MARCH 6 2015 (The Bulletin) – Azerbaijan’s state energy company SOCAR plans to issue a Eurobond by the end of March, the company’s CEO Rovnag Abdullayev said. Mr Abdullayev said SOCAR was launching the Eurobond because of the slide in oil prices over the past six months or so which have hit the company’s profits.
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(News report from Issue No. 222, published on March 11 2015)
MARCH 4 2015 (The Conway Bulletin) – The European Union has identified Central Asia and the South Caucasus as a future source of energy that will, importantly, reduce its reliance on Russia.
In an interview with the FT, Maros Sefcovic, the European Commission’s vice-president for energy affairs, said that the region could become a major supplier of gas to the EU.
In particular, the EU is looking to Azerbaijan and Turkmenistan. It has diligently invested time and money building up relations and pipeline infrastructure over the past few years in the region.
Now, as relations with Russia sour over the Kremlin’s support for separatists in Ukraine, the EU is speeding up its search for alternative sources of energy.
And in Central Asia and the South Caucasus it will find a willing partner. The fallout over the drop in Russia’s economy and the collapse in energy prices have been severe and governments are looking for alternative markets. Europe may be bureaucratic but it is stable and reliable.
Turkmenistan’s government was quick to respond positively to the EU’s smoke signals.
It’s a different scenario in countries which don’t produce energy.
Armenia is reliant on Russia’s Gazprom for its energy. It has had to ask for a gas price discount, pulling it more and more under the influence of the Kremlin.
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(News report from Issue No. 221, published on March 4 2015)
FEB. 25 2015 (The Conway Bulletin) – In a boost to Turkmenistan’s aspirations to expand its client base for gas deliveries, the EU said it was stepping up efforts to diversify its energy suppliers away from Russia.
The Financial Times reported that a long-term energy blueprint drawn up by the EU will emphasis building relations with countries such as Turkmenistan, Azerbaijan and Algeria.
Russia currently supplies around 27% of the EU’s gas needs, an excessive over-reliance, according to EU diplomats.
Maros Sefcovic, the European Commission’s vice-president for energy affairs, said it was sensible to diversify.
“As much as we want to diversify our energy sources, I think the countries around the Caspian equally want to diversify their [export] routes,” he told the FT.
This will please Turkmen President Kurbanguly Berdymukhamedov. He has said that he wants to increase the number of clients Turkmenistan has for its gas.
China dominates Turkmenistan’s order books. Iran and other neighbours also buy gas but in smaller quantities.
It has previously floated the idea of a pipeline underneath the Caspian Sea linking Turkmenistan directly to pipelines pumping gas from Baku across the South Caucasus, Turkey and into Europe. The problem is that building the pipeline requires serious investment.
Turkmenistan holds the world’s fourth largest gas reserves in the world and its officials want to supply Europe.
“A huge resource base of hydrocarbons onshore and offshore allows Turkmenistan to increase the exports of natural gas to the world markets, to develop the new routes of its exports in the eastern and the European directions,” the Turkmen energy ministry said after the FT story.
A global drop in energy prices is pressuring Turkmenistan’s economy, forcing the Central Bank to devalue its currency. Part of the problem is Western sanctions on Russia imposed in retaliation for its support to separatists in Ukraine.
But there may be an upside for Turkmenistan, as the row speeds up Europe’s energy diversification.
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(News report from Issue No. 221, published on March 4 2015)
FEB. 25 2015 (The Conway Bulletin) – Armenia has asked Russia not to raise the price it pays for gas despite a drop in the value of its dram currency, media reported quoting the head of the Public Services Regulatory Commission (PSRC) Robert Nazaryan.
Russia’s Gazprom owns the gas distribution system in Armenia and can, therefore, dictate the price that Armenians pay for their gas.
The worry for officials in Armenia is that the dram lost around 15% of its value against the US dollar at the end of last year. Energy prices are set in US dollars, making it more expensive for people in Armenia to buy.
“In this connection at this moment the Armenian side is conducting negotiations with the Russian side for the natural gas price not to be raised because of the dram-dollar fluctuations,” media quoted Mr Nazaryan as saying.
Russia dominates Armenia’s economy and by asking Gazprom to keep the cost of gas consistent, Mr Nazaryan is effectively asking for a subsidy. If Gazprom agrees, Armenia will fall further under the control of the Kremlin.
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(News report from Issue No. 221, published on March 4 2015)
FEB. 18 2015 (The Conway Bulletin) — Turkmenistan intends to increase production of gas in 2015 to around 80b cubic metres compared to 76b cubic metres in 2014, media reported quoting its energy ministry.
This is important because it underlines Turkmenistan’s determination to sell more gas to make up for the drop in prices.
Over the last few years Turkmenistan has built up its client base for gas and shifted itself into position as one of the region’s major gas suppliers.
Its main client is China but Europe, India and Pakistan are also clamouring to receive more gas.
News that Turkmen President Kurbangkuly Berdymukhamdov wants to increase gas production this year will be a boost for the proposed TAPI pipeline that is planned to run from Turkmenistan across Afghanistan to Pakistan and India and also for a potential pipeline to run under the Caspian Sea that will feed gas to Europe.
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(News report from Issue No. 220, published on Feb. 25 2015)
FEB. 13 2015 (The Conway Bulletin) — Russian energy company LukOil said that along with a consortium headed by South Korea’s Hyundai Engineering it had won a contract to build a gas processing plant in the Kandym region of south Uzbekistan. LukOil did not say how much the project would cost but it did say that it was its largest investment in Uzbekistan.
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(News report from Issue No. 219, published on Feb. 18 2015)
>>Criticism comes after Russia cuts Turkmen gas imports>>
FEB. 17 2015 (The Conway Bulletin) — Turkmenistan has criticised Russia as an unreliable gas partner, hinting that it was moving away from its traditional energy alliance with Moscow and was instead looking for new clients and markets.
Ties between Turkmenistan and Russia have been increasingly strained and, perhaps, the Kremlin’s shadow boxing with the West in eastern Ukraine persuaded it to issue the harshly worded statement and speed up its search for new clients.
“Gazprom and its affiliates periodically violate agreements at interstate, intergovernmental and interdepartmental level, leading to the view that unfortunately the major energy company is an unstable partner,” the AFP news agency reported quoting an article on the website of Turkmenistan’s oil and gas ministry.
Earlier this year, Gazprom said that it was cutting imports of gas from Turkmenistan and Uzbekistan by up to two-thirds.
Like other countries in the region, Turkmenistan has been trying to deal with the fallout from the decline in the value of the rouble and also the fall in energy prices. President Kurbanguly Berdymukhamedov has ordered his energy executives to search for more clients.
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(News report from Issue No. 219, published on Feb. 18 2015)
FEB. 11 2015 (The Conway Bulletin) — The countries developing the planned 1,800km pipeline to run from Turkmenistan through Afghanistan to Pakistan and India failed to announce a company to lead its construction as had been expected at a meeting in Islamabad. Media had said that France’s Total would be announced as the TAPI consortium leader.
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(News report from Issue No. 219, published on Feb. 18 2015)
FEB. 8 2015 (The Conway Bulletin) — Perhaps feeling the pinch from falling energy prices, Turkmen leader Kurbanguly Berdymukhamedov wants Turkmenistan to increase the number of foreign clients it has for its gas, the official website turkmenistan.ru reported. Mr Berdmukhamedov has already increased Turkmenistan’s client case since taking over.
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(News report from Issue No. 218, published on Feb. 11 2015)
FEB. 10 2015 (The Conway Bulletin) — Turkmen officials are due to meet in Islamabad with counterparts from Pakistan, India and Afghanistan to decide on the contractor to build the TAPI pipeline, media reported. Sources said the leading candidate to build the pipeline to pump Turkmen gas to Asia is Total.
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(News report from Issue No. 218, published on Feb. 11 2015)