revista presei pe energie 23 noiembrie – part III

2010/11/23

Novinite: US Company Confirms Sizeable Shale Gas Discovery in Bulgaria

Bulgaria: US Company Confirms Sizeable Shale Gas Discovery in Bulgaria

Some 300 B cubic meters of shale gas are lying untapped in centralnorthern BulgariaDirect Petroleum manager for Bulgaria Kolyo Tonev has confirmed for Novinite.com (Sofia News Agency).

The discovery was made in the fall by Direct Petroleum, a US company specializing in natural gasextraction with a Bulgarian branch.

The deposit is in the so-calledEtropole argillite formation and is estimated based on previous data and new sample drillings. According to Tonev, those older results were neglected because no adequate technology was available to extract gas.

Shale gas is the same in composition to regular natural gas, but is found dissolved in clay-like rocks, instead of being trapped in underground cavities. As such, it requires a different and more intensive drilling technique only recently developed in the States.

Tonev, who spoke to Novinite.com on the matter, said that it is not yet clear how much of the 300 B cub.m. found will actually be accessible for commercial exploitation.

But he added that, given the great size of the discovery, “but no matter how small the percentage of extractability is, the quantities produced will be significant.”

Exploitation will start within 4-5 years, after a number of regular preparatory procedures are finalized.

Direct Petroleum hopes to start the first ever shale gas extraction at another site – the 6 B cub.m. strong Deventsi source – by the end of 2011.

Novinite: Bulgaria Excited about Nabucco after Turkmenistan’s Generous Offer

Bulgaria’s Foreign Ministry insists on fast progress on the construction of the Nabuccogas transit pipeline after at the end of last week Turkmenistan announced it was ready to provide the project with more natural gas that it can handle.

Bulgaria’s Foreign Minister Nikolay Mladenov will meet on November 23, Tuesday, in Vienna, with the management of the Nabucco Gas Pipeline International, the consortium formed by Turkey, Bulgaria, Romania, Hungary, Austria, and Germany for the construction and operation of the pipeline.

“I asked for this meeting because the realization of Nabucco is a priority for Bulgaria and for Europe. It is our country that made everything necessary to facilitate the start of the project. That is why we must be active in mobilizing the support for it. Especially now because of the opportunities that emerged before Nabucco after the announcement of Turkmenistan‘s First Deputy Prime Minister Baymurad Khojamukhamedov that his country is ready to provide 40 billion cubic meters of gas annually for Nabucco,” explained Mladenov.

At an energy forum last Friday, Khojamukhamedov pledged there would be an agreement on constructing a trans-Caspian pipeline along the bottom of the sea to transport Turkmen gas across the Caspian to Azerbaijan where it would be fed into pipelines linking up with the Nabucco pipeline.

In his words, a pipeline from gas fields in Eastern Turkmenistan to the Caspian Sea was already under construction.

Turkmenistan‘s Deputy PM made it clear that it had 40 billion cubic meters of spare natural gas annually to offer the EU.

“Taking into account domestic demand in the west of the country and supplies from there to Iran, we will have 40 billion cubic meters of gas free every year, so European countries need not worry,” he said.

This amount is larger than the projected capacity of 31 billion cubic meters of gas annually which Nabucco is supposed to transfer from the Middle East, the Caucasus, and the Caspian Region through Turkey into Bulgaria and the rest of the EU.

Turkmenistan has not formally committed yet to any supplies for Nabucco even though its officials have mentioned the 3300-km long EU pipe as part of the country’s scheme to diversify its markets.

Turkmenistan‘s support as a gas supplier could prove to be key for Nabuccobecause the project has been seriously questioned over the lack of potential sources. As of now, after its expected completion in 2014, it is expected to draw gas from Iraqi Kurdistan and Azerbaijan.

The race between Nabucco and its rival Russian sponsored project South Stream appears to be tightening after last week Bulgaria and Russia signed a key deal for the construction of the South Stream section on Bulgarian soil.

Bulgaria, which is a crucial participant in both projects, has granted support for bothNabucco and South Stream.

Novinite: EC Admits South Stream, Nabucco Rivalry

The competition between the South Stream and the Nabucco gas pipelines was admitted by EU Energy Commissioner Guenther Oettinger.

South Stream can, in the long term, be considered a rival to the Nabuccoproject,” Oettinger stated as an answer to a journalist’s question during the 10th Anniversary of the EU-Russia Energy Dialogue High level conference in Brussels, 22 November 2010.

The EC used not to consider the two projects as competitors until recently.

Bulgaria, which already signed the South Stream deal with Russia November 13 2010, is eager to also participate in the Nabucco project, as it is seen as an opportunity for the Balkan country to eliminate its complete energy dependence from Russia.

The South Stream gas transit pipeline is supposed to be ready by 2015. Its construction is expected to cost between EUR 19 B and EUR 24 B. It will be transporting 63 billion cubic meters of natural gas annually, or 35% of Russia’s total annual natural gas export to Europe.

The South Stream pipe will start near Novorosiysk on the Russian Black Sea coast, and will go to Bulgaria’s Varna; the underwater section will be 900 km long.

In Bulgaria, the pipe is supposed to split in two – one pipeline going to Greece and Southern Italy, and another one going to Austria and Northern Italy through Serbia, Croatia and Slovenia.

The other major gas project, the EU-backed Nabucco will directly connect the world’s richest gas regions – the Caspian region and the Middle East – to the European consumer markets. It is also planned to pass through Bulgaria.

The pipeline will link the Eastern and Southern border of Turkey to Baumgarten in Austria – one of the most important gas turntables in Central Europe – via Bulgaria, Romania and Hungary. It will be 3 300 km (1,800-mile) and aims to diversify gas supplies in Europe.

The Nabucco project is estimated to cost EUR 7.9 B.

According to Turkmenistan’s First Deputy Prime Minister Baymurad Khojamukhamedov, his country is ready to provide 40 billion cubic meters of gas annually for the Nabucco gas pipeline.

today.az: Iran set to step up gas imports from Azerbaijan

Iran’s Deputy Oil Minister Jawad Oji has said in an interview with ISNA news agency that experts continue to consider possibility of increasing gas imports from Azerbaijan to 2-5 million cubic meters per day. A special committee has been launched to step up gas imports from Azerbaijan, the oil minister said.

There is already a contract on swap gas supplies from Azerbaijan to Nakhchivan.

“We must be sure that Azerbaijan has completed the construction of necessary supply pipelines and has installed compressor stations of high pressure,” the minister explained.

news.az: Gas pipelines transport 14.5bn cu m of gas in January-October

Gas pipelines in Azerbaijan shipped 14.5 billion cubic meters in the past ten months, an increate of 9.9% year-on-year.

The Baku-Tbilisi-Erzerum pipeline hauled 30.2% of the overall gas transported.

news.az: Investments in oil sector reach $2.85bn

Investments in Azerbaijan’s oil sector were AZN 2.28bn ($2.85bn) in January to October this year.

nvestments in the oil sector have increased AZN 675.2m compared to the same period last year, according to figures from the State Statistical Committee.

The oil sector received 32.3% of overall investments.

During the reporting peroiod, investments in the non-oil sector were AZN 4.777bn ($5.971bn), an increase of AZN 439m compared to last year.

The non-oil sector received 67.7% of overall investments.

The increase in investments in the oil sector is the result of work on the Chiraq Oil project, which includes the construction of an additional platform at the Azeri-Chirag-Guneshli bloc.

news.az: Turkmenistan upbeat on Trans-Caspian gas pipeline

The possibility of the transit of Turkmen gas to European markets via a Trans-Caspian pipeline to Azerbaijan is to be discussed later this week.

An unnamed source in the Azerbaijani government toldABC.az said that the pipeline would be discussed at the Azerbaijan-Turkmenistan intergovernmental commission on economic cooperation due to be held in Baku on 25 November.

Although talks on Turkmen gas transit through Azerbaijan have been conducted, no official agreements have been signed yet.

“Today we have a possibility not only of finishing the negotiations, but also of starting work to ensure such transit,” the government source told ABC.az.

“We see no reasons that could adversely affect the project. Russia’s position on the Trans-Caspian pipeline does not pose a threat either, as there are also other forces,” the source said.

The Azerbaijani government source’s expressed lack of concern at Russian opposition to the Trans-Caspian pipeline was echoed by Turkmenistan’s first deputy prime minister, Baymurad Khojamuhamedow, last week.

He said that Turkmenistan would be ready to provide some 40 billion cubic metres of natural gas to the Nabucco pipeline project to pump gas from the Caspian region to Europe.

Speaking at the Oil and Gas Turkmenistan-2010 forum, Khojamuhamedow said that agreement would be reached on constructing the Trans-Caspian pipeline to link up with feeder pipelines to Nabucco on the Azerbaijani side of the Caspian.

Taking into account domestic consumption in the west of the country and gas supplies from there to Iran, Turkmenistan will have up to 40bn cu.m of gas annually, so European countries need have no worries about gas shortages, Khojamuhamedow said, according to ABC.az.

“At the Caspian littoral states’ summit in Baku Turkmen President Gurbanguly Berdimuhamedow suggested that any two of the five countries having access to the Caspian Sea could with mutual consent lay subsea pipelines, and most of the littoral states supported him. It is very good news for us that others supported the initiative too. This corresponds to the policy of diversification of sales markets for Turkmen natural gas, and we are putting those plans into action in an orderly fashion,” Khojamuhamedow said.

He added that Malaysia’s Petronas would supply 5bn cu.m. of gas from a Turkmen offshore bloc in 2011, but this gas had simply nowhere to go. Petronas could also double production in a few years.

“Turkmenistan is also building the East-West gas pipeline with a capacity of 30bn cu.m for gas supplies to the West,” Khojamuhamedow said.

gazeta.kz: KMG set to play an even bigger global role in energy

KazEnergy panel on ensuring energy security agreed that sufficient reserves plus location are major factors for supplying energy to meet global demand. Because Kazakhstan has huge reserves and a critical Eurasian location, it is indispensable for meeting world demand, and things are looking good for its state oil and gas concern, KazMunaiGas.

Kairgeldy Kabyldin, chairman of KazMunaiGas, said that KMG’s prospects for the next 20 years are promising indeed.

Kazakhstan is in the top 10 for world hydrocarbon reserves (5.3 billion tons of oil and 3.3 trillion cubic meters of gas) and plans by 2020 to become atop 10 production country, with forecast output of 140 million tons. This places KMG in a strong position to help ensure energy security for large parts of the planet.

Kazakhstan will invest $35 billion in its oil and gas sector in 2010-14, and KMG will naturally play a big role in all projects. Kabyldin outlined future priorities in its development plan, which first stresses production, then oil transportation, gas transport, high-valued-added products and, finally, oil and gas services.

Kazakhstan and Azerbaijan extract the most oil in the Caspian region, at over 56 million and 37 million tons, respectively. Kabyldin reviewed transport routes for Kazakh crude, which now include the Caspian pipeline, the Atyrau-Samara pipeline and the Kazakhstan-China pipeline (Atasu-Alashankou) as well as the Aktau seaport. Combined capacity is over 60 million tons per year, with up to 80 percent of Kazakhstan’s oil sent to Europe.

KMG’s current projects include the Caspian Pipeline Consortium’s expansion project, the creation of the Kazakhstan Caspian Transportation System(capacity of which is expected to reach 67 million tons per year by 2015) and the Kazakhstan-China pipeline. Kabyldin stressed the need for second-phase production at the Kashagan oil field for the viability of the KCTS, which is intended to send rising levels of Kazakh oil from Kashagan and the Tengiz field via the Caspian to the world. He noted that KMG is continuously improving safety and modernizing its transport systems.

With the country focusing on eastward projects, KMG is working with the China National Offshore Oil Corporation on the Kazakhstan-China pipeline to join Kazakhstan’s two stand-alone pipeline systems and allow more crude to be sent to China. The KMG chairman concluded by saying Kazakhstan’s export policy should be flexible and efficient, and that the diversity of routes exemplified this. He said that Kazakhstan wants equitable partnerships with neighbors and international firms, with terms supporting the country’s interests and security.

Angus Miller, Caspian-energy adviser in Britain’s Foreign and Commonwealth Office, said that Britain prioritizes energy security for itself and the European Union and thus attaches great importance to Kazakhstan because of its ‘‘enormous’’ resources. The self-described ‘‘old hand’’ at Kazakhstan is part of a wider advisory group to the British government. The group’s aim, he said, is to ‘‘reduce damaging volatility in the international energy markets and maximize benefits that flow from the development of the region’s natural resources, for the U.K., the E.U. and Kazakhstan.’’

Miller acknowledged the move to use less carbon-based fuel but said there are signs that global demand will rise for decades, especially from emerging nations. He noted the ‘‘twin needs of energy demand and energy security are upper-most in the minds of energy ministers. That is why transparency of action and intent is so important.’’

He praised Kazakhstan for committing to stability and the rule of law in its support for the Extractive Industries Transparency Initiative.

Miller concluded by saying, ‘‘Kazakhstan has long been an attractive place in which to invest,’’ and he reminded attendees that Shell and the BG Group were among the first foreign majors in the country.

Rovnag Abdullayev, president of the State Oil Company of the Azerbaijan Republic, outlined Socar’s investments and role in energy security. He pointed out that the country now has 31 production-sharing agreements; it has invested more than $37 billion into the industry since 1994; and 34 companies from 15 nations work there. Azerbaijan is a major transport hub, and Socar ships hydrocarbons to most regional energy centers. He also took special note of planned enhanced cooperation with KMG in oil shipments.

At the press conference following the panel, Abdullayev also stressed that the two nations recently met to discuss another vital security issue: coordinated responses to oil spills and other crises. Sun Bo, vice president of PetroChina, talked about the changing dynamics of the natural-gas market, with consumption moving from member countries of the Organization for Economic Cooperation and Develop ment to non-OECD countries. He noted that

China is the largest natural-gas market in the world, providing an ideal customer for the center of natural-gas production —Eurasia. He urged close cooperation and understanding to achieve a win-win situation in terms of energy supply and to promote overall development in Eurasia.

centralasianewswire.com: Kazakhstan wants to ‘adjust’ energy company agreements

Kazakh officials have announced they will review production sharing agreements (PSAs) with foreign oil and gas consortiums to align them with current economic realities.

Officials of the Accounts Committee, Kazakhstan’s top financial control body which oversees the adoption of the state budget, were speaking at an economic conference on legal aspects of mineral resources management in the capital Astana on Friday.

“We should work out a mechanism … of reviewing production sharing agreements for their possible change, taking into account the balance of interests of all parties,” the Reuters news agency cited Accounts Committee member Altai Zeinelgabdin as telling the conference.

“The economy is not standing still, the conditions of its development are changing, and this often demands the revision of PSAs, especially when state interests are violated under such agreements,” he added.

The officials argued that in the chaotic 1990s following independence from the Soviet Union, Kazakhstan made concessions with foreign investors to stabilize its distressed economy that it should not be held to today.

“Many of the clauses contained in the existing PSAs do not meet the demands of the present time as many of the regulatory documents and laws relating to the mineral resource managements have been amended and significantly revised,” the Interfax-Kazakhstan news agency cited Zeinelgabdin as saying.

The head of the Tax Committee under the Finance Ministry, Daulet Yergozhin, told reporters PSAs needed to be “adjusted” rather than “revised”.

“We do not mean to say that the PSAs will be revised. We are saying that the PSAs that were signed in the 1990s need to be clarified and adjusted to the new economic environment.” Interfax-Kazakhstan reported Yergozhin as saying.

President Nursultan Nazarbayev warned foreign energy majors in January they could lose their immunity from tax legislation changes, which they currently enjoy under PSA agreements.

Calls to abandon the agreements with foreign ventures have been made by Kazakh officials in recent years who consider them unjust.

The largest energy consortiums Tengiz, Kashagan and Karachaganak were all agreed PSA contracts.

Analysts say Kazakhstan is trying to follow in the footsteps of Russia and other big energy producers that have put pressure on foreign majors who are drawing in higher revenues off the back of high oil prices.

centralasianewswire.com: Turkmenistan is crucial to China’s energy security

Turkmenistan continues to heat up its already warm and close relations with China.

On Wednesday and Thursday, China’s rising Vice Premier Wang Qishan will stop off for a two-day visit to Turkmenistan after holding talks with Russian leaders in Moscow. Wang is widely being seen as being groomed to be China’s next premier.

He was invited to Turkmenistan by Deputy Prime Minister Baymyrat Hojamuhammedov. Both men will participate in the first meeting of the China-Turkmenistan cooperation committee, China’s official Xinhua news agency reported Sunday.

As we have monitored at Central Asia Newswire, Turkmenistan’s soft-spoken but bold President Gurbanguly Berdimuhamedov has been enthusiastically embracing ever closer ties with China following the success of the new Turkmenistan to China pipeline, which started operating in December 2009.

This 4,200-mile-long pipeline also flows through Kazakhstan and Uzbekistan and will also eventually carry Kazakh and Uzbek natural gas to the energy hungry industries of China. When operating at full capacity, it is designed to meet a significant portion of China’s natural gas import needs. That is also very good news for Turkmenistan, which despite its relatively modest size sits on the fourth largest known reservoir of natural gas in the world.

Turkmenistan gas supplies to China have already grown to strategic importance in their volume.

On November 14, China Energy News announced that the huge new influx of natural gas from Turkmenistan alone – which will exceed 3 billion cubic meters in its first year of pipeline operation, is the main reason why China will not suffer natural gas shortages this winter.

And the gigantic, state-owned China National Offshore Oil Corp (CNOOC) has been ordered to start buying natural gas on a large scale from foreign markets in order to primarily supply the city and region of Shanghai, China’s financial banking center, according to China Energy News.

This will allow Beijing to reserve domestic natural gas production as an emergency fall-back reserve.

It was the coming online of theTurkmenistan to China pipeline that made this longer-term planning possible. Already, Turkmen President Berdimuhamedov has approved the construction of second major gas pipeline to China.

Reuter’s News Agency pointed out last week that China suffered serious gas shortages in the winter of 2009. It also noted that China’s domestic use of natural gas for energy has risen by 300 percent since 2000.

China has also concluded major long-term deals with nations such as Qatar and Indonesia to import natural gas. But Turkmenistan and its neighboring Central Asian republics are far closer to China, and to do not require liquefied natural gas to be transported by ultra large carriers (ULCCs) along potentially vulnerable sea-routes that could be targeted by terrorists or, in the event of some larger conflict, by the U.S. or Indian navies.

China is, therefore, betting big on Turkmenistan to supply its major natural gas energy needs in the long term, and to offer it a lasting solution to last year’s potentially crippling gas shortages.

On November 17, President Berdimuhamedov in a prepared speech to the annual Oil and Gas Turkmenistan conference in the Turkmen capital Ashgabat publicly celebrated his country’s growing energy trading relationships with both China to the east and Iran to the south.

Russia does not object to Turkmenistan selling as much gas as it can, or wants to, to either Iran or China. The Kremlin has close security and diplomatic ties with both countries.

However, Berdimuhamedov is risking Moscow’s anger by supporting the construction of the Nabucco gas pipeline from the Caspian Basin through Azerbaijan, former Soviet Georgia in the Caucasus and through Turkey to the Mediterranean. He is potentially straining Kremlin relations by reviving the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. The United States strongly supports both projects.

“Exporting natural gas to the Russian Federation, the People’s Republic of China and the Islamic Republic of Iran, our country keeps pipeline modernization activities at the center of its attention, the Turkmen president stated.

“Furthermore, alongside conducting negotiations on the construction of a gas pipeline in second direction to China, Turkmenistan spares no effort to launch construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.”

Despite maintaining relations with Beijing and Moscow Turkmenistan remains outside the web of Russian and Chinese-led security alliances that cover most of Central Asia. Still slowly emerging from its long era of isolation under tyrannical founding President Saparmurat Niyazov, it has yet to join either the Russian-led Collective Security Treaty Organization (CSTO) or the Russian- and Chinese-led Shanghai Cooperation Organization (SCO). In fact, it is the only remaining Central Asian nation that has not yet joined either group.

But in reality, Turkmenistan is already bound big time to China in a relationship that has proven hugely beneficial and vital for both countries.

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