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Tuesday, March 31, 2009

Turkmenistan: international tender for Caspian pipeline spur opens, Gazprom must compete

03–30–2009 – Eurasianet – Turkmenistan has launched an international tender for the construction of a pipeline that Gazprom had once considered a done deal. The move highlights increasing friction between Ashgabat and the Kremlin on energy issues. The tender for the East-West spur, which should link Turkmenistan’s vast gas deposits with the Moscow-controlled Prikaspiiski pipeline network, had to date only been associated with the state-owned Russian gas giant. Now, Gazprom will have to place a bid and compete against other international companies. The 600-kilometer spur is estimated to cost roughly $1.5 billion. In 2008, Gazprom pledged to finance the project using its own funds, but Russia’s economic woes have hit the gas giant especially hard. [For background see the Eurasia Insight archive]. Following the failure of Turkmenistan and Russia to ink a deal earlier in March during an official visit to Moscow by President Gurbanguly Berdymukhamedov, Russian media outlets have speculated that Russian officials are now worried that Ashgabat might try to double-cross the Kremlin. A source in Ashgabat told the Vremya newspaper on March 30 that "the Turkmen leader did not want to give the Kremlin assurances that the infrastructure will be used only to increase exports to Russia through the planned [Prikaspiiski] gas pipeline. And Moscow did not want to sign [away] billions in investment, given the high risk of shifting some or even the entire volume of gas in the Trans-Caspian gas pipeline [outside of] Russia." According to the tender, companies may compete to design and construct the spur which is being billed as between 800 and 1,000 kilometers in length. "This project will have significant positive impact on economic and political processes in different regions of the world, in addition to the obvious commercial benefits for participants as well as potential consumers," the Turkmen state news agency commented March 27.

Monday, March 30, 2009

No alternative to South Stream through Serbia - Gazprom

Mar 30, 2009 BELGRADE, (Tanjug). Deputy Chairman of the Board of Executive Directors of Russian energy company Gazprom and Director-General of Gazexport Alexander Medvedev has said that the route of the South Stream gas pipeline through Serbia is a priority for Russia and Gazprom and that a route through Romania is not being considered as an alternative. Medvedev expects technical preparations for the project to be completed by the end of this year for all involved countries, and said that research has been requested for the section from Russia to Europe, to be followed by steps concerning the transit of gas to consumers. South Stream will be completed by the end of 2015 and pipeline capacity will be increased from 30 to 47 billion cubic meters, he said in an interview to Novosti daily.

Friday, March 27, 2009

Gazprom firmly intends to complete South Stream proj in 2015

MOSCOW, Mar 27, 2009 (Prime-Tass) -- Russia’s natural gas monopoly Gazprom has a firm intention to complete the South Stream gas pipeline project in 2015 despite the ongoing economic crisis, the company’s Deputy CEO Alexander Medvedev said Friday, ITAR-TASS reported. Gazprom is also currently considering increasing the annual throughput capacity of the proposed pipeline to 47 billion cubic meters from 30 billion cubic meters planned initially, Medvedev said. Medvedev added that the company planned to complete the feasibility study of the project by the end of this year. The final agreement on the implementation of the South Stream project is expected to be signed in Bulgaria at the end of April, Medvedev also said. The South Stream pipeline is expected to be built by Gazprom and Italian energy company Eni. The pipeline will run from Russia under the Black Sea to Bulgaria and then branch into two stretches. The first stretch is expected to run to the southwest via Bulgaria and Greece to Italy, while the second stretch is expected to run to the northwest to Austria.

Thursday, March 26, 2009

Russia, Turkmenistan fail to sign pipeline agreement

03-26-2009 - RIAN by Sanobar Shermatova - MOSCOW: The Moscow visit of Turkmen President Gurbanguly Berdymukhammedov on March 25 has clarified relations between the two countries. Turkmenistan, a country in Central Asia, has huge reserves of natural gas, which its neighbors need to meet their energy requirements. But what does it need from Russia? Russia's policy in Central Asia is focused on gaining access to its energy resources. The Caspian pipeline project, which Vladimir Putin negotiated with Turkmenistan, Kazakhstan and Uzbekistan, badly needs Turkmen gas to become effective. Russian President Dmitry Medvedev hoped to sign an intergovernmental agreement on building a West-East pipeline across Turkmenistan, which would have advanced the project lobbied by Moscow to a new level. Under the plan, the pipeline would link deposits in northeast Turkmenistan to the Caspian Sea. However, the sides have not signed the agreement, and details of the two presidents' talks point to problems with financing the West-East pipeline. Russian Energy Minister Sergei Shmatko will soon go to Ashgabat to finalize the agreement, which is to be signed during the president's next meeting, Russian presidential aide Sergei Prikhodko told the media. Although the project has been put off, it is unlikely that Moscow has lost it. Turkmenistan is currently formulating a strategy of national development. The Moscow visit by its president should be viewed against the backdrop of his official visits to Kazakhstan in May 2007 and Uzbekistan in February 2008. The latter two countries proposed their own schemes for consolidating the Central Asian countries, where Turkmenistan is assigned a special role. Ashgabat is cleverly evading the attempts of its large neighbors to draw it into the zones of their influence, which highlights the country's political priorities. Turkmenistan's relations with Russia will differ from Kazakhstan and Uzbekistan's relations with the Kremlin. However, a rapid rapprochement between them is unlikely. Evidence of this is the refusal to accept a simplified visa regime proposed by Russian Deputy Prime Minister Viktor Zubkov. Sources say the new regime was only planned to facilitate visits by Russian businessmen. The complicated consular procedures could be eventually simplified. But nothing is done quickly in Turkmenistan, which abides by the golden rule: Why run when you can walk? The hierarchy of Turkmenistan's priorities, where Russia so far holds the top spot, will be certainly complemented by other partners. Turkmenistan could also review its associated status in the CIS. Recently, it proposed holding the conference of the Council of the CIS Foreign Ministers in Ashgabat, which may be good news for its neighbors.

EU Piebalgs:Nabucco Pipeline Won't Solve Energy Needs

March 26th, 2009 – BRUSSELS -(Dow Jones) - The planned Nabucco pipeline won't solve Europe's energy needs as it will only be one source of diversification, European Energy Commissioner Andris Piebalgs said Thursday. "It's important, but it's not basic change," Piebalgs said during a panel at a business conference. He said energy efficiency, renewable energy and other similar policies would create the "basic change" the European Union needs to make in order to reduce its dependence on energy imports, while at the same time meeting the challenges of increased energy demand. The European Commission has been considering the Nabucco project - a 3,300-kilometer pipeline supposed to bring central Asian gas to Europe - as a priority to differentiate E.U. energy supply sources, mainly away from Russia. However, the project has raised skepticism by some experts and E.U. countries, which question the availability of enough gas in central Asia to fill the pipeline and make it commercially viable.

Burgas-Alexandroupolis oil pipeline construction to start in 2010

03-26-2009 - RIAN - The construction of the Burgas-Alexandroupolis oil pipeline will start in 2010, the Greek development minister said after a meeting with the president of Russia's state pipeline operator, Transneft.

Wednesday, March 25, 2009

Moscow fury at Kiev gas move

03-24-2009 - Upstream OnLine - Russia broke off talks with Ukraine today after Kiev angered the Kremlin by asking European Union investors to help modernise its gas pipeline network which supplies about 20% of Europe's gas. The spat over investments in Ukraine's gas pipeline network has revived fears of a repeat of the January gas dispute between Russia and Ukraine when major EU customers were left without gas for nearly two weeks in the dead of winter. European officials on Monday welcomed a Ukrainian plan to modernise its gas network but Russia is dismayed that it was not included in the discussions. Prime Minister Vladimir Putin threatened to review ties with the European Union and officials warned that the risk of gas supply disruptions would rise if Russian interests were ignored. President Dmitry Medvedev today said Russia has postponed talks with Ukraine's government and that Moscow had a number of questions about the EU-Ukraine gas discussions. "We had planned to hold inter-governmental consultations next week," Medvedev told a meeting of senior officials at the Russian security council. "We need to think about postponing them. Such consultations will take place only after the Russian side clarifies a number of issues," Reuters quoted him as saying. "Russia has... number of questions about the final declaration." Ukrainian Prime Minister Yulia Tymoshenko said the overhaul of the gas transit system was not aimed against Russia. "Neither Russia nor Europe lost yesterday. Ukraine simply defended its national interests," Tymoshenko told a news conference. "Russia can also take part in investment projects, in reconstruction and modernisation." But the force of the Russian reaction indicates the sensitivity of the big power efforts to gain leverage over Ukraine's gas pipeline network. A Ukrainian source close to gas talks said negotiations between Gazprom and Ukraine's state gas company, Naftogaz, could be complicated by Russia's reaction to the pipeline plan. "All this may significantly complicate talks between Naftogaz and Gazprom," the source said. The two companies are in talks on the price Naftogaz will have to pay for gas in the second quarter of this year.

Nabucco-South Stream 1-0

23 March 2009 - New Europe by Kostis Geropoulos - Despite efforts to the contrary, European Union leaders in Brussels have given final approval to 200 million of investment in the controversial Nabucco project, mentioning the gas pipeline by name. This is a victory for the European Commission, which now hopes that these funds will be used to raise more money to help construct the pipeline, which will carry Caspian natural gas to Europe, lessening EU’s dependence on Russia. The spokesman for EU Energy Commissioner Andris Piebalgs, Ferran Tarradellas Espuny, could not hide his enthusiasm. “Nabucco is being done. We received the money,” he told New Europe late on March 20. London-based HSBC analyst Paul Spedding noted that 200 million is “only a drop in the ocean. Nabucco will cost billions.” However, he told New Europe, “It’s a good start that could help unblock the project.” The EU energy spokesman explained that the EU will not give 200 million to the Nabucco consortium, but to the European Investment Bank, which in turn will use this money to raise more money. “When a bank raises money out of the funds it has received it can go from one to 10 so it’s possible that the European Investment Bank could raise funds of about two billion for Nabucco,” Tarradellas Espuny said. “The idea is that Nabucco is not going to receive 200 million, but it’s going to receive loans for maybe two billion, which they would have to give back of course. But they are going to have credit in a time that is very difficult to get credit,” he said. He reminded that the feasibility study for Nabucco is already done and that this money would be spent to construct the pipeline and generate jobs, which is the idea behind the recovery plan. The EU leaders have given final approval to five billion Euro of investment in energy and telecom infrastructure projects, including Nabucco and the ITGI project. The ITGI gas pipeline that will carry from Azerbaijani gas to Italy via Turkey and Greece has been allocated 100 million. The investments are part of a larger EU economic stimulus programme aimed at combating the global economic downturn. “It is construction, creating jobs, putting tubes on the ground, buying steel... Otherwise it doesn’t make sense; with a feasibility studies you don’t spend money, you don’t create jobs, you don’t re-launch the economy. This is the point of the recovery plan,” Tarradellas Espuny said. Initially, German Chancellor Angela Merkel came out against the proposal, saying that there was no need for EU financial support for Nabucco. Merkel also said Germany would only support projects that had a stimulating effect on the economy in 2009 and 2010. This was interpreted as an argument against Nabucco, as the pipeline’s construction is supposed to start only in 2011. “The issue is not about Nabucco but rather long-term verses short-term investments,” Spedding said, adding that building pipelines is a long-term goal. “Nabucco is about boosting energy security,” he said. Markel’s pressure, however, may have eventually worked to Nabucco’s advantage given that the construction of the pipeline will have to start sooner. “It is money that has to be committed before 2010,” the EU spokesman told New Europe. “This for Nabucco is very, very important because it means they are not going to wait. Moreover, it’s possible that they are going to advance it otherwise they are going to lose the money. That’s for Nabucco and for all the other pipelines. All the companies that want to make these projects know that they are going to have money and they are going to start building earlier than expected, which the very idea of the recovery plan,” Tarradellas Espuny said. Nabucco also overcame another hurdle last week. In a previous conclusions document presented at the EU summit, the Nabucco name had been replaced by the more general expression “Southern Energy Corridor.” Romania, Austria, Poland and Slovakia did not accept this replacement and said they could not vote the projects list unless Nabucco was on it. The EU energy spokesman said that he is very happy that the word “Nabucco” was included in the project list. “Personally I’m very satisfied. The fact that they called it ‘Southern Corridor’ gave me a lot of problems because they immediately thought they were talking about South Stream and had to make a lot of telephone calls to tell them that it isn’t like that. ITGI is also mentioned by its name and it is receiving an additional amount of money. If you take the Southern Corridor as a whole it’s an additional amount of money than initially thought for Nabucco,” he said. Don’t break out the champagne just yet. HSBC’s Spedding said that securing financing and adequate gas supplies as well as competition from Russia’s rival South Stream pipeline were issues that would determine Nabucco’s future. Russian energy monopoly Gazprom is moving in favor of its South Stream pipeline to Italy and Central Europe. “Unlike in the case of Nabucco, we have everything we need for this project (South Stream) to materialise,” Russian television quoted Gazprom deputy chief Alexander Medvedev as saying earlier last week. “We have gas, the market, experience in implementing complex projects and corporate management.” But the EU energy spokesman, who just returned from an EU-Russia energy dialogue in Moscow on March 20, brushed off Moscow’s claims. “They say a lot of things. They say South Stream on the contrary is more advanced. Well, Nabucco is going to have money and South Stream I don’t know where it’s going to get the money from,” Tarradellas Espuny said. He said the European Commission is not afraid of a little healthy competition so bring it on. “Competition, well, we are for free markets and competition is not bad. But we support Nabucco and when the Commission supports something normally it goes forward. I think Nabucco is going to be done. There are things to be solved, but there is a lot of will and commitment to be done by all the parties including Azerbaijan, Turkey, the European Union with the interest of other countries like Turkmenistan,” he said. “We don’t think it’s going to be easy, but it’s going to be done.”

Tuesday, March 24, 2009

France adds voice to Nabucco chorus

03-19-2009 - Upstream OnLine - A French government minister has called on Turkmenistan to join the planned Nabucco pipeline that would deliver gas from Central Asia and bypass Russia. Foreign Trade Minister Anne-Marie Idrac, on a visit to the Central Asian state, told reporters late last night she had discussed the issue with the Turkmen government. "Of course, as a gas consumer, France is interested in seeing a new westward route for Turkmen gas some day," Idrac told Reuters through an interpreter. "France is contributing a lot to forming a positive opinion on this project among the Europeans." Shoring up the reliability of European Union energy supplies has topped the bloc's agenda since a row between Moscow and Ukraine in January halted Russian gas flows to eastern Europe in the depths of winter. To curb its reliance on Russian gas, the EU is backing the 3300 kilometre Nabucco pipeline from Central Asia to Austria, though analysts said the project has so far secured only a fifth of the gas needed to break even. Turkmenistan, Central Asia's largest gas producer, has said before it was interested in Nabucco, but is at the same time pressing ahead with a new pipeline to Russia which currently buys most of its gas - about 50 billion cubic metres a year.

Thursday, March 19, 2009


3/19/09 - Eurasianet.org - It would seem the European Union is losing faith in the long-sought Nabucco pipeline project. The pipeline has disappeared from an EU list of projects designated to receive development assistance of up to 5-billion euros. Perhaps not coincidentally, Nabucco fell off the EU list at the same time the Russian energy conglomerate Gazprom announced that it had turned down an offer to participate in the Nabucco project. A top company official, Alexander Medvedev, said during a March 16 interview broadcast by the Vesti television channel that Gazprom would devote its resources to developing the rival South Stream pipeline. EU foreign ministers, meeting on March 16, apparently made the decision to downgrade the Nabucco project. In January, the EU set aside $250 million euros to help with pipeline construction. Around the same time, however, a summit meeting in Budapest, convened in order to jump start Nabucco, ended in disappointment. The pipeline project remains bogged down by questions about natural gas supplies. [For background see the Eurasia Insight archive]. The inability to bring clarity to this issue apparently played a major role in the EU funding decision.

Deferring Nabucco Is Win-Lose for Gazprom

19 March 2009 - The Moscow Times - On Monday, the foreign ministers of 27 European Union countries could not agree on the 3.5 billion euro budget for energy projects. This means, among other things, that the fate of the Nabucco project, which was supposed to be allocated 250 million euros, has been essentially put on hold. Cutting the priority for the Nabucco gas pipeline, which if built will bypass both Russia and Ukraine, can be seen as either a victory for Gazprom or as a relief for the EU members, whose budgets have been heavily taxed by the financial crisis. Although France and Italy also supported the downgrading of Nabucco, Germany, which stands to be on the receiving end of the Nord Stream pipeline, is Nabucco's largest opponent. Nord Stream's shareholders include Gazprom with 51 percent, German enterprises E.On and BASF with 20 percent each and Dutch Gasunie with 9 percent. Most of the skepticism surrounding Nabucco centers on the lack of gas to fill it. Iran, with the world's second-largest natural gas reserves, could easily fill the pipeline, but it is impossible to imagine Tehran as a reliable partner in Nabucco considering how many sharp points of contention there are between Iran and the United States (and many EU members as well) -- mainly over Tehran's nuclear program. Turkmenistan, which has the world's fifth-largest reserves of natural gas, could play a prominent role in Nabucco, but this would require building a new Trans-Caspian pipeline. Moreover, there are security issues regarding transit routes through Georgia and Turkey. Gazprom's other proposed project, South Stream, which would transport gas from Russia to Bulgaria and onward to other European countries via the Black Sea, would be Nabucco's competitor. Now Gazprom can see itself as the victor. While Europe is shelving Nabucco until more prosperous times, Gazprom continues to see the ambitious South Stream and Nord Stream projects as their key strategic priorities. On the other hand, Gazprom's gas exports to Europe have shrunk since the beginning of the year by 40 percent in comparison with the same period a year ago. Moreover, long-term forecasts point to European demand for gas dropping much more than previously believed, which makes the Nabucco deferral logical. Gazprom may believe that the Nabucco downgrade strengthens its status as a near-monopoly supplier of gas for Europe. But the price of having this privilege may prove to be very expensive.

Wednesday, March 18, 2009

Russian Oil Cos Look For Foreign Loans

16.03.2009 - [Neftegaz.RU] - According to unofficial data, Rosneft, LUKoil, Gazprom Neft and Tatneft are each in talks with consortiums of foreign banks on the opening of pre-export credit lines worth a total of roughly $5 bln. Rosneft and LUKoil have the most significant debts, amounting to $21.2 bln and $9 bln, respectively. According to RBC, analysts believe, however, that this will not prevent Russian companies from securing funds that they need during the period of liquidity deficit. The ruble's devaluation and lower taxes are expected to play to the companies' advantage. Meanwhile, if the price of oil slumps to $25 per barrel, oil companies may find it hard to refinance their debts. Rosneft and LUKoil expect to take out loans of up to $1.5 bln each, while Tatneft is seeking $1 bln, and Gazprom Neft hopes to secure between $500 mln and $600 mln.

Nabucco gas pipeline is not on EU’s agenda anymore

Nabucco pipeline17 March, 2009 - Russia Today - The ambitious Nabucco pipeline project intended to pump Central Asian natural gas to Europe bypassing Russia has been excluded from EU’s priority projects, a source in the EU’s Council of Ministers said on Tuesday. The Nabucco gas pipeline is to be laid through the territories of Azerbaijan, Georgia, Turkey, Bulgaria, Romania, Hungary and Austria to connect Europe with Central Asia, which is rich in hydrocarbons, bypassing Russia. The project is supported by 27 EU members, all the transit countries, and the US. The estimated cost of Nabucco pipeline, construction planned to start in 2010, is $10 billion. The previously announced €250 million (approximately $323 million) allocated to start the project were recently cut to just €50 million ($64.5 million) due to the economic crisis. From the very beginning the project was considered as a rival to Russia’s South Stream gas pipeline designed to annually pump 31 billion cubic meters of natural gas from Russia and Central Asia via the Balkans to Europe. Bulgaria, Serbia, Hungary, Italy and Greece have already agreed to participate in the project. Russia-Ukraine gas conflicts raised concerns over the energy dependency of Europe once Russia completely cut off gas supplies to Ukraine at the beginning of January 2009 after failing to reach agreement over annual gas prices payment of a Ukrainian gas debt. Later on Russia stopped gas deliveries to Europe via Ukraine, stating that the latter was stealing transit gas. Kiev denied the accusation.

Tuesday, March 17, 2009

Gazprom turns down invitation to join Nabucco project

MOSCOW, March 17, 2009 (RIA Novosti) - Gazprom has received an invitation to join the Nabucco pipeline project to pump gas from Central Asia to Europe, but will not take up the offer, a deputy head of Russia's energy giant said. In an interview with Vesti TV on Monday, Alexander Medvedev said Gazprom would stick with its South Stream project and stay out of Nabucco. "Unlike in the case of Nabucco, we have everything we need for this project [South Stream] to materialize," he said. "We have gas, the market, experience in implementing complex projects, and corporate management." The executive said Gazprom was not prepared to split its operations between two projects simultaneously. "You chase two rabbits, you catch neither. We have a rabbit we know, and we will chase it," he said. The $10 billion Nabucco pipeline, backed by the European Union and the U.S., is intended to link energy-rich Central Asia to Europe through Azerbaijan, Georgia, Turkey, Bulgaria, Romania, Hungary and Austria, bypassing Russia and Ukraine. Construction has been tentatively scheduled to begin in 2010. The South Stream 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, but its capacity could be increased by a further 16 billion cu m. The project involves Bulgaria, Serbia, Hungary, Italy and Greece. Russia's transit disputes with its former Soviet neighbors have raised concerns in Europe about too much energy dependence on Russia. Russia cut off gas supplies to Ukraine on January 1 after failing to reach a deal over debt and prices for 2009 in late December, and later halted gas deliveries to Europe, saying Ukraine was stealing transit gas. Kiev denied the accusation.

Monday, March 16, 2009

Korea Gas Seeks to Join Sakhalin-Vladivostok Pipeline Project

March 16 (Bloomberg by Shinhye Kang) -- Korea Gas Corp., the world’s biggest buyer of liquefied natural gas, is seeking to take part in a Russian pipeline project to connect fields at Sakhalin with the port of Vladivostok near the North Korean frontier. Joining the development of the 2,000 kilometers (1,243 miles) link proposed by OAO Gazprom may help the country secure a stable supply of the fuel, Yoon Byung Cheol, leader of the Russia Project Team at Korea Gas, said today by phone from Seongnam. South Korea is turning to Russia, holder of the world’s biggest proven gas reserves, as it faces stronger competition for energy from China and Japan. Korea Gas signed an initial accord with Gazprom in September to import 10 billion cubic meters of gas annually for 30 years, equivalent to almost a quarter of the country’s yearly needs, starting in 2015. South Korea is seeking the consent of North Korea to build an overland pipeline on its territory to Vladivostok. If that fails, supplies may be delivered by an undersea pipeline, a costlier option, Yoon said. Russia has a 19-kilometer frontier near Vladivostok with North Korea, which is separated from South Korea by a heavily armed border.

Friday, March 13, 2009

Kazakhstan & Turkmenistan deal blow to Nabucco pipeline prospects

pipeline03–12–2009 – Eurasianet.org – Turkmenistan and Kazakhstan have reaffirmed their support for a Russian-backed project to expand natural gas exports out of Central Asia. The news is not a welcome development for those advocating the construction of a new European export route, dubbed Nabucco. According to a statement issued by Kazakhstan's government, Prime Minister Karim Masimov and Turkmen President Gurbanguly Berdymukhamedov met in Tehran on March 11 on the sidelines of the Economic Cooperation Organization summit and renewed their commitment to the stalled expansion of the Prikaspiisky pipeline network. "During the meeting much attention was paid to the construction of the Prikaspissky gas pipeline project. The parties noted that 'everything is on schedule and no problems in the implementation of this project are anticipated,'" the statement said. The pipeline is a joint Gazprom, KazMunaiGaz and Turkmengaz project. According to Gazprom's website, the conduit is designed to carry up to up to 30 billion cubic meters (bcm) of Turkmen gas and 10 bcm of Kazakh gas a year. Construction is due to start later this year. Some experts believe that if the Prikaspiisky expansion proceeds, there might not be sufficient export supplies available to make the planned Nabucco route economically viable

Thursday, March 12, 2009

South Stream gas pipeline to be launched in 2015 - Putin

MOSCOW, March 10, 2009 (RIA Novosti) - Russia's prime minister said on Tuesday that the South Stream gas pipeline would be commissioned in 2015, and that construction costs were estimated at 10 billion euros ($12.7 billion). "Construction will cost around 10 billion euros. And there will be no problems with funding," Vladimir Putin told a news conference in Moscow following intergovernmental talks with Hungary. The Russian premier said that Russia had sufficient natural gas reserves to meet Europe's demand "for practically a century." The South Stream pipeline is designed to pump 31 billion cubic meters per year of Central Asian and Russian gas to the Balkans and on to other European countries, but its capacity could be increased by a further 16 billion cu m. The project involves Bulgaria, Serbia, Hungary, Italy and Greece. During the consultations, Putin said: "Today an important step will be made towards implementing our accords. A basic agreement on cooperation between Gazprom and the Hungarian Development Bank will be ready for signing." Plans have also been finalized for a gas storage facility. "A separate document on building a large underground gas storage facility on the territory of Hungary has been drafted. Hungarian company MOL is Gazprom's partner in this project," Putin said. "The gas storage facility will have a capacity of over 1 billion cubic meters. This is a large volume, which will enable us to ensure energy security, and the stability of the Hungarian energy sector." The facility will be put into service in 2012-2013.

Wednesday, March 11, 2009

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

03–09–2009 – MOSCOW (MarketWatch) - 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.

Monday, March 02, 2009

Gazprom builds up gas exports to Turkey

2 Mar 2009 - Steel Guru - Itar-Tass reported that Gazprom has increased days gas supplies to Turkey by 25.4 million cubic meters. Gazprom press service said that on February 11th to 25 the volume of gas exports to Turkey through the Blue Stream gas pipeline had grown from 20 to 29 million cubic meters, as well as Russia's gas export through the western route via Ukraine, Moldova and Bulgaria - from 20 to 29 million cubic meters. The press service said at present, the overall gas export to Turkey is 67.4 million cubic meters a day. Gas supplies in a bigger volume continue. It is not the first time when the Russian gas giant meets the needs of Turkish gas consumers. Earlier, the Turkish Botas company had often asked for a bigger volume of gas exports, and Gazprom always satisfied the Turkish demand, given technical possibilities. Turkey is Russia's second biggest gas importer after Germany. In 2007, Russia exported 23.4 billion cubic meters of gas to Turkey.

Nabucco Must Not Get Public Money - Merkel

exclamation sign March 02, 2009 - AFX News Limited - German Chancellor Angela Merkel said on Sunday the Nabucco gas pipeline must not be subsidized with public money. To curb its reliance on Russia, the EU is backing the Nabucco pipeline which would carry Caspian gas across Turkey, Bulgaria, Romania and Hungary to an Austrian distribution hub. Merkel was speaking to reporters after an EU leaders summit.

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