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Tuesday, July 29, 2008

PetroNeft puts $10M in pipeline

Jul 29, 2008 - Scan Oil&Gas Magazine - Dublin-based Russia producer PetroNeft Resources has hired local Russian contractor CJSC Karos to supply $10 million in pipe for a planned 60-kilometre export pipeline from the Lineynoy oilfield in Tomsk region, Russia. The export line will end at the Bashneft Lukpaiskaya transfer point northwest of the of the company’s operated License 61. “The pipe will be sourced from Russian pipe mills in the Urals and Volgograd Regions and will be delivered to staging areas by the end of October 2008,” chief exec Dennis Francis said in a statement. Construction of the pipeline will start in winter and is scheduled for completion in April 2009, followed by first production of oil from the Lineynoye oil field in the second half of 2009. “This is another critical milestone on the path to bringing our fields to year-round production,” Francis said, adding, “Our Russian staff did an excellent job in the redirection of the necessary pipeline survey and design work.”

Monday, July 28, 2008

Bulgaria ratifies South Stream gas pipeline project

bulgariaMOSCOW, July 28 (RIA Novosti) - The Bulgarian parliament has ratified an agreement on building a pipeline to pump natural gas to southern Europe, Vice Premier Igor Sechin said on Monday. The $14 bln South Stream pipeline is expected to annually pump 30 billion cubic meters of Central Asian and Russian gas across the Black Sea to the Balkans and onto other European countries, with the first deliveries scheduled to start in 2013. Apart from Bulgaria, Serbia, Hungary, Italy and Greece are also involved in the project. "Positive news has come from Bulgaria. Its parliament ratified on July 25, by an overwhelming majority of 140 votes, the intergovernmental agreement on cooperation in the construction of the South Stream project," Sechin, who is in charge of Russia's fuel and energy complex, told a government session. Sechin said Russia and Bulgaria had signed the agreement on January 17, 2008. Russian energy giant Gazprom is implementing the South Stream project on a parity basis with Italy's Eni.

Friday, July 25, 2008

German-Russian Baltic Sea Gas Pipeline Delayed

24.07.2008 - Deutsche Welle - Completion of the controversial Nord Stream gas pipeline under the Baltic Sea is likely to be delayed by one year from 2011 to 2012, a German executive working on the Russian-led project said Wednesday. "We don't expect the first natural gas to arrive till 2012," said Andreas Hieckmann, the project chief at the Gazprom Germania company. His comment clashed with a printed news release from Nord Stream, a consortium with Russian, German and Dutch involvement, which stated that 2011 was the target for the first flow. He was speaking in Waren, north of Berlin, where Gazprom is studying the suitability of a bed of deep rock to store the gas in after it lands. Nord Stream said it aimed to complete a multinational environmental review of the undersea route by the end of this year.
Unfair advantage? Sweden has echoed environmentalists who fear the seabed trench for the pipes may kill sea life and stir up toxic material. Poland has led strategic criticism, saying Russia may gain a massive advantage by piping the gas outside the borders of intermediate nations. Hieckmann said he expected delays because dumped wartime ammunition would have to be recovered from the Baltic seabed before the pipeline is laid and because of the "political friction" in the permissions process. "Even if the regulatory procedures go according to plan, it will be a complex construction job," he said. When complete, the line will transport 27.5 billion cubic meters (971 million cubic feet) of gas annually to western Europe. After landing on the German coast, the line will split, with one, codenamed NEL, bound west, and the other, the OPAL, bound south.

Tuesday, July 22, 2008

Stroitransgaz bags Dolphin pipe gig

22 July, 2008 - Upstream OnLine - Russia's Stroitransgaz has won a $418 million contract to build a gas pipeline across the United Arab Emirates, the UAE's Dolphin Energy said in a statement released today. Stroitransgaz beat Italy's oilfield services company Saipem and Greece's Consolidated Contractors International to the contract. Dolphin shortlisted the three companies for the contract to build the 240 kilometre (150 mile) pipeline earlier this month. Work on the pipeline will begin this quarter, Dolphin said. Dolphin imports gas to the UAE from Qatar. The new pipeline will allow it to pump gas from the emirate of Abu Dhabi on the Gulf coast to the east coast emirate of Fujairah on the Gulf of Oman. The gas will feed a new power and water desalination plant in Qidfa, Fujairah. Mubadala Development Company, run by the government of the emirate of Abu Dhabi, owns 51% of Dolphin. France's Total and US independent Occidental Petroleum each hold 24.5% stakes. Dolphin in December awarded a contract worth over $200 million to supply steel for the pipeline to Germany's Salzgitter .

Monday, July 21, 2008

exclamation signBRIEFLY 21.07.2008 - RZD News - Operations to expand the capacity of the Baku-Tbilisi-Ceyhan (BTC) pipeline are to be completed by the end of 2008, while construction works will be over in September 2008. The pipeline's capacity will be increased from the designed capacity of 1m to 1.2m barrels of oil a day, which will cost $69m. At this point, the pipeline is carrying over 800,000 barrels of oil a day, and by the end of the year it will be pumping 1m barrels. Azerbaijan's light oil has been carried to the global market via the BTC pipeline since April 2007, RBC reports.

Federal AntiMonopoly Service ready to start talks with Gazprom on equal access to pipes

Federal AntiMonopoly Service ready to start talks with Gazprom on equal access to pipes.July 21, 2008 - Russia Today - The Federal Antimonopoly Service says it's ready to start negotiating with Gazprom on giving independent gas companies equal access to pipelines. The announcement comes after prime minister Vladimir Putin urged the FAS to resolve the access problem. FAS head Igor Artyemyev told Business Today he's ready for a "serious dispute" adding, The papers are ready, the problem is to understand what is acceptable and what is not for Gazprom and why, because we need to provide equal access to gas pipelines, while Gazprom says it will never agree to this principle, and the prime minister says - no, you will agree as it's in the national interests to settle the issue. So apparently first there'll be a serious dispute between our service and Gazprom, then the issue will move to the level of deputy prime minister Igor Sechin, and at his suggestion it will be considered by the government.

Wednesday, July 16, 2008

Putin Scolds Miller on Pipeline Access

14 July 2008 - Moscow Times by Anatoly Medetsky - SEVERODVINSK, Arkhangelsk Region - A Gazprom-commissioned oil rig destined for the Arctic dwarfed the black hulks of diesel- and nuclear-powered submarines docked for maintenance Friday at the Sevmash shipyard, but its dimensions apparently left Prime Minister Vladimir Putin unimpressed. After being shown the towering structure, Putin walked with Cabinet members, industry executives, local officials and representatives of the shipyard to a nearby, freshly painted building to open a meeting on the future of the oil and gas industry. And he began with harsh words for Gazprom chief Alexei Miller. "I would like to draw the attention of ... Miller to the fact that oil and gas companies still experience certain problems with access to your pipelines," Putin said, looking at the Gazprom chief executive. "They do, don't shake your head." The salvo at Gazprom looked like a sign of support for the country's oil companies -- and for Deputy Prime Minister Igor Sechin, who oversees the energy industry -- that want the gas giant to make its pipelines more accessible. The companies, including Rosneft, where Sechin is chairman, need the pipelines to utilize associated gas, a by-product of oil production, most of which they currently flare, or burn off. Putin said Gazprom, which has set itself the ambitious goal of having a market capitalization of $1 trillion by 2014, should equally, if not to a greater extent, honor the state's plans to reduce flaring, which would bring more gas to the market and improve the environment. "If this situation continues, we will continue to burn associated gas in huge volumes. And you will spend huge resources to increase the output of your own company," Putin said. "This is in the corporate interest. Controlling the pipelines, you must keep in mind that it is necessary to defend state interests. "Please, act based on this as well. Perhaps, primarily based on this," he said. Sechin, in a meeting earlier this month, gave Gazprom and several government offices until Aug. 11 to come up with proposals for how the monopoly could transport more associated gas from oil producers. The Natural Resources Ministry is asking the government to delay by a year its target of having 95 percent of associated gas used by power stations and the chemical industry, Putin said. The current deadline is 2011. No details were released on whether a decision on a postponement was reached. Except for Putin's speech, the meeting was closed to the press, and no addition details came to light on steps planned by the government or the oil and gas industry for the development of the sector. Emerging from the closed talks, Miller did not look particularly upset by the criticism. He agreed to answer questions only briefly, however, and wrapped up an impromptu news conference before anyone asked about Gazprom's relations with other gas-producing companies. He then stepped off with a reporter from Kommersant, which is owned by Gazprom-connected businessman Alisher Usmanov, to speak about the issue. He said Gazprom was ready to cooperate but that it was not technologically feasible for some independent gas producers to access Gazprom's pipelines, the newspaper reported. Putin, in his opening speech, said the Federation Council had that same day approved a raft of tax breaks for the oil industry, which will save it up to 140 billion rubles ($6.14 billion) annually, starting next year. An earlier estimate by the Finance Ministry put the figure at slightly more than 100 billion rubles. President Dmitry Medvedev is expected to sign the bills, possibly later this month. The Cabinet is also looking at tax breaks that would stimulate development of offshore oil fields in the Black Sea, the Sea of Okhotsk, as well as on the Yamal Peninsula, Putin said. In return for the favor, Putin said, he had received reports that oil companies would at least keep production at last year's level, despite the current downward trend. Oil output has dropped 0.3 percent in the first quarter of 2008, compared with the same period last year. Speaking after the meeting, the chiefs of Rosneft and LUKoil, the country's largest and second-largest oil producers, respectively, sounded optimistic about maintaining or increasing production, although they did not say how soon it would happen. "We've been set the task of achieving stabilization, and I'm sure it will be fulfilled," Rosneft chief executive Sergei Bogdanchikov said. LUKoil chief executive Vagit Alekperov said the tax measures would "not only allow us to stabilize production levels, but also to increase production." As the executives spoke to reporters, Putin met with another audience. Smiling, he shook hands with several people in a crowd that had been waiting to catch a glimpse of him for the more than two hours. In response to one of their questions, he said the government was working to depend less on imports. Alekperov said the government was putting together another package of tax-relief measures that could bring the total annual savings by oil companies to 400 billion rubles ($17.55 billion). The package will be finalized by August, he said, apparently referring to the measures Putin mentioned for Yamal and the Okhotsk and Black seas. One thing in Severodvinsk, however, stood as a testament to how plans can fall short. The giant oil rig, intended for the Prirazlomnoye offshore oil field in the Pechora Sea, will begin operation in 2011, one year later than the most recent plan, Miller said at the meeting, Interfax reported. Originally, the $2.3 billion rig was scheduled to start work in 2004.

Russia considering Oman’s stake in CPC

July 11, 2008 - Russia Today - Russia is considering buying Oman's stake in the Caspian Pipeline Consortium according to Deputy Prime Minister Igor Sechin. Oman decided to sell its 7% share in the CPC due to what it called the inefficiency of the project. Russia and Kazakhstan have the preemptive right to buy out Oman's stake, which they could divide equally.

Monday, July 07, 2008

Russia's chairmanship of Helcom to help solve Nord Stream problem

MOSCOW. (RIA Novosti commentator Tatyana Sinitsyna) - On July 1, Russia assumed the rotating chairmanship of the Helsinki Commission (Helcom), the intergovernmental organization of the nine Baltic Sea countries and the European Community working to protect the Baltic marine environment from all sources of pollution and to ensure safe navigation in the region. The Helsinki Commission, set up in 1991, is the governing body of the Convention on the Protection of the Marine Environment of the Baltic Sea Area, usually referred to as the Helsinki Convention. It works through intergovernmental co-operation between Denmark, Estonia, the European Community, Finland, Germany, Latvia, Lithuania, Poland, Russia and Sweden, and is a clear example of combining efforts for a noble cause. "Russia will ensure the fulfillment of Helcom's Baltic Sea Action Plan," Igor Maidanov, director for international cooperation at the Russian Ministry of Natural Resources and Environment, said when assuming office. "We have agreed on the necessary mechanisms and must now use them efficiently." The plan to drastically reduce pollution in the Baltic Sea and restore its good ecological status by 2021 was adopted at the Helcom ministerial meeting in Krakow last year. It stipulates pollution standards from agriculture, navigation and other sources. "We will do our best to ensure that all member countries comply with these standards," Maidanov said. New problems are regularly added to European concerns over the Baltic Sea, such as the Nord Stream gas pipeline project proposed in 2005. Not all Baltic region countries accept this Russian-German idea, some rejecting it as completely unsound. This has put Russia and Germany in an uncomfortable position. The quandary was predictable, however, and project organizers should have foreseen the conflict of interest. "It was clear from the start that the Baltic countries would protest the project. This is why it's loosing momentum," said Lev Merklin, a researcher at the Institute of Ocean Studies of the Russian Academy of Sciences. He said the problem should not be solved by sheer force and that a solution should be coordinated with all of the Baltic countries. Construction of the 600-km (373-mile) onshore segment of the pipeline in the Vologda and Leningrad regions in northwest Russia began in December 2005 and is to be completed by 2010. Its 1,189-km (739-mile) offshore segment should begin at the Portovaya Bay near Vyborg in the Leningrad Region and end at Greifswald in Germany. The pipeline's design capacity is 55 billion cubic meters (1.94 trillion cubic feet) a year, supplying Russian natural gas to consumers both in Russia and in Germany as well as many other countries, ensuring sustainable development of the European economy. However, its environmental impact cannot be overlooked because the Baltic Sea is "the ailing man" of Europe, and new impacts on it should be allowed only after thorough consideration. Part of the problem is that 1 million metric tons of chemical agents were buried in the sea in 1945 by the Allies'. It was a mistake made amid the euphoria of the alliance's victory over Nazism, which future generations will have to work hard to remedy. "The coastal nations using the sea's resources are rightfully concerned about man's handling of the sea's ecosystem," said biologist Mikhail Flint, deputy head of the Institute of Ocean Studies. "The average depth of the Baltic Sea, which has been damaged by the burial of WWII chemical weapons, is only 71 meters. The gas pipeline will affect fragile marine life in that active belt." Professor Flint said modern marine experience and technologies could make the pipeline project relatively harmless for the Baltic Sea if the countries and companies concerned act accurately and wisely, avoiding the chemical weapons burial sites. Few people are aware of Norway's offshore gas pipeline in the sea, for example, because it is being operated very carefully, he said. The Nord Stream pipeline could also be relatively harmless if available research and technical capabilities are applied to the problem. The immediate task is to reach a consensus with the Baltic countries in whose territorial waters the pipeline is to be laid. Helcom is a good instrument for attaining this goal by acting prudently and patiently and respecting the positions of the countries involved. Moscow hopes that its chairmanship of Helcom will facilitate a solution for the Nord Stream problem.

Wednesday, July 02, 2008

Oman plans to leave Caspian pipeline project

Oman plans to leave Caspian pipeline project July 1, 2008 - Russia Today - Oman is reportedly planning to pull out of the Caspian Pipeline Consortium which pumps oil from Kazakhstan to Russia's Black Sea coast. The sultanate’s government said it was not making enough profit from the project and wanted to sell its 7% stake. It comes as the Kremlin is set to tighten its grip on Central Asian oil supplies. The 1,510 kilometre long pipeline pumps 700,000 barrels a day from Kazakhstan to the Russian port of Novorossiysk. The Russian side has warned minority shareholders of more severe financial demands. The shareholders include U.S. companies Chevron and Exxon Mobil.

Russia-Turkey: Blue Stream is not enough

russiaturkeyMOSCOW. (RIA Novosti political commentator Andrei Fedyashin) - Russian Foreign Minister Sergei Lavrov is to hold talks with his Turkish counterpart Ali Babacan when he visits Ankara on July 2. He will be also received by President Abdullah Gul and Prime Minister Recep Tayyip Erdogan. Such a high-level welcome usually indicates that the host side attaches great importance to a visit, or that the trip is a prelude to a visit by the head of state. In some cases, both are true. A visit by President Dmitry Medvedev to Turkey, our major Black Sea neighbor and Russia's special trade and economic partner, would be timely. Russia and Turkey have many issues to discuss, apart from their routine agenda: settlement in the Middle East, Iraq, and on Cyprus; the Iranian nuclear program; the situation in the South Caucasus and Central Asia, and Kosovo. One of the major issues is trade and economic cooperation. Trade between the two countries is booming. Last year, it was $22.5 billion, and in the first four months of this year, it soared more than 60% to reach $10.6 billion. Russian-Turkish trade in 2008 is expected to break all records of 2007. Russia accounts for a quarter of all projects built by Turkish companies abroad. Last year, they were awarded three billion dollars worth of contracts. It is a pity, then, that the visit will be marred by the latest tourist scandal, whereby Turkish firms refused to provide accommodation for Russian tourists who had already sent them their money. But such problems are inevitable when the flow of the Russian tourists is rapidly on the rise. This sensitive issue will not be at the top of the agenda, but Mr. Lavrov will have to talk about the record of Turkish companies in fulfilling their commitments to their Russian partners. The situation here leaves much to be desired, and the problems are not confined to the tourism industry. This year, Russia has blacklisted foreign companies that are not complying with their obligations to Russian partners, and avoiding implementation of rulings by international commercial courts of arbitration. The compilers of the blacklist have not disclosed the number of Turkish companies on their register, but it is rumored that there are dozens of them. It is rather difficult to monitor companies with a bad record because in Turkey a host of firms (legal entities) may be registered in the name of one individual. Therefore, while checking on the reliability of future partners, Russian businessmen are advised to ignore the name of the company, and to pay closer attention to its owners and managers. This will help them discard a dishonest partner. Many Russian medium-sized businesses are reluctant to deal with Turkey because it is next to impossible for foreigners to win a suit against dishonest Turkish companies. The national courts prefer to help their compatriots. Turkish companies are also adept at the mechanism of bankruptcy to dodge the implementation of legal decisions, meaning foreigners seldom receive any money even if they do win a case in court. Although these problems pose a real and substantial impediment to the development of partnership, Turkey and Russia have more important problems to discuss. Fundamentally, the established system of trade and economic ties has long become too narrow for Moscow and Ankara. For the last ten years it was based on the famous Blue Stream project. It is certainly unique and was well managed. It was the backbone for all other projects, and even determined our foreign policy partnership at both regional and global levels. But now it has become too small to embrace our new projects. For all the optimistic figures and facts, reliance on Blue Stream is likely to become a stumbling block to widening cooperation. Russia and Turkey have to put it on a new level. They should expand their contacts in such major spheres as the nuclear power industry. The Atomstroyexport (Russia's nuclear power equipment and service export monopoly) is ready to provide Turkey with a project for the construction of a nuclear power plant (NPP) that will be less expensive and more reliable than its American counterparts. Such NPPs will help Turkey to consolidate its positions at the regional energy market, especially considering Iran's nuclear energy problems. Moscow has long been hinting to Ankara that it is best to give priority to economic expediency, especially in the energy industry. The two countries will not be able to strip their relations of politics. But it would be sensible to thoroughly weigh all economic and political issues. Russia has long been ready for this.

Uzbekistan to build pipeline to pump Turkmen gas to China

BEIJING, July 2 (RIA Novosti) - Uzbekistan has started building a pipeline for natural gas supplies from Turkmenistan to China, the Chinese news website Sina reported on Wednesday. A joint Chinese-Uzbek joint venture has been established to construct and operate the pipeline, to run 1,801 km (1,119 miles) from Turkmenistan to the western border of China via Uzbekistan and Kazakhstan, Sina said, citing information from China's National Petroleum Corporation. The cross-border gas pipeline is expected to be commissioned in late 2009 and will operate for a term of 30 years. The pipeline is designed to pump up to 30 billion cubic meters of natural gas per year to China from Turkmenistan. A framework agreement on Turkmen-Chinese oil and gas cooperation was signed in April 2006 when Turkmenistan's then president Saparmurat Niyazov visited China. The deal stipulates annual natural gas supplies to China totaling 30-40 billion cubic meters at $80 per 1,000 cubic meters.

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