TBY talks to Josef Grandl, Central Asia and Caucasus General Manager for ABB Group, on the Azeri energy sector and the company’s activities.

TBY In coming to Azerbaijan, was the main attraction the oil and gas industry, or was it to upgrade the national electricity grid?

JOSEF GRANDL The first attempt by ABB Group to enter the Azerbaijani market was the investments in the transmission and power generation sector, followed by the oil and gas sector. These were the two primary sectors we were focusing on. In recent years we have extended our portfolio, into all areas of electrical power and automation down to small switches for households.

What are some of the big public infrastructure projects that you have worked on here in Azerbaijan?

In general, we played a major role in the development of the power transmission sector. A large project, recently awarded, was a project in the western city of Ganja with a value of about €30 million. And then there were the BP oil and gas investments.

What were some of the activities you were involved in with BP?

With BP we won the contract to supply control safety, which included the safety systems on five offshore oil and gas platforms, a single Shell terminal, and the BTC pipeline through to Turkey. Basically, we supplied all the control safety processes on the BTC, such as fire and gas shutdown systems. It was a substantial project. The installation and commissioning phase was about five years. Now we are into a maintenance phase, which should continue over the lifetime of the installation.

Azerbaijan emerged from the Soviet Union with a particular style of electrical grid and infrastructure, and then it had to update fairly rapidly. Is it still in that phase of trying to update, repair, and extend?

I would say the major refurbishment phase is more or less over. For sure, there are certain substations from that time period. Soviet products were long-lasting and solid, and therefore had a long lifespan. However, most of the key components have now been replaced. I would say we are in a phase of extension and new installations to meet the growing demand of the market. In the oil and gas sector, the Caspian BP projects are world class. It is a quality installation using the best in class standards, and it will be here for a long time. It was isolated from what was already there, because there are new platforms, new wells, new terminals, and a new pipeline. The result will be world-class oil production for years to come. That is what we have achieved, and we are pushing forward for more of the same in the oil and gas phase.

Is your focus more on the oil and gas sector?

BP is our main Oil & Gas industry customer in Azerbaijan, and we are seeking to win future jobs with BP. But we are also interested to extend our customer base in that important market segment. Despite that we see a potential demand for other industry infrastructure, as the country will strive to broaden the scope of investments in order to increase the value adding in the country (refineries) and to become less dependent from the oil sector.

You mentioned your projects with BP, and the Eurovision project. What are your other outlooks in the medium term?

The construction industry is recovering greatly since the crisis 2010, and I’m positive for its development in 2011. We expect quite dynamic development, especially continuing in the oil and gas sector for sure, to develop additional fields. In the pipeline area, there is a lot of interest in transporting oil and gas to Europe so as to become less dependent from Russia. And then there is the further development of the transmission network. We also assume that Azerbaijan will be included in the worldwide move towards energy efficiency and alternative energy. The country has lots of oil and gas, but the government has started to pay attention on how people use energy. That is a major strategy focus of ABB worldwide right now.

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