Tag Archives: gas

China re-jigs ownership of Turkmenistan’s gas pipeline

NOV. 23 2015 (The Conway Bulletin) — PetroChina, a subsidiary of China’s state-owned energy company CNPC, said it wants to sell a 50% stake in the Central Asia-China gas pipeline for $2.4b in order to turn a profit this year, a requirement in its government mandate.

The likely buyer of the 50% stake in the Central Asia-China pipeline is another Chinese company, state-owned China Reform Holdings, Bloomberg reported.

The ownership switch shouldn’t change operations at the pipeline, which mainly pumps gas from Turkmenistan, but its does highlight both China’s ownership of energy infrastructure in Central Asia and, also, how pressure on profits in China is having an impact in the region.

China’s economy has slowed this year, undermining commodities prices around the world and triggering a switch in policy from China across various industries. In the oil and gas sector, it plans to unbundle upstream and midstream operations, a process that will have an effect on oil and gas fields across Central Asia as well as on pipelines.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Dragon Oil says it is interested in investing in Turkmen ambitious pipeline

NOV. 22 2015 (The Conway Bulletin) — Dubai-based Dragon Oil said it was considering investing in the proposed TAPI gas pipeline project which aims to deliver gas from Turkmenistan to India, an important show of Western support for the often derided project.

As reported in the FT, Dragon Oil said it has started talks with Turkmenistan over an investment in TAPI, a pipeline that will stretch 1,700km across Afghanistan and Pakistan.

“This [discussions on TAPI] has been ongoing for a long time. But now it’s very serious, things have been signed between the countries. That’s why we have shown our interest to go in,” Faisal Rabee Al Awadhi, general manager for Dragon Oil in Turkmenistan, told the FT at an oil and gas conference in Ashgabat.

Dragon Oil didn’t say what stage its negotiations with Turkmenistan were at, how much it was considering investing or when a final decision would be made. Other, bigger, Western oil and gas companies have decided not to invest in TAPI.

Dragon Oil already operates an oil field in Turkmenistan.

Turkmenistan’s state-owned gas company Turkmengas is the project leader for TAPI, which is slated to cost $10b.

Construction is supposed to start in December but it is a controversial project. Concern over security – the route crosses territory fought over by central government forces and the Taliban – has raised serious questions over whether the pipeline will ever be built at all.

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(News report from Issue No. 258, published on Nov. 27 2015)

Turkmen president joins leaders at gas summit in Tehran

NOV. 23 2015 (The Conway Bulletin) – Turkmen president Kurbanguly Berdymukhamedov flew to Tehran for the third Gas Exporting Countries Forum (GECF), sometimes dubbed the OPEC of gas, taking the normally reclusive state into the mainstream.

Generally unwilling to participate in international organisations, Turkmenistan accepted an invitation from GECF to attended its forum as a guest. Mr Berdymukhamedov’s acceptance of the invitation showed that he wants to play a deeper role in shaping global energy prices and policy.

A disparate group of 12 major gas exporting countries, the GECF meets biannually to try to set the agenda for world gas prices. In contrast to OPEC, a group of oil exporting countries, it has little power to influence price or sway production plans.

Gas prices are generally indexed to oil prices.

At the Forum, Mr Berdymukhamedov also held a side meeting with his Iranian counterpart Hassan Rouhani. Russian president Vladimir Putin also attended the forum.

According to Simon Pirani, senior researcher at the Oxford Institute for Energy Studies, Turkmenistan’s activity at the Forum had a diplomatic, rather than commercial tone. He said Turkmenistan remain fixed to its China-centric export strategy.

“Exports to Russia will remain low, which will preserve relations with Russia, but there is not much that Turkmenistan can do in the short term to diversify its exports, especially due to its traditional policy of selling gas at the border,” Mr Pirani told the Bulletin.

GECF is a high profile, but still relatively impotent group. It aspires to hold the influence that OPEC wields but is more of a talking shop.

Members of GECF are Iran, Algeria, Bolivia, Egypt, Equatorial Guinea, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, United Arab Emirates, and Venezuela. Azerbaijan, Iraq, Kazakhstan, the Netherlands, Norway, Oman and Peru have observer status.

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(News report from Issue No. 258, published on Nov. 27 2015)

Azerbaijani energy company releases gas figures

NOV. 20 2015 (The Conway Bulletin) – Azerbaijan’s state-owned energy company SOCAR said it produced 5.76b cubic metres of gas in the first 10 months of the year, down 5.5% compared to last year. Oil and gas exports are vital to the Azerbaijani economy.

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(News report from Issue No. 258, published on Nov. 27 2015)

Azerbaijan’s oil/gas output drops

NOV. 17 2015 (The Conway Bulletin) – Despite pledging to maintain oil and gas production this year, both have fallen in Azerbaijan. Oil production, vital for the economy, fell 2% to 35m tonnes in the first 10 months of the year, a government source told Reuters, and the national statistics office said gas production dropped 2.7% in same period.

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(News report from Issue No. 257, published on Nov. 20 2015)

Kazakhstan does not complain about Karachaganak

NOV. 13 2015 (The Conway Bulletin) – Kazakhstan does not have a complaint against the Karachaganak Petroleum Operating (KPO), which operates the oil and gas field, and does not intend to levy a fine against it, energy minister Vladimir Shkolnik said. His intervention was intended to smack down a report by Bloomberg that the energy ministry was preparing a £2b fine against KPO.

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(News report from Issue No. 257, published on Nov. 20 2015)

Turkmenistan begins expanding giant gas field

NOV. 18 2015 (The Conway Bulletin) – Turkmenistan will expand its giant Galkynysh gas field by around 50% over the next few years, media reported quoting Ashirguly Begliyev, head of Turkmengas, giving gas projects to India and the EU a major boost.

Galkynysh forms the core of Turkmenistan’s gas production. Its main client is China although it wants to diversify its client base. The EU has been negotiating with Turkmenistan to try and organise for gas supplies to be sent west across the Caspian Sea, through the South Caucasus, Turkey and onto Europe.

India, likewise, has been working on a project that could see gas pumped from Turkmenistan across Afghanistan to Pakistan and finally to Indian consumers.

First, though, Turkmenistan needs to boost output at Galkynysh. Almost all of its current 60bcm of gas goes to China. A proportion of the next phase of Galkynysh’s development will also travel to China, but spare capacity is being built in.

“We are in talks with a consortium of Japanese companies and have also received proposals from Korean firms and from Petrofac company,” Reuters quoted Mr Begliyev as saying on which companies may be involved with the third phase development of Galkynysh.

Importantly, too, Galkynysh is vital for Turkmenistan’s own self image. It sees itself as an increasingly important regional energy player and has been looking to pull in more clients.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Aliyev visits Georgia

NOV. 6 2015 (The Conway Bulletin) – Azerbaijan’s President Ilham Aliyev flew to Tbilisi for a meeting with Georgia’s President Giorgi Margvelashvili. Officially, the clearly good-natured meeting only yielded promises of a deeper relationship but energy links were likely to have been discussed. Georgia is an important transit country for Azerbaijani gas en route to Turkey and Europe.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

BP says it is confident Azerbaijan’s ACG oil output will be strong

NOV. 10 2015 (The Conway Bulletin) — BP said it expects to maintain last year’s production levels at Azeri Chirag-Guneshli (ACG), the largest oil field complex in Azerbaijan, despite analysts’ predictions that output would fall.

BP, which owns a 35.8% stake in ACG, has been under pressure to ensure that Azerbaijan’s most important oil project doesn’t reduce its output any further.

“We expect that the production on the results of 2015 at the block will not be lower than last year. Current production figures are ahead of the forecasted ones,” Gordon Birrell, BP regional director, told reporters .

Analysts had predicted a drop of 3% in Azerbaijan’s country-wide oil output in 2015 compared to 2014.

In H1 2015, production at ACG declined by 2.3% to 641,000 barrels/day compared to the same period in 2014.

This means that the third quarter report, due in the next few weeks, will have to show an increase in production to cancel out the Q1 drop.

Maintenance work halted operations at West Azeri in May and at Chirag in September. BP said it would carry out further work at Chirag on Nov. 10 for 25 days.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Turkmenistan plans TAPI start

NOV. 7 2015 (The Conway Bulletin) – Turkmenistan will host the official groundbreaking ceremony for the TAPI pipeline, which will pump gas from fields in the east of the country to consumers in India, via Afghanistan and Pakistan, on Dec. 13. This is important because TAPI has been spoken of for decades.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)