revista presei pe energie 2 februarie – part V

2011/02/02 Jordan Officials: Gas Imports From Egypt Unaffected By Turmoil

Jordan continues to receive natural gas supplies from Egypt via the Arab Gas Pipeline despite the ongoing political turmoil in the North African state, an official at the Jordanian energy ministry said Tuesday.

“We are still receiving gas from Egypt at agreed quantities and on a daily basis,” the official told Dow Jones Newswires.

The amounts of gas supplied to the kingdom from Egypt has began to rise since last December to reach “240 million cubic feet a day” and that level was preserved in January, Jordan’s National Electricity Co. head Ghaleb Maabreh said in a separate statement posted in the company’s web site.

He added that Jordan and Egypt also continue to exchange electricity via 500-megawatt cable running beneath the Red Sea , which also supplies power toSyria and Lebanon . Currently 60% of Jordan ‘s electricity is generated from natural gas, the bulk of which is imported from Egypt .

Jordan and Egypt signed an agreement in 2004 for the supply of 240 million cubic feet a day, or 2.48 billion cubic meters a year, of Egyptian gas at preferential price via the Arab Gas Pipeline, with the option of raising total supply by a further 900 million cubic meters a year.

The pipeline runs from Egypt to Jordan and extends to Syria and Lebanon .

Egypt agreed in October to resume exports of natural gas to Jordan to levels stipulated under the 2004 bilateral agreement after supplies dropped below the agreed volumes because of domestic gas shortages in Egypt , Jordan ‘s official news agency Petra reported at the time.

Jordan suffered power cuts last summer when it received below-average natural gas supplies from Egypt , which also suffered from high demand during the summer months.

The Jordanian energy ministry has plans to import gas from other countries in the region including Qatar to meet domestic demand. Jordan ‘s Prime Minister Samir Rafai discussed with Qatari officials in Doha during a recent visit the possibility of importing gas from the gas-rich Gulf Arab state.

The kingdom imports some 95% of its energy needs at a cost of around 19% of its gross domestic product. Rosneft, ExxonMobil To Explore For Black Sea Oil

U.S. oil giant Exxon Mobil Corp. (XOM) Thursday became the second company in a month to sign a major offshore oil exploration agreement with Russian oil company OAO Rosneft (ROSN.RS), following a similar deal with BP PLC (BP).

The deal is ExxonMobil’s biggest new venture in Russia since it agreed landmark ventures to produce oil and gas off the coast of Sakhalin in Russia ‘s far east. It shows how Russia is drawing in the expertise of Western oil companies to explore the country’s largely untapped coastal waters. Rosneft has little experience in offshore drilling and is keen to access the advanced technology of companies like ExxonMobil and BP.

ExxonMobil and Rosneft will jointly explore the Tuapse Trough area of Russia’s Black Sea, an area that could contain around 7.3 billion barrels of oil equivalent, said Rosneft Chairman and Russian Deputy Prime Minister, Igor Sechin, at a press conference on the sidelines of the World Economic Forum annual meeting here.

“ExxonMobil will bring its technology, project execution capabilities and innovation to complement Rosneft’s strengths and experience in the region,” said the company’s Chairman and Chief Executive, Rex Tillerson, in a statement.

“We will build on the successful relationship we have with Rosneft through the Sakhalin-1 project to help meet energy needs in Russia and the wider Black Sea area,” he said.

“ExxonMobil technologies will effectively complement Rosneft’s experience and resources,” said Sechin. “Development of this area will become the springboard for full-scale Black Sea basin development.”

The companies’ joint statement didn’t give details of the ownership structure of the agreement, or how the cost of exploration will be shared.

In its deal with BP, Rosneft will own two-thirds of the exploration joint venture, but BP will carry the first $2 billion in exploration costs. The companies also made a cross-shareholding agreement that will see BP take an additional 9.5% stake in Rosneft, and Rosneft take 5% of BP.

At 1115 GMT Thursday Rosneft shares were trading slightly up at 247.59 rubles on Russia’s Micex exchange. European Parliament inches closer to Turkmen gas deal

A deal to expand energy cooperation between Turkmenistan and the European Union moved a step closer to implementation last week with the approval by the European Parliament of a key resolution.

The Foreign Affairs Committee of the European Parliament on Wednesday formally adopted a resolution to approve a recommendation that would put an already-existing partnership agreement into motion.

The Partnership and Cooperation Agreement (PCA) was signed by Turkmen and EU delegates in 1998 but has not yet come into force, the Tehran Times news agency reported on Monday.

The recommendation would set in motion a plenary vote in May to solidify the agreement.

Members of the European Parliament, however, acknowledge that a deal with the authoritarian state may rankle the EU and so are hoping to attach certain provisions to the agreement.

The parliament wants to include an addendum to the PCA that would allow the body to review the process of democratization in Turkmenistan on a constant basis.

“The agreement would be suspended if the human rights and democratization clauses will not be respected,” Tehran Times quoted Member of the European Parliament (MEP) Norica Nicolai as saying during the Tuesday debate.

Turkmenistan, which sits atop the fourth-largest reserves of gas in the world, is hoping to provide the fuel for the EU’s proposed Nabucco pipeline that would transport Caspian gas through the southern tier of Europe. Barroso in the Caspian

European Commission President Jose Manuel Barroso was in Turkmenistan last week negotiating ways the Caspian country’s vast natural gas reserves might ameliorate European dependence on Russian resources through the so-called Southern Energy Corridor. Coming on the heels of a successful agreement inked in Baku to bring Azerbaijani gas to the European Union, Barroso’s meeting in Ashgabat instead indicated the need for more talks in the coming months.

It has long been conventional thinking in the West to see Turkmenistan as ‘a bridge too far.’ Though European leaders have longed for access to Turkmenistan’s 8.1 trillion cubic meters of proven gas stores, substantial impediments to any southern corridor project have prevented the opportunity to connect European consumers with Turkmen producers. However, Ashgabat’s decision to diversify away from Russia and China by shaking hands on the TAPI pipeline to Pakistan and India, and the expression late last year of their willingness to construct a trans-Caspian pipeline that could connect to a project supplying Europe, have put the concept of a southern corridor firmly back on the table. European decision makers must react quickly to this opportunity, but must also press for the adoption of the most logical project.

There have traditionally been a number of factors preventing the construction of a pipeline from Turkmenistan to Europe: the country is often thought to be simply too far away, given the technical restraints on the length of pipelines and the difficulty in crossing the Caspian; Turkmens have often been reluctant to negotiate with European leaders, and; the ongoing dispute between Azerbaijan and Turkmenistan over ownership of the off-shore Serdar/Kyapaz gas field has prevented cooperation between the two nations.

These obstacles have led to suggestions for Iraqi, rather than Turkmen gas, to be linked into the southern corridor. Moreover, the completion of the 1,139 mile China-Central Asia pipeline, which connects China’s Xinjiang province with Turkmenistan, has led many to assume that Ashgabat would concentrate on strengthening its ties to Beijing’s enormous market, at the expense of Europe. However, developments in recent weeks suggest that Turkmenistan may be on the way to overcoming many of these obstacles. The agreement to construct the 1,700 km TAPI pipeline, connecting the gas rich field of Dauletabad in southern Turkmenistan to the expanding markets of Pakistan and India, is a hugely ambitious project given the need to pass through the unpredictable provinces of Helmand and Kandahar in war-torn Afghanistan. Though the pipeline cannot be built until the security situation in Afghanistan improves, the deal demonstrates Ashgabat’s determination to diversify away from Russian and Chinese demand.

Secondly, after years of ambiguity or silence, the Turkmen government has finally expressed its willingness to work with Azerbaijan on the construction of a trans-Caspian pipeline, which could link up to a project transporting gas to the huge European market. In November, both the president and deputy prime minister expressed their willingness to supply Europe with as much as 40 billion cubic meters, or bcm, of gas annually via a pipeline crossing the Caspian and South Caucasus.

Though these proposals remain far from concrete, they do place the three primary southern corridor projects back in the spotlight. The largest of the three, the Nabucco pipeline, aims to deliver 30 bcm of gas to Europe, beginning in Turkey and finishing in Austria; the Italy-Turkey-Greece Interconnector, or ITGI, is the smallest solution to opening the southern corridor with a capacity of less than 10 bcm; while the Trans-Adriatic Pipeline, which aims to transport gas from the Caspian to Albania, Greece, and Italy, is the shortest pipeline, with a flexible capacity of around 20 bcm. Its plans also allow for the reverse flow of gas, an important option in case of future gas cutoffs, such as those experienced in Eastern Europe in 2008. Perhaps most importantly, however, a project the size of Trans-Adriatic does not – at least initially – require gas from anywhere other than Azerbaijan. Southern corridor construction can begin as negotiations with Turkmenistan continue.

Though the Nabucco project is undoubtedly the most discussed of the three, this does not mean it will necessarily win out. In fact, given the timeframe the Turkmens are implying (completion by 2015), it appears more likely that a smaller project will be adopted. This needs to be recognized by European decision makers, who should be pushing for the most realistic proposal to be agreed upon as soon as possible. While the Turkmens are currently interested in the southern corridor, the rapidly changing nature of Eurasian energy geopolitics in recent years ensures that there are no guarantees this enthusiasm will persist. Furthermore, given the uncertain prospects of the TAPI project, it would make sense to undertake a more stable mission in the southern corridor. For these reasons, European decision-makers should perhaps more seriously consider the medium sized Trans-Adriatic Pipeline, which is the most cost effective of the three projects and has the added ability to expand its capacity relatively easily.

Richard Morningstar, the United States’ Special Envoy for Eurasian Energy, recognized these developments in his recent suggestion that Nabucco is “not the only project” worth considering.

The southern corridor is both a vital source of energy for the expanding European gas market and a potential political asset in countering the dominance of Russia and China. Turkmenistan’s changing attitude provides an opportunity that cannot be missed, but Western decision-makers should take advantage of it prudently and support the project that makes the most sense.

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