Ferrostaal Starts Gas Pipeline Modernization in Ukraine

Kyiv, July 3, 2012. A global provider of industrial services in plant construction and engineering Ferrostaаl Industrieanlagen GmbH will perform modernization of Ukrainian gas transporting system. The cost of such works would pay off faster than the Russian alternative pipeline South Stream becomes operational, states the German company. Ferrostaal will perform reconstruction works at the Soyuz gas pipeline starting with Bar compressor station in Vinnitsia region, Ukraine.

After conducting a project assessment for a year, Ferrostaal has signed a memorandum of understanding with Ukrainian Naftogaz to perform equipment upgrade at the compressor station in central Ukraine. Such modernization will extend the operating life of gas turbines and compressors for another 15 years. The reconstruction will decrease fuel consumption in gas turbines at Bar by estimated 28 percent, as well as improve gas compressors’ efficiency, informs Naftogaz.

Renovation of Bar compressor station is part of a larger reconstruction project, which involves modernization of the cross-country pipeline Soyuz (Orenburg–Derzhkordon). The reconstruction of more than 1.5 thousand kilometer pipeline “will allow to significantly increase the capacity of the pipeline and improve its efficiency at a relatively modest price”, stated the Cabinet of Ministers of Ukraine in the respective statement.

“There is no alternative to the modernization of the Ukrainian gas transporting system,” said the Prime Minister of Ukraine Mykola Azarov, discussing the new reconstruction project launched with Ferrostaal.

He explained that in winter gas had to be stored in specially designed facilities – storage units for freezing temperatures that Ukrainian pipelines are equipped with. Neither of the Ukrainian gas transporting system alternatives – the North Stream or the South Stream pipelines – have, or will have such storage facilities at their disposal in the nearest future, noted Ukrainian official.

Azarov also noted that the pipelines modernization project in Ukraine could benefit from a tripartite gas consortium – featuring the EU, Russia, and Ukraine. In February 2012, the President of Ukraine Viktor Yanukovych called for such a consortium, naming it vital for establishing unified energy cooperation rules.

Interestingly, Ferrostaal is already working on the renewal of the Urengoy–Pomary–Uzhgorod pipeline. According to the Cabinet of Ministers of Ukraine, the reconstruction of Ukrainian gas transporting system is estimated at USD 5.3 billion.