Vol. 54, n° 4, February 19, 2015 Main news - Cedigaz · • LNG tankers lie unused around...

Vol. 54, n° 4, February 19, 2015

Main news LNG: Transport-Distribution

• GAIL LNG tender to ferry gas from US finds no bidder. • LNG tankers lie unused around Singapore as gas downturn turns to crisis.

LNG: Supplies- Imports – Exports

• China's first private LNG import terminal project in Zhejiang delayed. LNG: Price

• Australian LNG to Cost Nearly Half the Price of Qatar Gas. LNG: Use for Power Generation

• Kenya delays signing LNG deal with Qatar on domestic gas discovery.

LNG: Use as Marine Fuel • Wärtsilä engines to power Shell’s LNG bunker vessel.

LNG: General Information

• BP Energy Outlook: dramatic growth in LNG production. LPG: Use as Automotive Fuel

• Government urged to get behind LPG for vehicles. Natural Gas: Exploration

• China discovers enormous gas field in South China Sea. Natural Gas: Transport-Distribution

• Turkey, Russia Outline Route of Turkish Stream Pipeline. Natural Gas: Supplies- Imports – Exports

• Central Asia looks east for gas market as Russians turn off pipe. • Russia cannot avoid sending gas through Ukraine with finances critically dependent on energy

exports. Natural Gas: Consumption

• Ukrainian PM Believes Country Should Consume Zero Russian Gas. Natural Gas: General Information

• Kiev Cuts off Gas to Donetsk and Lahansk.

Cedigaz News report - CNR54-4

LNG

TRANSPORT - DISTRIBUTION

INDIA:

GAIL LNG tender to ferry gas from US finds no bidder

After postponing tender deadline thrice and also one year later, state-owned gas utility GAIL India Ltd has not found any bidder for its $ 7 billion tender to hire newly-built LNG ships to ferry gas from the US.

GAIL's Rs 42,370 crore tender to hire nine newly-built liquefied natural gas (LNG) tankers drew a blank due to the government's condition of building a third of the ships in India, officials said.

GAIL had in August last year floated a global tender to charter nine newly-built ships for transportation of natural gas in its liquid form at sub-zero temperature (LNG) from the US.

The tender, however, required bidders to build one-third of the ships in India, a condition that found no takers.

It first postponed the last date of bidding from October 30 to December 4, then to January 6 and February 17.

GAIL was originally not in favour of the condition but succumbed to Oil Ministry's dictate once it was threatened with a Presidential directive.

Officials said the company may now have to re-float the tender without the 'Make in India' condition.

GAIL board had on April 4 last year approved hiring of up to 11 newly-built LNG ships.

The Ministry saw the chunky contract to be the perfect opportunity for India to exercise buyer's clout and wanted a part of the contract be set aside for Indian shippers to kick-start domestic manufacturing by compelling global majors to transfer LNG shipbuilding technology to India.

GAIL, however, resisted this but the Ministry in no uncertain terms told the firm that a Presidential directive -- an order from the owner of the company -- will be issued.

The company fell in line and re-floated the tender calling for bids in lots of three with the condition that at least one ship in each of lots should be built in India.

But the tender evoked lukewarm response with major shipbuilders not wanting to move to India, they said.

GAIL will start receiving LNG from the US from December 2017 and it needs the tankers before that. It has already lost one year in the tendering process. (February 19, 2015)

02/19/2015


SINGAPORE:

LNG tankers lie unused around Singapore as gas downturn turns to crisis

Over a dozen liquefied natural gas (LNG) tankers are parked, many idle, in and around Singapore - one of the world's biggest trading hubs for the fuel - in a sign that the slowdown engulfing world gas markets may be worsening into a crisis. With Asian spot LNG prices down by almost two-thirds since February 2014 as slowing demand combines with rising output, shippers are parking their tankers close to ports like Singapore where unused ships can be easily maintained and serviced until new orders come in.

Leading ship brokers estimate over one-tenth of the global fleet of 400 LNG tankers is currently unused because of slowing growth in Asia's biggest economies. The impact just in Singapore suggests the problem could be worse. "There are currently 30 to 40 (oil and gas) tankers sitting in Singapore, many without anything to do," said Javier Moret, head of LNG origination at Germany's biggest power producer RWE during a conference in Singapore this week.

According to shipping data on Thomson Reuters, seven tankers have been sitting idle off the east coast of Johor, Malaysia, for over two weeks, and another two ships have been anchored south of Batam, Indonesia, for several months. Half a dozen LNG tankers are in Singaporean docks. The 15 ships have a combined capacity to carry 2.26mcm of LNG, about two weeks worth of Singapore's gas demand. For ship owners, idled tankers mean a loss of $60,000 in daily chartering fees per vessel. The gas these 15 tankers can carry would be worth over $200 million in current market terms. Around a year ago, that amount of LNG would have been worth almost $600 million. (February 13, 2015)

02/13/2015

GERMANY:

Ziemann develops new LNG container

Given the increasing transport volume of liquefied natural gas (LNG), the German company Ziemann International has developed a patented container for the transport of cryogenic LNG.

The box is the same size as a standard 40 foot container and has been certified by the certification authorities (TÜV, BAM, BV) for the first time as a process tank. This means that the tank container may be emptied during transport on a ship, for example.

Ziemann said that itss container might be used to replace terminals' tank systems which had previously been permanently installed at the facilities of the end consumers. As a result the use of LNG in the fields of logistics, operation and authorization procedures will be simplified. (February 19, 2015)

02/19/2015


SUPPLIES - IMPORTS - EXPORTS

AUSTRALIA:

Australian LNG output cuts seen long-term amid gas shortage

A shortage of coal-seam gas, needed to feed about $60 billion of export projects in eastern Australia, may prompt the developers to reduce shipments in the long term, according to Credit Suisse Group AG.

The LNG developments in Queensland state face a potential shortfall of 4,500 to 9,000 petajoules over two decades, or as much as 30% of the supplies needed, Sydney-based analysts Mark Samter and Martin Kronborg said today in an interview.

While a deal to bring Arrow Energy Ltd.’s gas into the plants developed by companies including Santos Ltd. and BG Group Plc would fix the problem, getting it to the projects would be expensive, the analysts said.

An oil price of at least $75 a barrel would be needed to make that viable, they said. Arrow is owned by Royal Dutch Shell Plc and PetroChina Co.

Santos is building the Gladstone LNG project that’s scheduled to begin later this year, while BG is operator of the Queensland Curtis LNG development, which started up late last year.

Origin Energy Ltd. is developing a third plant on Curtis Island with ConocoPhillips that’s due to begin in 2015.

If Arrow gas doesn’t make it to the plants on Curtis Island and new domestic gas projects aren’t approved, “the next logical step is less offtake from either GLNG or QCLNG,” Samter said. “Something ultimately has to break.”

The possibility of lower output from the projects would probably be “many years away,” according to Samter. (February 17, 2015)

02/17/2015

CHINA:

China's first private LNG import terminal project in Zhejiang delayed

The start-up of China's first privately owned LNG import terminal project has been postponed, a source close to independent gas distributor and project operator ENN said. The 3mtpa Zhoushan LNG terminal project in China's eastern Zhejiang region received construction approval from Beijing in January this year and was initially scheduled for completion by end 2016. However, the commissioning has now been delayed until late 2017 or 2018, said the source, who did not disclose the reasons for the delay.

Slow downstream demand, driven by rising gas prices and sluggish GDP growth, coupled with rising pipeline imports and plunging prices of alternative fuels, have halved China's LNG consumption growth, said industry sources. (February 16, 2015)

02/16/2015


INDIA:

Gazprom Mulls Increased LNG Supplies to India by 2020

Gazprom is considering increasing its LNG supplies to India to as much as 5 million mt/year by 2020, according to a company official.

"With a portfolio of 25 million mt/year, we could potentially sell as much as 5 million mt/year to India," Alexander Medvedev, deputy chairman of Gazprom's management board, said in an interview with Platts.

Gazprom recently reached an agreement to potentially raise LNG supplies to India's state-owned buyer GAIL to 3.5 million mt/year from the earlier agreed 2.5 million mt/year.

The duration of the contract may also be increased from 20 years to 25 years, with supplies expected to start from 2019, Medvedev said. (February 9, 2015)

02/10/2015

PAKISTAN:

Pakistan ready to receive first LNG cargo in early March

Pakistan's newly built Engro Vopak liquefied natural gas (LNG) terminal is ready to receive its first cargo in the first week of March, Engro Vopak's chief executive said on Wednesday.

"We are ready to take the first cargo in the first week of March," the chief executive, Sheikh Imranul Haque, told a conference in Singapore.

"We started building the terminal last year and now it is ready after 10 months," he said, adding that the LNG would be supplied by Qatar.

The terminal near the southern port city of Karachi will initially handle 0.4 bcf of LNG per day (3.1 million tonnes per year), but it aims to finally import 0.6 bcf per day. (February 11, 2015)

02/11/2015

No one from Qatargas was available to comment.

The south Asian country of 180 million people suffers from serious power shortages; power cuts can last up to 20 hours a day in some areas. (February 18, 2015)

02/18/2015

PAKISTAN - QATAR:

Qatargas, Pakistan close to 15-year LNG supply deal –sources

State-run Qatargas is in the final stages of talks on a deal to supply Pakistan with 3 million tonnes of liquefied natural gas annually for 15 years, industry sources in Doha told Reuters on Wednesday.

"The deal to supply Pakistan with 3 million tonnes a year for 15 years is in the final stages and will be signed in a matter of a few weeks," said one source.

A second source said the first shipment would be received by March.

An official from Pakistan's Ministry of Water and Power confirmed that an LNG deal was planned but declined to give details.


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CANADA:

Repsol seeks regulatory nod for East Canada LNG export terminal

Spanish energy giant Repsol filed an application this week with Canadian regulators to begin exporting liquefied natural gas from its under-utilized Canaport import facility in Saint John, New Brunswick.

The company plans to import as much as 271bcf of natural gas per year by pipeline from the United States and western Canada, then convert it to nearly 5 million metric tons of LNG at a new on-site liquefaction facility, according to the application with the National Energy Board of Canada dated Tuesday, Feb. 10.

The filings did not cite a cost estimate for the project, but sources have told Reuters it could hit $4 billion. The project is one of four LNG export terminals proposed in eastern Canada, aiming to ship abundant North American natural gas to energy-hungry markets overseas. Many more are being proposed on Canada's west coast.

The existing Canaport marine terminal, jointly owned with Canada's Irving Oil, is well-positioned to meet Europe's demands for cheap and dependable gas in the face of the Ukraine crisis, according to analysts. But it would likely depend on big, and potentially controversial, pipeline investments through New England.

Canaport was built in 2009 to turn LNG received from overseas by tanker back into its gaseous form, then send the gas by pipeline into Canadian and US markets, but the shale boom in the United States has since left the plant severely underutilized.

Between 2008 and 2013, natural gas imports from eastern Canada to the northeast United States fell by 82%, according to data from the US Energy Information Administration.

On Canada's west coast, Vancouver-based NewTimes Energy Ltd. filed an application on Wednesday to the National Energy Board seeking a 25-year licence to export, making it the 19th export terminal proposed for British Columbia. (February 12, 2015)

02/12/2015

YEMEN:

Yemen LNG exports ongoing, 1 production train in maintenance

Yemeni exports of liquefied natural gas (LNG) are running as normal despite one production plant, or train, undergoing planned maintenance, Total CEO Patrick Pouyanne said.

"In Yemen operations are running smoothly, gas is being produced, the power plant is still working," Pouyanne said on the sidelines of a conference in London. "Presently one of the two trains is in planned maintenance shutdown, exports continue as normal."

The 6.7-million-tonne-per-year gas export terminal operated by France's Total lifted a two-week force majeure last month which had been announced amid deteriorating security following the collapse of the government. A source at the Yemen LNG project said full exports would resume within a matter of days as the maintenance outages nears its end.

Two separate sources at Total said that while maintenance was indeed planned, its start was brought forward. It was not immediately possible to confirm which of the facility's two production trains was shut. (February 13, 2015)

02/13/2015


PRICE

INDIA - AUSTRALIA:

Australian LNG to Cost Nearly Half the Price of Qatar Gas

India will start importing natural gas (LNG) from Australia by end of the year at a rate which will be about 40 per cent less than the price of its current shipments from Qatar on a long-term contract.

Petronet LNG Ltd will in December start receiving liquefied natural gas (LNG) from Exxon Mobil-owned Gorgon LNG plant in Australia on a 20-year deal, a company official said.

The price is directly indexed to crude oil prices and at ruling oil price of USD 50 per barrel, LNG at Australian port will cost USD 7.25 per mbtu. After adding shipment cost of around USD 1, the landed price of the Gorgon LNG would be around USD 8.2, he said.

While its Australian contract is indexed to average global oil prices in the preceding one year, Petronet's 25-year deal with RasGas of Qatar is on a five-year moving average of Japanese Crude Cocktail (JCC).

So, LNG from Qatar costs about USD 12.667 per mmBtu at the port of loading and nearly USD 13 at Indian coast.

Industry sources said long-term LNG from Qatar is costlier than what is available on the spot market at about USD 7 per mmBtu rate, reflecting the slump in international oil and gas prices. (February 10, 2015)

02/11/2015


WORLDWIDE:

Oil Prices May Recover, But Not LNG

One major knock on effect from the oil bust is the collapse in prices for liquefied natural gas. Unlike oil, which largely trades on an open market and fluctuates depending on supply and demand, natural gas trades differently in different places. In the U.S., natural gas trades much more openly than in Europe and Asia, which have historically linked the price of gas to the price of crude oil.

That created a huge opportunity for natural gas producers in the U.S., who wanted to profit off of their cheap supplies by exporting to Europe and Asia where prices were often much higher. The spread between the different regional markets widened significantly after the Fukushima meltdown, as Japan’s energy needs went into overdrive after the country moved to shut down more than 50 nuclear reactors. The Platts Japan Korea Marker (JKM), a benchmark price for the spot market in Asia, surged to price levels nearly three or four times as high as those found in the United States.

But LNG prices are crashing back to Earth, falling in tandem with the collapse in crude. And while LNG may benefit if oil prices rebound, a variety of factors could prevent prices from bouncing back to their highs during the 2011-2014 period.

First, economic growth in Asia remains unimpressive. China’s GDP grew at its slowest rate in a quarter century in 2014. The world’s largest LNG importer, Japan, has seen modest economic improvements over the past year, but growth is still weak. South Korea actually imported 9% less LNG in 2014 compared to a year earlier.

Second, and more importantly, Japan is moving closer to restarting some of its nuclear reactors. Although only one or two may actually come back online in 2015, a gradual return to nuclear power will seriously cut into Japan’s LNG demand. Japan’s LNG imports may fall this year.

Third, a massive volume of LNG export capacity is about to flood the market over the next two to three years. Global export capacity is expected to surge by 34%, jumping from 290mtpa at the end of 2013 to almost 400mtpa by 2018. Australia in particular is in the midst of a massive LNG construction phase, with export capacity expected to more than triple over the next 3 years.

As such, LNG prices may suffer longer than oil prices. LNG prices in Asia may average just $10.30 per million Btu (MMBtu) in 2015, a 38 percent decline from last year. Worse yet, they are not expected to recover anytime soon – analysts at Australia & New Zealand Banking Group Ltd. predict they will average $10 in 2016, half of what they were during the peak years following the Fukushima meltdown. Current contract prices are going for around $12 to $14/MMBtu, but the most recent spot market prices have plummeted to a mere $6.65/MMBtu, the lowest level in almost five years. See the two FERC maps from 2013 and

2015 to get a sense of the dramatic change in prices.

Market watchers expect oil prices to begin to rebound towards the end of 2015. While that will ripple through to LNG, the wave of new LNG export capacity coming online may prevent LNG prices from rising, even if oil sees a strong recovery.

the LNG market often takes much longer to balance out. Building export terminals requires huge upfront capital costs, but once completed, operating costs are relatively low. That means exporters have fewer incentives to shut in capacity, delaying the convergence towards some sort of supply and demand equilibrium. In other words, LNG prices could remain depressed for some time. (February 11, 2015)

02/12/2015


USE FOR POWER GENERATION

KENYA:

Kenya delays signing LNG deal with Qatar on domestic gas discovery

Kenya is delaying signing an agreement on importing LNG from Qatar due to the discovery of 1.8 Tcf of gas in onshore block 9.

Energy Cabinet Secretary Davis Chirchir told Platts by telephone Monday that the signing of a deal for Qatar to supply 1 million mt of LNG a year to fire a planned 700-MW power plant in Mombasa was being delayed.

He said the government was looking at ways of optimizing the use of the gas found in the middle of last year by Africa Oil Corp. at the Sala-1 well in block 9 in northeastern Kenya before making a commitment to import LNG from Qatar.

"We have to be careful not to rush. You do not want to commit yourself say for 10 years and find your own gas can not find a market," he said. Africa Oil and Marathon Oil Corporation, each own 50% of the onshore block 9.

"The plan is to transform the natural gas Africa Oil and Marathon Oil Corporation discovered to power in the next nine to 15 months to add an additional 200-500 MW to the national grid," Chirchir said.

Kenya plans to build in Indian Ocean port city of Mombasa at Dongo Kundu 700-MW plant to use LNG from Qatar to contribute to generation of additional 5 GW by 2017 to reduce cost of electricity to about 7 US cents/KWh.

The building of the Dongo Kundu 700-MW gas plant entails the construction of a floating storage re-gasification unit to supply gas to other electricity generating plants in Mombasa currently fired by diesel.

Kenya Pipeline Company in April 2014 signed a non-disclosure agreement with Qatar Gas to negotiate the supply of 1 million mt/year of LNG when President Uhuru Kenyatta visited Qatar. (February 16, 2015)

02/17/2015

Argus Australia and Global LNG Markets 2015 New Pricing Paradigm

www.argusmedia.com/ausglng

11 March 2014

The fourth annual Argus Australia and Global LNG Markets 2015 conference examines the impact of changing supply and demand fundamentals on the global LNG market and the Australian east coast domestic gas market. It looks at shifting pricing paradigms, as the LNG market grapples with new supply contracts linked to the US Henry Hub, consumer pressure to move away from the oil index and the challenges of developing liquid gas hubs in Asia.

Top reasons to attend the Argus Australia and Global LNG Markets 2015

1. One day of content intensive hot updates on the Australian east coast gas market

2. Meet with an international expert speaker panel to gain insights into the latest market activities

3. Have personalised discussions with market leaders and understand the strategies that their companies use.

Conference Highlights Include:

• Key drivers in global LNG spot markets • Outlook for Gladstone spot supplies • Falling oil prices – what do these mean for future LNG export projects globally? • Asia and the push away from oil-indexed LNG pricing • Henry Hub pricing and its impact on Australian LNG • Examining China’s growth potential - what does the Russia - China pipeline deal mean for

Australian LNG projects? • LNG netback versus hub gas - which new Australian east coast gas pricing paradigm will

prevail? • Building liquidity and developing a forward curve in east coast gas markets

Conference Speakers • Rod Duke, Vice-President Downstream, GLNG • Chandra Dev Singh, Head of Derivatives - Risk Management, International Trade, Bharat

Petroleum • Geoffrey Cann, Consulting National Director, Oil and Gas, Deloitte Touche Tohmatsu • Ryuta Kitamura, Assistant General Manager Sydney, Jogmec • Darren Foulds, Origination Manager, GDF Suez Australian Energy • David Hewitt, Oil and Gas Analyst, Credit Suisse • Rod J Johannessen, General Manager Strategy and Service Delivery, APA Group • Ross Lambie, Senior Economist/Gas Markets Manager, Bureau of Resources and Energy

Economics • Peter Geers, Executive General Manager, Markets, Australian Energy Market Operator • Anne-Sophie Corbeau, Research Fellow, Kapsarc • Fiona Poynter, Vice-President, LNG Asia-Pacific, Argus

For Registration and more details, please contact Ashrafe Hanifar at: [email protected] / [email protected] / Tel: +65 6496 9977

http://www.argusmedia.com/ausglng




USE AS AUTOMOTIVE FUEL

POLAND:

Gazprom, Solbus launch LNG buses in Poland

Gazprom Germania and Solbus have launched 35 LNG buses, bringing natural gas fuelled transport to the streets of Warsaw, Poland.

The companies, together with distribution partner Lider Trading, won a public tender issued by Warsaw’s municipal transport company MZA Miejskie Zaklady Autobusowe in November 2013.

Gazprom Germania is both supplying both the LNG and refuelling facilities for a group of 35 urban buses supplied by Solbus. The companies previously launched Europe’s first 11 LNG city buses in the Polish city of Olsztyn in October 2013.

Comments

“Natural gas-powered buses both emit significantly fewer pollutants than comparable diesel buses and have motors that are significantly quieter, which is particularly welcome in the inner city. That’s why we and our Polish partner Solbus want to convince more customers of the benefits of natural gas for transport,” commented Timo Vehrs, Director of Business Development at Gazprom Germania.

“Natural gas-powered buses are a very tangible solution for eco-friendly public transport in Warsaw. Natural gas is considerably cheaper. Using natural gas also makes us less dependent on oil,” added MZA spokesperson, Adam Stawicki. (February 19, 2015)

02/19/2015


USE AS MARINE FUEL

NETHERLANDS:

Wärtsilä engines to power Shell’s LNG bunker vessel

An LNG bunker vessel to be built at the STX Offshore & Shipbuilding Co. yard in South Korea, on behalf of Shell, will be powered by Wärtsilä DF dual-fuel engines.

LNG as marine fuel

The ship will be used to deliver gas to LNG-fuelled vessels in northwest Europe. The newbuild contract is in response to the increasing acceptance by the shipping industry of LNG as a marine fuel. The engine order was placed with Wärtsilä in December last year.

The new Shell vessel will be based at the port of Rotterdam in the Netherlands, and will load from the new break bulk terminal and jetty to be constructed by the Gas Access to Europe (Gate) terminal. It will be able to bunker customers at other locations. It will be powered by three 8-cylinder Wärtsilä 20DF dual-fuel engines, capable of operating on either gas or diesel fuels. The engines are scheduled for delivery in spring 2016.

Commenting on the order, Aaron Bresnahan, VP Sales, said: "This new specialised vessel is an important step towards LNG becoming the fuel of choice for shipping in Europe, and Wärtsilä is pleased and honoured to cooperate with Shell and STX in this project. LNG eases compliance with both the new and anticipated future IMO environmental regulations, and we are proud that our development of technologies throughout the gas chain is of increasing value to the marine sector."

Dr Grahaeme Henderson, VP of Shell Shipping & Maritime, added: "This specialised LNG bunker vessel is a pioneering new design. It will have a capacity to carry 6500 m3 of LNG fuel, and will be highly efficient and manoeuvrable. It will be able to load from big or small terminals and to bunker a broad variety of vessels. We worked closely with our customers on the specifications of this exciting new bunker vessel and will use cutting-edge technology. Shell is proud to be leading in the development of LNG fuel in shipping." (February 9, 2015)

02/09/2015


GENERAL INFORMATION

WORLDWIDE:

BP Energy Outlook: dramatic growth in LNG production

According to the latest edition of the BP Energy Outlook 2035, global demand for energy is expected to rise by 37% from 2013 to 2035, or by an average of 1.4% per year.

Asian expansion

Despite the dramatic recent weakening in global energy markets, ongoing economic expansion in Asia – particularly in China and India – will drive continued growth in the world’s demand for energy over the next 20 years.

Spencer Dale, BP’s Chief Economist, commented: “After three years of high and deceptively steady oil prices, the fall of recent months is a stark reminder that the norm in energy markets is one of continuous change. It is important that we look through short term volatility to identify those longer term trends in supply and demand that are likely to shape the energy sector over the next 20 years and so help inform the strategic choices facing the industry and policy makers alike.”

Highlights: LNG

As demand for gas grows, there will be increasing trade across regions and by the early 2020s Asia Pacific will overtake Europe as the largest net gas importing region. The continuing growth of shale gas will also mean that in the next few years North America will switch from being a net importer to net exporter of gas.

The overwhelming majority of the increase in traded gas will be met through increasing LNG supplies. Production of LNG will show considerable growth over the rest of this decade, with supply growing almost 8% per year through the period to 2020. This also means that by 2035, LNG will have overtaken pipelines as the dominant form of traded gas.

Gas markets

Increasing LNG trade will also have other impacts on markets. Over time, it can be expected to lead to more connected and integrated gas markets and prices across the world. It is also likely to provide significantly greater diversity in gas supplies to consuming regions such as Europe and China.

Energy self-sufficiency in North America, which is expected to become a net exporter of energy this year, and increasing LNG trade are also over time expected to have fundamental impacts on global energy flows.

Moving east

Increased oil and gas supplies in the US and lower demand in the US and Europe due to improving energy efficiency and lower growth will combine with continuing strong economic growth in Asia to shift the energy flows increasingly from west to east.

Bob Dudley, BG Group CEO, concluded: “The energy industry works on strategies and investments with lifespans often measured in decades. This is why an authoritative view of the key trends and movements that will shape our markets over this long term is essential… and is precisely why this Outlook is so valuable.” (February 17, 2015)

02/18/2015


LPG


JAPAN:

Astomos, Tasweeq sign new LPG deal

Qatar International Petroleum Marketing Company (Tasweeq) has signed a term contract with Japan’s Astomos Energy Corporation for the sale and purchase of Qatar’s LPG for one more year. This would to be the 8th LPG term deal between the two companies. Astomos, a leading LPG-specialised player in the world, has 25% domestic market share in Japan. (February 16, 2015)

02/16/2015



UNITED KINGDOM:

Government urged to get behind LPG for vehicles

The Government is being urged to introduce an integrated fuels strategy that supports liquid petroleum gas (LPG) and helps local authorities convert their fleets to less polluting forms of fuel.

UK LPG, the industry trade representative body, alongside supplier Autogas, has released a manifesto setting out its vision for the industry in the UK.

As part of a number of recommendations, it is urging the Government to replace individual fuel strategies, such as the plug-in grant scheme, with an integrated approach that supports gaseous alternatives such as LPG.

Linda Gomersall, general manager of Autogas, said: “It is essential that the Government takes an integrated approach to road fuels policy, to avoid the belief that one fuel is favoured over another, or that there is one solution to a challenge that has differing levels for different users, regions and requirements.”

More than 150,000 vehicles are powered by LPG in the UK, with the fuel available from more than 1,400 sites.

It emits significantly fewer harmful pollutants such as CO2, NOx and particulate matter than petrol or diesel models. And, thanks to its better environmental performance, LPG attracts a lower fuel duty than petrol or diesel, meaning that it currently retails for around 61.6p per litre (ppl) compared with 113.3ppl for diesel and 106.5ppl for unleaded petrol.

Gomersall said: “LPG autogas offers fleets the benefit of low pump prices that could slash fuel costs by 40% – backed by the Government’s firm commitment to a 10-year duty trajectory – while our analysis shows that it produces 14% less well-to-wheel CO2 than petrol and 10% less than diesel, highlighting LPG’s value and relevance today as a low-carbon alternative fuel.”

The industry manifesto comes as Autogas undergoes a rebrand and a new conversion network aims to make the switch to LPG easier.

The new brand identity is to be rolled out across the company’s 215 refuelling sites across the UK.

In addition, the company has launched a new website, which provides motorists with information about the cost-saving, health and environmental advantages of LPG, as well as helping them find a centre that can carry out conversions.

Members of the Autogas approved conversion scheme were hand-picked by the company after rigorous assessment to ensure they could deliver work and service to the very highest standards.

Furthermore, all workshops are also approved members of UK LPG, meaning they are subject to ongoing scrutiny and assessment.

Gomersall concluded: “Throughout the world, governments are thinking imaginatively about incentives and schemes to encourage and support the manufacture of LPG autogas-ready vehicles, consumer take up of LPG autogas and encouragement to convert to LPG autogas. This type of approach is absent in the UK.

“The UK needs to follow European counterparts, such as Germany, which has already introduced 10-year low-duty guarantees and produces LPG models with over 500,000 LPG cars currently on the road, and is much more advanced in terms of LPG usage.” (February 10, 2015)

02/10/2015


CNG


UNITED STATES:

UPS wants to build 8 natural gas fuel stations in New Stanton

UPS Inc. wants to build eight stations dispensing compressed natural gas to fuel company vehicles at its facility in New Stanton. The facility would be the first in the community dispensing compressed natural gas.

TruStar is involved in constructing 16 fueling sites for UPS. Natural gas stations in Oklahoma City and New Orleans are scheduled to open later this month.

UPS has nearly 1,000 package trucks on the road that use natural gas, according to the company's website. UPS began extensively using CNG in 1989 to assess its benefits and viability as an alternative fuel. (February 12, 2015)

02/13/2015

NATURAL GAS

EXPLORATION

CHINA:

China discovers enormous gas field in South China Sea

The world's largest net oil importer, China National Offshore Oil Corporation, has announced the discovery of 100 bcm of natural gas field in the South China Sea.

China's state news agency Xinhua reported late Monday that a deepwater drilling rig had discovered Lingshui 17-2, the country's first self-support deepwater gas field, in September 2014 and it has since been approved as a large-scale gasfield.

It was located 150km south of Hainan Island, and its operational depth is 1500m below the sea's surface, according to CNOOC.

"Discovery of the field opened the door to deepwater oil and gas resources in the South China Sea and the huge exploration potential of deepwater areas there," said Wang Yilin, CNOOC chairman.

Xie Yuhong - a manager at the company - told Xinhua that connecting other gas fields to Lingshui will create the possibility of a gas corridor to meet great demand from Hong Kong and Macau, and other southern states.

He added that the well could produce 1.6 million cubic meters of gas per day, the highest daily flow of all CNOOC's gas wells during testing. (February 10, 2015)

02/11/2015

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IRAN:

Iranian bank to invest $7 BLN in South Pars Gas Field

The Managing Director of Bank Mellat, Iran’s biggest private bank, has announced that the institution will invest $7 billion in the development of South Pars gas field, Iran’s largest resource holding some 30 percent of the country’s total proved gas reserves.

Iran’s Shana news agency quoted Mohammad Reza Saroukhani as saying that some $5 billion will be invested in phases 20, 21, 22 and 23, while $2 billion will be put in phase 13 of South Pars.

It’s expected that some 125 million cubic meters of gas per day (mcm/d) will be produced from the mentioned phases in total.

Iran has inaugurated phases 1 to 10 to 2009 and commenced the phases 12, 15, 16, 17 and 17 with half production capacity in 2014. South Pars has been divided to 24 phases and currently produces less than 390 mcm/d of raw gas.

Managing-director of Pars Oil and Gas Company Ali-Akbar Shabanpour told Mehr News Agency that Qatar produces 1.6 times more gas than Iran from joint South Gas field. Iran planned to complete South Pars by 2018. After full implementation of this field, the country’s total gas production level will stand above 1.1 billion cubic meters per day. Currently Iran produces about 660 mcm/d in total. Iran reportedly needs $20 to $25 billion in investment to complete the South Pars project.

National Iranian Gas Company (NIGC) Planning Director Hassan Montazer Torbati told reporters today that Iran’s gas production in South Pars had increased by 22 billion cubic meters during the current fiscal year, which started on March 21th, 2014, leading to a 2.5 bcm gas trade balance. (February 18, 2015)

02/19/2015


PRODUCTION

NETHERLANDS:

Dutch 'put production before safety' in quake-hit area

A Dutch public commission said Wednesday government and energy companies had put production ahead of safety in Europe's biggest gas field, triggering a series of minor earthquakes.

"It seems that safety in regards to earthquakes had no influence on the decision to extricate gas" from northern Groningen, the independent Dutch Safety Board (OVV) said in a report.

The OVV launched an investigation in early 2014 following numerous protests and complaints by villagers after quakes damaged farms, homes and historic buildings in the area.

The earthquakes increased in parallel with gas extraction, growing from 110 tremors in the 1990s to 500 between 2000 and 2013.

The relatively low magnitude earthquakes are described as a "natural" result of huge pockets of air left underground by massive gas extraction.

The OVV's report which investigated incidents between 1959 and early 2014 said "maximum production took precedence over safety".

It said a bulwark of companies including the Dutch Earth and Oil Company (NAM), Shell, ExxonMobil and Gas Terra formed a "closed circle aimed at consensus" about gas production.

The Dutch economics affairs ministry "as the only governmental party was supposed to have the public's interest at heart."

"Yet it formed part of this same bulwark that gave production the priority," the OVV said.

Last year, government announced it would slash gas production in northern Groningen from 50 million cubic metres to 40 million cubic metres by the end of 2016.

The Netherlands is Europe's second-largest producer and makes some 13 billion euros ($14.7 billion) annually from gas.

The Groningen field, the biggest in the European Union, provides the Netherlands -- the world's 10th-biggest gas producer -- with two-thirds of its gas.

The OVV said "the damaged relationship between Groningen's residents and gas mining needs to be fixed."

"This starts by the parties involved admitting that until 2013 they've not paid enough attention to people's safety."

"It also means giving Groningen's residents a bigger say in the decision-making when it comes to activities deep underground." (February 18, 2015)

02/19/2015


NETHERLANDS:

Earthquakes forces cabinet to limit gas extraction in Groningen

Gas extraction in Europe’s largest natural gas field Groningen will be limited, as the Dutch government will wait for the results of a safety research to continue with the extractions. Residents of Groningen are complaining for about two years now for the deteriorating living conditions in Groningen and the economic damage the earthquakes caused to their families. Groningen gas field has been exploited for almost 50 years, but earthquakes started to become more frequent, in 2013, averaging one a week, compared to fewer than 20 a year before 2011.

In 2013, Telegraph had reported that up to 60 per cent of the 60,000 homeowners in the Groningen region have experienced earthquake damage to their homes and a local anti-drilling activist group,De Groninger Bodem Beweging (GBB) or Groningen Ground Movement, has complained that many houses have become unsellable. “Many people feel they have become prisoners in their homes. They can't move,” said Daniella Blanken, the GBB spokesman.

Today, the Dutch government decided to set the maximum limit of gas extraction at 16.5bcm in the first half of 2015, and will decide afterwards whether to maintain last year's schedule to cut total gas extraction to 39.4bcm in 2015 or to make further reduction on the basis of new research. In 2012, gas extraction in Groningen was 47.8bcm, 53.9bcm in 2013 and 42.5 bcm in 2014. (February 10, 2015)

02/10/2015

ABU DHABI:

Tecnicas Reunidas wins $700m Gasco contract

Abu Dhabi Gas Industries (Gasco) has awarded Spain’s Tecnicas Reunidas (TR) a $700 million contract for a natural gas project in Abu Dhabi.

The contract covers Package 3 of Gasco’s Integrated Gas Development Expansion Project aimed at producing 400mcf of additional gas from its offshore fields and alleviating the emirate’s rising gas shortage, said a company statement.

The project consists of several gas processing units, gas pipelines, condensate pipelines and all required interconnections.

As part of the contract, TR will conduct the engineering, procurement, construction, installation and commissioning of the Shah Gas Gathering Centre. (February 8, 2015)

02/09/2015

Moreover, the ministry said that Turkmenistan will fully ensure the gas export on all routes, including Iran, Russia, China and such projects as TAPI (Turkmenistan-Afghanistan-Pakistan-India) and Trans-Caspian pipeline (under the Caspian Sea to the coast of Azerbaijan), as well as on other possible export routes. (February 16, 2015)

02/16/2015

TURKMENISTAN:

Turkmenistan plans to increase gas production volume

Turkmenistan plans to produce over 80bcm of commercial gas in 2015, a message from the country’s Ministry of Oil and Gas Industry and Mineral Resources said.

Turkmenistan produced over 76bcm of natural gas in 2014, while its export volume neared 45bcm, said the message.



RESERVES

CHINA:

South China Sea gas field has 100b cubic meter reserve

China's first deepwater gas field in the South China Sea has proven reserves of more than 100bcm, the country's largest producer of offshore gas, the China National Offshore Oil Corp (CNOOC) announced on Saturday.

The Lingshui 17-2 field, which was discovered in September 2014 and is located 150 kilometers south of South China's Hainan Province, has been identified as a large-scale gas field, demonstrating that the South China Sea has extensive exploitable oil and gas resources, China Central Television (CCTV) reported on Saturday.

The annual output of the Lingshui 17-2 field is expected to reach 3.5 to 4bcm, Xie Yuhong, a manager with the CNOOC, was cited by CCTV as saying. "This figure is relatively conservative," Xie said.

China consumed 180bcm of natural gas in 2014, according to a report released by the China Petroleum and Chemical Industry Federation, a non-governmental organization, in January 2015. By the end of 2014, China's proven reserves of exploitable natural gas amounted to 37tcm, according to the Ministry of Land and Resources.

Over 32% of the natural gas used by China in 2014 was imported and in 2013 the ratio was 31.6%, the report noted.China's increasing reliance on other countries for its natural gas is risky as the country cannot store huge amounts of gas, like it can with oil, and its gas supplies could be affected by changes in bilateral relationships, said Lin Boqiang, an energy expert from Xiamen University.

The State Council in November 2014 urged the country to speed up the development of oil and gas extraction projects in the South China Seas in its five-year energy plan. "The majority of oil and gas resources in the South China Sea are in the form of deepwater reserves. The lack of deepwater exploitation technology was a key obstacle preventing China from conducting much extraction in this area previously," Lin said.

The CNOOC has made technological breakthroughs in high-temperature and high-pressure drilling. The Lingshui 17-2 field is also the first significant deepwater gas and oil discovery made by the semi-submersible CNOOC 981 rig. (February 9, 2015)

02/09/2015

2015)

02/12/2015

TRANSPORT - DISTRIBUTION

PAKISTAN:

China Gas Pipeline Bureau to Begin Laying Gas Pipeline in Pakistan

China Petroleum Pipeline Bureau (CPP) will soon begin laying 700 km Gwadar-Nawabshah gas pipeline in Pakistan on government to government basis. Once complete, the pipeline will transport up to one billion cubic feet per day of regasified LNG. CPP is expected to finish the pipeline in two years.

Pakistan hopes that the pipeline would also facilitate Iran-Pakistan pipeline project if international sanctions on Tehran go. An official said that CPP would bring the required capital of $1.5 billion and will also construct the LNG terminal in Gwadar, costing $800 million. The terminal, which is likely to be offshore, will have a capacity of 500mmcfd of LNG. (February 11,


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GREECE - BULGARIA:

Interconnector Greece-Bulgaria in the spotlight

The post-election political landscape in Greece saw the Syriza party assume office and put into motion plans to move forward with a main natural gas project between Greece and Bulgaria. This project has been in limbo due to continuous political instability and successive general elections in both countries since 2012.

The Interconnector Greece-Bulgaria (IGB) constitutes a cornerstone in gas cooperation between Athens and Sofia in relation to the Southern Gas Corridor project and in particular, the Trans-Adriatic Pipeline (TAP). Moreover, the recent initiative by the Greece's DEPA regarding a proposed energy gas axis streaming from the Aegean Sea towards Central Europe, named the "Central Corridor", is also dependent on the conclusion of IGB. The reason for this is for there to be a set of interconnectors reaching Hungary that would in turn be able to accommodate an even grander plan - the Aegean-Baltic Corridor - which would reach Poland.

Bulgaria is in the midst of disappointing energy security developments and its envisaged role as a preferred route for the transport of substantial amounts of gas into the EU. The cancellation of both Nabucco and South Stream along with non-discoveries of significant amounts of domestic gas, continues to place the country in a challenging position with respect to energy security and has increased the desire to play a role in the shaping of things regarding the axis between Eurasian producers and Western consumers. For the moment, Sofia has received news from the EU Commission that it is eligible to receive €250 million in funding in order to proceed with connecting Greece, Turkey and Romania via interconnectors and developing its underground storage facilities.

IGB is crucial if Bulgaria is to meet its aim of 1bcm of gas deliveries per annum from Azeri SOCAR post 2019 and decrease its almost 100% dependency on Gazprom. Further, Greek plans of creating an LNG installation in Northern Greece to supply the Balkans would also need IGB as the main transfer conduit.

The development of IGB process has been slow process due to the lack of interest by potential traders in using the potential gas transportation capacity. This is primarily the result of the aforementioned plans still being a theoretical level, whilst the likely introduction of the Turk Stream changes the discourse once more, regarding Southeastern European gas supplies.

The victory of the Syriza party in Greece also puts forward the option of a Turk Stream spur into Greece and then Italy via the Interconnector Greece-Italy (ITGI), in which the IGI Poseidon consortium has a 50% stake. Thus, matters are still in flux, while there is increasing probability of early general elections in Bulgaria.

Therefore the probability that the IGB route will be delayed once more is increasing, without taking into account that other variables, such as Gazprom’s tactics, Turkey’s ambitions and potential developments from SOCAR, may further complicate the situation. (February 10, 2015)

02/10/2015


IRAN - IRAK:

Iran works on gas pipeline to Iraq

Iran continues its attempts to increase its regional clout, with domestic companies joining forces to finance the gas pipeline to Iraq.

The National Iranian Gas Company (NIGC) said that there are 14 consortia that voiced their interest to take the next step in the project.

‘Hamidreza Araqi, who is … managing director of the National Iranian Gas Company (NIGC), said the groups of companies have already received the necessary documents related investment in the project, and should offer their qualifications by the set deadline’ reads a post on the company’s website on Monday.

NIGC will be called to review the qualifications of the companies. The companies have to be ready to allocate $1.5 billion on the project.

Araqi confirmed the company’s intention to support Iranian production, adding that capacity is expected to rise by 200 mcm per day in the Iranian year starting in March.

The additional gas would confirm Iran’s progress in the field.

“Iran’s gas production capacity has risen by 100 million cubic meters per day this year” Araqi commented in a separate press note. (February 16, 2015)

02/17/2015

BULGARIA:

It is vital for Bulgaria to construct its interconnectors with Romania and Greece

It is vital for Bulgaria to construct its interconnectors with Romania and Greece, so that the gas flow is secured and Bulgaria could serve as a natural gas transiting country. This is what Daniel Mitov, Bulgarian Minister of Foreign Affairs, said during a press conference.

“Slovakia has its idea how to receive gas, which goes through Bulgaria and other countries in the south-to-north direction. Bulgaria must have clear intentions about the construction of a gas pipeline to [Bulgarian coastal city of] Varna. This is of vital importance, so that Bulgaria can be sure whether its ideas can be realised,” Mr Mitov added. He pointed out that he would insist on the natural gas diversification not only of the sources, but of the tracks, stressing on the fact that the EU must be aware that Bulgaria would defend its role as a gas transiting country.

“Apart from the connectivity, Bulgaria will also aim at retaining its importance as a transit country. And here I talk not only about natural gas, but about electricity, too. Bulgaria can become a serious exporter of electricity. We are currently making estimations what should be done, so that Bulgaria fulfils this potential,” Mr Mitov said further. (February 17, 2015)

02/18/2015


PAKISTAN:

Pakistan, Russia to Finalise Karachi-Lahore Gas Pipeline Deal Next Week

Pakistan and Russia are expected to finalise, next week, a deal on laying a $1.7-billion gas pipeline from Karachi to Lahore. The Economic Coordination Committee (ECC) of the cabinet has given its, in principle, consent for the construction of the 1,100km North South Gas Pipeline from Karachi to Lahore for the supply of re-gasified LNG to proposed gas-fired power plants in northern Pakistan.

The two countries signed a preliminary agreement in December for awarding the contract of laying the gas pipeline to a Russian company in a government-to-government arrangement. In addition to Russia, Pakistan has also signed a deal with China under which Beijing will finance LNG terminal and Gwadar pipeline project. (February 7, 2015)

02/09/2015

TURKEY - RUSSIA:

Turkey, Russia Outline Route of Turkish Stream Pipeline

Turkey and Russia today tentatively agreed on the route for their planned Turkish Stream gas pipeline which Moscow hopes will replace its now scrapped South Stream project.

Turkish Energy Minister Taner Yildiz and Gazprom chief executive Alexei Miiller surveyed the route over the Black Sea during a four-hour ride by helicopter from Istanbul.

Russian President Vladimir Putin dramatically scrapped the South Stream project during a visit to Ankara in December, blaming the European Union for placing obstructions in its way.

The South Stream pipeline aimed to carry Russian gas from southern Russia to EU consumers under the Black Sea avoiding Ukraine, whose relations with Russia are currently in deep crisis. It was to have surfaced in EU member Bulgaria. Under the new Turkish Stream project, the pipeline will surface on Turkish territory on the Black Sea and then carry the gas overland up to the Greek border.

Mr Yildiz told the Anatolia news agency that the pipeline landfall was planned to be in the Turkish Black Sea town of Kiyikoy.

The Turkish Stream pipeline would go through Turkey's Luleburgaz region to the town of Ipsala on the Turkey-Greece border.

"We had an opportunity to... explore the pipeline route," Mr Yildiz told Anatolia. "We passed over some places two to three times as we tried to assess how we can work with environmental concerns,"he added.

Gazprom in a statement confirmed the route and said that the length of the onshore pipeline in Turkey would be 180 kilometres (110 miles) after it crosses the Black Sea.

"The tentative date for the completion of the first line is December 2016," it said.

The capacity of the pipeline -- to be built by a new Gazprom subsidiary -- will be 63bcm of gas. About 50bcm will be delivered to the Ipsala gas hub for further export.

The Turkish Stream pipeline is seen as a symbol of a burgeoning new relationship between Turkey and Russia, at a time when both countries have chilly ties with the West. (February 9, 2015)

02/09/2015



TURKMENISTAN - UZBEKISTAN:

Central Asia looks east for gas market as Russians turn off pipe

Russia's gas giant Gazprom has recently announced its plans to cut the volume of natural gas imports from Turkmenistan and Uzbekistan this year. Alexander Medvedev, deputy chairman of the company, noted that Gazprom would reduce gas purchases from Turkmenistan from 10bcm to 4bcm per year and the amount from Uzbekistan from 3.8bcm to around 1bcm. Russia will replace the imports with its own gas supply.

The news is not surprising because Gazprom declared about half a year ago that it would give up importing natural gas from Central Asia. Nevertheless, the decision of Russia to completely waive gas purchases so rapidly has signaled the unpredictable volatility of the market, since the country has monopolized natural gas exports of Central Asia for several decades.

Turkmenistan and Uzbekistan boast abundant natural gas resources. The Central Asia-Center gas pipeline system built between 1960 and 1988 was the only channel for Central Asia to transmit its natural gas to other countries. After the dissolution of the Soviet Union in 1991, Russia took advantage of its monopoly position to buy gas from Central Asia and then resell it at a profit. The peak of Russia's gas purchases came in 2008 when the country bought more than 40bcm from Turkmenistan and nearly 15bcm from Uzbekistan. (February 12, 2015)

02/12/2015

CYPRUS - EGYPT:

Egypt, Cyprus Sign Gas Related MoU

Cyprus and Egypt signed a MoU pertaining to cooperation in the field of oil and natural gas, Egypt’s ministry of petroleum said in a statement.

The agreement, signed by Egyptian petroleum minister Sherif Ismail and Cypriot energy minister Yiorgos Lakkotrypis on Monday in Cairo, aims to promote cooperation between the two countries in the field of development and exploitation of the discovery of Aphrodite gas. It is the follow-up to the meeting which was held in Nicosia on November 25, 2014 between the two countries.

The ministry statement said that technical solutions to transport gas through a direct sea pipeline from Aphrodite field to Egypt would be examined.

Ismail said in November that Egypt is looking to import Cypriot gas both for domestic use and for possible re-export to other countries. The North African nation is reeling under severe gas shortage due to falling domestic production amid rising usage. In recent months, Cairo has signed deals to source gas from various sources. (February 16, 2015)

02/17/2015


IRAN - AFGHANISTAN:

Iran Planning to Export Natural Gas to Afghanistan

An Iranian energy official said that the country's rich gas fields in the Northeast and Afghanistan growing energy demand have prepared a good ground for exporting gas to the neighboring nation. Afghanistan is a potential market for Iran’s gas, and it is possible to turn the country to a permanent consumer of Iran’s gas. Iranian private sector is willing to make investment in this field Hamid Reza Araqi said.

He further added that a number of Iranian private companies have started talks for providing gas for Afghan border towns. Araqi went on to say that Iran can now pipe gas to Afghanistan by building a 100-kilometer long pipeline from Khorasan Province, Northeastern Iran.

He also said Iran is ready to provide the pipeline infrastructure for gas exports to Afghanistan.

Iran plans to export 80bcm of its natural gas annually to the Asian and European countries by 2025. (February 10, 2015)

02/11/2015

THAILAND:

PTT Asked to Speed Up Gas Imports from Malaysia

Thai government has urged the national energy firm PTT to expedite its natural gas deal with Malaysia, National News Bureau of Thailand (NNT) reported Friday.

The state owned energy company is expected to import 300mcf of natural per day from the neighboring country.

The natural gas purchase of 300mcf/day is expected to commence from 1 April 2015. Malaysia has already constructed gas pipelines to transport natural gas from the area.

Thailand is looking to import more gas to replace potential declines in pipeline imports from Myanmar. Gas is used for almost 70% of Thailand's power generation. About one quarter of those supplies are piped in from Myanmar, although those contracts are winding down and Thailand's neighbour is expected to use more of its natural gas resources for its own development.

Also last month, Qatargas delivered first LNG cargo of approximately 90,000 tons to Thailand’s PTT Plc under the long term deal signed between the two parties.

In 2012, PTT and Qatargas 3 inked a Sale and Purchase Agreement under which the latter was to deliver 2MTA of LNG for a period of 20 years beginning from 2015. The agreement was PTT’s first long-term LNG SPA. (February 6, 2015)

02/09/2015

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HUNGARY - RUSSIA:

Putin Renews Gas Deal During Controversial Visit to Hungary

Russian President Vladimir Putin has agreed a deal to keep supplying gas to Hungary on a visit to Budapest that cemented Hungary's close ties with the Kremlin.

After several hours of talks on Tuesday, Putin and Hungarian Prime Minister Viktor Orban said they had reached agreement to extend a gas supply contract that expires this year. They said there were some technical issues to fix before it could be signed.

Orban said a big stumbling block, a clause in the expiring contract that means Hungary has to pay for gas it contracted to buy but did not use, had been resolved. He said Hungary can use the remaining gas under the contract in the coming years, and pay at the time when it draws on the gas. But he did not disclose the price it would have to pay.

Both Orban and Putin said they would back a successor to the South Stream project, a gas pipeline that was to have pumped Russian gas under the Black Sea to southern Europe but which Moscow has abandoned in the face of objections from Brussels.

One option raised by both leaders was to expand a proposed Russian pipeline into Turkey to include spurs that would take the gas through Greece and the Balkans to Hungary. (February 18, 2015)

02/18/2015

RUSSIA:

Russia cannot avoid sending gas through Ukraine with finances critically dependent on energy exports

Russia's plan to cut out Ukraine as a gas transit route is unrealistic because the EU will seek non-Russian gas rather than build the links it would need to Moscow's proposed new pipeline to Turkey, industry sources and analysts say. Last year, as violence flared in eastern Ukraine and Moscow faced new sanctions, President Vladimir Putin announced that Russia had axed the South Stream gas pipeline across the Black Sea to Bulgaria, designed to bypass Ukraine and ship gas straight to the European Union.

Russia's Gazprom has also said the EU will not receive any deliveries of gas via Ukraine after a current transit contract expires at the end of 2019. Instead of the 63bcm of gas that Europe was to receive via South Stream, Russia has proposed a new undersea pipeline to Turkey with the same capacity. Known informally as Turkish Stream, its first line of 15.75bcm a year should be operational by 2017 and supply just Turkey. Gazprom suggested the European Union should build its own link from an as-yet unbuilt gas hub at the Turkish-Greek border to take some 50bcm from the new route proposed by Putin -- an idea greeted with scepticism in Brussels. "I would be very surprised if companies working with long-term contracts which go well beyond 2019 will just tomorrow swap all their demand to Turkey (from Ukraine) and would be happy to do so," (February 13, 2015)

02/13/2015


PRICE

AZERBAIJAN:

SOCAR rejects Greek requests for lower prices and transmission fees

The state Azeri natural gas firm SOCAR has rejected two of the three requests made by the Minister of Productive Reconstruction, Environment and Energy Panagiotis Lafazanis for a reduction of the price of natural gas and to introduce transmission fees for transporting natural gas through Greek soil. SOCAR however has accepted the request for a shareholding participation of the Greek side in the TAP.

This development is said to be associated with the earlier decision by the European Commission to indefinitely suspend its investigation into the Azeri purchase of the Greek natural gas system operator DESFA. SOCAR’s Vice President on Investment and Marketing Elshad Nasirov told the Azeri news agency Azernews that the Greek request for a reduction of prices was not in line with international practices.

Mr. Nasirov explained that the agreement singed in 2013 for 1 billion cubic meters of natural gas on an annual basis may only be revised in case of a sudden change in prices. Furthermore, he argued that a price change would only be possible after consultation with the rest of the pipeline’s shareholders, which includes BP (20%), SOCAR (20%), Statoil (20%), Fluxys (19%), Enaga (16%) and Axpo (5%). Regarding transmission fees, Mr. Nasirov claimed that there was no such provision and that this matter is something that Greece would have to discuss with the European Union.

The Azeri official was open to Greece purchasing more shares into the pipeline, but urged the Greek government to rush, hinting that others may also be interest in a stake in the southern stream. It remains to be seen whether the Greek state or state natural gas company DEPA will have the necessary funds. (February 18, 2015)

02/18/2015

deliveries of natural gas to Ukraine on December 9. (February 16, 2015)

02/16/2015

CONSUMPTION

UKRAINE:

Ukrainian PM Believes Country Should Consume Zero Russian Gas

Ukraine's Prime Minister Arseniy Yatsenyuk claims that he wants to bring the consumption of Russian gas in Ukraine down to zero. Ukraine should bring the consumption of natural gas from Russia down to zero, the country’s Prime Minister Arseniy Yatsenyuk has said.

“We have proven that we are able to break our dependency from Russian gas… I want to bring it [the consumption of Russian gas in Ukraine] down to zero,” Yatsenyuk said as quoted in a statement published on the official website of Ukrainian government late on Sunday.

Ukrainian Prime Minister added that in 2014 Ukraine bought only 33% of the gas it has consumed from Russia while in 2013 this figure stood at 95%. Earlier Ukrainian gas network operator Ukrtransgaz said that in 2014 Ukraine imported 5.1bcm of gas from Europe – Slovakia, Poland and Hungary — which is 51% more than in 2013.

In 2014 Ukraine spent almost six months not receiving any gas from Russia due to Kiev’s massive debt that at the time exceeded $5 billion. Following months of negotiations with participation of the European Union, Moscow resumed the



USE FOR POWER GENERATION

UNITED STATES:

U.S. burns record natgas to generate power in January

US electric companies in the lower 48 states gobbled up record amounts of natural gas to generate power in January 2015 as low prices made it more economic to burn gas instead of coal.

Power generators used an average 23.1 billion cubic feet per day of gas in January 2015, up 13 percent from the 20.5 bcfd average in January 2014, according to Thomson Reuters Analytics.

That was the most gas consumed by the power sector during the month of January on record, according to federal data going back to 1973.

"Low prices, particularly in the U.S. Northeast, have provided gas-fired plants with a significant advantage over coal despite warmer temperatures and lower demand for heating this winter," said Kyle Cooper at IAF Advisors, a consultancy in Houston.

Gas prices at the Henry Hub benchmark in Louisiana and New York City averaged $2.97 and $8.35 per mbtu in January 2015, respectively, well below averages of $4.59 at the Henry Hub and $30.51 in New York in January 2014. (February 10, 2015)

02/11/2015


GENERAL INFORMATION

UKRAINE:

Kiev Cuts off Gas to Donetsk and Lahansk

Despite winter and promises to restore peace in Donbas, the Ukrainian government stopped the deliveries of natural gas to the self-proclaimed republics of Donetsk and Luhansk, the LPR's gas authorities said.

DONETSK – The eastern Ukrainian self-proclaimed Luhansk and Donetsk People’s Republics have gas reserves to last only until Thursday evening after Kiev cut off the delivery pipeline into the region, a source in the LPR’s gas pipeline company said.

“Ukraine has cut off the delivery of gas to the territories of the Luhansk and Donetsk People’s Republics. This was done barbarically, the valves on the main pipeline were removed and they cannot be turned on again,” the source was quoted as saying by the Luhansk Information Center.

The temperature in the area has been hovering at around minus 5 degrees Celsius (25 degrees Fahrenheit).

“The republics have enough gas supplies until this evening,” the source said.

Gas supplies to the breakaway republic were cut on Monday night, the source said, but militias were able at first to switch to other strings of the pipeline, before the gas valves were shut off completely on Wednesday.

The source said the region would be forced to "take measures to alter gas flows."

"It is possible to do. All measures have been outlined, and we are waiting for the [final] decision," the source added.

Breakaway regions of Donetsk and Luhansk have been arguing about energy supplies with the Ukrainian government in Kiev since the armed conflict broke out last April. (February 19, 2015)

02/19/2015

Vol. 54, n° 4, February 19, 2015 Main news - Cedigaz · • LNG tankers lie unused around...

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Transcript of Vol. 54, n° 4, February 19, 2015 Main news - Cedigaz · • LNG tankers lie unused around...