revista presei pe energie 30 septembrie – part III

2010/09/30

upstreamonline.com: Nabucco sets sights on Iraq

The EU-backed gas group Nabucco said Iraq was its most viable partner for future gas deliveries and stepped up pressure on Azerbaijan, saying Baku should not be tempted by offers based on higher prices alone.

“Iraq is probably the most real, most viable gas supplier,” Reuters quoted Dimitar Abadjiev, Nabucco Gas Pipeline International’s head of corporate affairs as telling reporters today on the sidelines of an energy seminar.

“Iraq is bigger, and it’s just on the border with Turkey. It’s easier. It’s much less dependant on Russia. We’ve had preliminary talks … and I’m optimistic,” he said.

Nabucco aims to help wean Europe off its dependency on Russian gas by transporting up to 31 billion cubic metres of gas per year from Iraq and the Caspian region to an Austrian hub via Turkey and Eastern Europe.

Azerbaijan has been in talks with more than 20 companies and consortiums and will decide later this year which project gets gas from its giant Shah Deniz II gas fields, co-led by BP and Statoil .

The government has said the gas contracts will go to the company that offers the highest price, and the Nabucco and Russian offers are seen as the main contenders. Russian gas export monopoly Gazprom said recently its competitors would not be able to beat its price for gas from Shah Deniz.

“Price isn’t everything,” said Abadjiev.

“They have an interest to diversify consumers and … this is a real option for them to go to the European market.”

Russia proposes to buy gas on the Azeri border without allowing Azerbaijan to export gas to Europe directly.

The development has worried many EU politicians who say it would only boost the continent’s reliance on Russian fuel, which already accounts for around a quarter of Europe’s demand.

Abadjiev said Nabucco expected to have the first gas from Iraq, 10 billion Bcm, and another 8 Bcm from Shah Deniz in 2015. Nabucco’s shareholders include Hungary’s MOL, Romania’s Transgaz , Bulgaria’s Bulgargaz, Turkey’s Botas, Germany’s RWE and Austria’s OMV .

upstreamonline.com: Sechin nod for Rosneft gas sales plan

Rosneft chairman Igor Sechin today backed the company’s ambitions to sell gas to China – a move which will challenge Gazprom’s monopoly on exports from the world’s biggest gas producer.

“This is a unified position and right now it exists in the form of an idea, a request,” a spokesman for Sechin, who is also Russia’s deputy prime minister, told Reuters.

“Co-ordination with Gazprom will be worked out with Gazprom itself.”

The comments are the latest sign of growing competition between Russian producers and Gazprom for the lucrative Chinese market, which Rosneft already supplies with oil.

On Tuesday Lukoil and China National Petroleum Corporation (CNPC) signed a co-operation agreement which will see natural gas supplies heading to China, possibly from Central Asia.

Russia’s second-largest gas producer, Novatek, is eyeing liquefied natural gas exports from its project in the Arctic Yamal peninsula.

“Rivals are readying to break up Gazprom’s monopoly and that they will be able to export gas,” Valery Nesterov from Troika Dialog said.

Earlier this week, Rosneft’s newly-appointed president Eduard Khudainatov said Rosneft is talking to Gazprom about the possibility of selling gas to China. Under Russian law, Gazprom has a pipeline gas export monopoly.

“Initiatives like that are discussed with the chairman. That is an agreed position, so far in the form of an idea, a wish. Co-operation with Gazprom will be worked out,” Sechin’s spokesman told Reuters.

Sechin’s support will give Rosneft a strong hand in its foray into gas market of China where, according to consultants Wood Mackenzie, demand for the fuel is set to rise from 9 billion cubic feet per day in 2009 to 43 Bcfd in 2030.

“In case the major political forces intervene and Deputy Prime Minister Igor Sechin turns the discussion in Rosneft’s favour, the oil company’s natural gas may well end up in Asia,” Deutsche Bank said in a note.

Sechin has been critical of Gazprom’s operations and in an interview with Reuters in June said the company must raise its game by penetrating the swiftly growing markets of Asia.

upstreamonline.com: Gazprom looks to rope in Shah Deniz 2 flow

Russia’s gas export monopoy Gazprom is the only viable buyer of gas from Azerbaijan’s giant Shakh Deniz 2 field, Gazprom’s export chief Alexander Medvedev said.

Both Russia and the EU are vying for large gas contracts from Azerbaijan’s giant BP and Statoil-led Shah Deniz field to supply competing pipeline projects.

“Based on pure economic logic there is no other competitor who could beat our price,” Medvedev told Reuters in an interview Wednesday..

Analysts say gas-rich Russia’s push to buy Azeri gas, however, is an attempt to prevent the European Union from diversifying its gas resources beyond Russia.

The EU-backed Nabucco pipeline project intends to bring Central Asian gas directly, bypassing Russia and Ukraine, but it has had a difficult time signing supply deals.

Russia’ rival South Stream pipeline would also bypass Ukraine, the main transit country for Russia gas to Europe, and bring gas supplies from Russia’s coast, under the Black Sea to Bulgaria or Romania.

“We will do South Stream irrespective of how the Ukrainian system will continue,” said Medvedev.

Gazprom and Ukraine’s state-owned energy and gas pipeline company Naftogaz are in discussions to merge.

“If you look at the additional 200 Bcm for export to Europe that will be required in 2030 you see that the priority must be how to keep the capacity of the Ukraine system,” said Medvedev.

“If there is not new investment the capacity will decline.” Medvedev also said Japan’s Mitsubishi would be one of its preferred candidates for partnership on the Sakhalin 3 gas project.

“One old friend is better than two new ones,” said Medvedev.

Gazprom recently discovered a large gas field on the Kirinsky block of the Sakhalin 3 project on the Sea of Okhotsk.

Japan’s Mitsubishi and Mitsui are Gazprom’s partner in the Sakhalin 2 project which is to produce 9.6 million tonnes of liquefied natural gas (LNG) this year.

Japan is increasingly turning north for its energy needs as Russia sends more oil and gas to Pacific customers from the new oilfields of East Siberia and expands LNG production on Sakhalin.

Production from one of the biggest gas fields in East Siberia, Kovykta, is slated for 2020, according to a government development plan for the Far East, said Medvedev.

The licence holder for Kovykta is currently undergoing bankruptcy and the field is expected to return to state hands.

Medvedev said Gazprom had not yet decided whether or not to bid for the field when it goes up for auction.

“It is a large scale investment, we will wait now and see,” said Medvedev.

georgiandaily.com: Proposed Caspian-Black Sea Canal Would Have Enormous Geopolitical Impact

een the Caspian and Azov seas, an enormously expensive “gigantist” project with roots in the Stalinist 1930s and one that, if realized, would have enormous geopolitical consequences.

“In today’s “Izvestiya,” journalist Konstantin Volkov says that what his Moscow paper has been able to learn so far this “new mega-project,” one that Prime Minister Vladimir Putin has supported since at least 2007, “promises to become the most expensive in the entire history of contemporary Russia” (www.izvestia.ru/obshestvo/article3146612/)

In 2009, Volkov says, the European Development Bank provided 2.7 million US dollars to study two possible routes – a “Eurasian” canal just north of the North Caucasus mountain range and a second branch of the existing Volga-Don canal which would pass somewhat further north.

According to the newspaper, the results of the study of the two, although still classified “secret,” are in fact “ready” for a “final” decision by the leaders of the Russian Federation and Kazakhstan, the two countries most immediately affected but hardly the only ones given the other Caspian and Black Sea littoral state and their neighbors.

But as Volkov puts it, “the question immediately arises: why in fact is it necessary to spend billions of dollars for a new link between the Caspian and the Azov?” The existing Volga-Don canal works more or less well for almost all purposes, including those that the backers of the new canal say it would fulfill.

However, as Putin put it, “the appearance of a new canal “would not simply give the Caspian littoral states a way out to the Black and Mediterranean, that is to the world ocean, but also qualitatively change their geopolitical position and allow them to become sea powers” as a result of this link.

Eurasianist Aleksandr Dugin told the paper that “the question here is geopolitical: In exchange for the establishment of the Eurasia canal, Russia will increase its influence in Kazakhstan. And if to these two countries joint also Azerbaijan and Iran, who are also on the Caspian littoral, this will create a new oil cartel that won’t be overawed by OPEC.”

If this canal is built, Russia will gain some immediate economic benefits from transit fees, given that between six and ten percent of the world’s oil is in the Caspian basin. But more important, it will be able to challenge those promoting other pipeline routes such as Baku-Jehan because ships will be able to carry the oil further and less expensively.

Moreover, Volkov continues, “if alongside will be established a transcontinental route connecting the industrial regions of China with the Caspian, then the new artery will become a channel for shipping Chinese goods” and that path could become a competitor to the sea route through the Suez canal.

The projected cost of each of the possible roots is roughly 500 billion rubles (16 billion US dollars), although as Volkov points out, those projections do not include many of the ancillary construction projects that will be needed or take into consideration the possible social costs or likely overruns.

According to the “Izvestiya” journalist, Moscow hopes to get the countries of the region who will be the direct beneficiaries, including not only Kazakhstan, but Azerbaijan, Iran and Turkmenistan, as well as China to help pay for the construction of this canal, a plan that means such a canal will trigger geopolitical tensions even before it goes into operation.

But the possibility this project is already generating controversy inside the Russian Federation, with ecologists questioning its impact and others the opportunity costs of spending money on such a canal at a time when Russia needs to invest in other infrastructure projects, including roads and public health facilities.

centralasianewswire.com: Kazakhstan, Russia company to cooperate on renewable energy projects

Kazakhstan has signed a deal with Russia’s biggest hydropower company to jointly build renewable energy facilities in a southern region of the Central Asian country, the RIA Novosti news agency reported on Tuesday.

The southern regional government of Zhambyl will participate with the Russian company RusHydro in the process of setting up new hydro and wind power plants.

According to the terms of their Memorandum of Understanding, RusHydro will share its knowledge and technologies in designing, building, launching and managing the green enterprises.

RusHydro noted that Kazakhstan has considerable potential for small hydroelectric plants, Ria Novosti reported.

The leading Russian firm intends to sign deals with regional governments elsewhere in the vast nation and is eyeing the area near Kazakhstan’s largest city of Almaty, also in the south.

“The company could build small hydro power plants in the Almaty region,” the news agency cited the firm as saying.

Climatic conditions in Central Asia’s largest country offer plentiful supplies of hydro, wind and solar energy.

The highest solar potential is in the southern regions while high speed winds are mainly recorded in the southeast mountains, central areas of the republic and near the Caspian shores in western Kazakhstan.

Although the country’s rich fuel resources have lead to low electricity prices, many southern areas lack sufficient electricity infrastructure and are prone to power cuts during the bitterly cold winters.

Novinite: Romania Wants to Export Electricity to Bulgaria

Romania could export more electricity to Bulgaria, according to Adrian Baiscusi, general manager of Romanian power grid operator Transelectrica (TEL).

Baicusi has stated, as cited by Act Media, that as a result of Turkey joining the European electricity network (UCTE) in September, Romania should have opportunities to export energy to the south.

“For the period to come, the exchange with the neighbors will be intensified, asTurkey got into the syncronisation with UCTE and will import more energy from Bulgaria. We will export more to Bulgaria” Baicusi said at a seminar on energy issues.

Bulgaria is traditionally an exporter of electricity to countries in the entire Balkan region, even after the first four reactors of the Kozloduy NPP were shut down in 2002 and 2006, and it is unclear what Baicusi as no further details on his statement have been provided.

He did point out, however, that while looking to the south, Romanian producers could be in competition with the Eastern European states such as Ukraine, with lower prices

“We have pressure from the East, where there is cheap energy and the companies put pressure to get in the European zone. There is pressure for the Romanian producers, ” Baicusi said.

Novinite: Bulgarian PM Asks Russians to Build Belene NPP for EUR 7 B

Bulgaria’s Prime Minister Boyko Borisov hinted he has asked Russian companyAtomstroyexport to build the Belene Nuclear Power Plant for not more than EUR 7 B.

Borisov has confirmed a recent statement of Sergey Kirienko, the CEO of the Russian state company Rosatom, which is the parent company ofAtomstroyexport, that the construction of Bulgaria’s second NPP at Belene should be resumed soon thanks to an agreement with the Bulgarian government.

The statements by Borisov and Kirienko have come right before Bulgaria’s preliminary construction contract with Atomstroyexport expires on September 30, 2010; the contract clauses provide for the re-adjustment of the price and deadlines based on inflation and other factors.

“The problem with Belene is the price. I have sent the Russians an offer about a maximum price for the construction, and we will go ahead with the project if they agree on it. What is more, within a month we will be announcing the strategic European investors interested in the Belene Nuclear Plant,” the PM said in an interview for private cable TV “Kanal 3”.

The Belene NPP was de facto frozen in the fall of 2009 when the previously selected strategic investor, the German company RWE, which was supposed to provide EUR 2 B in exchange for a 49% stake, pulled out.

Subsequently, Rosatom offered Bulgaria a loan of EUR 2 B so that the construction can continue, in exchange for a stake in the future plant that the Bulgarian government could then buy out by returning the money. The offer was refused by the Borisov Cabinet which also made it clear it would construct the Belene plant only if an European (apparently meaning EU or Western European) strategic investor can be found.

The government has started a tender to select a consultant that is supposed to help it pick an investor; the project, which originally was supposed to be 51% owned by the Bulgarian state, is to be restructured based on the fact that the National Electric Company NEK has already spent BGN 1 B on Belene. Over the past months, the Borisov Cabinet made it clear it might agree on a 20-30% stake in the future plant.

The recent news about the Belene project included Serbia’s interest to participate in its with a share of up to 5%, and the interest on part of the Chinese government, which, however, says that the use of Russian technology is an obstacle to the participation of Chinese investors.

Under Bulgaria’s preliminary contract with Atomstroyexport signed in 2008, the construction of the Belene plant with two 1000-MW VVER nuclear reactors is supposed to cost EUR 3.997 B. However, the contract expires on Thursday, September 30, 2010, which means that all variables in it – including the adjustment of the price according to the inflation, the parameters for the delivery of equipment and construction and launch deadlines should already be negotiated.

Yet, Borisov made it clear he wanted no readjustments but offeredAtomstroyexport a set price and firm deadline.

“I would like to reduce the price of the nuclear plant by EUR 700-800 M, down from over EUR 7 B,” he explained hinting that EUR 7 B should be the maximum price the Bulgarian government is willing to pay. A few days earlier Economy Minister Traikov estimated the cost of the Belene plant at EUR 8-9 B.

Reports in the Bulgarian media say that the Russians would be glad to accept Borisov’s offer for setting a certain price for the construction as this would save them the negotiations about which inflation index should be used for the readjustment of the original price of EUR 4 B. Atomstroyexport’s offer to use the inflation rate inRussia has been flatly rejected by Bulgaria, and the issue of which inflation index of Eurostat should be used has been up in the air.

PM Borisov has explained that Bulgaria should stick with the Russian technology for Belene precisely because its only existing NPP Kozloduy is using Russian reactors.

“We are going to turn the Belene NPP into an European project. This is very important because if we don’t do it, Turkey is constructing four reactors, and in 10 or 20 years we will be importing electricity from Turkey, not the other way around. Because the only operation reactors of Kozloduy, 5 and 6, expire in 2020. But if we built reactors 1 and 2 at Belene with the Russians, we will be able to extend the life of the Kozloduy reactors. Because only the Russians have the right to do that. Thus, we will also have four reactors in 2020, just like Turkey. So I am actually doing something good for Bulgaria contrary to all accusations that I am serving somebody else’s interest,” Borisov stated.

The license of Unit 5 of Kozloduy expires in October 2017, and of Unit 6 – in October 2019. According to Bulgaria’s Minister of Economy, Energy and Tourism Traicho Traikov, the government has already prepared a plan for extending their life.

Technically, the life of the Bulgarian reactors can be extended only by the Nuclear Regulatory Agency based on the execution of a modernization program.

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