Tag Archives: gas

Azerbaijan strikes gas deal with the EU

SEPT. 25 2013 (The Conway Bulletin) — Rovnag Abdullayev, the chairman of Azerbaijan’s state energy company SOCAR, was emphatic when describing a deal between the consortium developing the Shah Deniz II gas field in the Azerbaijani sector of the Caspian Sea and energy companies in the EU.

It was, he said, the “biggest gas deal in the history of Azerbaijan” and it also marked “the beginning of direct links between Azerbaijan’s huge gas resources and the European markets.”

Clearly for Mr Abdullayev the deal to send around 10b cubic metres of gas every year to Europe for 25 years was historic.

It’s certainly big and important. The deal was worth $100b, reportedly, to the energy consortium developing Shah Deniz II — BP, Statoil and SOCAR — and allows Europe to reduce its dependency on Russia for it gas supplies.

Geopolitically, the gas deal has another important undertone.

Russia is the major loser in the deal. It has been unable to secure extra gas supplies from Azerbaijan. Azerbaijan has also been able to establish itself as a key competitor to Russia for the European gas market.

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(News report from Issue No. 153, published on Sept. 25 2013)

Azerbaijan sells more gas to Georgia

SEPT. 23 2013 (The Conway Bulletin) — Azerbaijan has steadily increased its gas sales to Georgia over the past few years, Gagamali Seyfullayev, head of state energy company SOCAR’s gas export department, told media. This year Azerbaijan will pump about 1b cubic metres of gas to Georgia, up from 775m in 2011.

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(News report from Issue No. 153, published on Sept. 25 2013)

Hyundai signs contract in Turkmenistan

SEPT. 13 2013 (The Conway Bulletin) — In a consortium with two other unnamed companies, South Korea’s Hyundai Engineering & Construction won a $3.4b contract to build an ethane treatment plant in Turkmenistan, media reported. The contract, with Turkmengas, demonstrates just how wealthy Turkmenistan has become over recent years.

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(News report from Issue No. 152, published on Sept. 18 2013)

Chinese pipeline to pass through Tajikistan

SEPT. 14 2013 (The Conway Bulletin) — Rounding off a tour of Central Asia, Chinese president Xi Jinping signed a deal with his Tajik counterpart, Emomali Rakhmon, to build a 400km gas pipeline crossing Tajikistan to China from Turkmenistan. The deal, announced on the side lines of a regional summit in Bishkek, is a major boost for Tajikistan.

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(News report from Issue No. 152, published on Sept. 18 2013)

Rolls Royce wins pipeline contract in Kazakhstan

SEPT. 11 2013 (The Conway Bulletin) — Britain’s Rolls Royce has won a $175m contract to build compressor units to pump gas along a 1,115km pipeline from Kazakhstan to China, media reported quoting Beimbet Shayakhmetov, general director of the Asia Gas Pipeline. The pipeline is one of several being built in Central Asia.

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(News report from Issue No. 152, published on Sept. 18 2013)

Azerbaijan says Nabucco is not dead

SEPT. 5 2013 (The Conway Bulletin) — Maybe, just maybe, the Nabucco pipeline project is not dead yet. That was the message given out by Natik Aliyev, Azerbaijan’s oil and gas minister, on Sept. 5.

Nabucco was the ambitious project backed by Central European countries to pump gas from Azerbaijan’s sector of the Caspian Sea.

After years of planning and negotiations it lost out on the lucrative contract earlier this year to a rival bid, the Trans-Adriatic Pipeline (TAP). TAP will pump Azerbaijani gas to Europe through the Balkans and under the Adriatic Sea to Italy.

And that looked like that for Nabucco.

Except that now Mr Aliyev has opened up the possibility of building another pipeline to carry gas to Europe.

“Nabucco is not dead,” he said, according to media reports. “It depends on our resources and I think that we have enough resources to increase production.”

Azerbaijan and Europe have become increasingly dependent on each other over the past few years. Europe has been desperately trying to reduce its dependency on gas from Russia, seen as an unreliable partner. Azerbaijan has also been keen to diversify its client base away from Russia.

When the Caspian Sea gas field Shah Deniz II starts production in 2019/2020 it will transform Azerbaijan’s energy outlook. It may also need more pipelines snaking from the Caspian Sea towards Europe.

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(News report from Issue No. 151, published on Sept. 11 2013)

Armenia chooses Russia and joins Customs Union

SEPT. 11 2013 (The Conway Bulletin) — Serzh Sargsyan, the Armenian president, sent shock waves across the South Caucasus and Europe when he signed Armenia up for Russia’s Customs Union.

The Kremlin set up the Customs Union in 2011 to ease trade between its partners and to draw them in closer. Commentators have dubbed it a Eurasian Union to counter the European Union.

Until Armenia moved into the Customs Union, only Kazakhstan and Belarus had joined. Kyrgyzstan has said it will join and Tajikistan has also been eyeing up membership.

Few though predicted Armenia’s jump towards Russia.

Mr Sargsyan’s decision to move into the Customs Union was a snub for European diplomats.

It’s not, perhaps, that surprising though. Armenia has been casting around for friends to provide a bulwark against Azerbaijan and Turkey. Armenia is still officially at war with Azerbaijan over the disputed region of Nagorno-Karabakh. Turkey is a key Azerbaijan ally.

Russia has given financial and military support to Armenia and maintains a large army base in Armenia. Gazprom, the Russian gas monopoly, also owns 80% of Armenia’s gas distributor and has been trying to buy the outstanding 20%.

Even so, Armenia’s move into the Customs Union will be felt across the region for years.

(News report from Issue No. 151, published on Sept. 11 2013)

Azerbaijan may need more pipelines

SEPT. 5 2013 (The Conway Bulletin) — Azerbaijan may need another gas pipeline once Shah Deniz II starts production in 2019/2020, media quoted the Azerbaijani energy minister, Natik Aliyev, as saying. His statement may breathe fresh life into the Nabucco project which lost out on pumping gas to Europe earlier this year.

(News report from Issue No. 151, published on Sept. 11 2013)

Kazakhstan approves new energy code

AUG. 29 2013 (The Conway Bulletin) — After several months of deliberation, the Kazakh government signed into law a new energy saving code that should turn the country into a beacon of green, power-saving efficiency in the former Soviet Union.

For foreign investors and business, the code — dubbed Energy Efficiency 2020 — is something of a quandary. It will create opportunities for some businesses but also additional cost for industry.

Kazakh President Nursultan Nazarbayev decreed that by 2015, the country needed to reduce its power consumption by 10%. Energy Efficiency 2020 aims to cut this by 25%.

Mr Nazarbayev’s motivation for this decision may have been EXPO-2017, a global opportunity to showcase his gleaming capital, Astana. Part of the EXPO-2017 message is clean, efficient energy.

In any case, the ramifications will mainly be felt by large industry. Kazakh media reported that under the new code it will process energy audits of 2,000 industrial sites.

Those businesses that don’t pass the audit will have to buy and implement a series of energy saving technologies and techniques.

Another part of Kazakhstan’s society that will be heavily targeted to improve energy efficiency is insulation in Soviet-era housing. This is often leaky, spilling out much of the heat generated by the centrally-controlled system.

It is unclear who will foot the bill for this ambitious target, but the government said it has already allocated $7.1b for various energy saving projects.

(News report from Issue No. 150, published on Sept. 2 2013)

Azerbaijan joins pipeline consortium

JULY 30 2013 (The Conway Bulletin) — Azerbaijani state energy company SOCAR (20% stake), BP (20%) and Total (10%) joined the consortium developing the Trans Adriatic Pipeline (TAP) that will pump gas from the Azeri sector of the Caspian Sea to Italy, TAP said. The other members of the consortium are Statoil (20%), Fluxys (16%), E.ON (9%) and Axpo (5%).

(News report from Issue No. 146, published on Aug. 5 2013)