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Friday, February 27, 2009

Transneft to Finish ESPO Pipeline in Time

25.02.2009 - [Neftegaz.RU] - The news was reported by the company's press office that quoted Alexei Sapsai, general director of the project's operator - part of Transneft. By this deadline, an oil loading terminal will be completed in Kozmino. Sapsai also reiterated that Transneft's investment program stood at $6.02 bln. for 2009, including $2.64 bln. to be used to complete the ESPO's first phase. As reported earlier, the first phase with the capacity of 30m tonnes of oil a year is to be finished by December 25, 2009.

Germany Rules Favorably on OPAL Gas Pipeline

February 25, 2009 - AFX News Limited - Germany's energy regulator on Wednesday exempted from regulation the OPAL pipeline project which would transport Russian gas arriving via the Baltic Sea, but threw out a similar request by NEL, another project. The move signifies partial support for Nord Stream, the planned pipeline link to bring Siberian gas to Europe from 2011 under the Baltic Sea, because its success will hinge on whether the new volumes can be cheaply shipped onshore. Wintershall, BASF's oil & gas unit, and utility E.ON had applied for exemptions for the two planned inland links, arguing potential investors must be free from tariff checks and the need to give unhindered access to third parties because the pipelines would be built for transit. They double as partners in a consortium with Russia's Gazprom and Dutch Gasunie that will build and operate the 7.4 billion euros ($9.51 billion) Nord Stream pipe. They will benefit from marketing opportunities for the eventual 55 billion cubic metres of gas volumes due to arrive every year. "With its ruling today, the Bundesnetzagentur (regulator) mostly exempts OPAL from network access and transit fees regulation for 22 years after its launch," the Bonn-based authority said in a statement. "For NEL, the applications were rejected," it added. OPAL is designed to transport gas via Germany to the Czech Republic, making it a genuine transit link, while NEL is due to end in Rehden, north Germany, meaning it is a purely national facility, said Bundesnetzagentur president Matthias Kurth. E.ON unit Ruhrgas will own 20 percent and Wintershall unit Wingas 80 percent of OPAL and for NEL, the E.ON share is 25 and for Wingas 75 percent. Kurth also stressed that only those transports on OPAL would be freed of regulation that were identifiable as shipments destined for the Czech Republic and beyond. But he would check on shipments on OPAL inside Germany and on those arriving from the Czech Republic in the other direction, he said. Kurth, who added that the decision would be sent to Brussels for final agreement by the European Commission, said the decision was "a clear signal in favour of linking up the Baltic Sea pipeline onshore and making a significant contribution to Europe's (gas) supply security." The Nord Stream team has driven the need for the link harder since the recent Russia-Ukraine gas transit row underscored the need for Europe to become independent of that land-based route. But the Nord Stream gas must have the two onward transport links in place so that it can be brought to the market.

Thursday, February 26, 2009

Itera eyes Turkmenistan pipe

02-24-2009 - Upstream OnLine - Russian gas producer Itera will build a pipeline in Turkmenistan to link its prospective gas fields to export routes, a government source said today. Turkmenistan, Central Asia's largest gas producer, sells most of its gas to Russia's Gazprom, but is also building a new link to China and considering other options. "State company Turkmengaz will finance the project, which costs $176.7 million," the source said. The planned domestic pipeline will connect planned gas fields in the Karakum desert, which could hold up to 2 billion cubic metres of gas according to earlier official estimates, to a station pumping gas into the main export pipeline to Russia.

Friday, February 20, 2009

ESPO Chinese Pipeline Leg Construction To Start in April

20.02.2009 - [Neftegaz.RU] - Sechin told that the construction is to begin as soon as China starts transferring $25 billion loan to Russian state-controlled crude producer Rosneft and pipeline operator Transneft. It is scheduled for April. Transneft head Nikolai Tokarev confirmed that the construction would begin in April saying that "the funds are available." On Tuesday Russia and China signed an intergovernmental agreement on the construction of a branch of the East Siberia-Pacific Ocean (ESPO) oil pipeline toward China and long-term Russian oil supplies. Under the agreement, Russia will supply 110 million barrels of crude annually for 20 years to China. China, in turn, will provide $25 billion in loans to Rosneft and Transneft.

Slovenia, Russia make progress on South Stream talks...

LJUBLJANA, Feb 20, 2009 (Reuters by Marja Novak) - Slovenia and Russia have taken a step forward in talks on the planned South Stream gas pipeline, a potential supply route to Europe which could run through Slovenia, Slovenia's economy ministry said on Friday. "Most of the agreement (on running South Stream through Slovenia) is harmonised to the satisfaction of both parties," the ministry said in a statement issued after talks with Russian officials in Ljubljana on Thursday. It said two important issues were still open but gave no details. Talks will continue in the second half of March. The pipeline is a joint project of the Russian gas export monopoly Gazprom (GAZP.MM) and Italian energy group Eni (ENI.MI). It is due to be built by 2013 and will transport Russian gas from the Black Sea to south-east Europe, avoiding Ukraine, whose row with Russia left many countries in the region without gas in January.

Azerbaijan Has Enough Gas To Fill Nabucco Pipeline - Official

Nabucco pipeline02-18-2009 - Downstreamtoday - Azerbaijan has enough gas reserves to fill the planned Nabucco pipeline, a senior local oil official has said. "Currently, Azerbaijan has more than 2,000bn cu.m. of gas reserves, of which 1,200bn cu.m. are in the Sah Daniz field, 300bn cu.m. in the Azari-Ciraq-Gunasli block of fields and 500bn cu.m. in other fields," Xosbaxt Yusifzada, deputy president of the State Oil Company of the Azerbaijani Republic (SOCAR), said, as reported by APA news agency on 19 February. Yusifzada added that Azerbaijan had some other promising fields and that its current gas reserves enabled his country to take part in the Nabucco gas project.

Gazprom Discusses Construction of Pipeline System In Bolivia

18.02.2009 - [Neftegaz.RU] - It is the latest Kremlin move to increase its influence in South America, Reuters reported from Moscow. "We spoke about Russia helping our friends in Bolivia with hydrocarbons and the construction of a gas transport system," Medvedev said after the meeting with Evo.

Russia's Transneft plans to start on Chinese pipeline leg in 2010

MOSCOW, February 17, 2009 (RIA Novosti) - Transneft plans to start building a Chinese leg of the East Siberia-Pacific Ocean later in 2009 and to commission it in 2010, Russia's monopoly pipeline operator said in a statement on Tuesday. Under an agreement signed between Russia and China in Beijing earlier in the day, a branch of the ESPO oil pipeline will be built toward China and Russia will supply China with 15 million metric tons (110 million barrels) of crude annually for 20 years. "The construction of the leg should be synchronized with the construction of the first line of the ESPO pipeline," the statement quoted the company's vice president, Mikhail Barkov, as saying. The pipeline's first leg was launched in October 2008 in the reverse direction, running westwards. The construction of the pipeline, designed to bring Russian oil to the lucrative Asia-Pacific market, is due to be completed later this year, which will enable ESPO to pump its first oil eastwards. Barkov also said that China's $10 billion loan to Transeft would primarily be invested in the construction of the Chinese leg. "In addition, there are projects that will contribute to the functioning of the entire eastern pipeline and this leg in particular," the Transneft official said. A source close to negotiations said on Tuesday China would extend a $15 billion loan to Russian state-run oil giant Rosneft against the guarantee of oil supplies, while Transneft's $10 billion would be granted with the infrastructure as collateral.

Monday, February 09, 2009

Gazprom to form joint venture in Vietnam

MOSCOW, Feb. 9 (UPI) -- Russian energy monopoly Gazprom received a license for four blocks in gas fields located in the waters off the coast of Vietnam. Gazprom and PetroVietnam signed bilateral agreements to develop four blocks in October following meetings between high-level officials. The license for the four offshore south Vietnamese fields is in place for the next three decades, with the option for five-year extensions, the Platts news agency reported Monday. The four blocks encompass 17,647 square miles. The project operator will be a joint venture, Vietgazprom, between the Gazprom energy giant and PetroVietnam. Gazprom in 2007 said exploratory results at one of the blocks produced initial natural gas flow rates of about 14.1 million cubic feet per day.

Gazprom pipeline's cost may reach 24 billion euros, report says

02/09/2009 - MarketWatch - MOSCOW - The price for the OAO Gazprom-led South Stream gas pipeline carrying Russian and central Asian gas beneath the Black Sea to Europe may be EUR24 billion, the Vedomosti daily said Monday, citing a Gazprom presentation shown to investors. The part running under the Black Sea, which Gazprom plans to build jointly with Italy's Eni will cost more than EUR4 billion, while the 1,300-kilometer stretch to Austria and the 900-kilometer stretch running to Greece will cost a combined EUR15 billion and EUR20 billion, the paper said. South Stream is a rival project to the European Union-backed Nabucco pipeline, which will carry central Asian and possibly Middle Eastern gas to European markets. Both are scheduled to come carry about 30 billion cubic meters of gas to Europe by the middle of next decade. However, neither pipeline has begun construction yet.

Southern Gas Route Faces Delay

09 February 2009 - The Moscow Times - Gazprom plans to delay gas deliveries to Europe through its South Stream pipeline as it cuts investment, and the project may cost considerably more than previously announced. The start date for shipments through South Stream, originally set for 2013, will be pushed back to the end of 2014 or 2015, according to a presentation to investors Friday in Moscow. Gazprom spokesman Sergei Kupriyanov couldn't be reached for comment. The cost of the project may top 24 billion euros ($31 billion), Gazprom told investors. Energy Minister Sergei Shmatko said in July that the project might cost $20 billion. Gazprom may cut investments by 14 percent this year, according to the presentation. The gas producer said it would invest $29 billion this year, down from $33.6 billion in 2008. "Our takeaways were generally positive, including surprisingly large declines in expected capex outlays," Alfa Bank wrote in a note after the presentation. "Gazprom is adapting to the new economic reality." Gazprom's budget is based on a Urals crude price of $50 per barrel. Other scenarios assume prices of $40, $30 and $25, the company said. Exports to Europe may fall 5 percent this year to 170 billion cubic meters from 179 bcm in 2008, it said, and the average price per 1,000 cubic meters will drop to $280 from a record of $409 last year.

Yamal-Europe Gas Pipeline On Consideration

09.02.2009 - [Neftegaz.RU] - "Russia will not commence the construction of the Yamal-Europe 2 gas pipeline across Belarusian territory until after the completion of the Nord Stream and South Stream gas pipelines," Russian ambassador to Belarus Aleksandr Surikov told a news conference in Minsk last Friday. "The issue has not been discarded but rather postponed for further research," the ambassador said. He noted that long-term gas supply contracts - for periods of 20 to 30 years - with European consumers must become a precondition for considering the Yamal-Europe 2 project. At the same time, Surikov stressed, any energy supplier or producer "seeks to bypass transit states" in its supply structure. Asked about the construction of the Baltic Pipeline System oil pipeline (BPS-2, which bypasses Belarus), Surikov reminded that the decision had been "made in order to get rid of transit dependence, even if [that dependence is] on a friendly country." The ambassador also noted that, after 2009, Russia and Belarus will have to revisit the issue of separating the export duties on oil and oil products. The Yamal-Europe natural gas pipeline is 4,196 kilometers long and connects to natural gas fields located in Western Siberia, with future plans to connect the Yamal peninsula in Russia with Germany.

Gazprom To Delay Gas Deliveries Thru South Stream

09.02.2009 - [Neftegaz.RU] - According to the Moscow Times quoting a Gazprom's presentation to investors the start date for shipments through South Stream, originally set for 2013, will be pushed back to the end of 2014 or 2015. Gazprom spokesman Sergei Kupriyanov couldn't be reached for comment. The cost of the project may top $31 billion, Gazprom told investors. Energy Minister Sergei Shmatko said in July that the project might cost $20 billion. Gazprom may cut investments by 14 percent this year, according to the presentation. The gas producer said it would invest $29 billion this year, down from $33.6 billion in 2008. "Our takeaways were generally positive, including surprisingly large declines in expected capex outlays," Alfa Bank wrote in a note after the presentation. "Gazprom is adapting to the new economic reality." Gazprom's budget is based on a Urals crude price of $50 per barrel. Other scenarios assume prices of $40, $30 and $25, the company said. Exports to Europe may fall 5 percent this year to 170 billion cubic meters from 179 bcm in 2008, it said, and the average price per 1,000 cubic meters will drop to $280 from a record of $409 last year.

Gazprom estimates South Stream cost

RBC, 06.02.2009, Moscow 19:20:42 - Gazprom puts the total cost of the South Stream project at EUR 25bn, the gas giant indicated in an investor roadshow. The gas pipeline's underwater section will cost EUR 4bn to build, while the construction of a further onshore arm to Austria and Greece is estimated at EUR 15-20bn.

Thursday, February 05, 2009

Transits Through Azeri Pipeline Decreased

05.02.2009 - [Neftegaz.RU] - The Azerbaijani State Oil Co. reported Tuesday crude transportation through the 520-mile pipeline from Caspian ports to the Black Sea declined 34.7 percent in January, RIA Novosti reported Tuesday. Baku-Novorossiysk has an estimated capacity of 36.6 million barrels per year. Shipments in January 2008 were 2.6 percent less than they were in January 2007. Transits through the pipeline declined in 2007 when operators opened the Baku-Tbilisi-Ceyhan pipeline, the world's second longest, to Turkey. Flow through the 1,099-mile BTC is expected to rise in 2009 as regional suppliers look to transit their resources through the pipeline as the regional infrastructure expands. Oil from Kazakhstan's offshore Kashagan field debuted through BTC in November, marking the first time foreign oil transited through the pipeline. Azerbaijan is positioning itself as a major energy supplier with vast oil and gas reserves in the Caspian Sea.

Finland Could Back Nord Stream Pipeline

02-05-2009 - RIA Novosti - Finland could give its backing to the Nord Stream project to build a gas pipeline under the Baltic Sea to deliver Russian gas directly to Germany, the Finnish foreign minister said on Thursday. 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. Alexander Stubb said in an interview with the Belgian radio station Contact Plus that the Nord Stream project was necessary along with the South Stream and Nabucco gas pipeline projects. The South Stream gas pipeline is designed to annually pump 31 billion cubic meters of Central Asian and Russian gas to the Balkans and on to other European countries. It involves Bulgaria, Serbia, Hungary, Italy and Greece. The Nabucco pipeline is viewed as a rival to the South Stream project and is designed to link energy-rich Central Asia to Europe through Turkey, Bulgaria, Romania, Hungary and Austria, bypassing Russia and Ukraine. Construction has been tentatively scheduled to begin in 2010.

CPC pumps record volumes

02-04-2009 - Upstream OnLine - Kazakh and Russian oil exports via the Caspian Pipeline Consortium (CPC) rose to 761,340 barrels per day last month, the highest level ever, and rose 1.4% from 750,871 bpd in December, CPC said. The group exports CPC Blend from a terminal near the Russian port of Novorossiisk. Russian companies including as Rosneft, Surgutneftegaz and TNK-BP also transport crude via the link. Last year, CPC transported 32.2 million tonnes of oil, down from 32.6 million tonnes in 2007. The pipeline group is led by US supermajor Chevron and includes Russian pipeline company Transneft, ExxonMobil, Shell, BP and Lukoil . State shareholders Russia and Kazakhstan own 31% and 19% in CPC respectively. BP is leaving the Chevron-led CPC over disagreement about its expansion terms approved in December by all other consortium members.

Nabucco Consortium May Review Investment Plan

The Nabucco gas pipelineFebruary 04, 2009 - Reuters, AFX News Limited by Orhan Coskun - The Nabucco gas pipeline consortium may review its 7.9 billion euro ($10.3 billion) investment plan this year given the fall in steel prices, its Managing Director Reinhard Mitschek said on Wednesday. The pipeline could begin in Georgia and Iran or in Ankara and the consortium would consider both alternatives positively, Mitschek told reporters in the Turkish capital of Ankara. The project would carry Caspian gas 3,300 km (2,051 miles) across Turkey, Bulgaria, Romania and Hungary to an Austrian distribution hub. It is designed to diversify gas supplies to Europe by reducing dependence on Russian gas. So far it has received scant financial commitment, and it has only a fifth of the gas commitments needed to make it viable. Mitschek said the latest revisions to the cost of the pipeline were made when steel prices were at a peak. "But there has been an important drop in steel prices since then. We can revise the price of the pipeline lower in one of our meetings this year," Mitschek told a group of journalists. But the revision may come after steel prices stabilize, he added. The European Commission said last week 250 million euros would be contributed to the European Investment Bank towards funding the pipeline. Nabucco's shareholders are Austria's OMV, Hungary's MOL, Romania's Transgaz, Bulgaria's Bulgargaz, Turkey's Botas and Germany's RWE . Ahirboz, outside Ankara, had been considered for the start of the pipeline, but Mitschek said the Nabucco consortium was looking at Ankara as an option for the start of the pipeline as well as at the borders of Georgia and Iran. "We are open to both possibilities. The most important thing is feasibility," Mitschek said. A Turkish Energy Ministry source told Reuters last year that Ankara and the European Union had agreed the pipeline would start at a site near Ankara. But analysts say Ankara has frustrated the consortium by asking for a share of the gas to flow through the line in exchange for using Turkey as a starting point for the project, which has forced Nabucco partners to consider other options.

Pan-European Oil Pipeline In Doubt

February 04, 2009 - AFX News Limited - An oil pipeline intended to link the Caspian basin and Italy appears to be in doubt due to a lack of clear commitment from the partners, the head of Croatian oil pipeline operator Janaf said on Wednesday. Croatia, Romania, Serbia, Slovenia and Italy signed an agreement in 2007 on building the Pan-European Oil Pipeline (PEOP) to bring crude from the Caspian basin via the Romanian Black Sea port of Constanta to Trieste in Italy. First projections said it could become operational in 2012. "Croatia has done its part, in financial and organisational terms in this preparatory phase, but it seems that at this moment there is a lack of sufficient will for that project," Ante Markov, Janaf's chief executive, told a news conference. The PEOP's costs are estimated at between $2 billion and $3.5 billion. Some Croatian industry sources said earlier this year that the 1,400-km (870 mile) pipeline was unlikely to become operational before 2015 or even later, if at all. "Italy has not yet formally confirmed its participation in the project. Without Italy and the markets it serves, it doesn't make sense to build the pipeline," Markov said. Industry sources say Slovenia has voiced concern in talks with its potential partners about environmental protection of its sensitive karst terrain, through which the PEOP would run. Markov said that those interested in Caspian crude had shifted their focus to other pipeline projects. PEOP's envisaged annual capacity is 1.2-1.8 million barrels per day. Janaf, which is 75-percent owned by the state, its energy companies and other agencies, has a big portion of the Croatian transport facilities for PEOP already in place. Citing environmental concerns, Croatia all but dropped the Druzhba-Adria pipeline project which was meant to connect Russian oilfields with Croatia's northern Adriatic deep sea port of Omisalj a few years ago. Markov said Croatian and Russian energy officials and experts would meet in Moscow next week and will discuss potential projects involving trade and supply of oil.

Monday, February 02, 2009

EU United On Nord Stream, Nabucco - Commissioner

January 30, 2009 - Deutsche Presse-Agentur - The European Union is united on the natural gas pipelines its members aim to build in a bid to diversify bloc's supply and import routes, Energy Commissioner Andris Piebalgs said Friday. Piebalgs spoke of unity after German Chancellor Angela Merkel asked the 27-member bloc to support a Nord Stream pipeline, which would bring Russian natural gas under the Baltic Sea directly to Germany. Czech Prime Minister Mirek Topolanek, whose country chairs the EU until June 30, said Tuesday that Nord Stream, as a pipeline deepening the EU's reliance on Russian gas, was "a direct threat to the Nabucco project" that would skip Russia as a supplier. Speaking to reporters at an energy security conference in the northeastern Czech city of Ostrava, Piebalgs said that the EU has backed Nord Stream as "one of the alternative routes." "There is an agreement on this pipeline. It is not controversial," Piebalgs said, adding that Germany also supports Nabucco as Germany's gas firm RWE is a member of its consortium. "The difference of opinion is not (as) big as people feel. The EU is rather united on this pipeline policy," he told reporters. Topolanek, also present at the energy meeting, declined to comment on Merkel's letter. Poland and the Baltic states have been the chief opponents of the Nord Stream pipeline, which bypasses them. Piebalgs said that while Poland would prefer other routes Warsaw was "not hostile" to the Russian-German line. "Nobody says we do not need additional gas supplies to Germany or the Netherlands," he said. Playing down Topolanek's previous statements, Czech Vice-Premier for European Affairs Alexandr Vondra said that Europe's growing demand for gas would make use of both pipelines. The Nord Stream and Nabucco, which would bring gas from the Caspian via Turkey, "are not in competition", he said. The European Commission on Wednesday proposed 250 million euros for Nabucco but the 8-billion-euro project faces hurdles despite the backing. The EU is yet to strike a transit deal with Turkey and competes for Nabucco's supply in the Caspian with Russia, which offered Central Asian countries market-level prices. "Our chance is that each and every producer also looks for diversification," Piebalgs said. The EU backs Nabucco over a South Stream pipeline that would carry Russian gas to Italy under the Black Sea and via Greece. "We take note of it but definitely Nabucco is most important for us because it brings not only new source ... but it also brings a new route," the commissioner said

Gazprom has funds for South Stream

BELGRAD, Jan 30, 2009 (Tanjug) - Gazprom's income in 2008 will exceed 100 billion dollars, according to preliminary assessments, and its net profit 35 billion dollars, which indicates that the Russian concern has a solid financial basis for the realisation of the South Stream gas pipeline, which could open 100,000 new jobs in Serbia, an analysis published by the Russian news agency RIA Novosti said. The South Stream will make it possible for southern and central European countries to satisfy their growing need for gas, but also bring them tangible economic benefit in the form of opening of new jobs and financial inflow from the transit of gas, said the analysis written by Russian ecomic analyst Oleg Michayev. The analysis said that the South Stream would bring Serbia two billion euros of FDIs, 200 million euros from the gas transit tax per annum and another 100 million euros for the servicing and quality control of pipeline sections.

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