challenging topography, in regions lacking any infrastructure, as well as in thickly-settled districts, where every inch of land is someone’s property, where builders have to navigate through roadways and railways and redirect gas distribution and electric power grids.
- Last year Interfax reported that Stroygazmontazh and CJSC Stroytransgaz aimed to participate in the South Stream tenders. Is this true?
A.R. Companies decide to participate in tenders only if they know all the conditions – all the benefits and risks. So far no tenders for the overland sections of South Stream in the EU have been announced. However, I can say one thing for sure: our company has all the necessary resources to work on this project. The company owns more than 2,700 pieces of technology and equipment, one of the largest fleets in Europe, and we continuously invest in upgrading. Our fleet includes 12 automated CRC-Evans welding machines. This is one of the highest totals in the former USSR. CJSC Stroytransgaz employs over 12,300 highly qualified professionals with unrivaled expertise and track records in welding technologies, diagnostics and nondestructive testing. Furthermore, much of this knowledge is exclusive-to- Russia; it was used at more than 20 projects including Sakhalin-1, Sakhalin-2, CPC and Nord Stream. While implementing the ESPO-2 project in 2010, CJSC Stroytransgaz specialists set a world record for productivity of welding work performance.
We were the first in Russia to open two major training-manufacturing centers – in Smolensk and Tomsk regions, which possess all the necessary technology, equipment and manufacturing facilities to prepare workers and specialists demanded in the construction and maintenance of FEC facilities – up to 4000 people a year. In addition, our centers conduct testing and attestation of welding equipment, materials, technologies and processes. The first center – “Base in Gagarin” in Smolensk region – is renowned as the site of testing and attestation of new welding technologies for a unique object – the Nord Stream coastal section. Our reference list includes dozens of successful projects and just as many new contracts. Even counting the current projects portfolio, our resources are underutilized….
- Yet it’s quite important to have experience of working in the EU. Many Russian contractors currently lack this. Does CJSC Stroytransgaz have such experience?
A.R. We have experience of working in Europe. First, until last year our company was part of Argus Group, which for many years has been a successful provider of equipment and materials for oil and gas projects in the most varied countries. Argus gradually expanded its business, with construction becoming a separate line of activity, and then a separate company – CJSC Stroytransgaz itself. Second, in 2012 we began combining resources in the segment of oil and gas construction with another major player – Stroytransgaz, whose team has many years’ experience of working abroad, including in the EU. The company has long worked in Finland, handled the design and construction of the GAZELLE gas pipeline in the Czech Republic, an offshoot of the universally-known Nord Stream.
All this experience – of both Argus Group and Stroytransgaz – forms part of the assets of CJSC Stroytransgaz, so we are confident in our own strengths. Our objective is to be among the leaders of world oil and gas construction industry.
In addition, do not forget that construction companies – Russian and foreign alike – occasionally exchange experience; we do not live on different planets. The largest players are members of the International Pipeline and Offshore Contractors Association. The organization has existed since 1966 and CJSC Stroytransgaz is among its participants. Every year IPLOCA members gather at special conventions; the latest meeting was held in late September in Washington, D.C., where CJSC Stroytransgaz acted as one of the event’s sponsors. We are deeply impressed by IPLOCA’s main goal – to enhance pipeline construction standards and increase the safety and effectiveness of the pipeline industry. CJSC Stroytransgaz also continuously strives to improve its operations. Thanks to participation in such events, we can see what other companies offer, interact and exchange experience, and learn about trends and growth areas of the industry.
- Another gas pipeline project is underway to bring South Stream to fruition – Southern Corridor – to expand Russia’s gas transport system to the Black Sea coast. Is your company participating in this project?
A.R. Yes, CJSC Stroytransgaz is the general contractor for the construction of Kazachya compressor station in Krasnodar territory, the anchor facility of the Southern Corridor.
- The project envisions 10 compressor stations; why do you call Kazachya in particular the "anchor"?
A.R. Of all the compressor stations, only Kazachya will have a special gas treatment plant, one of the world’s most powerful, since the designated capacity of South Stream is 63bn cu m of gas a year, more than Russia’s existing undersea gas pipelines, that is Nord Stream or Blue Stream. Kazachya will dispense exactly this amount to deliver failure-proof operation of the Black Sea system – the fuel will be cleansed of moisture, heavy hydrocarbons and mechanical additives. To ensure a smooth journey of 900 km along the bottom of the Black Sea, the utmost quality of gas drying is required to the necessary dew point. The treatment plant will have maximum output of 195.2m cu m per day. This exceeds the daily average of all of France. As for a nearby neighbor – Belarus – it is 3.5 times greater.
So Kazachya may be called a unique object without any dissemblance. Just imagine how the treatment plant appears. This is essentially an entire factory. The total weight of the structures exceeds 12 thou tons, 20 adsorbers weighing around 225 t each, 22 m tall and up to 6 m wide, which must be delivered to the construction site along foothill roads, bypassing villages, towns and farms. In northern Russia, which lacks such population density, such structures are more easily transported. But this is happening for the first time in years in the south. As a result, besides the compressor station, new transport infrastructure will be built in the region. Initially the adsorbers will be delivered by sea to Temryuk Port, where the wharf will be reinforced in advance – or else the port could not receive such oversized freight. After that, setups on barges will travel up the Kuban River until Varenikovskaya village, located on the river’s left-hand shore 35 km from Krymsk. A new wharf will be built alongside the village, including deepening work, which will allow the barges to moor and unload. After that, special automobile platforms will transport the adsorbers to Kazachya. And because the usual road will not withstand this workload, a special road is under construction – around 20 km – with roadbed coating of increased durability.
- Such large-scale construction along the Black Sea coast surely concerns the environmentalists, since this is a resort zone…
A.R. It was precisely to protect the coastline that it was decided to build the treatment plant not at the terminal point of Southern Corridor – on the seashore – but at Kazachya, located around 30 km from the coast. All the project’s details were vetted; it conforms to the best environmental standards. All the technological, technical and construction solutions were developed with consideration for local natural-climactic and geological conditions. At all of our projects, we stringently practice rational use of natural resources; the environmental management system of CJSC Stroytransgaz was certified for compliance with international ISO standard 14001:2004. I can assure you that we use the very best, most modern standards – or else a company such as Gazprom would not choose us as general contractor. Specifically, at Kazachya, the total area due for restoration and beautification after construction totals 91.3 hectares. This is dozens of percentage points higher than at analogous projects, and comparable to the area of an urban area, where thousands reside.
- Judging by what you say, the construction of Kazachya requires considerable resources. Is there enough left for your other projects?
On the whole, our resources allow for implementing several large-scale projects at once while guaranteeing the very highest quality standards, fulfilling schedules and estimates. Of course, all directors will say this about their companies. But these are not empty words. The best evidence is our contracts. We currently operate in 40 Russian regions. During 2013 we have implemented eight gasification projects – in the YNAO (Yamal), Kaluga, Tambov, Novgorod, Volgograd and Irkutsk regions, in Khabarovsk territory and Bashkortostan. In parallel, we are implementing capital repair of gas pipelines for five subsidiary businesses of Gazprom – Gazprom Transgaz Tomsk, Gazprom Transgaz Surgut, Gazprom Transgaz Yugorsk, Gazprom Transgaz Nizhny Novgorod and Gazprom Transgaz Ukhta in more than 15 regions. Plus we are working on the construction of new pipeline sections of SIBUR to transport a broad fraction of light hydrocarbons from the YNAO to Tobolsk-Neftekhim. We are also working to revamp portions of the Parabel-Kuzbass gas pipeline, while the second construction phase of the Bovanenkovo-Ukhta system is ongoing. And as yet unmentioned are the new tenders which we also plan to participate in, and of course, win.
