Tag Archives: hydrocarbons

Azerbaijani SOCAR’s deal to buy Greek gas distributor put into doubt

MARCH 28 2016 (The Conway Bulletin) – Belgian gas distributor Fluxys has pulled back from buying a 17% stake in Greece’s gas pipeline operator DESFA, media reported, potentially derailing a deal by Azerbaijani energy company SOCAR to buy 49% of the Greek company.

Azerbaijan’s SOCAR had initially agreed to buy a 66% stake in the Greek distributor in 2013 for €400m ($454m) but the European Commission stepped in and said that a 2009 regulation meant it could only buy a 49% stake. This effectively froze the deal until SOCAR found a company to agree to buy the 17% stake.

The pressure is now on SOCAR, which has until the end of 2016 to comply with EU regulations and find another purchaser.

In the current low-priced market, though, this will not be easy and SOCAR admitted as much.

“Currently we are in the process of reducing the stake of DESFA through sales to potential buyers in Europe and this process is expected to be completed in late 2016,” the Natural Gas Europe website quoted an unnamed source at SOCAR as saying.

For SOCAR, buying a stake in DESFA is important. It is due to play an important technical back-up role in Greece for the final section of a pipeline pumping gas to Europe from Azerbaijan.

The Greek newspaper Ekathi- merini quoted unnamed sources as saying that the deal with Fluxys was off. When reached by phone, though, Fluxys declined to confirm one way or the other.

A Fluxys spokesman said: “Since the beginning, we have not been involved directly as a company. It is a matter that Fluxys shareholders need to address.”

Neither Belgium’s Publigas, which owns 77.7% in Fluxys, nor Canada’s Caisse de depot et placement du Quebec, which owns 20% in Fluxys, could be reached for a comment.

Fluxys had looked like a good fit to buy DESFA because it owns a 19% stake in the Trans-Adriatic Pipeline (TAP), the planned final section of a network of pipelines stretching from the Caspian Sea to Europe.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Azerbaijan’s SOCAR applies to ADB for Shah Deniz loan

MARCH 28 2016 (The Conway Bulletin) – Azerbaijan’s state-owned energy company SOCAR said it applied for a $450m loan from the Asian Development Bank (ADB) to help pay for the expansion of its Shah Deniz gas project.

The loan, according to both ADB and SOCAR, is aimed at financing the second phase of the project, which the company plans to bring online by 2018. Shah Deniz is core to Azerbaijan’s future gas plans.

BP, which develops the field together with SOCAR, said the expansion of the Shah Deniz project will cost around $28b and will add 16b cubic metres annually to the current production of around 10b cubic metres.

Gas produced at Shah Deniz 2 is already booked for export to Georgia and Turkey in 2018 and further on to Europe by 2019, with the completion of the Southern Gas Corridor.

Unnamed ADB sources told Natural Gas Europe: “It is in the processing stage. Once approved, the loan will be provided under the state guarantees.”

There was no information on the timeline of the loan.

SOCAR, hit by sustained low oil prices, has applied to various sources for financing and has sought to divest from some of its unprofitable ventures to raise cash for its core projects.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Stock market: Nostrum Oil & Gas

APRIL 1 2016 (The Conway Bulletin) – Nostrum Oil & Gas has suffered a long period of sustained low oil prices, which has hit both its revenues and its stock price.

Nostrum’s revenues fell by a staggering 42% last year, accompanied in the downward trend by lower production volumes.

And, as shown in the graph, Nostrum’s share price has continued to fall, down 48.7% in Q1 2016.

Nostrum, however, remains confident about its long term objectives and pointed out in its full year results that it had cut costs and was investing in its processing capacity.

It made no mention of the failed takeover offer for Tethys Petroleum of last summer, which hit Nostrum’s share price, especially after Tethys started talks with Kazakhstan’s Olisol last November.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Kazakh Pres. sacks energy minister

MARCH 25 2016 (The Conway Bulletin) – Kazakhstan President Nursultan Nazarbayev sacked former energy minister Vladimir Shkolnik immediately after a parliamentary election. This was part of a government reshuffle that switched several top-bureaucrats in government and local administrations. Mr Shkolnik, the highest-profile government official to be sacked, was replaced by power sector veteran Kanat Bozumbayev.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Iran wants more Turkmen gas

MARCH 23 2016 (The Conway Bulletin) – Iranian official said they wanted to increase gas imports from Turkmenistan to feed its northern region which doesn’t hold any gas reserves. “We import gas from Turkmenistan. It’s good for us because it means that we don’t need to get gas from [the] south to north- east Iran,” Ali Amirani, director at the National Iranian Gas Export Company, was quoted by Interfax Energy as saying. Gas relations between Iran and Turkmenistan are growing stronger and Iran is also mulling joint exploration activities in the border regions.

ENDS

(News report from Issue No. 273, published on March 25 2016)

Kazakhstan’s KMG debt worsens

MARCH 22 2016 (The Conway Bulletin) – International ratings agency Fitch said that Kazmunaigas’ adjusted debt ratio for 2015 might be worse than expected. A weak performance by KMG EP, Kazmunaigas’ upstream subsidiary, significantly lower dividends from its joint-ventures and a weaker tenge had combined to dent the company’s finances.

ENDS

(News report from Issue No. 273, published on March 25 2016)

Azerbaijan issues $1b Eurobond for gas pipelines

MARCH 24 2016 (The Conway Bulletin) – Azerbaijan’s finance ministry issued a $1b 10-year Eurobond to fund the Southern Gas Corridor company which is building an energy transport route between the Caspian Sea and Europe.

The initial yield on the debt was 7%.

Analysts have said that the rare debt issue for such a high-profile

Azerbaijani energy project is another indication of just how heavily the economic downturn has impacted finances.

The Southern Gas Corridor is a state-owned company in charge of the design and construction of pipelines that will send gas from the Caspian Sea to Europe by 2019. These include TANAP, which will run across Turkey and TAP, which will link Greece to Italy.

The EU considers the project to be a priority for its energy security strategy as it reduces its reliance on Russia for gas. Azerbaijan is hoping to give its gas sector a major lift with the EU as a key client.

ENDS

(News report from Issue No. 273, published on March 25 2016)

Smuggling ring busts targeting Georgian oil

MARCH 23 2016, TBILISI (The Conway Bulletin) — Georgian authorities broke up an oil smuggling operation near the village of Ruisi in central Georgia, highlighting the lack of security for infrastructures across the South Caucasus.

Smugglers were siphoning off crude oil from the Baku-Supsa oil pipeline, a BP-operated 800km-long pipeline that transports oil from Azerbaijan to the Georgian Black Sea terminal of Supsa.

Smugglers had installed a parallel pipeline that branched off the main trunk and fed trucks.

Major infrastructure projects in the South Caucasus often appear fragile and vulnerable. In November, a fire at a data centre shut down the internet in Azerbaijan.

In 2011, an elderly woman damaged a major fibre- optic cable while digging for copper in a rural Georgian village, cutting internet access in Armenia.

Last year, too, rebels from the Georgian breakaway region of South Ossetia, which has proclaimed independence, grabbed control of a section of the Baku-Supsa pipeline.

ENDS

(News report from Issue No. 273, published on March 25 2016)

Kazakh Kashagan field to reach commercial production next year

MARCH 18 2016 (The Conway Bulletin) – Halyk Bank effectively poured cold water over Kazakh officials’ forecasts that the giant Kashagan oil field in the Kazakh sector of the Caspian Sea would meet commercial production of 75,000 barrels/day this year. Instead, Halyk Bank said that Kashagan would be operating effectively only by the end of 2017. Kashagan is vital for Kazakh oil output.

ENDS

(News report from Issue No. 273, published on March 25 2016)

Turkmenistan boosts CNG

MARCH 18 2016 (The Conway Bulletin) – The Turkmenbashi refinery complex plans to produce 340,000 tonnes of compressed natural gas (CNG) this year, a 13% increase compared to 2015. The majority of the production is booked for exports to Georgia, Iran, Tajikistan, Afghanistan and Pakistan. Turkmenistan also uses CNG domestically as fuel.

ENDS

(News report from Issue No. 273, published on March 25 2016)