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Friday, August 26, 2005

Gazprom starts building North European gas pipeline

22.08.2005 IntelliNews Today - According to Leningrad Region’s governor’s press-office, Gazprom started the construction of North European gas pipeline. The first part of the pipeline is to be built in the Boksitogorsk district of the Leningrad Region and is expected to be completed within 6 months. The whole project envisages building more than 3,000-kilometer gas pipeline along the Baltic Sea floor from Russia to Germany , Netherlands and United Kingdom with possible branches to Sweden , Finland and Kaliningrad Region. Roughly estimated value of the project stands at USD 5-6bn.

North European gas pipeline - answer to CIS rebels?

25/08/2005 MOSCOW (Alexei Makarkin for RIA Novosti.)- Growing competition in the post-Soviet territory proclaims itself, above all, during high-level political events. This was demonstrated during the recent summit in Artek attended by the presidents of Ukraine, Georgia, Poland and Lithuania who announced plans for a Baltic-Caspian-Black Sea union. Clearly, it aims to create an alternative center of influence in the former USSR supported by Poland's ambitions to be an informal leader of the new members of "united Europe." Participants in this emerging bloc of CIS countries (Ukraine in the first place) hope to establish positive relations with the EU, which may in the distant future help them achieve their cherished dream - integration into Europe. The authors of the project, encouraged by the "color" revolutions, ooze optimism. But things are not that simple - accompanying political factors there is an economic factor and a big one, Russia's critical role as a gas exporter to the Old World. This role does not depend on the political climate: gas was pumped in the Soviet era, in the tumultuous 90s and is pumped now. While the leaders of the four countries, without inviting their Russian colleague, met in Artek, construction of the North-European gas pipeline (NEP) was begun. The first hundred kilometers across the Leningrad region will be laid within the next six months. In the second quarter of 2006, Gazprom plans to put into operation the first section of the line stretching 140km and passing through the Vologda and Leningrad regions. Later it is planned to extend the pipeline to the German city of Greifswald via the bottom of the Baltic Sea. The project is expected to go on line in 2010. The political undertones of the project are obvious. By sending gas directly to Europe and bypassing the transit countries Russia could cause serious economic problems for Ukraine and Poland. Ukraine and Russia often argue over the gas issue. Currently, the advantages of being a transit state allow Ukrainian to avoid serious troubles. Now the situation could be radically altered - even in the interim Russia may find an attractive alternative to the Ukrainian route. The project would have remained on paper if large German companies had not shown interest. In April, Wingaz, a subsidiary jointly owned by Gazprom and the German concern BASF, agreed to join the venture. Serious discussions are now under way with Ruhrgas, Gazprom's traditional partner. Big international banks have stepped forward with credits for pipeline construction. European public opinion sympathizes with Ukraine's "Orange Revolution" and supports Poland in its wranglings with Russia. But business interests are dictating German (and not only German) companies to optimize gas cooperation with Russia. Poland currently is pinning hopes on governmental change in Berlin - while Gerhard Schroeder is known as a champion of an alliance with Russia, his most probable successor - Angela Merkel - is more inclined to side with Washington and Warsaw (which she visited during her election campaign). German companies are known to heed government views: this fact appears to have played a role in the case of the NEP, which Schroeder approves. But in Germany, as elsewhere, we also see the opposite tendency: the government cannot help dealing with the business community. The CDU is traditionally seen as a party closer to big business than the SDP in Germany. So if the right-of-center forces have election success, the pipeline project may be continued. What will be the response of the transit countries to the Russian-German project? Political leaders hastily dusted off old plans to build a gas pipeline from Turkmenistan bypassing Russia, put forth five years ago by Yuliya Timoshenko (then as a vice-premier). Now she has agreed with Gaz de France to cooperate on this project - with gas deliveries planned from both Turkmenistan and Iran. But while the North European pipeline is already a going concern, Kiev's planned alternative is still vaguely worded in protocols of intent. Moreover, the gas partnership between Ukraine and Turkmenistan is far from thriving (the Turkmen leader publicly accused his Kiev partners of abuses) and to consider projects involving both Europeans and Iran in the politically tense present situation does not appear possible. So the "southern" alternative to the North-European line looks very doubtful. This means Russia now has a good "pipeline" argument in big political chess game concerning the Eurasian territory. Alexei Makarkin is deputy director of the Center for Political Technologies

Saturday, August 20, 2005

Gazprom starts building North European Gas Pipeline

ST.PETERSBURG, August 19 (Itar-Tass) - Gazprom has started the building of the North European Gas Pipeline on the territory of the Leningrad Region. The first 100 kilometres of the pipeline will be laid on the territory of the Boksitogorsk District within six months, a representative of the press service of the governor of the Leningrad Region reported on Friday.
The gas pipeline will go as well by the Tikhvin, Volkhov, Vsevolzhsk and Vyborg Districts of the Leningrad Region. It will permit to resolve the problem of gas supply to the cities and villages of those districts.
At present, gas is supplied to 60 per cent of their populated localities, but the figure will be brought to 100 per cent within the coming two years. Gas will be supplied to all the populated localities, which need it.
The implementation of the project by Gazprom is connected with the beginning of the development of the Yuzhno-Russkoye gas field, which is the main base for export deliveries of natural gas. The building of the pipeline by the territory of the Leningrad Region and by the seabed of the Baltic Sea is one of the key projects of Gazprom.
The pipeline will ensure Russian gas deliveries to Europe without its transportation by the territories of other countries. The pipeline will be 3,000 kilometres long. About 1,189 kilometres of pipes will be laid on the seabed from Vyborg to Greifswald, Germany.
The capacity of the pipeline will be 55 billion cubic metres. Its first stage will be put in operation in 2010. BASF Concern is the main partner of Gazprom. It owns 49 per cent of the stock.
Published with no written permission from the author

Monday, August 08, 2005

Gazprom to Commission 1,500 km of Pipelines This Year

07/08/2005 (00:19) RZD News - Russian natural gas extraction and transportation monopoly Gazprom plans to commission 1,500 kilometers of pipelines and 19 booster stations this year, the company's press service said Friday. The news followed a session on the schedule for commissioning the facilities of a gas transportation system, which will provide for exports through the Blue Flow mainline. Covering 1,213 kilometers under the Black Sea, Blue Flow links Russia to Turkey. Its estimated annual capacity is 16 billion cubic meters of gas. Turkey currently consumes no more than 4.7 billion cubic meters of Blue Flow gas a year, reports RIA-Novosti.

Exxon's Gas Pipeline

08/08/2005 (10:47) RZD News - President Vladimir Putin agreed to let Gazprom manage a pipeline that will export gas from an ExxonMobil-led venture exploring offshore fields in the Pacific Ocean. ExxonMobil heads the $12 billion Sakhalin-1 venture, which plans to start pumping crude and gas this year from Sakhalin Island fields in the Far East, reports The Moscow Times referring to Bloomberg. The venture plans to ship its first gas to the continent to clients in Russia's Khabarovsk region, through a pipeline being built by Gazprom and Rosneft. Putin agreed with "Khabarovsk Governor Viktor Ishayev's proposal to transfer the right to manage the pipeline to Gazprom," the president's press service said Friday in a statement.

Poland Calls Baltic Gas Pipeline Russian - German Conspiracy

05.08.2005 11:12 MSK MosNews - Polish politicians suspect Moscow and Berlin of entering an anti-Polish conspiracy, Financial Times Deutschland reported on Thursday, Aug 4. The Polish authorities are concerned about construction of the so-called Baltic gas pipeline that will take the Russian natural gas straight to Germany, bypassing all other countries. The pipeline's construction will be started by the Russian natural gas monopoly Gazprom in September. It is projected to be put in operation in five years. At present time Poland serves as an important transit corridor for Russian gas, just like Ukraine and Belarus. The plans to build a pipeline that will bypass its territory are considered by the Polish politicians as an insult. Just like other new members of the European Union Poland depends on Russian gas for 70 percent of its energy needs. Despite this fact it has been able to exert some pressure on Russia because of the pipeline that goes through its territory and takes the gas further, to Western Europe. But once the Baltic gas pipeline is built Moscow won't have to fear transit problems and Gazprom will be able to turn off its supplies of gas to Poland should any kind of crisis situation arise. Polish politicians have already called the Russian-German pipeline idea a nightmare. "Baltic Sea pipeline unambiguously violates the common interests of the European Union and its member states," a Polish opposition leader Jan Rokita said. Rokita, who may be Poland's new prime minister after upcoming parliamentary elections, demands that the issue of the Baltic pipeline is put on the agenda of negotiations between Russia and the European Union. Poland's current Prime Minister Marek Belka said that he will "push for alternative projects" in Brussels. Warsaw, along with Baltic states, has suggested an Amber pipeline that will go through the territories of Latvia, Lithuania and Poland. Polish experts say that such a pipeline would be much cheaper than the Baltic one. Poland and the Baltic states may be in for a big disappointment though. "The chances of a pipeline that would be alternative to the Baltic one are negligible," Kai-Olaf Lang, a polar expert from the Berlin fund of science and politics told the newspaper. On the one hand the companies that plan to build the pipeline, such as Russia's Gazprom and Germany's giants Wintershall and E.ON Ruhrgas, have already signed declaration of intent. On the other hand Russia has no interest in other routes because it wants to become independent from transit states, especially if they are quite unfriendly like Poland. Meanwhile Polish politicians have already called Russia's energy policies a "new economic imperialism".

Sunday, August 07, 2005

Chinese pipelines may appear in Russia, not U.S.

MOSCOW, August 5 (RIA Novosti) -- The United States is preparing to introduce an import quota for Chinese welded pipes, which may mean that they could come to the Russian market, a business newspaper reported Friday. Biznes wrote that Russian pipeline producers feared a repeat of 2004, when Ukrainian producers dumped their pipelines on the market. Seven U.S. pipe producers have initiated an anti-dumping investigation by the U.S. International Trade Commission. They consider that the import of the given pipes from China should be limited to 90,000 metric tons a year. But 182,000 tons of Chinese pipes have already been supplied. If the Americans establish quotas, about 250,000 tons of Chinese pipes may end up on the Russian market. The U.S. hearings on the issue will be held in mid-September. The Chinese pipes would equal a 5% share of the Russian pipe market, said Alexander Deineko, who heads the Pipe Industry Development Fund. If they were to emerge in Russia, he said medium-sized and small plants producing pipes for regional needs would be the first to suffer, but major producers would also be hit hard. "We knew that a net exporter was building up its presence nearby," Deineko said. "But we did not think it would become a real threat as early as 2005." In the opinion of Dmitry Baranov, head of analysis with the PRADO Bankir i Konsultant commercial group, the threat of China losing the U.S. market is real. However, he said China would try to dispatch the "released" pipes to Southeast Asia and the Middle East, as there are no major pipe exporters from the U.S. and Europe. He added it was unlikely that these pipes would be competitive in Russia due to their inferior quality. Meanwhile, Andrei Litvin, an analyst with MDM bank, said he was certain that Russia would have time to introduce protective measures, as was the case with the Ukrainian pipes in 2004.

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