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Monday, August 25, 2008

Putin 'backs pipe access plan'

20 August, 2008 - Upstream OnLine - Russia's Prime Minister Vladimir Putin supports the idea of equal access to pipelines for independent gas producers along with Gazprom, anti-trust chief Igor Artemyev said today. In an interview with business daily Vedomosti, Artemyev said all the relevant agencies have approved a bill on equal access to Gazprom's pipelines for other gas producers that have long been fighting to get access to lucrative export markets. The service is going to submit the bill to the government for final approval this week and sees the chances of changes in the current system to be very high, he said. "Firstly, premier Vladimir Putin has publicly said to [Gazprom's chairman Alexei] Miller that he supported the idea. Secondly, the position of vice-premier Igor Sechin is extremely positive," Artemyev was quoted by Vedomosti as saying. Independent gas producers, which produce around 16% of all Russian gas, have long been complaining that they often have to sell the fuel to Gazprom at local prices, about five times lower than the export price which is now around $400 per 1000 cubic metres. The anti-monopoly service had earlier said that Gazprom should retain its export monopoly status but would have to buy gas for exports from independent producers on a pro-rata basis to their production. "The rules on non-discriminatory access must be accepted, all independent producers, including oil companies should have equal rights with Gazprom and its subsidiaries, all voluntary actions by Gazprom should be excluded," Artemyev said. Analysts told Reuters that the proposal, if approved, should increase gas sales revenues of independent gas producers such as Novatek and oil companies producing gas such as Lukoil, by up to 60%. Artemyev also said his agency has suggested the government should set a fair formula price at which Gazprom would buy the fuel from independent producers. "It will produce some average contract price which surely will not be $50 per Mcm," he said.

BTC primed for flow tests

20 August, 2008 - Upstream OnLine - UK supermajor BP said today that testing of the Baku-Tbilisi-Ceyhan (BTC) oil trunkline is set to begin, ahead of a move to resume operations on the route damaged by a fire earlier this month. "We've taken the decision to start dynamic integrity testing of the line today before a move to full operation," BP spokesman Toby Odone told Reuters. "This will involve some limited and intermittent flow of oil through the pipeline. "For ship scheduling purposes, the lifting programme at Ceyhan will be updated today to start loadings from the beginning of next week." The closure of the pipeline, after an explosion on the line in eastern Turkey, caused members of the BTC pipeline consortium to declare force majeure on exports from Ceyhan. BP holds 30.1% of BTC, while Socar holds 25%. Other shareholders include Chevron, ConocoPhillips, StatoilHydro, Eni and Total. Kurdish separatist guerrillas claimed responsibility for the explosion, although energy and military officials said they doubted the explosion was caused by sabotage.

Oil supplies to Turkey to resume after Baku-Ceyhan pipeline blaze

BAKU, August 20 (RIA Novosti) -- Oil supplies from Azerbaijan to Turkey, cut following a recent fire at the Turkish section of the Baku-Tbilisi-Ceyhan pipeline, will be resumed shortly, the Turkish operator said on Wednesday BOTAS International limited said the section had been repaired and was currently being tested. The blaze occurred at a compressor station in the province of Erzincan on August 5, raging at a height of up to 50 meters. Azerbaijan holds vast oil and gas reserves in the Caspian Sea, which it exports to neighboring Georgia, Turkey, and Europe through three pipelines - Baku-Tbilisi-Ceyhan via Georgia to Turkey, Baku-Novorossiisk, which links the Azeri capital with the Russian Black Sea port of Novorossiisk, and Baku-Supsa to Georgia. A total of 1.2 million barrels of oil a day are shipped to Turkey via the Baku-Tbilisi-Ceyhan pipeline.

Guler sees quick fix on BTC

18 August, 2008 - Upstream OnLine - Oil flows along the fire-damaged Baku-Tbilisi-Ceyhan (BTC) pipeline could resume within a few days, Turkish Energy Minister Hilmi Guler said today. Guler also told a press conference in Ankara there was no evidence of sabotage on the pipeline. Kurdish separatist guerrillas had claimed responsibility for the explosion and said they would carry out more attacks on economic targets inside Turkey. The $4 billion BTC link can pump up to 1 million barrels per day from fields in the Azeri sector of the Caspian Sea to Ceyhan on the Turkish Mediterranean coast. Meanwhile, Guler said Turkey will hold major talks with Iran on energy sector co-operation in the next month and hopes that their negotiations will yield fruit within that period. Guler was speaking at a news conference after Turkey and Iran failed to conclude expected energy accords during Iranian President Mahmoud Ahmadinejad's two-day trip to Turkey last week. "We will hold important talks with Iran within one month. We hope that the work which we launched before will produce a result during this period," Guler said. Ahead of his departure from Turkey on Friday, Ahmadinejad had said he hoped the two neighbours would soon sign energy accords. Washington, which is trying to pressure Tehran to give up its nuclear programme, opposes such agreements. Turkish sources have attributed the failure to sign the accords to new demands from Iran on pricing and investment conditions, Reuters said. Neither side has given an official reason for the delay.

Independents push for end to Gazpromā€™s export monopoly

19 August 2008 - Russia Today - Gazprom may soon lose its status as the sole exporter of Russian gas. The country’s antimonopoly watchdog is preparing amendments giving independent producers access to gas pipelines. Independent gas producers have lobbied for access to Gazprom’s export routes for years. But they now have powerful allies, including the Federal Antimonopoly agency, a Deputy Prime Minister Igor Sechin - and the Economy Ministry. Denis Borisov, Analyst at Solid says Gazprom may be forced to share its export profits. "Since Gazprom is a monopoly when it comes to selling Russian gas abroad, it may be asked to share the profit it makes - namely, the difference between export and domestic gas prices - with independent producers." Independent producers acocunt for about 15% of Russia’s total gas output, but that’s expect to double by 2020. Experts say the Independents may gain access to the giants pipeline in line with their share of production. But there is no consensus on the issue within the government and Vitaly Ermakov, from Cambridge Energy Research says this reflects two competing outcomes policymakers want in the gas sector. “The Russian government is largely divided on the issue. On the one hand, Russian policy makers want a tightly controlled state monopoly in the gas sector, which is a strategic sector. On the other hand they would like to use the advantages of the market, they would like to bring in additional volumes that the independents can produce.” The amendments would benefit some of Russia’s biggest energy companies, which have built up their gas units in recent years according to Denis Borisov. "The main beneficiaries from the proposed changes would be Lukoil, TNK-BP, Rosneft and, of course, Novatek, Russia’s largest independent gas producer. They could gain a total of as much as $10 BLN a year in additional revenues." But the gas giant may not stand idly by, and watch its estimated $40 billion of export revenues cannibalized. If the legislation is passed, Gazprom may boost transportation fees for the independents to compensate its losses.

Nabucco pipeline in doubt

Nabucco pipeline in doubt14 August 2008 - Russia Today - Europe and America will drop Georgia from a new oil and gas project after Tbilisi's attacks on South Ossetia. That's according to industry analysts, who believe the vast new Nabucco gas pipeline project, which deliberately bypasses Russia, will now be quietly shelved. Tbilisi was planned as the hub of EU and US projects to cut dependence on Russian oil and gas.The Nabucco and Trans-Caspian gas pipelines were to extend the existing Georgian route through to Turkmenistan and Western Europe. Construction of Nabucco was slated to start in 2010. Georgia's invasion of South Ossetia has turned that progress on its head. On Tuesday BP shut an oil pipeline and a natural gas pipeline running from the Caspian through Georgia because of the war. Experts say that foreshadows a greater pullout of Western energy interests from Georgia, starting with Nabucco. Lev Snykov, Vice-President at VTB Capital says Nabucco is at risk. "Nabucco is a huge, huge multinational project and I'm sure there are high risks that it would be postponed." Rival Russian gas pipeline projects South Stream and Pre-Caspian are ready to fill the gap. Konstantin Batunin, Oil and Gas Analyst at Alfa-Bank says they are more certain than the alternatives. "Those projects being pursued by Russia they have a future. But all those projects involving Georgia they used to be kind of vague in the past, now they're getting even more vague."

BP weighs up BTC damage

13 August, 2008 - Upstream OnLine - BP and Turkish pipeline player Botas have started damage assessment work at the Baku-Tbilisi-Ceyhan (BTC) pipeline in eastern Turkey following a fire last week. BP and partners are now able to access the BTC pipeline after it cooled down, company spokesman Toby Odone said to Bloomberg today The assessment will take "a week or so", he added. "It'll take quite a while to work out what has happened," Odone said. The Turkish authorities are also investigating the cause of the explosion, he said. The fire on the BTC link, which has a 1 million barrel per day capacity, broke out on 5 August following an explosion in the Erzincan province. The Kurdistan Workers' Party claimed responsibility for the attack. BP and Botas denied the terror group's claim. The fire on the 1768-kilometre pipeline, which links Azerbaijan through Georgia with the Turkish port of Ceyhan, was extinguished on 11 August and took about two days to cool down. Meanwhile, BP declared force majeure on liftings from the Baku-Supsa oil pipeline following its shut-down yesterday. BP closed the 150,000 barrels per day route to Supsa on Georgia's Black Sea coast from Baku, Azerbaijan due to the conflict between Georgia and Russia.

Georgia crisis 'won't stop BTC flows'

12 August, 2008 - Upstream OnLine - Fighting in Georgia will not stop oil flows through the Baku-Tbilisi-Ceyhan (BTC) pipeline, with a source at Turkey's pipeline outfit Botas adding that exports will resume via the trunkline once the pipeline is repaired. The pipeline carrying Azeri crude, which passes through Georgia, was hit by an explosion claimed by Kurdish separatist guerrillas on Turkish territory two days before conflict began over the South Ossetia region between Russia and Georgia. "We are not linking the fighting between Russia and Georgia with the oil pipeline at the moment. We are focused on repairing the pipeline," the source, who declined to be named, told Reuters. "Oil exports will begin when the pipeline is repaired, the fighting is not an obstacle for exports," he added. Yesterday another Botas source said repairs may not be finished for one to two weeks or longer. No oil is currently flowing through the pipeline. The $4 billion BTC pipeline can pump up to 1 million barrels per day, the equivalent of more than 1% of world supply, from fields in the Azeri sector of the Caspian Sea to Ceyhan on the Turkish Mediterranean coast. UK supermajor BP holds a 30.1% stake in BTC, while Azeri state oil company Socar holds 25%. Other shareholders include US supermajors Chevron and ConocoPhillips, Norway's StatoilHydro , Italy's Eni and France's Total. Kurdish separatists claimed responsibility for the explosion and said they would carry out more attacks on economic targets inside Turkey.

BP shuts Baku-Supsa pipeline due to Georgia conflict

12 August 2008 - Reuters - BP has shut an oil pipeline to the Georgian Black Sea port of Supsa on security concerns due to a military conflict in the country, BP said on Tuesday, further limiting export options from the landlocked Caspian Sea. "We have decided to temporarily suspend Baku-Supsa as a precautionary measure. We are monitoring the situation in Georgia and will restart the pipeline when it becomes clear it can work safely," BP-Azerbaijan spokeswoman Tamam Bayatly said.
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Friday, August 01, 2008

South Stream Pipeline cost now estimated at $20 Billion

South Stream Pipeline cost now estimated at $20 BillionJuly 31, 2008 - Russia Today - The South Stream gas pipeline will cost an estimated 20 billion dollars - that's according to the Russian Energy Ministry. The major new route to southern Europe, which will be jointly built by Gazprom and Italy's ENI, is expected to take 30 billion cubic meters of gas per year and rival the Nabucco pipeline. ENI's CEO said last year the project might cost at least 15 billion dollars. Gazprom said it would issue a final estimate of the pipeline's cost after its feasibility study is concluded by the end of next year. The pipeline, which is expected to be launched in 2013, is to travel 900 kilometers under the Black Sea to Bulgaria and then split into two onshore routes.

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