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Samsung suspends building work at essential Kazakh power plant

ALMATY, SEPT. 23 2015 (The Conway Bulletin) — Korea-based Samsung Engineering said it was suspending construction work at a 1,320 megawatt coal-fired power plant near Lake Balkhash in Kazakhstan due to financing issues, throwing into doubt the feasibility of the $2.2b project that the Kazakh government has said is vital to meet growing demand for electricity.

Alluding to the impact of an economic downturn that has hit the economies and currencies of Central Asia, Samsung Engineering said it was worried that Kazakhstan couldn’t guarantee it would buy the power that the plant was due to generate.

“Samsung Engineering has been forced to temporarily halt the operation of the project because of an issue with the Kazakhstan government over the guaranteed purchase of the power to be produced from the project,” the company’s CEO Park Jung-heum told The Korea Times. He didn’t say when the project might resume.

The Kazakh government has not commented.

A consortium led by Samsung Engineering and Korean Electric Power Corp. won the project tender in 2009. The project was due to be completed in 2020 and would have supplied 9% of Kazakhstan’s total electricity demand.

The power plant was due to cost $2.2b to build. Korean Eximbank and Korea Trade Insurance Corp. pledged additional loans of around $3.5b.

In August, Samsung also said it was worried about the strength of Kazakhstan’s banking sector which is saddled with a large amount of bad debt, a legacy of the 2008/9 Global Financial Crisis.

Kazakhstan needs to increase its electricity generation capacity to power its export-oriented industrial sector and to feed its increasingly energy hungry population or face the prospect of black-outs. World Bank data showed that in 2014, Kazakhstan consumed around 88b kilowatt hours of electricity. In 2000, it consumed 48b kilowatt hours, figures that highlight the growth in demand.

Samsung’s decision to halt its big project at Balkhash is a serious setback for Kazakhstan’s energy plans.

It is also a litmus test for Kazakhstan’s ability to follow through with major infrastructure projects it planned during a period of high oil prices and steady export revenues.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

BP extends DNV GL deal in Azerbaijan

SEPT. 22 2015 (The Conway Bulletin) — BP said it would extend DNV GL’s contract in Azerbaijan’s leading natural gas field for the second stage of operations. Oslo-based DNV GL provides marine warranty and consulting for oil and gas fields globally. The second phase of Shah Deniz sets it up for a massive expansion that will eventually mean more gas being sent to Europe.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Kazakh CBank intervenes again

SEPT. 21 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank bought $200m-worth of tenge to protect its currency after it broke through the psychologically important 300/$1 barrier. Despite pledging not to intervene in the value of the tenge, the Kazakh Central Bank has spent over $700m this month on its defence.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Turkmenistan taxes alcohol, cigarettes

SEPT. 19 2015 (The Conway Bulletin) – Turkmenistan’s parliament, a rubber-stamping chamber for President Kurbanguly Berdymukhamedov, passed a law which will impose more tax on tobacco and alcohol. Turkmenistan has been looking to raise more tax during the current economic downturn.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Azerbaijan begins TANAP work

SEPT. 18 2015 (The Conway Bulletin) – Azerbaijan has begun work on the Trans Anatolian Pipeline (TANAP) project, part of the route that will carry gas from the Caspian Sea to Europe, local media quoted Rovnag Abdullayev, the chairman of Azerbaijan’s state-owned energy company SOCAR, as saying. Mr Abdullayev said that 400km of pipes had been delivered to TANAP.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Russia blocks fish to Kyrgyzstan

SEPT. 23 2015 (The Conway Bulletin) — Rosselkhoznadzor, Russia’s food safety agency, seized 48.5 tonnes of Chinese canned fish being transported via railway to Kyrgyzstan from Estonia. The cargo was sent back to Estonia because its certificates did not comply with Eurasian Economic Union (EEU) rules. Canned fish from China is shipped to Estonia before being sent to Central Asia. The seizure highlights just how complicated transporting products across the EEU has become.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Georgia bets on Bitcoins

SEPT. 25 2015 (The Conway Bulletin) — BitFury, a company linked closely to Bitcoin, will build the first Technology Park in Georgia and has pledged to invest $100m in the project (Sept. 24). The Park is being built in Gldani a district of Tbilisi. BitFury provides technological infrastructure for Blockchain, the virtual wallet for the Bitcoin payment network. It already operates a data centre in Gori, 70km west of Tbilisi.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Georgian rugby team wins

SEPT. 19 2015 (The Conway Bulletin) – Causing something of an upset, the Georgian rugby team beat Tonga 17-10 in their opening match of the Rugby World Cup in England. Georgia has the best national rugby team in the former Soviet Union and is ranked 13th in the world.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Georgia’s Central Bank intervenes

SEPT. 21 2015 (The Conway Bulletin) – Georgia’s Central Bank said it bought $27m worth of lari to strengthen its currency. This is the 6th intervention by the Central Bank this year to prop up its currency which has lost around 37% since September 2014. It said earlier this year that it wouldn’t prop up its currency.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Ukraine Air argues with Turkmenistan

SEPT. 22 2015 (The Conway Bulletin) – Ukraine International Airlines postponed the resumption of flights to Ashgabat due to an ongoing row between the two countries’ aviation authorities. Flights were suspended in August and were due to resume on Sept. 21. Ukraine is also locked in a row with the aviation authorities in Uzbekistan.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)