Vol. 54, n° 6, March 13, 2015 Main news · Vol. 54, n° 6, March 13, 2015 . Main news . LNG: ... • Trans-Afghan gas pipeline may become a ... He stated this while talking to media

Vol. 54, n° 6, March 13, 2015

Main news LNG: Production

• Santos GLNG Brings First Gas into LNG Plant. LNG: Supplies- Imports – Exports

• Chevron's Gorgon to ship first LNG cargo by year-end. • European Ports Set to Lose LNG Supply to Egypt This Summer. • Indian State of Gujarat to Get Two New LNG Terminals. • Shell, consortium explore possible supply of LNG to Ghana power project. • Yamal and Fluxys contract for LNG transhipment at Zeebrugge Terminal.

LNG: Price

• Australian LNG projects can weather oil price of $45/barrel. LNG: Use as Automotive Fuel

• Whitbread partners with ENN to open LNG refuelling station.

LNG: Use as Marine Fuel • Shell contracts first LNG-fuelled supply vessel for deepwater Gulf of Mexico.

LPG: Use as Automotive Fuel

• Time for Government to rectify historic LPG investment withdrawal gaffe. Natural Gas: Production

• BP to develop Egypt’s West Nile Delta Gas fields. • Premier Oil starts gas production in Indonesia.

Natural Gas: Supplies- Imports – Exports

• Ankara Seen Stalling Russian Hopes on 'Turkish Stream' Gas Plan. • Trans-Afghan gas pipeline may become a reality. • Europe's energy market & Gazprom: our evolving relationship. • Great chance for Nabucco to be realised.

Natural Gas: Storage

• Underground gas storage capacity 'key to energy security'.

Cedigaz News report - CNR54-6

LNG

PRODUCTION

RUSSIA:

Rosneft clinches LNG deal with Golar

Russia renewed its focus on LNG on Thursday, with Rosneft and Golar signing a Memorandum of Understanding.

"Within the ambit of the memorandum the parties will analyze the possibility of employing Golar’s advanced FLNG (Floating Liquefaction of Natural Gas) commercialization technologies at Rosneft projects, potentially opening new markets to Rosneft, one of the leading gas producers in the world" reads the note released on Thursday.

The company led by Igor Sechin sees the MoU as an instrument to strengthen production, while reducing upfront CAPEX for LNG plants.

In 2014, Rosneft reported a 49% increase in gas production to 56.7 bcm. The company is looking to increase its LNG focus, given the decision of the Kremlin to liberalise its export regulations for LNG (December 2013), while maintaing Gazprom’s monopoly on pipeline exports. (March 5, 2015)

03/06/2015

AUSTRALIA:

Santos GLNG Brings First Gas into LNG Plant

Marking an important step towards plant commissioning, Santos GLNG on Monday said it has brought first gas into its LNG plant on Queensland’s Curtis Island.

The gas brought into the two-train facility will fire the first gas turbine generator to be used for high voltage power generation, Santos said in a statement.

Santos Vice President Downstream GLNG Rod Duke said: “We’ve completed almost all of the construction required for initial production, and LNG plant commissioning is progressing strongly.”

A number of plant subsystems have been commissioned so far, including emergency electric power generation, power distribution and switchboards, instrument air, nitrogen, diesel supply, water systems, inlet gas separation and filtration, and the main flare, Santos GLNG said. Commissioning will continue as Santos GLNG approaches first LNG in the second half of this year.

“Santos GLNG is over 90% complete and on track for first LNG in the second half of 2015,” Duke said.

Santos GLNG is a joint venture between Santos, PETRONAS, Total and KOGAS. (March 9, 2015)

03/10/2015


SUPPLIES - IMPORTS - EXPORTS

AUSTRALIA:

Chevron's Gorgon to ship first LNG cargo by year-end

Chevron will ship its first LNG cargo from the $US54 billion ($70.7 billion) Gorgon project before year's end and said the monster venture would be "nicely profitable" despite the drop in crude oil prices.

Incoming head of upstream Jay Johnson said gas would arrive at the plant being constructed on Barrow Island off the WA coast "any day", to be used to fire up the first gas turbine generator. First production would be in the third quarter, and the first LNG exports by the end of the year.

Gorgon, the biggest single resources project ever built in Australia, was originally expected to begin production before December 31 last year but its schedule has slipped, while the budget has also surged from an initial estimate of $US37 billion when approved by its partners in September 2009. The start-up timing given in the briefing, however, confirms output will begin this year, despite some concerns in the market that it could slip into 2016. (March 11, 2015)

03/11/2015


IVORY COAST:

Ivory Coast Signals Intention to Import LNG from Nigeria

Nigeria may soon begin to supply Liquefied Natural Gas (LNG) to the Republic of Cote d’Ivoire which has indicated its intention to enter into trade relationship with Nigeria on LNG.

Cote d’Ivoire’s latest intention was on Thursday disclosed by the Nigerian National Petroleum Corporation (NNPC) which said the development was a positive one in Nigeria’s move to seek broader frontiers for its LNG away from the traditional Asian-pacific hub.

NNPC in a statement conveying the development, also noted that it was the first of its kind and good for Nigeria’s sub-regional push to market its LNG.

Cote d’Ivoire, it said, will procure LNG supplies from Nigeria to support of its growing power needs.

In a statement signed by NNPC’s Group General Manager Public Affairs Division, Ohi Alegbe, in Abuja yesterday, explained that the package would see Nigeria commit a small chunk of its daily LNG output which stands at over three billion cubic feet of gas per day, to its sub-regional neighbours in the first instance before the eventual extension of the West Africa Gas Pipeline to Cote d’Ivoire and Senegal.

Ohi stated that a delegation from the Ivorien Ministry of Energy, led by one if officials, Kone Moussa was at the NNPC Towers to state their intentions.

They said that their country would be relying on structural diversion of LNG cargoes from Nigeria as a starter within the next few months to tackle their growing energy needs.

Moussa informed that the country has already entered into a working relationship with Sahara Energy to drive the process.

The Group Managing Director of the NNPC, Dr. Joseph Dawha, who received the delegation, stated that the corporation would be ready to cash in on the opportunity in line with its overall strategic expansion drive for Nigeria’s LNG market.

Dawha’s perspective was equally echoed by Dr. David Ige, Group Executive Director, Gas and Power of the corporation, who emphasised that the move would help broaden the supply base.

Ige said: “At the moment, the entire West African sub-region starting from Nigeria is undergoing phenomenal economic growth and that practically translates into a higher demand for energy.

As you know, the West African Gas pipeline terminates in Ghana, so Cote d’Ivoire has come to request that we bring gas to them in the first instance by LNG and ultimately in the future by extension of the pipeline.”

He further noted that apart from offering a strategic opportunity for NNPC and Nigeria, the project is in line with the spirit of the New Partnership for Africa Development (NEPAD) and would serve the mutual growth of ECOWAS member countries by fostering the economic integration of the West Africa’s corridor.

“What this means is that in future we don’t have to go as far as Europe or Asia to supply LNG when we can do so next door,” he said.

The statement also said a delegation from Ghana led by the Minister of Power, Kwabena Donkor, was earlier at the NNPC Towers to seek support on recent unintended gas supply disruptions in the West Africa Gas Pipeline (WAGP) grid.

Ige promised that the NNPC was working aggressively with all other partners in the WAGP to restore supply disruptions wrought by extraneous factors.

“It has been a very difficult time not only for Ghana but for Nigeria as well because of the disruptions in pipelines.

“But I believe and strongly too that the various interventions that are ongoing by the Federal Government would help restore as well as grow the reliability of the WAGP,” he said. (March 13, 2015)

03/13/2015


EGYPT:

European Ports Set to Lose LNG Supply to Egypt This Summer

Europe is likely to attract fewer liquefied natural gas (LNG) shipments than previously expected this summer as Egypt gears up to become the region's top-paying importer, traders said, potentially increasing gas prices in northwest Europe.

While analysts still expect more LNG to land in Europe this year than in 2014, forecasts will be tempered by increased competition with Egypt, signalling tighter supplies at a time when Dutch authorities move to limit production from Europe's biggest gas field.

That may force gas prices higher in northwest Europe as utilities look to refill depleted inventories, analysts said.

A year-long demand slump in Asia, the world's biggest LNG market, has triggered a rush of sea-borne deliveries to typically overlooked European ports over the past two months, raising expectations that more will come during the summer.

"The start-up of new production plants in Australia and Papua New Guinea, with three more due to start in Australia this year, should mean that more flexible production from Qatar gets diverted into Europe," an analyst at a European utility said. (March 12, 2015)

03/13/2015

PAKISTAN:

First shipment of LNG to be arrived on March 26

Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi on Friday said that the first shipment of Liquefied Natural Gas (LNG) would arrive from Qatar on March 26 and supply would be injected in the system by March 31.

He stated this while talking to media at a signing ceremony at ministry. Ministry of Petroleum and Natural Resources secretary and Petroleum Concession DG was also present on the occasion. The minister said that in first year 200 mmcfd LNG would be imported following the agreement and later it will be increased upto 400 mmcfd. He said that it is very cheap fuel in comparison with diesel and others. He said that the licenses of those oil and gas exploration companies not working in their blocks for long time would be canceled. Khaqan Abbasi said that the ministry has canceled one license of Islam Ghar block and issued notices to 19 companies. He said that there is not like dislike for companies but we want they start work and complete it as soon possible. (March 13, 2015)

03/13/2015


INDIA:

GAIL interested in participating LNG importation project

GAIL has decided to undertake an evaluation of various opportunities in the setting up LNG importation facilities in Odisha and has accordingly, withdrawn the EOI process.

The Exchange had sought clarification from Gail (India) Ltd with respect to news article appearing in Financial Chronicle on March 04, 2015 titled "GAIL drops plan to set up Odisha LNG terminal"

Gail (India) Ltd replied stating "We would like to clarify that in October 2013, GAIL had signed MoU with Paradip Port Trust for setting up an FSRU Project within the port limits of Paradip Port. GAIL has also assessed technical feasibility of the FSRU Project at Paradip. Thereafter, GAIL initiated the process of selecting a Strategic Partner by inviting 'Expression of Interest' (EOI) from interested parties for becoming a Strategic Partner in GAIL's FSRU Project at Paradip Port, Odisha.

GAIL has decided to undertake an evaluation of various opportunities in the setting up LNG importation facilities in Odisha and has accordingly, withdrawn the EOI process. However, GAIL continues to remain interested in participating in LNG importation project along the coast of Odisha and would be working towards that end." (March 5, 2015)

03/05/2015

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03/05/2015

INDIA:

Indian State of Gujarat to Get Two New LNG Terminals

Government of Indian state of Gujarat plans to set up two more LNG terminals of 10 Million Metric Tonnes Per Annum (MMTPA) combined capacity in the near future.

According to Press trust of India, this information was provided in the state assembly on Tuesday by state’s Chief Minister Anandiben Patel who handles the ports portfolio.

Currently there are two LNG terminals in operation in the state, one at Hazira in Surat and the another at Dahej in Bharuch district. Both these terminals have a combined capacity to handle 17.5 MMT LNG per annum.

The two new terminals being planned are expected to come up at Jafrabad in Amreli district and at Mundra port in Kutch district, Patel said in a written reply

Patel said that an LNG port terminal with Floating Storage and Re-gassification Unit (FSRU) with a capacity of 5 MMTPA would be built in Jafrabad, Press Trust reported.

According to Press Trust, for the Jafrabad project, Gujarat Maritime Board (GMB) had selected Swan Energy Ltd as the developer on a Build, Own, Operate and Transfer (BOOT) basis.

For the Mundra project Adani Group and the state government-owned Gujarat State Petroleum Corporation (GSPC) have joined hands to set up an LNG import terminal at Mundra with an initial capacity of 5 MMTPA. (March 4, 2015)



WORLDWIDE:

LNG markets poised for a volatile 2015, BG Group says

Global liquefied natural gas player BG Group has forecast a volatile LNG market in 2015 because of "lumpy" additions to supply, mostly due to new Australian projects.

BG noted that after four years of supply "hiatus", with little net growth in global production, Australia was set to add some 58 million tonnes a year of capacity by 2019, from its seven projects under construction.

This year alone, five new LNG production units, or "trains", are likely to start up, adding 21 million tonnes a year, mostly in the second half, BG said in its annual LNG outlook report.

The new supply will drive a 3 per cent increase in global LNG trade, to 250 million tonnes a year this year.

On the demand side, 12 new LNG import terminals and one expansion are due to start up, introducing six new countries as LNG importers: Egypt, Jordan, Pakistan, Philippines, Poland and Uruguay.

Hanging over the market are uncertainties such as the rate of return of Japanese nuclear power plants, and the health of Chinese economy, and how this plays through to energy demand in China, BG said.

"How the LNG market responds to the growing volumes will be a key factor to watch in late-2015 and in 2016," BG advised.

"We expect the LNG market to become more volatile over the next few years as it responds to 'lumpy' supply and market-side additions plus exogenous supply and demand factors."

The British major warned of periods in the next couple of years where the balance of supply and demand could result in some cargoes flowing 'back' into European markets, but said it was unlikely Europe would see the annual levels of LNG imports it saw at its peak in 2011 until much later in the decade.

BG also said that because of the drop in the crude oil price, it expected a narrower price range between Asian and European LNG prices.

BG noted the slump in Asian spot LNG prices over the past year, but said that average import prices in Japan remained relatively flat signalling that prompt spot trade still had a limited market share.

BG said a key factor to watch was the number of LNG supply projects that reached a final investment decision this year, despite the slump in oil prices. In each of the last four years more than 20 million tonnes of capacity has got the go-ahead. In 2014 that included two projects in the US and one floating LNG venture in Malaysia.

Australia has no new projects due to reach a final investment decision this year, with the next being Woodside Petroleum's Browse floating LNG venture, which Woodside is targeting for mid-2016. The last new project to get the go-ahead was Inpex's $US34 billion Ichthys project in January 2012. (March 6, 2015)

03/06/2015


GHANA:

Shell, consortium explore possible supply of LNG to Ghana power project

Project developers General Electric (GE) and Endeavor Energy have, along with energy partners Eranove and Sage Petroleum, agreed to a supply term sheet with petroleum giant Shell and have entered into exclusive sale and purchase agreement (SPA) negotiations regarding the long-term supply of liquefied natural gas (LNG) to the Ghana 1000 project.

The Aboadze-based project was an integrated 1 300 MW gas-to-power project that would comprise a floating storage and regasification unit (FSRU) and infrastructure required to import LNG.

Once completed, Ghana 1000 was expected to become the largest power park in sub-Saharan Africa and would generate reliable power for Ghana, as well as help lower the cost of generating power for the country by up to 35% when compared with power generated from light crude oil.

The project’s first development phase was expected to be completed in late 2016 and would add 125 MW to the national grid. This would increase to 750 MW by 2018 and to 1 300 MW within five years.

“We are delighted to have reached agreement with Shell on the key parameters of a long-term LNG supply arrangement and have entered into exclusive discussions on a long-term LNG supply for the Ghana 1000 project.

“Securing a reliable, flexible and affordable LNG supply arrangement is a critical piece of the puzzle to make this project a reality,” GE Ghana CEO Leslie Nelson said in a statement on Tuesday.

Endeavor Energy CEO Sean Long added that the inclusion of Shell demonstrated the degree of interest and support in the project and added to the project’s “world-class” roster of participants.

“Importing LNG offers tremendous flexibility for Ghana to manage its power fleet. As a lower-cost alternative to light crude oil, LNG can be used not only on a long-term basis for new power projects, but can be imported on a spot basis to balance any short-term disruptions from Ghana’s domestic gas production or from diminished hydroproduction in years with low rainfall,” he commented.

Nelson, meanwhile, disclosed that wholly-owned Ghanaian company Sage Petroleum had become the latest participant to join the consortium, fulfilling the consortium’s commitment to ensuring the localisation of operations in Ghana.

Endeavor Energy and GE last month announced the signing of an agreement with Excelerate Energy, a provider of FSRU, for the reservation of an FSRU that would provide storage and regasification of LNG for the Ghana 1000 project. (March 10, 2015)

03/10/2015


BELGIUM - RUSSIA:

Yamal and Fluxys contract for LNG transhipment at Zeebrugge Terminal

Russian Yamal LNG and Belgian Fluxys LNG have signed a 20-year contract for transhipment of up to 8 million tons of LNG per year at the LNG-terminal in the Belgian port of Zeebrugge, to support year-round LNG deliveries from the Yamal Peninsula in the Arctic part of Russia to markets in Asia and the Pacific Ocean.

"A transhipment platform in Northwest Europe is a key element to our transportation and logistics arrangement," says Evgeniy Kot, Yamal LNG's general director, underlining the Yamal LNG project is progressing well, following the schedule. With the new transhipment volume of 8 million tons per year, Zeebrugge will see a significant increase in ship movements. "Thanks to a long-term agreement with such an ambitious LNG supplier we will embark on a new considerable investment for the terminal development," says Pascal De Buck, CEO at Fluxys Belgium.

During the Arctic summer, Yamal LNG will deliver its LNG to Asian-Pacific markets via the northern sea route, using ice class ARC7 LNG tankers. In winter periods, the Arctic LNG tankers will transit via the Zeebrugge LNG terminal. There Fluxys LNG will provide services to tranship LNG onto conventional vessels, used for final delivery to Asian-Pacific markets via the Suez Canal.

According to Fluxys this contract reinforces the Belgian gas system as a crossroad for international flows and the position of Zeebrugge as an all-round LNG hub in Northwest Europe. With transhipment services added to its offering the terminal will provide a complete range of services for large LNG volumes as well as for small-scale use for vessel bunkering and trailer loading. The transhipment services require the construction of the already planned fifth storage tank and additional process facilities. Together, the four existing storage tanks can hold 380.000 m³ of gas. The design for a fifth tank has been upgraded from 160.000 towards 180.000 m³. The first production of LNG in Yamal, using gas from the South Tambeyskoye field, is expected in 2017.

Yamal LNG' shareholders are the Novatek (60%), the Chinese National Petroleum Company (CNPC, 20%) and the French group Total (20%). Several Belgian authorities together own, by very complex intermediate holding structures, a large majority of the Fluxys shares. Fluxys is both owner and operator of the Belgian infrastructures for the transport and storage of natural gas and for LNG terminals. (March 8, 2015)

03/09/2015


PRICE

AUSTRALIA:

Australian LNG projects can weather oil price of $45/barrel

Australia's crop of new LNG projects appear to be able to weather the current low oil price environment, and are expected to generate free cash flow at a price of more than $45/barrel, local consultancy EnergyQuest said this week in its latest quarterly report.

"While a spot oil price of $60/barrel might imply an LNG price of only $8.70/MMBtu, oil prices in contracts are lagged," EnergyQuest said.

LNG term contracts are indexed to the Japan Customs Cleared crude oil price, an average price of crude imported into Japan, published by the government three months after delivery.

Normally, it takes two to four months for the JCC to reflect actual price movements in global crude prices, depending on where the oil comes from and how it is procured.

In addition to the lag in the JCC price, LNG contracts might have other mechanisms that result in lags, according to EnergyQuest.

The consultancy cited the Chevron-operated Gorgon project in Western Australia, where the reference is the average oil price for the previous year, and Qatar, which uses a five-year moving average.

"There are also likely to be S-curves or kinks in the slope so that even if pricing is 14.5% for oil prices between $70/b and $105/b, it may well be a higher percentage for oil prices below $70/b," EnergyQuest said.

"Also, once the LNG plant and pipeline are built, the marginal costs are relatively low. How quickly a project delivers free cash flow then depends on how quickly it achieves plateau output, capex soon after startup and opex," the consultancy added.

"Most projects suggest relatively high sustaining capex in the first five years but falling thereafter."

EnergyQuest said the Origin Energy-operated Australia Pacific LNG joint venture in the eastern state of Queensland had given the most comprehensive guidance.

"It defines a breakeven price as being at steady state operations and after all opex, sustaining capex, project finance interest and principal repayments and discretionary exploration and appraisal," EnergyQuest said.

"It says it will generate free cash flow for distribution to shareholders at prices above $40-$45/boe."

Santos CEO David Knox also gave verbal assurance at the company's 2014 full-year results briefing, that its Gladstone LNG project would be free cash flow positive at oil prices above $40/b.

Australia has enjoyed a boom in its LNG industry over the past five years, with six onshore projects and one floating facility worth around $200 million under construction concurrently around the country.

Once all the new projects are on stream, expected in 2017, Australia will top Qatar as the world's biggest LNG supplier, with capacity of around 85 million mt/year. (March 11, 2015)

03/11/2015


USE AS AUTOMOTIVE FUEL

UNITED KINGDOM:

Whitbread partners with ENN to open LNG refuelling station

Whitbread and ENN have opened a HGV liquid natural gas fuelling station at its Wellingborough depot.

The station is used to refuel 16 dual-fuel, natural gas-powered HGVs for Whitbread commercial operations around the UK, such as Premier Inn and Costa Coffee.

The station is the first deployment in Europe of a 45’ ISO containerised “plug and play” liquefied natural gas (LNG) refuelling station, 200+ of which already operate successfully in China. This compact, unmanned system dramatically reduces lead times for the installation of refuelling infrastructure, and provides a fast and reliable solution for natural gas vehicle refuelling.

The station design uses a modular approach: extra storage capacity can be added as and when required, as can additional dispensers and cryogenic pumps, and the station can also be expanded to enable refuelling with compressed natural gas (CNG).

“ENN has ambitious plans to rapidly develop a network of natural gas refuelling stations in Northwest Europe, and will open several more stations in the UK, Belgium, Netherlands and Germany in 2015” said Michael Liu, General Manager of ENN Europe.

“Our aim is to ultimately provide seamless LNG refuelling for companies like Kuehne + Nagel and Whitbread throughout the UK and the whole of Europe, and Wellingborough marks an important milestone on this journey.” (March 13, 2015)

03/13/2015

USE AS MARINE FUEL

UNITED STATES:

Shell contracts first LNG-fuelled supply vessel for deepwater Gulf of Mexico

Shell has taken delivery of the first LNG-fuelled offshore supply vessel for its deepwater operations in the Gulf of Mexico.

The vessel, chartered from specialist company Harvey Gulf International Marine, is the first of its kind in the region to run on both Liquefied Natural Gas (LNG) and diesel. Two more LNG-fuelled vessels are expected to follow. LNG fuel is a new alternative for vessel operators in the Gulf of Mexico responding to new sulphur and nitrogen oxide emissions regulations, as part of the North American Emission Control Area (ECA).

The Harvey Energy is 302-ft long and operates on three dual-fuel Wärtsilä engines. It will run on 99% LNG fuel and will be able to operate for around seven days before refueling. It will load from Harvey Gulf’s new LNG bunkering facility at their terminal at Port Fourchon. From there the Harvey Energy will go to Shell’s platforms, such as the new Olympus production platform, bringing equipment and drilling fluids. (March 5, 2015)

03/06/2015


LPG

USE AS AUTOMOTIVE FUEL

UNITED KINGDOM:

Time for Government to rectify historic LPG investment withdrawal gaffe

Autogas Limited is calling on the Government to rectify what it calls investment removal mistakes of the past in order to help the UK achieve its low carbon future

The calls are being made after a House of Commons Transport Select Committee report criticised the way the Government withdrew grants supporting the purchase of LPG autogas vehicles too early and warned it risks a similar collapse in the electric vehicle market if the Government does not learn lessons from its LPG experience.

“This latest report clearly recognises that the Government withdrew its support incentives for LPG too early, which had a serious impact on the market,” commented Paul Oxford, business development manager, Autogas Limited. “As LPG is identified as one of a basket of fuels that can help the UK achieve its low carbon future, we’d urge the Government to review its historic mistakes as well as potential distortion of the future market, by offering similar incentives, investment and support for LPG as it currently does with electric vehicles. Similarly, it’s essential that the motor industry itself also offers support and backing for LPG autogas as it’s currently doing in favour of newer Euro-6 diesel technology.”

The report states that as a number of fuel sources and technologies are appropriate for a low carbon future, the Government cannot pick a winner, but should provide certainty for market participants designed to incentivise investment. Drivers of autogas LPG powered cars already have an established network of some 1,400 refuelling points across the UK but until recently, have not had any long-term Government commitment to fuel duty reductions.

Without any long-term Government commitment to LPG, car manufacturers have been reluctant offer autogas powered models for sale in the UK, unlike other European territories where LPG models from 14 difference manufacturers are available directly from the showroom. Indeed, according to comments published in the media last week, Vauxhall said that their LPG ready models had “sold fairly well – until the Government pulled the plug on the fuel incentive, then they nosedived”.

Despite the lack of any original equipment options in the UK, more than 150,000 drivers already choose to run their cars on the cheaper, cleaner fuel and demand is expected to rise after an independent poll by consumper magazine Auto Express found that 26% of respondents would consider driving on LPG autogas.

“Previous Government fixations with CO2 targets and the subsequent increase in diesel usage mean that we have sleep-walked into a local air-quality time-bomb in the UK caused by increases in NOx and particulates which is costing around 29,000 lives every single year,” added Oxford. “LPG autogas is a proven, readily available fuel source which can help tackle this issue so we’d urge the Government to follow the recommendations of the Select Committee report and ensure that it remains at the forefront of the future of motoring.” (March 13, 2015)

03/13/2015


NATURAL GAS

PRODUCTION

EGYPT:

BP to develop Egypt’s West Nile Delta Gas fields

BP today announced that it has signed the final agreements of the West Nile Delta project to develop 5tcf of gas resources and 55 million barrels of condensates with an estimated investment of around $12 billion by BP and its partner. The project underlines BP’s commitment to the Egyptian market and is a vote of confidence in Egypt’s investment climate and economic potential.

Production from WND is expected to reach up to 1.2bcf/d, equivalent to about 25% of Egypt’s current gas production and significantly contribute to increasing the supply of energy in Egypt. All the produced gas will be fed into the country’s national gas grid, helping to meet the anticipated growth in local demand for energy. Production is expected to start in 2017. (March 6, 2015)

03/09/2015

Morning: Asia LNG Market in Reshaping Global Energy Landscape

Afternoon: Updates on Regional Demand and Supply

Morning: Solution Innovation for LNG Supply Chain

Afternoon: The Utilization of LNG

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UNITED KINGDOM:

France’s Total puts prime North Sea field on the block

French oil major Total is selling its stake in the North Sea Laggan-Tormore oil and gas field as it seeks to shed assets after a steep fall in the oil price, banking sources said.

Total is hoping to get up to $1.5 billion for its 80 percent operating stake in the field, located approximately 125 km north-west of the Shetland Islands in Britain's North Sea, the sources said.

The company aims to complete the deal in June, according to the banking sources.

A Total spokeswoman said: "We don't comment on market rumours."

Many oil companies are trying to sell assets in the ageing and high-cost North Sea oil province. However, the Laggan-Tormore is considered a high-quality asset as it is planned to start production at the end of this year.

It is expected to start production at the end of 2015 after initial delays, eventually reaching peak production rates of 93,000 barrels of oil equivalent per day. Total had sought to make the Laggan-Tormore gas and condensate field its third major hub in British waters, after the existing Alwyn North and Elgin-Franklin provinces. As recently as 2013, the company expected Laggan-Tormore to turn it into the top oil and gas producer in British waters.

But oil prices roughly halved between last June and January leading Total, like most of its peers, to cut spending and sell assets in order to boost their balance sheets. Oil prices have since stabilised at around $60 per barrel, but are still off peaks of more than $100 reached last year.

Total last month said it would cut 2015 investments by up to 13% to $23-24 billion and would spend 30% less on exploration work following oil price decline. "Total is reassigning their portfolio and want higher returns elsewhere in the world," one banking source said.

Denmark-based Dong Energy holds the remaining 20 percent stake in the field.

The sale of one of Total's key projects, meant to help the group reach its 2.8 million barrels of oil equivalent per day by 2017, also could signal that after having embarked on one of the largest asset-sale programmes in the industry in recent years, the group now has fewer non-core assets to dispose of. (March 12, 2015)

03/12/2015

INDONESIA:

Premier Oil starts gas production in Indonesia

Premier Oil announced it has started its gas production in the Pelikan field in Indonesia.

The group said both its Pelikan and Naga fields are expected to deliver additional reserves into Singapore under its long-term gas contracts.

Premier Oil believes the delivery of the two fields will increase its operational flexibility and grow the number of volumes supplied to meet growing market share.

Looking ahead, the FTSE 250 oil company expects to be able to respond to increased Singapore or domestic gas demand. (March 10, 2015)

03/10/2015


VENEZUELA - TRINIDAD & TOBAGO:

Venezuela, Trinidad and Tobago sign energy accord

Venezuela and neighboring Trinidad and Tobago have signed an agreement that will enable both countries to develop the Manakin-Cocuina natural gas fields along their shared maritime border.

The fields have been known to exist since 1983 when Petroleos de Venezuela SA (PDVSA) and Statoil ASA drilled the Coquina well, which discovered shallow-pay reserves across the border. It is matched on the Trinidad and Tobago side by BP Trinidad & Tobago’s Manikin-1 discovery on Block 5b.

It is part of the Plataforma Del Tana area—thought to contain more than 30 tcf of gas—which is shared between the two countries.

Trinidad and Tobago and Venezuela share several fields that share maritime borders.

On Block 1, PDVSA drilled its Dorado 1 well, which is said to have discovered a structure containing 1.5 tcf of gas. This is matched on the Trinidad and Tobago side by BPTT’s Kapok field, which is an amalgamation of three finds: Sparrow, Renegade, and Parang, believed to contain more than 4 tcf of gas.

On Block 2, where the Loran well was drilled in 1982, the border is shared on the Trinidad and Tobago side with Manatee field. That field has 10 tcf of gas—2.7 tcf on Trinidad and Tobago’s side and 7.3 tcf on Venezuela’s side. (March 5, 2015)

03/06/2015

RESERVES

MEXICO:

Mexican oil and gas reserves decrease

In 2014, Mexico’s proven oil and gas reserves dropped 3.1%, landing at 13 billion barrels of oil equivalent. Pemex could not find the needed reserves to supplement hydrocarbons produced last year, as reported by Mexico’s National Hydrocarbons Commission.

As of January 1, crude oil reserves total 9.71 billion barrels. At the same time last year, the figure stood at 9.81 billion barrels. Natural gas reserves stand at 15.3 tcf (433 bcm) versus 16.6 tcf (469 bcm) last year. Proven reserves of both products will last 10 years at the current rate of production.

The commission said that last year Pemex replaced 89% of its oil production with new discoveries and maintained a gas recovery rate of 47%. Mexico discovered 6.7 barrels of proven oil and gas reserves for every 10 barrels produced.

Last year was the final year Pemex enjoyed a monopoly over exploration and production activities in Mexico as the hydrocarbons commission is beginning to sell hydrocarbons blocks to private and international firms in an effort to boost production. (March 12, 2015)

03/12/2015


CYPRUS:

Total near agreement to extend offshore gas search

France’s Total is close to extending an offshore natural gas exploration programme in Cyprus after coming up empty in prior surveys, the energy minister said.

“The renewed agreement that we hope we will be signing next week will be talking about doing geological surveys in a different area but no drilling,” said minister Giorgos Lakkotrypis while speaking at an event at the Atlantic Council in Washington, DC “They can drill if they identify a drillable prospect, which unfortunately they have not done so far.”

Total confirmed in January that it had completed surveys over two Cypriot offshore blocks for which it had licenses, without finding potential drilling targets.

Italy’s ENI failed to find gas in a drill last year and is now searching elsewhere off Cyprus. US energy company Noble found gas reserves in 2011.

Turkey has challenged the island’s right to drill for gas, maintaining the Turkish Cypriots have an equal claim.

Total is among a raft of international oil exploration and production companies, including BP and ConocoPhillips , that have slashed 2015 budgets in light of lower oil prices. Drilling in the east Mediterranean is costly, because of its considerable depth. (March 10, 2015)

03/10/2015


SUPPLIES - IMPORTS - EXPORTS

TURKEY - RUSSIA:

Ankara Seen Stalling Russian Hopes on 'Turkish Stream' Gas Plan

Turkish concern about too much dependence on Russian energy and an upcoming election mean Russia's plans for a new gas pipeline to southeastern Europe are unlikely to advance as quickly as Moscow might like, Turkish energy officials said on Wednesday.

Facing objections from the European Union, Russia in December abandoned its $40 billion South Stream project which would have passed under the Black Sea to Bulgaria and carried up to 63bcm of gas annually to Europe.

Instead, Russian gas exporter Gazprom said in January it planned to build an undersea gas pipeline with the same capacity to an as-yet unbuilt hub on the Turkish-Greek border by the end of 2016.

But officials in Ankara said that time frame for the project, known informally as Turkish Stream, was unrealistic.

"The issue is not Turkish Stream alone, this is a whole package for Turkey's energy needs. We need to be a little bit patient," Energy Minister Taner Yildiz told Reuters.

Turkey is already heavily dependent on Russia for natural gas. Last year it bought 27.33 bcm of gas through the Blue Stream and West-East pipelines from Russia, equivalent to more than half of its gas imports.

Russian state nuclear company Rosatom is also building Turkey's first nuclear power plant.

"Russia is very keen but it's very likely that [Turkish Stream] will be delayed to at least 2017," one industry executive said, highlighting lengthy environmental approvals, especially ahead of a June general election.

A second government official said negotiations over the import price for Russian gas were also a factor. Turkey secured a 10.25% discount in late February but wants more.

By 2017, Turkey's gas demand is expected to outstrip current contracted import volumes. Supplies from northern Iraq, one alternative, will not come on line before 2018, leaving Ankara little choice but to buy more from Russia.

One Western diplomat in Ankara said the wrangling over Turkish Stream was more about a tussle between Brussels and Moscow over maintaining influence over Turkey. "People are realizing more and more that Russia is a lost cause and that we need to find more allies to the east and south. Turkey is number one," the diplomat said. "Russia is drawing Turkey into its orbit, and if it's not stopped now, then it may be too late." (March 11, 2015)

03/12/2015


INDIA:

Trans-Afghan gas pipeline may become a reality

Trans-Afghanistan gas pipeline connecting Turkmenistan, Afghanistan, Pakistan and India may become a reality soon as negotiation for the ambitious project is at the final stage, Petroleum Minister Dharmendra Pradhan said in Lok Sabha on Monday.

Mr. Pradhan said discussions over installing a pipeline to bring gas from Turkmenistan to India through Afghanistan and Pakistan were at the final stage and when the project becomes a reality, the country would be free from bring dependant on Gulf countries on natural gas.

Replying to a question, the Minister said government will also take a decision on a project to bring natural gas from Iran through a pipeline passing through Afghanistan and Pakistan.

He said India has been procuring crude oil from 25 countries and it was not correct to say that the country was over-dependent on the West Asia for crude supplies. (March 9, 2015)

03/09/2015

investment but it may also bring a lot of money and political power. (March 11, 2015)

03/11/2015

UKRAINE:

Ukraine to pay $245 per 1,000 cubic meters of gas received via reverse flows

Ukraine has significantly reduced its energy dependence on Russia and will be buying natural gas at $245 per 1,000 cubic meters this year, Ukrainian President Petro Poroshenko said.

"We have lived through the winter and purchased only 2bcm of gas; our latest procurement cost less than $300 [per 1,000 cubic meters] and Russia eventually had to request a 68% increase in gas flow, which crashed the gas market. Now we will be buying gas at $245 [per 1,000 cubic meters] via reverse flows," the president said in an interview. (March 10, 2015)

03/10/2015

TURKEY:

Turkey seeks to replace Ukraine as energy Hub

Russia says it will stop sending natural gas to Europe through Ukraine and will start sending it through Turkey. Turkey welcomes the decision. For ten years the country has aimed to be a major energy hub, or distribution center.

But some critics say Turkey is not prepared to play such a role. Atilla Yesilada is a senior partner at Global Source Partners, a research group in Turkey. He says Russia’s decision is a major opportunity for his country. “Turkey simply becomes the next Ukraine and Turkey could become a major energy hub that supplies Europe.”

But Mr. Yesilada says Turkey has a lot of work to do before that can happen. He says Turkey will need to understand the gas market, know the buyers, predict prices and build places to store natural gas. He says being an energy hub will require a big



CHINA:

Chongming Island to get natural gas

PETROCHINA Co has teamed up with Shenergy (Group) Co and Yangkou Port Co to set up a natural gas pipeline in Jiangsu Province that will serve Shanghai’s Chongming Island, PetroChina said yesterday.

The 90-kilometer natural gas pipeline, which crosses the Yangtze River, starts from Jiangsu’s Rudong County and is expected to carry 1.84bcm of gas each year.

Shenergy will also build a gas power station in Chongming to replace coal as the main source for electricity. It will be PetroChina’s third gas pipeline to Shanghai after those in Qingpu and Jinshan districts. (March 12, 2015)

03/12/2015

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RUSSIA - EUROPE:

Europe's energy market & Gazprom: our evolving relationship

While many may be counting on US LNG as an alternative solution to solve the diversification dilemma in Europe, Sergei Komlev, Head of Contract Structuring and Price Formation Directorate, Gazprom Export, says "not so fast."

In a speech at the European Gas Conference in Vienna, Austria on the future of the European gas market and the role Gazprom can play on it, Mr. Komlev countered: “A comparative analysis shows that US LNG delivered to Europe on a cost-plus basis will never be cheaper than gas on the British hub NBP. This means that if these supplies eventually reach the European market, they will be too modest in volume to change the continent's landscape.”

Gazprom's share of the European market should remain stable, he added.

Of Gazprom's role, he said that Russia is one of the most affordable sources of gas, especially in light of the low price of oil. “When it comes to gas on gas competition, there is no question that Russian pipeline gas is still one of the choice options in Europe,” he explained.

Mr. Komlev shared his views on a variety of aspects of the Russian - European gas relationship.

“It's evident the current commercial and political environment are exceptionally challenging for the industry and natural gas as a commodity,” he observed, explaining that long-term relationships being under strain made for turbulent times. He continued, “There's no doubt that Europe remains and will remain Gazprom's extremely important gas market – nearly half a century-long history binding us together.”

Mr. Komlev noted that Gazprom has been on the lookout for new business opportunities, some outside of Europe. He cited “the historic deal” of supplying 38 BCM of Russian gas to China for 30 years, and said that the amounts could soon be comparable to the volumes supplied to Gazprom's European partners.

“Gazprom is going eastward,” he reported, “so how will our relationship evolve in the coming years?”

He then presented the prospects for the European market, a forecast based on predictions from a dozen organizations, which showed that European demand will reach 165 BCM in 2025 and 208 BCM in 2035.

He commented, “Russia's ample gas reserves, supply capacity and competitive pricing, combined with a moderate-yet-gradual growth in demand and decline in indigenous production in Europe, will ensure that Gazprom will continue to play a vital role on the European market.”

While some believe gas might have already lost it's chance, Mr. Komlev said that in the long run Gazprom expects natural gas power generation to rebound, for example. “We also expect that new applications for gas – mainly small scale combined heat and power stations, bunkering and road transport – will result in additional demand of 140 BCM by 2035."

This, he said, is a figure comparable to the gas currently delivered to Europe along with Turkey. The fastest pace of demand growth will be in transport, according to him.

Mr. Komlev offered that Gazprom operates CNG networks in several European states and promotes use of LNG in transport, but offered: “Despite these positive developments, the future of natural gas in Europe is currently being called into question due to other newly emerging challenges.”

One of those, he said, is the use of cheap, dirty coal. “This can't be accepted as a sensible approach,” he commented.

Recent political turbulence, he explained, sometimes had resulted in negative international sentiment, which is now turning into what he called “anti-gas sentiment.”

“This is a worrying trend, both for Gazprom and its European partners, industry, energy development strategy, and for dealing with emissions and climate change challenges.”

According to Mr. Komlev, a 1% increase in the share of the natural gas in the EU energy mix can reduce emissions by 3%. Cheaper and cleaner than traditional fuels like petrol or diesel, the gas-driven vehicles market is more advanced than those for electric or hydrogen powered cars.

“Natural gas, unlike renewables, requires no subsidy,” he pointed out. “It needs fair competition and a level playing field.”

“Today, local production in Europe is declining, the political situation in North Africa remains unstable, and reserves in the Middle East are far from coming online soon for Europe,” he observed.

In line with its commitment to Europe, Mr. Komlev said that Gazprom has done its best to solve the differences with Ukraine's Naftogaz, continuing to supply Ukraine months after having received the last payment. “We've concluded the current winter package deal will help Ukraine in the cold season of high demand.” Gazprom, he said, did this because being a reliable supplier is its top priority.

“We cannot allow ourselves to endanger the well-earned trust and confidence of our European partners,” he explained.

Lack of sufficient volumes in Ukrainian gas storage, he said, would have increased the risk of gas being siphoned from the transit pipe: “It's a risk we're not willing to take.” That's why, he said, Gazprom has been working on building more reliable supply routes, drawing lessons from the 2009 gas transit crisis.

“Now, Nord Stream has been up and running for a few years and has proven to be a highly reliable route to deliver gas streams from Russia to Germany and further on to other European markets,” reported Mr. Komlev, who said that Gazprom had wanted to do something similar in South-eastern Europe.

“We know how difficult it is for these countries to ensure that gas reaches their grids,” he said, explaining that Gazprom's plans had clashed with the European Commission, which was not interested in implementing the project. According to Mr. Komlev, last December Gazprom's cooperation with Turkey received an upgrade with the announcement of the Turk Stream pipeline, so the South Stream project will be re routed to the border of the EU.

He explained, “The plan is to pump 63 BCM of Russian gas through the proposed Turk Stream pipeline, while 14 BCM is destined for the Turkish market, the rest would be available to our European customers at the hub on the border with Greece. I'm convinced this new project will serve the best interests of all parties involved.”

Besides pipelines, he reported that Gazprom is investing heavily in gas storage infrastructure, which provides a stable and flexible supply of gas in Europe.

In 2014, according to him, volumes of Russian gas in European underground storage exceeded 5 BCM and the company plans on expanding its own underground storage capacity in Europe another 5 BCM by 2017. He cited a project in the Czech Republic as one good example of such investment, as well as the extension of the “Katarina” facility in Germany.

“This all allows us to continue our work as a reliable supplier of gas to Europe. We stand ready to provide European markets with the gas they require, but Europe needs to make sure the right conditions are in place to let market forces play their part,” he said.

“Gas is not a political weapon; it is a commodity.”

Of Gazprom's strategy going forward, Mr. Komlev said that China had provided the company with an opportunity it could not refuse. He said Gazprom retained its commitment to Europe and that supplying gas to China would not affect existing gas contracts with Europe.

“We have grounds to believe that the political environment in Europe will be restored to a situation in which we feel welcome again. We're akin to continue doing business and hope the European Union in the future will foster exactly that – pure business without any political motives.”

Reiterating that Russians and Europeans are bound together by their history, geography and, ultimately, common interests, Mr. Komlev concluded: “Let's allow gas to do what it does best – provide clean energy for the future.” (March 5, 2015)

03/05/2015


BULGARIA:

Great chance for Nabucco to be realised

“There is a great chance for the Nabucco gas pipeline project to be realised,” said Bulgarian gas expert Hristo Kazandzhiev speaking for the morning programme of Radio FOCUS.

He commented that the construction of the gas pipeline was needed for Bulgaria and in his words it will be possible to secure the needed gas amount in 2020.

According to the expert, Nabucco has never been frozen and continuing the project was up to Bulgaria and the rest of the countries involved in the project. “When speaking of Nabucco and the Azeri gas deliveries we envisage 2019-2020, when the delivery of gas from the Shah Deniz gas field to the Bulgarian-Greek border are planned for,” Kazandzhiev remarked.

“Indeed, at the moment there is no gas, there are no free trade volumes, but in 2020 after the signed agreements between Azerbaijan and Bulgaria for 1 billion cubic meters of gas, as well as with Greece, the contracts on gas export to Italy, to Central Europe, there will be gas for certain,” the expert commented further. (March 9, 2015)

03/09/2015

Iran, as a country that has 2nd largest natural gas reserves of the world (after Russia) possesses the potentials to play a serious role in the gas market of the region and the world. For the same reason, the Russians are putting pressure on Iran not to enter this market. Certain hardliner political factions in Iran also are putting pressure on the regime to refrain from creating troubles for the Russians, who have been the ally of the Iranian regime in many cases in the history of the Islamic Republic in Iran. (March 5, 2015)

03/06/2015

IRAN - RUSSIA:

Iran and Russia Have Conflicting Interests in Export of Gas to Europe

As far as the export of natural gas to Europe is concerned, Iran and Russia are serious rivals. Iran, due to sanctions is not a major exporter of gas at all; however, it has the potential to break the Russian dominance over the gas market in Europe. Flow of the huge gas resources of Iranian gas towards the EU region means the end of Russian domination over the gas market and a serious blow to the capability of Russia for making the European countries tolerate the Russians policies in the region. The growing hostility of the Western countries and Russia, and serious inclination of Russia to keep its monopoly in the European gas market, along with reliance of the Islamic regime in Iran on the Russian support, puts Iranian government in a difficult situation regarding gas exports to Europe.

Some of the officials of the Iranian government have recently shown signs of being interested in supplying gas through the Caspian Sea and other possible routes to the European countries. At the same time, some of the representatives of the Iranian parliament are talking about a bill to ban export of gas to the EU countries, under the pretext that they are implementing the instructions of the Supreme Leader of the Iranian regime about retaliating the European sanctions through imposing sanctions against the EU.


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PALESTINE:

Palestine power firm cancels Leviathan natural gas deal

The Palestine Power Generation Company (PPGC) has cancelled a deal to buy about $1.2 billion of natural gas from the Leviathan field off Israel citing delays in development of the giant project.

Development of Leviathan have been thrown into doubt after Israel's competition regulator recommended in December the break-up of what it says is monopoly control of the country's offshore gas reserves by Noble Energy and Delek Group , which hold 85% of Leviathan.

In 2014, PPGC signed a 20-year deal to buy up to 4.75bcm of gas once Leviathan starts production later in the decade.

PPGC said certain conditions had not been met, including failure to secure approval from the anti-trust authority as well as other regulatory approvals. It also cited delays in development of the project, Delek Drilling, a partner in the field, said.

The cancellation will take effect in 30 days, unless anti-trust approval is secured before then, Delek said.

The largest offshore gas discovery for a decade, Leviathan has estimated reserves of 22tcf (622 bcm). Production had been expected to begin in 2018 following an initial investment of around $6.5 billion. Noble and Delek also control the nearby Tamar field, which started producing nearly two years ago from reserves estimated at some 10 tcf.

Israel's anti-trust regulator said the companies have too much control over Israel's natural gas reserves and should be forced to sell some of their assets.

PPGC aims to build a $300 million gas-fired power plant in Jenin in the Palestinian-controlled West Bank. The Palestine Development and Investment Inc holds an 18% stake in the PPGC.

The cancellation will take effect in 30 days, unless anti-trust approval is secured before then, Delek said. (March 11, 2015)

03/11/2015


RUSSIA:

Russia says Kiev will have to pay for rebel gas supplies

Russia could offer Ukraine more favourable terms for its gas supplies, following months of disagreements over the price Kiev pays for natural gas, according to Russian energy minister Alexander Novak.

A temporary supply deal, brokered by the European Union, is due to expire at the end of March. A $100 per 1,000 cubic metres 'discount' will also expire, and the two sides will have to come together to negotiate a new deal over the coming weeks.

The possibility that Russia will use its dominance over Ukraine's energy supply to boost the rebellion in eastern Ukraine looms again.

Novak told Reuters news agency that Russia could relax the terms of its gas supplies to Ukraine but he also said that Kiev would also have to start paying for gas deliveries to rebel-held territories in eastern Ukraine.

Moscow has flip-flopped on the question of who would pay for energy supplies to the rebel-held territories, at first suggesting it would foot the bill but later backtracking and warning Kiev that it would have to pay.

The Ukrainian government has refused to pay for gas deliveries to areas in Donetsk and Lugansk where pro-Russian rebels have seized towns and cities and declared their own autonomous republics.

Russia's state-run gas giant Gazprom removed a discount on the gas it sold to Kiev last April, effectively almost doubling the price. Kiev refused to pay the inflation price, which eventually resulted in Russia cutting off gas supplies to Ukraine for a six-month period.

"A discount is possible under the contract as well – no separate (summer) packages are needed if Ukraine and Russia reach an agreement. Take-or-pay (suspension)...is also possible, it depends on the talks between companies. (March 11, 2015)

03/11/2015

RUSSIA - CHINA:

Russia, China to finalise gas deal

A deal on exporting Russian natural gas from western Siberia to China will be finalised later this year, Chinese Foreign Minister Wang Yi told a press conference on Sunday.

Under the preliminary agreement, state-controlled Gazprom will supply China National Petroleum Corporation with 30 bcm (1 tcf) of gas per year. The deal was reached in November 2014 during a visit by Russian President Vladimir Putin to Beijing, but details such as price have not been agreed.

“We will fully begin construction of the eastern gas line and sign a co-operation agreement for the western line,” the Financial Times quoted Wang as saying. China is also set to buy 38 bcm (1.3 tcf) of gas per year from Russia’s far east. Construction of the $400-billion, 3,968-kilometre Power of Siberia pipeline officially began in September.

The foreign minister cited opportunities for expanding the two countries' relationship in oil and gas as well as nuclear energy. Russia’s rift with Europe and the US over Ukraine has led to increased economic co-operation with China. (March 9, 2015)

03/09/2015


RUSSIA - MACEDONIA:

Russia’s Stroytransgaz to Build Gas Pipeline in Macedonia

Russian company Stroytransgaz will start building a gas pipeline in Macedonia that would link the Balkan country’s gas network system to neighbouring Greece.

Stroytransgaz had been commissioned for the construction of the section of Russia-led South Stream gas pipeline in Macedonia's eastern neighbour Bulgaria. However, it pulled out of the project in August 2014 after EU member Bulgaria froze the project citing objections by the European Commission over the project’s incompatibility with EU energy legislation.

The construction of a Macedonian offshoot of South Stream, however, hasn’t been frozen as the section will enable connection to the Turkish Stream project that Russia announced as a substitute for South Stream, newsru.com reported on Thursday.

Under the Turkish Stream project Russian gas will be delivered to Turkey across the Black Sea via an underwater section. A gas hub could be built at Turkey’s border with Greece for possible deliveries to the EU.

In the first phase of the Macedonian project Stroytransgaz will build a 61-kilometre section from Klecovtse to Negotino that will allow gas to be delivered to the city of Stip. The construction of this section is planned to be completed in about a year. In the second phase another 60 km of pipeline will be built to enable connection to Greece’s gas network.

Macedonia imported 46mcm of Russian gas last year, down 9% compared to 2013, via the existing pipeline from Bulgaria that is transiting Ukraine. One of the main consumers in Macedonia is a Skopje-based thermal power plant owned by a Russian company, newsru.com said.

The estimated cost of the Macedonian pipeline is about USD 75 M. The country will pay USD 15 M, the remainder will be offset against debt owed by the former USSR to the former Yugoslav Federation, of which Macedonia was part. (March 12, 2015)

03/12/2015

PRICE

UKRAINE:

Ukraine seeks to hike 30% tariffs for Russian Natural Gas shipments to Europe

Ukraine will seek to hike the gas transportation tariffs it charges Russia for shipments of natural gas to markets in Europe by 30%, Energy and Coal Industry Minister Volodymyr Demchyshyn said late Wednesday.

Ukraine, Russia and the EU will hold trilateral negotiations on March 20 in Brussels to discuss gas supplies and prevent potential disputes between Kiev and Moscow.

Ukraine currently charges the Russian gas giant Gazprom $2.88 to ship of 1,000 cu m of gas 100 km (62 miles) across its territory, but the price is only valid until the end of the month and will have to be renegotiated.

"I set myself the goal of increasing this tariff by at least 30%," Demchyshyn told a press conference. (March 12, 2015)

03/13/2015


STORAGE

CHINA:

Underground gas storage capacity 'key to energy security'

Underground natural gas storage capacity should be expanded to increase the nation's strategic energy reserves and ensure supply, said a senior official from China Petrochemical Corp (Sinopec), the country's biggest refiner.

Sun Jian, general manager of the Jianghan Oilfield Branch of Sinopec, who is also a deputy of the National People's Congress, said during the two sessions that China should build more underground storage facilities along with increased exploration and an expansion of the pipeline network.

China, as the third-biggest natural gas user in the world, consumed 176.1bcm of natural gas last year, five times the level of a decade earlier.

However, Sun said the country does not have enough storage facilities for the fuel, and the ones that exist are poorly located.

As of Dec 31, there were 20 underground storage facilities with total capacity of 4.2 bcm, accounting for only 2.4% of annual consumption, which is far below the international standard of 10 to 15%.

In the natural gas industry, underground storage is considered the optimal means of coping with seasonal changes in demand. But only 2.8 bcm of China's storage capacity was deemed suitable for that purpose.

Sun said that China should do more in this area, since domestic companies possess the technology to build storage facilities and suitable geological locations exist in central parts of the country, as well as between the Yangtze and Huaihe rivers.

"The government needs to develop the policies for land, taxes and subsidies for underground natural gas storage construction," he said.

According to the CNPC Economics and Technology Research Institute, two underground natural gas storage facilities are under construction. One is owned by the country's biggest natural gas producer, China National Petroleum Corp, and it is scheduled to open this year.

The other, which will be completed in 2016, belongs to the Hong Kong and China Gas Co Ltd.

Preliminary work is being done on four other facilities, which are owned by Sinopec and CNPC, according to the institute.

Li Xiaolin, chairman of China Power International Development Ltd and a CPPCC member, said that China needs to raise the percentage of natural gas consumption in the country's energy mix.

According to the International Energy Agency, global gas demand will grow 2.7% annually in the coming five years. China's demand for this clean energy will increase to 273 bcm during the period, accounting for about one-quarter of the world's demand. (March 12, 2015)

03/12/2015


USE FOR POWER GENERATION

GREECE:

RAE offers gift to natural gas power plants

The Regulatory Authority for Energy (RAE) intends to restore subsidies to private-owned natural gas-operated electricity production units amounting to 500 million euros per year, citing arguments that appear outrageous given its role and the financial state of the country.

Restoring the subsidy that had been abolished upon the recommendation of the country’s creditors would add an extra burden to Greece’s already heavy energy costs.

RAE is planning to reinstate the Variable Cost Retrieval Mechanism introduced in May 2008, which effectively offered a safety net for private natural gas-powered electricity units, as it secured payments for them that were higher than the prices on the regular electricity market. The above proposal is to be put up for public consultation by March 16, which also reveals a sense of urgency. (March 4, 2015)

03/05/2015

GENERAL INFORMATION

UNITED KINGDOM:

Government tells Russian billionaire: you have seven days to save North Sea gas deal

The Government has given Russian billionaire Mikhail Fridman seven days to explain why he should not be forced to sell North Sea gas assets.

Ed Davey, the Energy Secretary, has written to Mr Fridman’s investment fund, LetterOne, saying he would “be willing to consider further representations” from the tycoon.

Mr Fridman gained control of the UK fields on Monday as part of a €5bn (£3.6bn) deal to buy the oil and gas division of Germany’s RWE.

The Government is concerned production at the fields could be halted if the West imposes more sanctions on Russia over Ukraine, and it therefore wants them sold to a third party.

“Protecting these assets is the Secretary of State’s priority,” the Government said on Wednesday night.

A LetterOne spokesman said: “We are keen to work with the Government and will leave no stone unturned to find a solution in the interest of everyone concerned.”

The stand-off comes after Russian President Vladimir Putin again threatened to cut off gas supplies to Europe in retaliation for his ongoing dispute with the West over eastern Ukraine.

Mr Davey is understood to be concerned about the possible impact on North Sea oil production that could arise from a potential tightening of economic sanctions.

The oil and gas deal "was discussed at the highest level, a sign of how seriously we take the matter", Reuters quoted a government source as saying. "The Government is not going to change its position on the matter."

The source added that the deal had been discussed at the National Security Council "in recent weeks". (March 5, 2015)

03/05/2015

Documents

Vol. 54, n° 6, March 13, 2015 Main news · Vol. 54, n° 6, March 13, 2015 . Main news . LNG: ... • Trans-Afghan gas pipeline may become a ... He stated this while talking to media