Russ Oil-Gas

Russian major oil-gas ...

  Gazprom    RusEnergy    World    Pipeliners  Zee Beam 







Monday, August 28, 2006

Gazprom: moving overseas with its own technology

MOSCOW. (By Vasily Zubkov, RIA Novosti economic commentator) - There is no doubt that Russia's Gazprom has become a global energy company and that its ambitious plans include looking for more partners and penetrating unexplored parts of the globe. Now seems to be Latin America's turn, a region which, in the words of Stanislav Tsygankov, head of the gas giant's foreign trade division, should become one of its future outposts. To be sure, Gazprom, as a state-controlled monopoly, could not have launched a peaceful offensive overseas, or even declared its intention to do so, without full backing from the Kremlin. And the more the West criticizes Russia's economic expansion and its desire to dominate world energy, the more active this support becomes. President Putin's trips to Algeria and some Latin American countries are eloquent examples. Putin is becoming a powerful lobbyist for Russian business. And it is no accident that his visits spawn documents on strategic energy partnerships. The Russian president appears to be a keen advocate of Russian corporate investment in the Latin American energy sector. He has asked for and secured from Venezuelan leader Hugo Chavez guarantees for Russian companies and their capital against possible nationalization in the oil and gas industry of Venezuela. Economic cooperation, rather than political slogans, has lately become the foundation of ties between Russia and a number of countries in Latin America, as indeed it has in some other regions of the world. Big business, and Russian business is no exception, puts profits and new markets above all else, and the slightest hint of political intervention greatly adds to the risks and breeds problems. Just recall the Baku-Tbilisi-Ceyhan oil pipeline. Global competition for hydrocarbon reserves has shown that state-run companies and companies enjoying state support are better placed to win dominant positions on international markets. The management of the Russian gas giant is aware that if state and commercial approaches are combined, long-term plans can be devised based on the prospective balance of gas inside and outside the country. In its Latin American strategy, Gazprom is happily combining the advantages of a transnational energy giant with the strong points of a national state-owned company. Not surprisingly, in the Latin American region, the Russian gas mammoth is cooperating chiefly with state-controlled and state-supported companies. In Brazil, the key player is Petrobras (Petroleo Brasileiro S.A.); in Bolivia, the state corporation YPFB (Yacimientos Petroliferos Fiscales Bolivianos); and in Argentina, Transportadora de Gas del Sur (TGS) (the former state-run gas transportation company Gas del Estado). In Venezuela, Gazprom is working with state-owned Petroleos de Venezuela S.A. (PdVSA). This is no mere coincidence, since in many South American countries it is the government that chooses a strategic ally in the gas and oil sector. Brazil, Venezuela, Bolivia and Argentina - countries with vast hydrocarbon resources - propose in the near future to dramatically increase their output, link their countries together with a common gas trunk line, reform national systems, and review their inventories, i.e. to make the oil and gas industry more profitable. So what about the Russian company is so attractive to Latin American countries? Above all, it has thirty-five years of unique experience in geological prospecting for and production of natural gas. Last year, Gazprom produced 547.9 billion cubic meters of gas, exporting 249.09 billion cubic meters of it. Within five years, the Russians boosted annual output by 36 billion cubic meters, an amount comparable to annual consumption in Argentina. Gazprom partners are no doubt also interested in the experience of building and operating high-capacity gas pipelines. Only a specialist can appreciate the scale of Gazprom's building effort - last year the concern put into service 1,400 kilometers of long-distance pipelines and feeder branches, building in addition eight large compressor stations and underground gasometers. Underground gas-holding capacities have grown by 1.86 billion cubic meters. In this light, Gazprom's experience is simply invaluable for plans to lay a trans-South American Venezuela-Argentina-Bolivia-Brazil gas pipeline more than 8,000 kilometers long, capable of transporting up to 150 million cubic meters a day, and costing $15 billion. And it looks very certain that the Russian concern will participate in the construction of this new gas artery. In fact, Venezuela and Brazil have already made unofficial overtures to the Russians. Gazprom has not yet made up its mind, but the Russians have already offered to carry out feasibility studies for this grand multi-national project on the South American continent. No doubt many Latin American countries are also interested in domestic transport projects (including Bolivia and Paraguay) and can benefit from Gazprom's expertise, particularly in laying undersea pipelines. The latter is especially important for the Brazilians, who are developing the Santos deep-water deposit on the Atlantic shelf. The knowledge and skills acquired by Gazprom in laying the world's deepest gas pipeline, running along the bottom of the Black Sea to Turkey at depths of over two kilometers, are stirring up real interest at Petrobras. An attractive point for them is that the Russians work with a pressure of 200 atmospheres in their pipelines, twice as high as in Brazil. Another area where Russia is ahead of the rest of the world is the establishment and operation of a single gas supply system. Gazprom created it and operates it, and the system has no match anywhere. It is run from one center and can respond flexibly to any engineering, economic and climatic factors. It ensures uninterrupted supplies to consumers, even at peak loads. There is great interest in such systems among gas-producing Latin American countries. At the same time, Gazprom is not a charity and expects returns from the use of its technologies in Latin America, and not only direct ones. They say the concern is also curious about South American technologies, especially natural gas used as a motor fuel, production of liquefied gas, and much else. In short, cooperation is going to be profitable and mutually beneficial.

Tuesday, August 15, 2006

Gazprom leadership discussed prospects of cooperation in gas sphere with Kazakh side

08–15–2006 Regnum News – On August 14, Gazprom CEO Alexei Miller, Kazakhstan's Energy Minister Bakhytkolja Izmukhmambetov and KazMunaiGaz National Company President Uzakbai Karabalin had a work meeting at Gazprom headquarters. As a REGNUM correspondent is told at Gazprom information department, the parties discussed prospects of cooperation in gas sphere. In particular, they talked about Gazprom and KazMunaiGaz establishing a joint Russian-Kazakh venture on the basis of processing facilities of Orenburg Gas Processing Plant. In this connection, they considered issues concerning signing of a long-term contract for gas supplies from Karachaganak gas field for processing at the Orenburg plant facilities and an agreement on supplying the processed gas to Kazakhstan’s domestic market. At the meeting, they also took up the issue of signing a contract for Kazakhstan’s gas imports in 2007.

What is Surgutneftegaz?

08–14–2006 Kommersant – The company was founded in 1993 by a resolution of the Russian government based on the state production association of the same name. Forty-five percent of the stock in the company belonged to the state, 8 percent was sold at a closed auction and 7 percent was bought by the company itself for vouchers. The remaining 40 percent was sold to AO Neft-Invest in June 1994 by the Khanty-Mansi Autonomous Area property fund. In 1995, a 40.16-percent state share was transferred to the company's pension fund by auction for 1.4 trillion rubles ($310.2 million).
According to the media, 62 percent of the stock in the company is controlled by company management at present through its subsidiaries. About 24 percent of stock is in free circulation, mainly as ADR. The company's capitalization is $38.2 billion. Its stock is traded on MICEX and RTS.
Surgutneftegaz's production in 2005 amounted to 468.4 million barrels of oil and 14.4 billion cu. m. of natural gas. It refined 135.6 million barrels of oil. Its proceeds in 2002 were $15.9 billion and net profit $4.2 billion. The company's reserves are estimated at 18.2 billion barrels of petroleum equivalent.
The company is currently the fourth largest oil producer in Russia and has a reputation for thriftiness, having accumulated $10 billion in free funds and refusing to acquire foreign assets.
Surgutneftegaz has 18 subsidiaries and one dependent enterprise. Its main production assets are concentrated in Khanty-Mansi Autonomous Area and the Sakha Republic (Yakutia). Among its other assets are the Kirishinefteorgsintez oil refinery, the Surgut natural gas processing plant and about 300 filling stations. It has 92,800 employees.
Vladimir Bogdanov is the company's general director, Nikolay Zakharchenko is the chairman of the board of directors.

Gazprom Registers U.S. Subsidiary

HOT 08-14-2006 Kommersant by Natalya Grib - Gazprom has founded a company, Gazprom Marketing and Trading USA in Houston, Texas, to manage the regular delivery of liquid natural gas and the purchase of regasification terminals in the United States. Having begun to deliver gas to the U.S. in 2005, the Russian gas monopoly is planning to move to the direct delivery of liquid natural gas from the Shtokman field and to snap up 20% of the market, a share which could grow from 18 billion cubic meters in 2005 to 40-50 billion cubic meters in 2010. On Friday, Gazprom's press service announced that British group Gazprom Marketing and Trading, Ltd. would gain a new subsidiary company: Gazprom Marketing and Trading USA, Inc. (GMT USA), registered in Houston, Texas in July. The new company will market the delivery of liquid natural gas and natural gas in America and will work on "the long-term development of the activities of Gazprom in the country." The general director of GMT USA will be John Hattenbergen, who has worked on exploration, extraction, and marketing of gas and liquid natural gas for Marathon Oil, BP, El Paso Global LNG, and TransCanada Pipelines, Ltd. Mr. Hattenbergen is the real founder of GMT USA, explaining that marketing liquid natural gas "is not a business that you want to be in alone, so we are creating a partnership with other large players in the field." Shell and BP control the largest share of the liquid natural gas market in the U.S. In addition, Gazprom is carrying on talks with Canadian Sempra, which controls gas distribution networks and four terminals. Of all the gas markets in the world, the U.S. market is the most dynamically evolving. The yearly increase in the demand for gas in the U.S. will be 1.8% until 2025, and, according to the U.S. Department of Energy, by 2025 the delivery of liquid natural gas to America will grow to 100 billion cubic meters (it was 17.9 billion cubic meters in 2005). Four regasification terminals for liquid natural gas are already operating (at a capacity of 45.8 billion cubic meters), and ten more are being requested, for a total capacity of 140 billion cubic meters. In September 2005, in conjunction with Shell Western BV and BG Group, Gazprom's first tanker for the transport of liquid natural gas arrived at Cove Point, USA. In December, a second tanker arrived with the participation of Gaz de France, MED LNG&Gas, and Shell. As GMT told Kommersant, this year the company plans to send five or six additional tankers to the U.S. Between 2006 and 2009, Gazprom intends to obtain shares in or to rent space at one of the terminals for liquid natural gas on the east coast of the U.S. and the Gulf of Mexico and to begin delivery of liquid natural gas under long-term contracts (of up to three years). In the words of the deputy head of Gazprom's board of directors, Aleksandr Medvedev, this will allow the company to shift to the delivery of its own liquid natural gas under long-term contracts within the framework of the Shtokman project. By 2010, Gazprom will be supplying gas not only wholesale but also directly to the final consumers. In the opinion of experts in the field, its U.S. operations will be profitable for the gas giant. According to Troika Dialog analyst Valery Nesterov, even with prices for pipeline gas at $260 for 1000 cubic meters, the price of liquid natural gas will remain at $380-$400 per ton, which will allow Gazprom to steadily increase its holdings while increasing its delivery volume.

New Gazprom Oil Unit Probed Over Excess Production

10.08.2006 - MosNews - The Russian prosecutor's office has launched a new oil-related case on Wednesday, Aug. 9. This time serious charges are being made against Sibneft-Noyabrskneftegaz, the largest subsidiary of Gazpromneft (former Sibneft, which was bought by Russian gas monopoly Gazprom). The company is accused of exceeding oil production quotas. The case against Sibneft-Noyabrskneftegaz joins a slew of high-profile accusations that have been made against various Russian oil companies. In general, however, the companies are accused of failing to meet licensing conditions and of underproducing. Not so with Sibneft. According to the information from the prosecutor's office, between 2001 and 2005 Sibneft-Noyabrskneftegaz earned over 20 billion rubles. Over the same period of time the company exceeded oil production quotas at a number of its deposits. The prosecutor's office has started three criminal cases against the enterprise, but Vremya novostei daily claims that nobody has been charged yet in relation to the case. The law envisages a relatively mild punishment for the crime of excess production: imprisonment for up to three years or a fine of up to 500,000 rubles (about $18,000). Experts believe that the company will most likely be made to pay the fine, Echo of Moscow radio station reported on Thursday, Aug. 10. Gazpromneft, the company's current owner, said it has no plans to get involved in the case and promised that it will forward any questions to the company's former owners. Until October 2005 Noyabrskneftegaz belonged to Sibneft Oil Company, which was controlled by billionaire Roman Abramovich and his business partners. The prosecutor's office has not yet given the names of any suspects and did not say how long the investigation will take. The oil company may not even be fined, some sources say. Kommersant daily quoted Noyabrsk prosecutor's office as saying that the case may be closed if the company fully compensates the state for the losses incurred. Sibneft-Noyabrskneftegaz declined to comment on the accusations until the investigation is completed.

Gazprom, Algeria's Sonatrach Sign Official Cooperation Accord

14.08.2006 - MosNews - Two of the world's leading producers and exporters of natural gas, Gazprom of Russia and Algeria's Sonatrach, ended an awkward delay of six months by signing a memorandum of understanding on Friday, Aug. 11, in Moscow. As MosNews reported, the two companies signed preliminary protocol in March, on the sidelines of President Putin's visit to Algeria. The expected signing of the final agreement was postponed twice. Mineweb reported in July, quoting Gazprom officials, that the pact would not be finalized until September. Russian sources also told Mineweb that there had been "political pressure" from the United States on Sanatrach, which exports liquefied natural gas (LNG) to the American market. If the information was true, the wording of the agreement which the vice presidents of Sonatrach and Gazprom have now signed, appears to confirm that the pressure has failed to make its mark, and an alliance for the North American, as well as the West European markets, is the very direction the two companies are now committed to taking; not least of all for future shipments of LNG from a proposed new plant on the Baltic coast, near St. Petersburg. According to a statement issued by Gazprom, the joint memorandum "opens the way for deeper cooperation between the companies, identifying, among other things, the following major directions of further joint businesses in the oil and gas sector: geological exploration, production, transmission, gas transmission and distribution network development, asset swaps, natural gas and oil processing and marketing in Algeria, Russia and third countries." A source close to Gazprom explains that ties between the Russians and Algerians go back many years in the Soviet period, when Moscow supplied an estimated $10 billion worth of arms on postponed credit terms; and through Soviet prospecting organizations, helped Sonatrach find some of the major gas deposits it is currently exploiting. The joint memorandum anticipates that Gazprom will assist Sonatrach in finding fresh reserves within the country, and cut its pipeline costs in getting products to Algeria's ports. Algerian gas remains more expensive to produce, and to consume, than Russian gas. According to the source, Gazprom is looking to negotiate a geographic market carve-up of natural gas that will increase Gazprom's penetration of the Spanish and Portuguese markets; at the same time, the combination of the two suppliers should fully occupy the European market, and make it difficult for any other gas producer —- notably Iran, Kazakhstan, or Turkmenistan —- to entertain the idea of competing in the westward direction. Gazprom and the Iranians are looking to negotiate a parallel carve-up of the eastern Asian market. Russian strategy at the governmental level will also make sure that its gunboats, along with Iran's, deter any US-contrived plan to encourage a pipeline on the bed of the Caspian Sea to transport either oil or gas from the eastern shore to US-guarded facilities in Azerbaijan or Turkey. Although the Caspian shore states —- Russia, Iran, Azerbaijan, Kazakhstan, Turkmenistan —- have already aserted their sovereignty over oil and gas deposits on the seabed, within a territorial limit, they have spent more than a decade now failing to agree on terms that would allow the seabed in the "international zone" of the Caspian to be used for pipelines, resource exploration, or other national projects. Sonatrach's advanced skill in gas liquefaction, and its experience managing shipborne LNG exports, is anticipated in the joint memorandum to become available to Gazprom, as the latter plans to build a new processing plant in the Russian northwest; and to take control of the Royal Dutch Shell project for an LNG plant exporting to Japan and South Korea. Due to come onstream in 2008, this is located at Aniva Bay, at the south end of Sakhalin island in the Russian fareast. Gazprom is behind moves made last week by environmental inspectors of the federal ministry of Natural resources to halt pipeline construction by Shell and its local joint-venture partner, Sakhalin Energy Investment Corporation. Shell is now in negotiation with Gazprom to sell a sizeable equity stake in the project, known as Sakhalin-2, to Gazprom.

Rosneft and Gazprom Engage in Fierce Competition as Kremlin Tightens Control over Energy Sector

08.08.2006 - Reuters - The Kremlin's drive for greater control over Russia's energy sector will accelerate but, in contrast to other resource-rich countries, will involve fierce rivalry between two state champions, Rosneft Oil Company and Gazprom gas monopoly, the analysts said. Western oil investors seeking a foothold in Russia have accepted the idea that they will have to partner with either of the two state firms in any big future projects. But they would not dream of pulling out of Russia —- where booking substantial oil reserves or buying minority stakes in sizeable producers is still possible —- unless the Kremlin launches a direct attack on their interests. "It has become clear that it will be increasingly difficult to implement major energy projects in Russia without the involvement of state champions," said Elena Anankina from Standard & Poors. "But where Russia differs from Latin America or Kazakhstan is that it has fierce competition between two state giants, which will most likely become more acute over time." High energy prices have emboldened energy-rich states to change deals with foreign companies to their advantage. This year Ecuador announced plans to take over oilfields operated by U.S. Occidental Petroleum, Bolivia sent troops to occupy its natural gas fields and Venezuela took back two fields from European oil firms ENI and Total. In Russia, the drive began in 2003 with the demise of the country's leading oil firm Yukos, which says the Kremlin acted to punish its politically ambitious owners. Yukos' main oil unit was bought by Rosneft, which has just raised $10 billion in its stock market float. Gazprom last year bought oil firm Sibneft, putting more than a third of Russian oil under Kremlin control. Some critics of the Kremlin say the driving force behind resource nationalism is personal enrichment of different clans around President Vladimir Putin, who steps down in 2008. Others argue it has become a source of funding for social development. "Increasing state control and sharing windfall oil revenues has become the most effective tool for the Kremlin to fund social needs," said Sergei Glazer of Vostok Nafta, a fund which owns $3.3 billion of Gazprom stock. "The key risk would be of Soviet-style super centralization, which would lead to a drop in production," said Glazer. Russia provoked a furious reaction when Gazprom briefly cut gas supplies to Europe in January in a dispute with Ukraine. Moscow toned down its resource nationalism before hosting its first summit of the Group of Eight rich nations in July. But, with the West now paying less attention, the Kremlin has shed some of its inhibitions. Russia has cut oil supplies to Lithuania, blaming a pipeline leak, hitting the Mazeikiu refinery. Yukos sold Mazeikiu to Poland's PKN Orlen after rejecting rival Russian bids. And Moscow has told Royal Dutch/Shell to suspend pipeline construction on the Far Eastern island of Sakhalin at a time when Gazprom is seeking a major stake in the project. "The overall strategy aimed at boosting state control is very clear. But tactically it will depend on which group within the Kremlin wins specific battles," said Glazer. Investors are now looking to see who grabs the leftovers of Yukos, now in liquidation. Also on the radar screens is whether the state will buy out the Russian partners in TNK-BP, a 50/50 venture with BP whose shareholder agreement expires early next year. One of Russia's biggest planned projects is the Shtokman LNG project, in which big energy firms are vying to participate. Some analysts believe U.S. companies may lose out because of rocky Kremlin-U.S. relations. However, difficult relations with the United States have done no harm to U.S. ConocoPhillips's strategic partnership with Russia's top oil firm Lukoil, in which the U.S. company plans to raise its stake to 20 percent. And, via the Rosneft IPO and opening up of Gazprom's 49 percent free float to foreign ownership, the Kremlin is sharing some of the risks and rewards of Russia's energy boom with international investors. "It is hard to take this too negatively. I cannot foresee this happening in Venezuela. They are going the opposite way and are taking everything," said Ron Smith, chief analyst at Alfa Bank.

Friday, August 11, 2006

ENI to Help Gazprom Expand in Europe

09.08.2006 14:32 [Neftegaz.ru] - Russian state gas monopoly Gazprom and Italian energy giant ENI are in talks to build a $2.5 billion natural gas liquefaction plant near Saint Petersburg, said ENI CEO Paolo Scaroni, reported the Agence France-Presse. "At the present time we are discussing with Gazprom building a natural gas liquefaction plant close to Saint Petersburg with a capacity of eight billion cubic meters of gas per year," Scaroni said. Scaroni, however, said that Gazprom access to the Italian market would depend on ENI receiving access to oil and gas projects in Russia. Scaroni said ENI was interested in joint liquefied natural gas, or LNG, projects off northwest Russia in the Baltic and Barents seas. Scaroni said ENI could also help Gazprom's plans to expand in Western Europe, but added that Gazprom "is still a young company, and it has to muster up a little patience."

Gazprom Neft eyes further expansion into Central Asia

RBC, 10.08.2006, Bishkek 18:43:56.Gazprom Neft Asia will open representative offices in Kazakhstan, Tajikistan, and Uzbekistan soon, Kyrgyz President Kurmanbek Bakiyev's press office reported following his Wednesday meeting with Gazprom Neft Asia General Director Bolot Abildayev. Moreover, according to Abildayev, the company has plans to later enter the markets of China and Afghanistan. The company's prospective operations include production, processing and marketing of natural gas and sales of petroleum, oil, and lubricants (POL) in Central Asia, the head of Gazprom Neft Asia noted during the meeting.

Tuesday, August 08, 2006

Chinese Import of Russian Oil to Rise to 15 Mln Tones

08/08/2006 (12:34) RZD News - Chinese import of Russian oil is expected to rise to 15 million tones in 2006, while China imported 12.78 billion tones last year, said Chinese Deputy Minister of Trade Yu Guangzhou, as quoted on Tuesday by the Renmin Ribao newspaper. Russian oil deliveries to China are expected to be on the rise. According to the representative of the Chinese Ministry of Trade, the project of an oil pipeline is now on the drawing boards from the Russian border to China with an annual throughput capacity of 30 million tones. It will be 1,030 kilometers long, and only 63 kilometers of the total will run across the Russian territory. These 63 kilometers is a siding of the Eastern Siberia-Pacific oil pipeline, under construction now in Russia. The siding will run from the city of Skovorodino, Amur Region, the closest point to the Chinese border. The pipe will be built there by the end of 2008, reports ITAR – TASS.

Eni, Gazprom in Access Talks

Tuesday, August 8, 2006 - The Moscow Times (AP, Bloomberg) - Italian oil and gas group Eni wants to complete a deal with Gazprom that would give the Italian company direct access to Russia's huge hydrocarbon reserves, Eni's general director said in an interview published Monday. In exchange, Eni would help Gazprom expand into the European market, Paolo Sarconi said. "We are suggesting to Gazprom that we conclude a strategic cooperation agreement in which the presence of Eni in exploration and production in Russia would be assured," Sarconi was quoted as saying in an interview with Vedomosti. "We think that Eni in this situation could be of great help to Gazprom in developing new fields and in access to the European retail market." Sarconi said Eni was looking into the possibility of participating in Gazprom's Baltic LNG project, which foresees the construction of a liquefaction plant near St. Petersburg at an estimated cost of $2.5 billion. The facility would be capable of processing 8 billion cubic meters of gas per year. Gazprom has teamed up with PetroCanada in the project. Gazprom's stated strategy is to expand its presence in the gas supply chain from its Siberian well-heads to the homes of European consumers. In exchange for access to lucrative retail markets, the company has said Western oil and gas firms will be offered a chance to develop Russia's reserves, where major new fields lie in inhospitable provinces offshore or in eastern Siberia.

Russia's Gazprom to Help Venezuela's PDVSA

31.07.2006 10:16 [Neftegaz.ru] - Petroleos de Venezuela SA, state oil and gas company, said Russia's gas giant Gazprom will help Venezuela work out a plan to develop its gas industry over the next half century. The two companies will develop a plan of the gas sector for the next 50 years, a strategy which includes the development of the internal market as well as the process of regional interconnection. A team of 100 Venezuelan and Russian technicians should complete the study project within a year, according to statement. The team is expected to log more than 300,000 man hours. The agreement was signed by Petroleos and Gazprom, Russia's state- controlled gas monopoly.

Gazprom to Issue Bonds 15bn Worth

07.08.2006 09:27 [Neftegaz.ru] - Gazprom's Board of Directors upheld the decision to issue three series of bonds worth 15 billion rubles. Bonds of A7, A8, and A9 series will be placed on the MICEX Stock Exchange at par. Each issue includes 5 mln securities of RUB 1,000 par. Bonds A7 will mature in 3 years, bonds A8 - in 5 years, bonds A9 - in 9 years. Gazprom entered the ruble bond market last time in August 2005 when it placed a loan of series A6 worth 5 bn rubles. The first coupon rate was set at 6.95%. The demand from investors exceeded 12 bn rubles. As AK&M reported earlier, Gazprom is arranging for a Eurobond loan worth $500 mln. The maturity is likely to be 30 years.

Gazprom Increased Gas Price for Europe

04.08.2006 10:09 [Neftegaz.ru] - Gazprom will be selling gas to Europe at the price of over $300/ths cu meters in late this year, i.e. $50 above the average European price calculated on border of Poland and Germany. Of all European states, Romania was the first to complain, Kommersant reported. By late this year, Romania will be paying over $300/ths cu meters for gas imported from Russia (today’s price is $285), The Money Channel reported referring to Codrut Seres, minister of economy and commerce of Romania. Seres said the price could be $305 or $310. It is not just a high-ranked official of a European state specified the price deemed a trade secret. It is that Seres forecasted the time when the ceiling of $300 will be ultimately hit. Romanian Economy and Commerce Ministry, state-run SNGN Romgaz SA and Gazprom didn’t comment yesterday. Nevertheless, Romania has certain advantage over the neighbors, as the local production meets 60 percent of the country's consumption. But other states of Eastern and Central Europe are less lucky. Bulgaria, Poland, Czechia, Slovakia and Hungary depend on Russia’s gas in part and in whole. And hiking the border prices to $300 will drive up the prices on their markets. The situation will be even tougher for CIS. Unlike Western Europe, where gas accounts for 25 percent to 30 percent of the fuel and energy balance, or Eastern Europe, where gas covers 30 percent to 40 percent of it, CIS has from 50 percent to 70 percent on average. Moreover, Ukraine and Belarus have almost completely shifted their power grids to gas in the recent years and the reference price of $300/ths cu meters is bound to threaten competitiveness of their goods.

Gazprom, Algeria's Sonatrach sign memo to tap gas

MOSCOW, August 4 (RIA Novosti) - Russian energy giant Gazprom [RTS:GAZP] and Algeria's Sonatrach Petroleum Corporation have signed a memorandum on cooperation in natural gas prospecting, recovery and production, the Russian company said Friday. "The memorandum opens new opportunities for expanding cooperation between the two companies," Gazprom said. Algeria's proven natural gas reserves total 4.55 trillion cubic meters, the second largest reserves in Africa after Nigeria. It is also the continent's third largest oil producer after Nigeria and Libya, with 111.02 billion bbl in proven reserves.

Contact me:  

eXTReMe Tracker This page is powered
by Blogger. Isn't yours?