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Thursday, May 29, 2008

Transit states go green to sink Nordstream pipeline

Transit states go green to sink Nordstream pipelineMay 29, 2008 - Russia Today - The planned Nordstream project, which will bring Russian gas to Europe through a pipleline under the Baltic Sea, is once again in the firing line. The EU Petitions Committee has called for a study to assess the environmental impact of the $US 12 billion project. The Committee report came in response to appeals from Polish and Lithuanian environmental associations, which claim that the pipeline could harm marine eco-systems. The report stressed the potential threat to the environment posed by disturbing chemical weapons stocks from World War Two dumped in the Baltic. But environmental concerns are less substantial than economic considerations, according to Tatyana Mitrova, head of the Energy Research Institute. “It’s obvious that Poland is a loser in case of Nordstream construction because it’s losing its transit fees. So the reasons are very clear, and the means that Poland uses to fight against this project are very typical,” Mitrova said. Analysts say the previously planned projects crossing the Baltic Sea, but not bypassing Poland, never met any opposition from Warsaw. Many people think that the economic necessity of the pipeline is likely to prove too strong for those countries looking to resist it. But, they might be wrong. Paul Vandoren from the EU Commission delegation to Russia says the environment must be protected. “Economically speaking this is a very important project but it shouldn’t be introduced at any cost. It’s normal that all the aspects including environmental aspects are looked at very carefully,” Vandoren said. Nordstream’s developers say the Petitions Committee report is misleading and makes a number of factually incorrect claims. They say an independent Environmental Impact Assessment for the project has already been completed and it will be made publicly available later this year.

Medvedev Says Goodbye to Gazprom Board

28 May 2008 - The Moscow Times - President Dmitry Medvedev bade farewell to Gazprom's board of directors Tuesday, telling them that he intended to stay in close touch even after he is no longer the gas giant's chairman. "We will be meeting and continue to communicate during working meetings," he told the Gazprom directors and management committee members in a speech before the company held its annual board meeting. "Nothing is over; everything is just beginning," he said. First Deputy Prime Minister Viktor Zubkov is expected to succeed Medvedev, who is still officially the company chairman, next month. The annual shareholders meeting, scheduled for June 27, is expected to approve Zubkov's candidacy, Gazprom spokesman Sergei Kupriyanov said. Medvedev currently is chairman in name only and was not scheduled to chair Tuesday's annual board meeting, Kupriyanov said. Medvedev told the directors that his eight years as Gazprom chairman had seen the company transformed from a "half-reformed ministry" into a leading global company to be reckoned with and that operates "according to market rules." In 2000, Medvedev, then 35, added the chairman's job to his existing responsibilities as a member of former President Vladimir Putin's administration. "Together, we've managed to achieve the highest results," Medvedev told the meeting. "Very ambitious, serious tasks lie ahead," he added. In a signal that a greater emphasis will be placed on energy's role in the country's economy, a stand-alone energy ministry was created when Putin named his Cabinet earlier this month. Analysts have said, however, that Medvedev and his mentor, Putin, will make all key energy decisions. Speaking to reporters, CEO Alexei Miller said Gazprom would seek to become the world's "No. 1 company" but that the domestic market would remain its main priority. He said Europe would be the company's priority external market, Interfax reported.

European Parliament Urged Gazprom to Find Another Route for Nord Stream

May 28, 2008 - Kommersant - European Parliament’s PETI concluded that Nord Stream gas pipeline that Gazprom intends to lay offshore via the Baltic Sea from Russia to Germany would threaten the environment and proposed to consider some other routes for this purpose. PETI focused on the issue after receiving a petition signed by 30,000 EU residents, mostly from the Baltic States. The authority backed up the petition and forwarded it to the European Parliament that will deliver a nonbinding resolution in July. Russia needs Nord Stream to sell gas to Europe bypassing the intermediary nations. The plans are that the first stage of the gas pipeline will be constructed in 2010, while the second stage will be put into operation in two years. Gazprom again evaluated the project budget in April 2008. According to monopoly, laying Nord Stream, which length will reach 1,200 kilometers will cost €7.4 billion. In addition to Gazprom that owns 51 percent, the Nord Stream operators are German Wintershall, E.ON Ruhrgas (20 percent each) and Netherlands Gasunie (9 percent).

Rosneft and Gazprom divide spoils

27 May 2008 - Upstream OnLine - Russian state-controlled energy giants Rosneft and Gazprom have agreed on splitting hydrocarbon deposits in Russia's offshore play, a move which will restrict access for foreign and private players. A government official told Reuters that the two companies signed an agreement last year, under which Rosneft will develop oil deposits on Russia's northern shelf, while Gazprom will explore gas fields. The agreement has yet to be approved by the government, said the official. Gazprom and Rosneft declined to comment, a Reuters report said. Russian media reported last year that the government was discussing splitting strategic shelf deposits between Rosneft and Gazprom by holding closed auctions of the fields, which could reduce cash proceeds, but exclude surprise bidders. According to the Russian subsoil law, only companies which have state shareholding of over 50% and previous experience of working on-shelf, can develop oil and gas deposits offshore Russia's far eastern and northern seas.

Energy giant Gazprom generates 20% of budget revenue - Medvedev

MOSCOW, May 27 (RIA Novosti) - Gazprom contributes around 20% of the federal budget's revenues, Russian President Dmitry Medvedev, who used to head the energy giant's board of directors, said on Tuesday. "Around 20% of federal budget revenue comes from Gazprom, whose capitalization has increased 46 times since 2000," Medvedev said, describing the company's role as "exemplary." Gazprom's market capitalization currently stands at $362 billion. Medvedev said Gazprom faced extremely ambitious tasks, including the launch of the Nord Stream and South Stream gas pipelines, Far East ventures, and new projects in the oil sector, electric power and other areas. The Nord Stream pipeline, which Gazprom is building together with Germany's E.ON under the Baltic Sea at an estimated cost of $12 billion will pump Russian natural gas directly to Germany. The South Stream project is planned to transport 10 billion cu m of Russian gas annually across the Black Sea to the Balkans and onto other European countries, with the first deliveries scheduled to start in 2013. Gazprom also holds a controlling stake in the Sakhalin-2 project in Russia's Far East, with the project's estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas.

Gazprom plugs Turkish gas gap

turkey27 May 2008 – Upstream OnLine – Russia's gas export monopoly Gazprom has boosted gas supplies to Turkey after it asked for more gas following a stoppage of flows from Iran. Turkey stopped the flow of Iranian natural gas imports yesterday after Kurdish separatists launched an attack on the only gas pipeline connecting the two countries. The damage should be repaired in a few days' time, a source at Turkish state gas company Botas told Reuters. Sabotage is common on pipelines leading into Turkey from Iran and Iraq, where Kurdish separatist militants are based. Gazprom has in the past regularly raised supplies to Turkey following disruptions in deliveries from Iran. Today, it said it was now pumping 30 million cubic metres instead of the regular 22 MMcm via the Blue Stream pipeline.

CEO says Gazprom set to become world's top company

MOSCOW, May 27 (RIA Novosti) - Russian energy giant Gazprom is seeking to become the world's number one company, CEO Alexei Miller said during a meeting with Russian President Dmitry Medvedev on Tuesday. "...Very important steps will be taken, including making Gazprom the world's number one company," Miller said, adding that his company had experience, resources and over 300,000 employees to achieve the goal. Miller said Gazprom was now ranked the world's third-largest company for market capitalization, which currently stands at $362 billion. Financial statements say Gazprom produced 548.6 billion cubic meters of gas last year, excluding output by its subsidiaries, up 1.3% against 556 billion cubic meters in 2006.

Gazprom Will Drill Viet Shelf

May 26, 2008 - Kommersant - Gazprom has received four lots on the Vietnamese continental shelf for joint development with the national Petrovietnam company. If substantial reserves are found, Gazprom may enter Vietnamese markets as well, such as natural gas transport and refining. In return, the Vietnamese company will receive entry into Russia. The companies signed an agreement on Friday. The signatories will form a new company, Vietgazprom, as the operator of the project. Zarubezhneftegaz will represent the interests of Gazprom in the joint venture. Another joint venture, Gazpromviet, will be formed for joint operations in Russia and third countries. No Russian projects have been chosen yet. Gazprom chief Alexey Miller and Petrovietnam president Tran Ngoc Canh discussed joint projects in North Africa, Latin America and Angola. Vietsovpetro, in which Zarubezhneftegaz owns 50 percent, is the most successful Russian project in Vietnam so far. It was founded in 1981 and produces 8-9 million tons of oil per year. Vietgazprom has been operating a well on the Vietnamese continental shelf under a 2001 contract. An industrial gas flow began from that well in August of last year. The new blocks are located considerably to the south of that site. A Gazprom source says that monopoly will invest $380 million in geological exploration in the next seven years. That source added that Gazprom received the blocks without tender or competition in exchange for taking on all investment risks. Another source said that major Western companies were also interested in those blocks.

Gazprom to develop four new sites in Vietnam

vietnamMOSCOW, May 23 (RIA Novosti) - Gazprom has reached an agreement with Vietnam's state oil and gas company Petrovietnam to develop four new deposits on the Vietnamese shelf, the state-controlled Russian natural gas giant said Friday. "The agreement envisions prospecting work and further development of four new blocks on the Vietnamese shelf. Vietgazprom will be the project operator," the company said. The agreement also envisions the establishment of a new joint venture, Gazpromviet, to ensure the companies' participation in oil and gas projects in Russia and abroad. A Gazprom delegation led by CEO Alexei Miller arrived in Vietnam on Friday. Miller met with the Vietnamese president and prime minister, and with Petrovietnam officials to discuss further cooperation and the implementation of Gazprom's projects in Vietnam. Vietgazprom, a joint venture set up by Gazprom and Petrovietnam, is conducting prospecting work on the country's continental shelf in line with a 2000 contract envisioning the exploration, production and sale of hydrocarbons. Gazprom and Petrovietnam signed a cooperation agreement in November 2006, in line with which the companies cooperate in prospecting and development of oil and gas fields, as well as transportation and sales, and construction and maintenance of oil and gas pipelines and other infrastructure. The document also foresees the companies' interaction in projects in third countries.

Monday, May 19, 2008

Gazprom extends Korea supply deal

19 May 2008 - Upstream OnLine - Russia’s Gazprom, the world’s biggest natural gas producer, has extended a supply deal with Korea Gas, the world’s biggest buyer of liquefied natural gas, to 2013, it was reported. Korea Gas said today it would continue to work with Gazprom, a state-owned gas export monopoly, to develop gas projects in Russia and to build a LNG plant, Bloomberg reported. Korea Gas is reported to be seeking 1.5 million tonnes of LNG per year from the Gazprom-led Sakhalin 2 project as part of a plan to diversify its energy suppliers. However, first shipments of LNG from the project have been delayed from the second half of this year to 2009. The original 2003 deal between Gazprom and Korea Gas was to expire at the end of this month.

Gazprom, Rabaska Reach Agreement

canadarussia19.05.2008 - [Neftegaz.RU] - Gazprom Marketing and Trading USA and the Rabaska partners, Gaz Metro, Enbridge and Gaz de France have announced that they have signed a Letter of Intent outlining the major terms under which GMTUSA will become an equity partner in the proposed Rabaska liquefied natural gas regasification project and contract for 100 percent of the import terminal's capacity. The parties expect to execute definitive agreements before the end of this year. Using the Rabaska terminal, GMTUSA, a wholly owned subsidiary of OAO Gazprom, expects to import Russian LNG supplied from the Shtokman liquefaction project currently under development by OAO Gazprom, which anticipates initial production of LNG from Shtokman in 2014.

Gazprom gets access to Canada’s market

Gazprom gets access to Canada’s marketMay 16, 2008 - Russia Today - Gazprom has made its first large investment in North America, reserving all the capacity at the Rabaska LNG terminal in Canada. The gas giant has signed a deal with Canada's Enbridge, Gaz Metro and Gaz de France for deliveries to the liquefied natural gas terminal in Quebec. The $US 840 million terminal, due to open in 2014, will receive LNG from Russia's Shtokman field. The Shtokman field in the Barents sea is one of Gazprom’s largest projects. Its estimated reserves are 3.8 trillion cubic metres of natural gas and 37 million tonnes of condensate. Gazprom also says it boosted gas exports to Western Europe by a third in the first quarter of 2008. Deliveries rose to 35.4 billion cubic meters. Gazprom's share of the domestic gas market also grew to 85% in that period.

Gazprom picked up new gas fields without tender

May 15, 2008 - Russia Today - Russian business daily Kommersant reports that the day before the new president's inauguration energy giant Gazprom was granted one third of Russia's undeveloped federal gas reserves. It says the Kremlin handed over nine gas deposits to Gazprom without going to tender. But, the newspaper adds, the ministry that handed over the fields does not exist anymore after President Medvedev reshuffled his administration. According to Kommersant, the gas deposits amount to almost 4 trillion cubic metres of gas, which will increase Gazprom's reserves by 13%. The company will start developing the fields after 2015.

Gazprom takes slice of Rabaska pie

15 May 2008 – Upstream OnLine – Russian gas giant Gazprom has taken a stake in the planned Rabaska liquefied natural gas project, in Canada, adding that the feedstock for the development will come from the Shtokman field. Gazprom will join Enbridge, Gaz Metro and Gaz de France in the C$840 million (US$838 million) project in Quebec, which had been stalled pending a secure supply of imported LNG. The companies did not say how big Gazprom's stake in the 500 million cubic feet per day project will be, a Reuters report said. However, Rabaska president Glenn Kelly said each of the partners will surrender a portion of their stake. Rabaska LNG is now expected to go ahead in 2014, two to three years later than first envisioned. The date coincides with the scheduled start-up of the Shtokman liquefaction plant. The Rabaska partners have all their regulatory approvals in place, but have yet to start building the project. "We said publicly we wouldn't go ahead with construction until we had an LNG supply, and today has been a significant step toward that," Kelly told Reuters. Construction is now expected to start in 2010, he said. The partners aim to sign definitive agreements bringing Gazprom into the fold before the end of this year.

Gazprom lands nine-field, bid-free deal

14 May 2008 - Upstream OnLine - The Russian government has handed gas giant Gazprom the exclusive rights to develop nine northern gas deposits without a tender or bid process. The government said the fields include seven onshore deposits in the Yamalo-Nenets region, as well as two deposits in the Karskoye and Okhotskoye seas – including Kirinsky field, part of the Sakhalin 3 development – and have a combined total gas reserves estimated at over 2 trillion billion cubic metres. The fields are on the list of deposits of federal importance, meaning they are off-limits to international explorers. This is the government’s second tender-free award to Gazprom. Last month, the government handed Gazprom the rights to develop the Chayanda field, in Siberia, which has estimated gas reserves of 1.2 trillion cubic metres, also in a tender-free transfer, Reuters said.

Thursday, May 08, 2008

Gazprom Topmanagement Reshuffle

08.05.2008 - [Neftegaz.RU]- Newly inaugurated President Dmitry Medvedev, who was sworn in Wednesday, is stepping down as chairman of Gazprom with the current chief executive Alexei Miller stepping in as acting chairman. Medvedev on Wednesday asked the State Duma to approve his predecessor and political mentor Vladimir Putin as the new prime minister. Outgoing Prime Minister Viktor Zubkov is widely tipped to be elected chairman of Gazprom, the world's largest gas producer and the country's most important company, at the June meeting.

Tuesday, May 06, 2008

Gazprom lines up rig in Venezuela

06 May 2008 - Upstream onLine by Tom Darin Liskey - Russian explorer Gazprom will use the newbuild jack-up rig Offshore Vigilant to probe a potentially prolific offshore project in Venezuela’s shallow water sector, sources at the Offshore Technology Conference in Houston said. The rig – capable of operating in water depths of up to 350 feet – is being built at the Keppel AmFels shipyard in Brownsville, Texas, for Scorpion Offshore. Details about the length and day rate for the independent-leg, extended reach cantilever rig were not available. Scorpion officials declined to confirm that Gazprom will use the rig, saying only that it will be delivered to Venezuela. The proposed contract will last at least 11 months and generate some $72 million in revenues. The rig is scheduled for completion this year and should be delivered to Venezuela in the third quarter. Russia’s Gazprom wants a rig to explore the Urumaco 1 and Urumaco 2 blocks in the Gulf of Venezuela. PDVSA sources have said the Urumaco permits are expected to unlock significantly more than 1 trillion cubic feet of gas, based on seismic data. Meanwhile, Chevron is understood to be close to signing an agreement with Dallas-based Ensco for a jack-up to drill a well in Venezuela. Sources said the rig will probably come from the US Gulf of Mexico. The rig will be used to kick off exploration drilling in 2009 at the shallow-water Cardon 3 block. Moreover, the US supermajor has been leading an effort with other international oil companies including Spain’s Repsol YPF and Brazil’s Petrobras to share the rig. The Gazprom and Chevron acreage form part of the so-called Rafael Urdaneta project, which covers 30,000 square kilometres and, according to official reports, holds as much as 26 trillion cubic feet of natural gas.

E.ON: Negotiations with Gazprom Over Asset Swap Remain 'Difficult'

Wednesday, April 30, 2008 - AFX News Limited - E.ON AG said negotiations with Russia's Gazprom over a stake in the Siberian Yushno Russkoye gas field remain difficult. "Negotiations are difficult, not only because of the political change [in Russia], but also due to the exorbitant rise in crude oil prices," chief executive Wulf Bernotat said during the German utility's AGM. He did not say when he expects talks to progress. Gas prices are linked to oil prices, which saw massive hikes since E.ON and Gazprom in 2006 struck a basic agreement on an asset swap that sees E.ON acquiring a 25 percent minus one share stake in the company operating the gas field in return for some of E.ON's Hungarian assets. Gasprom consequently delayed talks as it re-evaluated the Yushno Russkoye field. E.ON later on also offered stakes in several of its European power plants, according to Gazprom. Also, Russian president Vladimir Putin will hand over his office to successor Dmitry Medvedev May 7.

Eni offers Gazprom $350m in asset swap

29 April 2008 - Upstream OnLine - Italy's Eni will offer Russian gas giant Gazprom upstream assets outside Italy worth $350 million as part of their asset swap deal, Eni boss Paolo Scaroni said today. "We have decided to focus investment opportunities in the upstream sector and not in Italy," Reuters quoted Scaroni telling a news conference. Eni and Gazprom formed a strategic partnership in 2006, to focus on both upstream and downstream in the oil and gas sectors, said Reuters. The exchange of assets is part of the agreement. Scaroni said earlier this month his group would offer Gazprom a stake in the Elephant oilfield in Libya but the deal required approval from Tripoli. "The first asset is Elephant in Libya, in which we hold 33% and think to cede a third to Gazprom. If this asset is enough considering the value to offer to them, then the deal is done. Otherwise we will look at other assets in Libya or elsewhere," said Scaroni.

Thursday, May 01, 2008

Gazprom, VNG to build gas storage facility in Germany

MOSCOW, April 30 (RIA Novosti) - Russian energy giant Gazprom and Germany's Verbundnetz Gas (VNG) are to build a 350-million-euro gas storage facility in the east of Germany, the companies said in a joint press release on Wednesday. A cooperation deal was signed in Moscow by Alexander Medvedev, a deputy head of Gazprom's management committee, and Klaus-Ewald Holst, the chairman of the executive board of the German company, a natural gas importer and supplier in the east of Germany. "Gazprom's participation in underground gas storage projects in Germany is an example of how the company's strategy to ensure energy stability in Europe is being implemented," said Alexander Medvedev. The storage facility will be built in the town of Bernburg, in the federal state of Saxony-Anhalt. The first underground storage space is to be commissioned in 2009. When it is completed in 2022, the facility will have an active storage capacity of 510 million cubic meters. "Over the next 14 years, Gazprom and VNG intend to jointly invest around 350 million euros in the construction of the underground gas storage facility and build a total of ten additional subsurface storage spaces in Saxony-Anhalt," said Holst. Gazprom is already involved in the operation of the biggest gas storage facility in Western Europe, located in the German town of Reden, with a capacity of over 4 billion cubic meters. Another facility is currently being built in Heidach, Austria, and may become the second largest in Europe, with 2.4 billion cubic meters.

South Stream Turns toward Greece

russiagreeceApr. 30, 2008 - Kommersant - Greece joined the Russian-Italian South Stream yesterday. An agreement was signed on the construction of a section of the pipeline across Greece with a capacity of 10 billion cu. m. of natural gas per year. Russian Ministerof Industry and Energy Viktor Khristenko and Greek Minister of Development Christos Folias signed the agreement in the presence of Russian President Vladimir Putin and Italian Prime Minister and Greek Prime Minister Kostas Karamanlis. Gazprom was forced to promise Greece a long-term contract for gas delivery with growing volume through 2013. Athens also retained the right to diversify its supplies with gas from Algeria and Turkey. Similarly to the agreements reached with Hungary and Bulgaria, Gazprom will form a joint venture with the Greek company DEPA to participate in South Stream. The agreement foresees tax benefits until the recoupment of the investment in the pipeline. The South Stream pipeline will stretch from Russia to Italy with a 30-billion cu. m. capacity. It is to be completed by 2013. It will run for 900 km. under the Caspian Sea and branch out in Bulgaria, with one line leading to Greece and onward to the Italian city of Brindisi, and another line running through Serbia, Hungary and Austria or Slovenia to northern Italy. Putin acknowledged yesterday that the Greek prime minister “is a strict negotiator.” Greece receives 90 percent of its natural gas and 30 percent of its oil from Russia.

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