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Tuesday, December 30, 2008

Gazprom reaches pipeline deal with Turkmenistan: company

AFP12–25–2008 – MOSCOW (AFP) — Russian gas giant Gazprom and Turkmenistan on Thursday reached an agreement on a planned gas pipeline linking the energy-rich central Asian country to Russia, the company said. Gazprom said its chief executive Alexei Miller and the chair of the Turkmen cabinet Tachberdy Tagyev had agreed the technical parameters of a key stretch of the Caspian pipeline, which aims to give Russia more access to Turkmen gas. "During the meeting, agreements were reached on the basic foundations for the technical assignment on the construction of the Turkmen portion of the Caspian pipeline," Gazprom said in a statement. Russia, Turkmenistan and Kazakhstan agreed to build the Caspian pipeline in December 2007. According to Gazprom it would be able to carry 30 billion cubic metres of gas from Turkmenistan to Russia annually. Turkmenistan exports virtually all its gas via Russian territory but Western countries as well as China have sought greater access to the country's enormous reserves. The former Soviet republic has been pursuing closer ties to the West since the death of its longtime dictator Saparmurat Niyazov in 2006.

Gazprom, Turkmen gov't sign Caspian pipeline requirements

RBC, 25.12.2008, Moscow 15:27:33.Gazprom and the Turkmen government have agreed on the technical requirements for the Caspian gas pipeline's Turkmen stretch, as well as a gas transit facility to be built at the South Iolotan field, the Russian gas monopoly's press office reported today. The decisions were made during today's meeting between Gazprom CEO Alexei Miller and Turkmen Deputy Prime Minister Tacberdi Tagyyew. Russia, Kazakhstan, and Turkmenistan signed an intergovernmental agreement for the construction of the Caspian gas pipeline on December 20, 2007, and the Russian State Duma ratified the document on December 19, 2008. The amount of gas transited through the pipeline is expected to reach a maximum of 30bn cubic meters per year from Turkmenistan and 10bn cubic meters from Kazakhstan. The construction is to begin in the second half of 2009 and end no later than in 2010.

Monday, December 29, 2008

Gazprom in Nord Stream talks with France

Dec. 23, 2008 - UPI - PARIS, A delegation from Russian energy monopoly Gazprom visited French officials to discuss energy cooperation, including the Nord Stream gas pipeline. Gazprom chief Alexei Miller met with his counterparts at French energy firm GDF Suez to discuss interactions in the world market and securing European energy resources, Gazprom said in a statement. GDF Suez said it viewed the Nord Stream pipeline through the Black Sea to Europe as a significant project to bring energy security to European markets. The French firm said it was interested in joining the project as a minority partner. Gazprom said last week it may court foreign investors to help fund major projects, including Nord Stream. Nord Stream is seen as a rival project to the Western-backed Nabucco pipeline to bring resources from Caspian states to Europe through Turkey, bypassing Russia completely. Miller took the opportunity to address European concerns over a row with Ukraine that could threaten winter gas supplies, saying Gazprom was working toward a resolution. "Gazprom will fulfill its contractual obligations to the European consumers and will endeavor to make Ukraine fulfill its international obligations on transit," he said.

Russian president signs law to ratify Caspian gas pipeline deal

MOSCOW, December 26, 2008 (RIA Novosti) - Russian President Dmitry Medvedev has signed a law to ratify an agreement with Kazakhstan and Turkmenistan to build a natural gas pipeline along the Caspian coast. The law was passed by the lower house on December 19 and approved by senators on December 22. The pipeline, which is part of plans to modernize and expand the Central Asian region's gas network, will run from Turkmenistan along the Caspian coast of Kazakhstan and on to Russia for further transportation to Europe. The joint agreement to construct the pipeline was signed on December 20, 2007. The pipeline is expected to transport an estimated 30 billion cubic meters of gas from Turkmenistan and up to 10 billion cubic meters from Kazakhstan.

Serbia joins Southern Stream

12–25–2008 – MOSCOW. (RIA Novosti political commentator Andrei Fedyashin) - On December 24, Catholic Christmas Eve, the Slavic gas transit system strengthened its position: Dmitry Medvedev and Serbian President Boris Tadic signed several agreements on oil and gas at a meeting in Moscow. Moscow, Belgrade and the European Union will benefit from Serbia's participation in the South Stream pipeline, one of the main issues of the Russian-Serbian talks. It was the first thing Medvedev spoke about when meeting his Serbian counterpart at the Kremlin. He ensured that all energy cooperation agreements between Russia and Serbia were designed to guarantee Europe's energy security. The pipeline, which is planned to carry 31 billion cubic meters of Russian gas annually, will run from the Russian village of Beregovaya in the Krasnodar Region to Bulgaria and from there to Romania, Slovenia, Hungary and Austria. Russia and Italy signed their first agreement concerning the South Stream pipeline system on June 23, 2007. The southern branch will carry Russian gas to Italy through Serbia, Montenegro, and even Macedonia. Until recently, the most sensitive issue was how much Serbia would receive from Gazprom's Gazpromneft for 51% of its oil monopoly NIS (which controls 72% of the oil and gas market, oil processing plants and 500 gas stations in Serbia, which is 70% of the country's retail fuel market). Gazprom is buying NIS for 400 million euros and plans to invest 550 million euros in production development. Serbia wanted much more than that, but the world economic crisis has moderated its demands. Some of Serbia's expenses will be partly compensated by gas transit. Up to 10 billion cubic meters of gas were supposed to run through the Serbian section annually. Now both parties have agreed to increase the annual volume to 21.4 billion, or even to 23.1 billion cubic meters. Serbia hopes that transporting Russian gas will make the country more attractive to investors. The Russian pipeline may even help Serbian efforts in joining the EU. Belgrade hoped to join by 2009, but the EU doesn't believe the country is ready to join yet. Still, it would be profitable for Brussels to accept a country which has a Russian gas pipeline, because Serbia would be more than just a transit territory near the EU, it would belong to it. When South Stream goes online, it will bypass politically unstable Ukraine. It was Kiev (at least, Yushchenko's Kiev) which opposed the Russian pipeline projects, both Nord Stream under the Baltic Sea, and South Stream under the Black Sea. They understand that when the pipelines start up, they will not be able to siphon Russian gas, or reject paying for gas or beg for "special conditions." The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

Pipeline dreams entangle Russians and Europeans

12-26-2008 - International Herald Tribune by Judy Dempsey - BERLIN: 2009 was supposed to be the year when Europe and Russia would diversify their energy sources and routes. The Russian-German Nord Stream pipeline that would run under the Baltic Sea was due to be completed in the coming months, ready to deliver gas by 2010. Once in operation, it would be the realization of Russia's dreams to reduce its dependency on troublesome transit countries, such as Ukraine. It would also be the crowning of the special relationship between Russia and Germany. Nord Stream would run from Vyborg, near St. Petersburg, touching land at Greifswald, on Germany's north-eastern coast. But as of this day, construction has not even begun. Then there is Russia's South Stream pipeline, meant to be built under the Black Sea with the Italian energy company ENI. It would link Russia to Bulgaria, denying Turkey lucrative transit fees. The European Union, too, has its pipeline plan: Nabucco. Feted six years ago as the pipeline that would reduce Europe's dependency on Russian gas, construction was supposed to be completed by 2009. No pipes have yet been laid. In the meantime, the dependency on Russian gas imports, already accounting for 42 percent of Europe's needs, is set to increase. The Russians and the EU have made such ambitious plans because the Europeans need gas and Russia needs Europe's rich markets. The North Sea gas fields that provided Europe with much of its gas are dwindling rapidly. And despite calls by the EU for more diversification to ensure energy security, the Europeans still look mostly to Russia for its energy. Yet with gas consumption among the 27-member bloc expected to rise a further 200 billion cubic meters a year by 2030 from present levels of about 300 billion cubic meters, or 10.6 trillion cubic feet, a year, there are no guarantees that Russia will be able to meet that demand. Russia's fields in Western Siberia are almost depleted; Nord Stream and South Stream (and Nabucco) are facing delays - and it is not certain they will add new capacity. The global economic crisis is a contributing factor for the delays. Oil prices, to which gas prices are closely linked, have plummeted from a high of $140 a barrel last summer to about $40 a barrel this month. That has made energy companies far more cautious about investing in long-term, capital-intensive projects. The three pipelines also have their own special problems. Nord Stream has still not obtained planning permission from all the countries that border the Baltic Sea. The credit crunch also means that banks will not be in a hurry to finance Nord Stream, which will cost €7.4 billion, or $10.3 billion, for the offshore work. Gazprom, the Russian state-owned energy company that holds the majority stake in Nord Stream, will not fund it alone, said Vaclav Bartuska, the Czech government's special energy envoy. "The Russians need European money. We have yet to see if the German banks will deliver," he added. At least the steel pipes for Nord Stream have been ordered. Germany's former chancellor, Gerhard Schroder, who is chairman of Nord Stream's shareholders' committee and who has developed a particularly close relationship with Vladimir Putin, the Russian prime minister and former president, is determined to see the project through. And even though Putin last month warned that Nord Stream might be abandoned if the Europeans did not support it politically, energy experts said he was bluffing. "Putin wants Nord Stream because it would tie Russian energy exports to Europe," said Borut Grgic, director of the Institute for Strategic Studies in Ljubljana, Slovenia. BASF/Wintershall and E.ON Ruhrgas, the German energy companies that have teamed up with Gazprom to build Nord Stream, are not prepared to jump ship, either. South Stream has problems too. This week Serbia signed an accord to join the project with Gazprom - after a year of haggling over the terms. But other countries supposed to be involved in South Stream, including Bulgaria, have also raised objections. When asked whether the $10 billion project would ever be completed, Mihaly Bayer, the special envoy for the Hungarian government, which is involved in both South Stream and Nabucco, replied cryptically: "There are still several intergovernmental agreements to be finalized." Even Alexei Miller, chairman of Gazprom's management committee, said recently that South Stream would not be ready until 2015. The EU's €7.9 billion Nabucco pipeline that plans to take gas from Azerbaijan and eventually Iran is lagging behind operation by up to three years. "Europe unveiled Nabucco before it had producers to fill the pipeline," said Grgic. "With no guaranteed sources of energy, there is no markets. And without markets, the consortium will not obtain financing," he added. The Nabucco management denied this week that the project was in trouble. "Financial institutes are shying away from financing volatile risk business and are shifting to long-term infrastructure projects such as Nabucco," it said in a statement. But whatever happens to these three projects, neither individually nor collectively will they meet Europe's growing demand for gas. Nord Stream will be able to deliver 55 billion cubic meters of gas a year, but it will not be new gas. "It will be gas which otherwise would have been sent across Ukraine," said a Nord Stream company official. The same is true for the South Stream's annual 30 billion cubic meters, which might include some supplies from some Central Asian countries. As for Nabucco, it plans an annual capacity of merely 31 billion cubic meters. The reason why so little new Russian gas will be sent to Europe is not just rising domestic demand. Russia has failed to invest in the sector. Even when energy prices were very high, Putin did not use the windfalls to modernize the energy infrastructure or introduce energy-saving measures. Instead, Gazprom spent them acquiring energy assets in Central Asia and the Balkans, buying newspapers and building swanky offices. As if blind to this, Europe has neglected to find new alternative gas sources. It could have supported the reconstruction of Iraq's energy sector, reached out to energy-rich Azerbaijan and done much more to save energy and support and renewables. Now the economic crisis will make the EU even more unwilling to look elsewhere for its energy. But the writing is already on the wall.

GDF Suez keen on Nord Stream berth

23 December, 2008 – Upstream – GDF Suez confirmed today it was keen to take a stake in the Nord Stream gas pipeline from Russia to Germany. Russia's Gazprom said on Monday the French energy group had expressed interest in taking a minority stake in the pipeline, which is due to start by the end of 2011, during a meeting between Gazprom and GDF Suez executives. "I can confirm that we are interested," a GDF Suez spokeswomam told Reuters. "We have always said we were interested in taking part in big infrastructure projects," she added. GDF Suez was unsuccessful in becoming the sixth partner for the Nabucco gas pipeline project, which aims to pump Caspian gas to Europe and is described as the rival project to Nord Stream. "We are only in the preliminary stages," she added. GDF Suez plans to buy up to 2.5 billion cubic metres of gas per year from Nord Stream, which would run 1200 kilometres from Vyborg in Russia to Greifswald in Germany under the Baltic sea. Nord Stream, majority owned by Russian gas monopoly Gazprom , is building the pipeline with Germany's BASF and E.ON and has plans to build two parallel gas pipelines of 1200 kilometres each. Dutch state pipeline operator Gasunie has joined the project, taking a 9% stake from the German partners.

Gaz de France Suez seeking minority stake in Nord Stream

MOSCOW, December 22, 2008 (RIA Novosti) - Gaz de France Suez is interested in joining the Nord Stream gas pipeline project as a minority shareholder, Russian energy giant Gazprom said on Monday. Top managers of the French and Russian companies met in France on Monday, where it was announced that "GDF Suez considers the Nord Stream project highly important, and is interested in its successful implementation and in joining it as a minority partner," Gazprom said in a news release. The Nord Stream pipeline, which will pump gas from Siberia to Europe under the Baltic Sea, bypassing East European transit countries, is being built jointly by Gazprom, Germany's E.ON and BASF, and Dutch gas transportation firm Gasunie at an estimated cost of $12 billion. The first stage of the project, with a transport capacity of some 27.5 billion cubic meters per year, is expected to come online in the fourth quarter of 2011.

Thursday, December 18, 2008

Russia looks to Bolivia-Argentina gas pipeline - Medvedev

MOSCOW, December 10 (RIA Novosti) - Russia is ready to take part in a project to build a gas pipeline linking Bolivia and Argentina, President Dmitry Medvedev said on Wednesday. Speaking after talks with his Argentine counterpart, Cristina Fernandez de Kirchner, Medvedev said: "We have the opportunity to develop cooperation in the gas sphere, including in the construction of a gas pipeline to link Argentina and Bolivia." "We hope that we will reach an agreement on the project's main issues," Medvedev told a news conference. Bolivia, which has Latin America's second largest gas reserves after Venezuela, signed a contract with Argentina last March to build a $1.5 billion gas pipeline that will eventually quadruple the amount of natural gas the country supplies to its southern neighbor. Russia's Gazprom, which is increasingly looking to Latin American markets, signed a gas prospecting deal with Bolivia earlier this year. The energy giant is also in talks with Brazil, Argentina and Venezuela that jointly plan to build a transcontinental pipeline which will also cross Bolivia. Medvedev also said Russia and Argentina would cancel visas soon in a bid to encourage business contacts and tourist flows. "We agreed to finish work over an agreement on visa-free travel as soon as possible," he said. During de Kirchner's visit to Russia, the first by an Argentine leader in ten years, a series of deals were signed, as well as a statement and memo on cooperation in nuclear power and energy respectively. In a joint statement after the talks, the presidents said their countries would continue to cooperate in space, primarily in probe and satellite launches, and pledged efforts to increase and balance trade with a focus on hi-tech projects. Bilateral trade has grown more than fivefold in the last four years to over $1.6 billion, although it has tilted in Argentina's favor. Medvedev and de Kirchner also reiterated appeals for reform of the global financial system against the backdrop of the ongoing credit crunch. They urged efforts to promote a fair world order and curb inequality. Argentina also expressed support for Russia's bid to join the World Trade Organization. De Kirchner invited Medvedev and Prime Minister Vladimir Putin, who she met on Tuesday, to visit Argentina. The invitations were accepted. The date for the visits will be coordinated via diplomatic channels.

Monday, December 08, 2008

Gazprom Stresses South Stream Project in Line with Schedule

12-05-2008 – Rigzone News - The Gazprom Management Committee took notice of the information relevant to the activities performed as part of the South Stream project implementation. The Company's specialized divisions were tasked to resolve the current issues within the Project Feasibility Study (FS) development, as well as to prepare the documentation for addressing its implementation at the Board of Directors' meeting. The meeting emphasized that the South Stream project was being implemented in line with the planned schedule.

Caspian thaw raises Nabucco hopes

Ilkham Aliev and Kurbanguly Berdymukhamedov04 December 2008 - Upstream OnLine - The European Union sees an improvement in relations between Caspian producers Turkmenistan and Azerbaijan as a step towards implementing the Nabucco gas pipeline project, a senior official said. The two gas-rich nations, eyed by Brussels as a key source of energy for the $10 billion Nabucco pipeline, took steps to overcome past disagreements this year by forging closer energy ties and agreeing to diversify energy shipments. EU representative for Central Asia, Pierre Morel, on a visit to the Turkmen capital Ashgabat, said that would help speed the implementation of Europe's broader Southern Corridor project which includes Nabucco. "I think this prepares the ground for the Southern Corridor," Morel told Reuters. "I am convinced the EU should step up its efforts to build Nabucco. The next steps might be taken in the coming months and in early 2009." Turkmenistan pledged to seek better ties with Azerbaijan after Saparmurat Niyazov, who showed little interest in regional co-operation, died in 2006. His successor, Kurbanguly Berdymukhamedov, visited Baku this year to settle old disputes over the ownership of borderline offshore Caspian oil and gas fields and mutual debts. Most recently, he met with his Azeri counterpart Ilham Aliyev last week. "President Berdymukhamedov's serious efforts with regards to Azerbaijan look promising," Morel said after talks with the Turkmen leader. Turkmen gas could reach Nabucco either through Azerbaijan, via a planned pipeline across the Caspian, or through Iran, but the latter option faces political challenges due to Iran's complicated relations with the West. EU officials have been frequent visitors to Ashgabat this year and Berdymukhamedov last month visited Germany and Austria to discuss energy and investment. "All these visits are like pieces of a puzzle coming together," Morel told Reuters. Turkmenistan currently produces about 70 billion cubic metres of gas a year, most of which goes to Russia. But analysts said the country, which has already promised to sell 10 Bcm of gas per year to Europe, needs foreign investment to ramp up gas production and meet its supply commitments. "Our companies are waiting for Turkmenistan to create the environment needed for investment," Morel said.

Tuesday, December 02, 2008

Russian purchase of Serbian oil company in doubt

01 December, 2008 - The Benton Crier - The $13 billion South Stream natural gas pipeline to be laid under the Black Sea would carry Russian natural gas to Bulgaria and Serbia before branching out to points in Western Europe. But Serbia‘s Economy Minister Mladjan Dinkic told independent B-92 TV late Sunday that those guarantees are only "verbal" and that Russia‘s energy monopoly Gazprom has so far refused to sign a written contract to confirm it. He said Gazprom plans to conduct a feasibility study by mid-2010, and that only after that analysis would the Russian company decide whether to build the South Stream pipeline. Analysts have questioned whether Serbia should now be selling off one of its most valuable assets at an undercut price without the pipeline guarantees from Moscow. The South Stream would undercut an alternative project — the Nabucco pipeline planned to carry natural gas westward from the Caucasus. That project is backed by the United States and the European Union as a way to ease Europe‘s energy reliance on Russia.

Monday, December 01, 2008

BP Is To Back Expansion Of CPC

01.12.2008 - [Neftegaz.RU] - The Moscow times reported a BP spokesman said Friday that the company wanted to sell its stakes in CPC to LUKoil and Kazakh KazMunaiGaz but that it needed the sale to be approved by all other private and state shareholders of the consortium. "BP supports the principles of CPC extension only if it has a clear and unencumbered right to sell its stake to a selected group of companies," said Vladimir Buyanov, BP's spokesman in Moscow. He added that BP was in talks with LUKoil and KazMunaiGaz to sell its stakes in its joint ventures with the Russian and Kazakh companies LUKArco and Kazakhstan Pipeline Ventures, which are members of the consortium. BP's stakes in the ventures bring its share in CPC to 6.6 percent. BP, whose percentage interest in the pipeline was bigger than its percentage interest in the Kazakh fields that feed the route, said it was the least interested in the planned expansion among other CPC shareholders. "BP supports the principles of CPC extension. However, the terms that were proposed have disadvantages to BP as the only company that has not enough oil to transport," Buyanov said. Pipeline monopoly Transneft, which holds Russia's 31 percent stake in CPC, had long opposed the plan to double the pipeline's capacity from the current 700,000 barrels per day, but it has now dropped its objections. Transneft previously argued that the pipeline yielded low returns and that expansion would add pressure on the already congested Turkish Straits shipping route. In the summer, most of the partners agreed to raise the shipping tariff to $38 per ton from $30.24 last year, and private investors agreed to halve interest rates on a $5 billion loan to CPC to 6 percent, easing concerns over funding. Transneft, which owns all pipelines on Russian territory except CPC, has said BP was insisting on borrowing more to fund the expansion. Chevron holds 15 percent in CPC. Its private shareholders also include Royal Dutch Shell, ExxonMobil and Rosneft.

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