Showing posts with label Gasprom. Show all posts
Showing posts with label Gasprom. Show all posts

Tuesday, July 10, 2012

TANAP Signed Amid Russian Threats

On June 27, 2012, Turkey's Prime Minister Recep Tayyip Erdogan and Azerbaijan's President Ilham Aliyev signed the long-awaited agreement to construct the TANAP pipeline.  This 2,000 kilometer natural gas pipeline will link the Shah Deniz 2 gas field in the Caspian with Turkey's western border.  The original design is for the pipeline to carry 16 bcm of gas annually, of which 6 bcm is for the Turkish domestic market.  SOCAR (State Oil Company of Azerbaijan) will own 80% of the pipeline, with the remaining 20% divided between the Turkish pipeline companies BOTAS (Turkish Petroleum Pipeline Corporation) and TPAO  (Turkish Petroleum Corporation.)  The project is estimated to cost approximately $7 billion, and is scheduled for completion in 2018.

The two signators called the intergovernmental agreement "historic."  Other observers were equally impressed.  Mahmut Mucahit Findikli, head of the Turkish parliament's energy committee, told SE Times, "This is not only a very optimal way to meet European gas diversification needs, but also very important for our country as it increases Turkey's role as a transit country."  Charles University's Caspian energy expert Jan Sir noted the project "Keeps alive the stategic rationale" for a southern energy corridor to provide Europe with non-Russian gas.  "For Azerbaijan, it opens new export opportunities and provides the desired diversification of external relations and stable income...With the opening of the Caspian to the West, Turkey's Caucasus connection would become stronger and Russia would lose much of its influence over the post-Soviet region."  World Energy Council's Hilal Pataci issued a warning, however, that the agreement could turn into a "problem in Russia-Turkey relations in the upcoming years."

Pataci's warning has been echoed by Gazprom, the Russian government-owned gas company.  In response to a Turkish request for additional Russian gas (because of an explosion halting imports on the Iran-Turkey pipeline), Gazprom graciously agreed and noted the company has been a dependable supplier.  It warned, however, that if TANAP were completed in 2018, "Turkey could then apply for help to Baku."

One has to wonder, however, how much impact a mere 10 bcm per year of natural gas will have on Gazprom's European monopoly.  The amount represents only about 2% of European gas consumption.

Saturday, September 11, 2010

Ukraine Denies Naftogaz-Gazprom Merger



Gazprom CEO Alexei Miller and Ukrainian Energy and Fuel Minister Yuriy Boyko have held talks on creating a joint venture between the ailing Ukrainian natural gas company Naftogaz and Gazprom. At the end of August, a Gazprom spokesman said talks were at an advanced stage, and CEO Miller told the press that the merger would lead to a fall in the price of gas for the average Ukrainian household (The St. Petersburg Times, 31 August 2010). Minister Boyko subsequently ruled out a merger, stating that Ukrainian President Viktor Yanukovych would only authorize a merger on an equal footing and in light of the country's national interests (Oil and Gas Eurasia, 08 September 2010).

The merger talks may have been scuttled in light of the appearance of a White Knight, German Chancellor Angela Merkel. Yanukovych had previously proposed the creation of an international consortium to modernize the pipeline system in the Ukraine, through which 80% of Russian gas sales to Europe has to pass. The European Union had signed an agreement to begin modernization, but there had been no follow-up. According to Korrespondent.net, however, Chancellor Merkel has stepped forward and stated that Germany is prepared to invest in the reconstruction of the Ukrainian gas transport system (Oil and Gas Eurasia, 31 August 2010).

Ukraine is not interested in being solely a transport country, however, Minister Boyko says the country is actively engaged in attracting partners to develop gas fields on the shelf of the Black and Azov seas. Boyko said he was seeking international partners in light of the expense and risk of the development projects (Oil and Gas Eurasia, 10 September 2010).

Dr. James J. Coyle is available to speak to your organization or at your event. Please contact him at jimcoyle@verizon.net.