Tag Archives: gas

Gazprom rises prices for Kyrgyzstan

MARCH 3 2016 (The Conway Bulletin) – Olga Lavrova, Gazprom Kyrgyzstan’s deputy director, said that the company had had to raise the price it charges to its Kyrgyz customers to match the devaluation of the Kyrgyz som. Gazprom, which bought Kyrgyzgaz in 2013 for a symbolic $1 plus debt, also said that it was still effectively subsidising the price of gas in Kyrgyzstan. Gas price rises are a sensitive issue in Central Asia and the South Caucasus.

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(News report from Issue No. 270, published on March 4 2016)

Turkmenistan constructs gas-to-liquids plant

MARCH 2 2016 (The Conway Bulletin) -A consortium formed by Japan’s Kawasaki Heavy Industries and Turkey’s Renaissance holding has started construction on a $1.7b gas- to-liquids plant in Turkmenistan. The plant will produce petrol from natural gas. When it starts production in 2018, the plant will process around 1.8b cubic metres of gas and produce 600,000 tonnes of petrol.

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(News report from Issue No. 270, published on March 4 2016)

Construction work on TAP to start, says Azeri energy ministry

FEB 26 2016 (The Conway Bulletin) – Azeri energy minister Natig Aliyev said construction works will start later this month on the Trans-Adriatic Pipeline (TAP), the final section of the so-called Southern Gas Corridor that will pump gas from Azerbaijan to Europe.

According to Mr Aliyev, TAP is also expecting to secure financing by the end of April.

“The issues of TAP financing will be completely solved on April 28,” he said.

TAP, a 10b cubic metres pipeline which runs across Greece, Albania and the Adriatic Sea to Italy will link up with the 16b cubic metres Trans- Anatolian Pipeline at the border with Turkey.

BP, Azerbaijan’s state-owned SOCAR, Snam, Fluxys, Enagas and Axpo are all shareholders in TAP.

European customers see the Southern Gas Corridor an alternative to Russian gas supplies and the European Commission has lobbied intensely to ensure that the project is completed by the 2019 deadline.

This week a delegation of the European Commission participated in the second meeting of the Southern Gas Corridor Advisory Council.

Federica Mogherini, vice president of the European Commission, emphasised just how much weight the EU put on the project.

“The Southern Gas Corridor is an essential element in the EU’s Energy Security Strategy,” she said.

“We strongly support the Southern Gas Corridor, and we are determined – and me personally – to do our part to ensure that it is completed on time.”

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(News report from Issue No. 270, published on March 4 2016)

EU wants improved ties with Azerbaijan

FEB. 29 2016 (The Conway Bulletin) – On a trip to Baku, Federica Mogherini, a European Commission vice-president in charge of external affairs, said the European Union and Azerbaijan need to work hard to improve relations which have soured over the past few years.

Ms Mogherini made the comments during a two-day trip to Baku and to Armenia’s capital Yerevan.

“It is time for a new chapter in the relations between the EU and Azerbaijan. We need an all-round strategic partnership between us,” she said during a speech to the Southern Gas Corridor Advisory Council.

“We have not always seen eye to eye in all matters, and we know that differences will remain between us in some areas. This is normal in international relations and often in European and even national politics.”

Europe has been vocal over what it has said is a systematic crackdown by the Azerbaijani authorities against civil society and the media. The Azerbaijani government has responded by accusing Europe and the United States of meddling in affairs which aren’t theirs and of trying to stir a revolution.

The result has been a drift by Azerbaijan towards Russia.

Still, Europe and Azerbaijan have been working together on a pipeline network running from the Caspian Sea to central Europe.

Europe wants to reduce its reliance on Russia for gas and its sees Azerbaijan as the solution. The pipeline network is dubbed the Southern Gas Corridor.

Ms Mogherini was careful to avoid direct mention of human rights and media freedom in her speech but the underlying message would have been clear and her speech was an important step towards, tentatively, mending Azerbaijan-EU relations.

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(News report from Issue No. 270, published on March 4 2016)

Azerbaijan’s President pays visit to Tehran

FEB. 23 2016 (The Conway Bulletin) – Azerbaijani president Ilham Aliyev flew to Tehran for talks with his Iranian counterparts. Media reported that the two sides signed a memorandum of understanding on oil and gas projects.

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(News report from Issue No. 269, published on Feb. 26 2016)

Kazakhstan says it does not have right to buy Karachaganak stake

ALMATY, FEB. 23 2016 (The Conway Bulletin) — Kazakhstan’s government said it will not try to buy a 29.25% stake in the Karachaganak gas field that Shell inherited from BG Group after it completed a takeover earlier this month.

Previously, Kazakh officials had said the government might use its preemptive rights to buy out BG Group’s share in the field, one of the most prolific in independent Kazakhstan’s history.

Kazakhstan has now said it does not have any preemptive rights to buy the stake because the Shell-BG deal was not directly linked to the Karachaganak contract. Shell, which completed its $53b takeover of BG on Feb. 15, has not commented.

A direct change in the structure of the contract would have given the Kazakh government the right to move first and buy stakes on sale at market prices. The government used this mechanism when ConocoPhillips wanted out of the contract for Kashagan, a giant oil field in the Caspian Sea, in 2013. At the time, Kazakhstan matched a $5.4b offer by India’s ONGC Videsh and later sold the stake to China’s CNPC for the same price.

Now, the government has decided it has no right to do so.

Of course, Kazakhstan’s economic position has changed considerably since 2013. Then it was awash with spare cash. Now it is counting its coppers and flogging off chunks of previously sacrosanct state companies to pull through a deepening economic crisis.

And, for Kazakhstan, shying away from the Shell/BG stake in Karachaganak makes it look good and pro- Western business, especially important in this tight economic climate.

Karachaganak’s shareholders are Shell with a 29.25% stake, ENI with 29.25%, Chevron with 8%, Lukoil with 13.5% and Kazmunaigas with 10%.

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(News report from Issue No. 269, published on Feb. 26 2016)

Azerbaijan and Iran look to resolve Caspian oil field row

FEB. 23 2016 (The Conway Bulletin) — Iran and Azerbaijan have started negotiations on how to develop the disputed Araz-Alov-Sharg oil project in the Caspian Sea that has lain undeveloped for 18 years.

The talks, part of a visit by Azerbaijani president Ilham Aliyev to Tehran to boost relations, also high- light Iran’s potential to be an important partner in the region now that most international sanctions have been lifted.

The oil and gas website Natural Gas Europe (NGE), quoted two sources close to Azerbaijan-Iran negotiations on talks over the Araz-Alov- Sharg project, which Iran calls Alborz.

It quoted a source close to negotiations as saying that they had “already reached a primary agreement to develop the block jointly, but they had not finalised the details”.

For Western companies any deal between Azerbaijan and Iran to develop the site would create problems.

The SOCAR website still shows off a production sharing agreement for the field signed in 1998 by several Western oil and gas companies including BP, Statoil and Exxon.

That PSA may turn out to be worthless and, if Azerbaijan and Iran can agree on the field’s ownership, may be torn up in favour of a bilateral Azerbaijani-Iranian deal.

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(News report from Issue No. 269, published on Feb. 26 2016)

Turkmenistan increases security over TAPI

FEB. 9 2016 (The Conway Bulletin) – Addressing a government meeting, Turkmen President Kurbanguly Berdymukhamedov ordered his government to increase security over the planned TAPI pipeline that will, it is hoped, pump gas to India. Last month the Taliban destroyed a transmission line sending electricity between Uzbekistan and Kabul. For TAPI to be successful, it needs to be able to guarantee security around the route. Governments that border Afghanistan have been warning that a resurgent Taliban are posing an increasing threat to stability.

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(News report from Issue No. 267, published on Feb. 12 2016)

Tecnimont to build plant in Azerbaijan

FEB. 5 2016 (The Conway Bulletin) – Italy’s Maire Tecnimont signed a $180m deal with Azerbaijan’s SOCAR Polymer to build a polyethylene plant near Baku, local media reported. The plant is part of SOCAR’s petrochemical complex in Sumgayit, 30km north of Baku. SOCAR Polymer is a subsidiary of SOCAR, Azerbaijan’s state-owned oil and gas company.

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(News report from Issue No. 267, published on Feb. 12 2016)

Stock market: Bank of Georgia, Tethys, Centerra

FEB. 5 2016 (The Conway Bulletin) — Bank of Georgia shares were up 6.9% this week, closing at £18.14 on Thursday. The bank has followed a downward trend since the beginning of the year, but news of the merger between its corporate banking and investment management departments lifted its shares.

BGEO Group, the holding that owns Bank of Georgia, said it is confident that the move will boost returns and reduce risk.

Tethys Petroleum shares jumped by 19.7% to 2.25p off the back of stable oil prices, leading an upbeat crowd of oil and gas companies involved in the region. Only Nostrum continued the slump.

Among miners, Centerra Gold posted a significant jump of 7.2% to 6.73 Canadian dollars after the Mongolian parliament unblocked negotiations over ownership and licences linked to one of their gold mines in the north of the country.

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(News report from Issue No. 266, published on Feb. 5 2016)