Tag Archives: hydrocarbons

China’s AIIB lends Azerbaijan’s SGC $600m

TBILISI, DEC. 21 2016 (The Conway Bulletin) — The China-led Asian Infrastructure Investment Bank (AIIB) pledged to lend Azerbaijan’s Southern Gas Corridor company (SGC) $600m to finance its share of the TANAP gas pipeline that will pump gas from the Caspian Sea to Europe.

The loan heaps more cash from international institutions onto the project. Media reports said that the World Bank had also pledged $800m to the project. This follows loan deals last week from the Asian Development Bank and previously from the European Bank for Reconstruction and Development (EBRD).

Announcing its loan, the AIIB said that TANAP was a vital infrastructure project.

“This crucial upgrade of energy infrastructure between Asia and Europe will further strengthen the economy of Azerbaijan while underpinning energy security in Turkey, as well as several countries in southern Europe,” a statement quoted AIIB’s vice President and chief investment officer, DJ Pandian as saying.

The World Bank also said that TANAP was vital to support.

The total cost of TANAP is slated to be between $10b and $12b. SOCAR, Azerbaijan’s energy company, owns a 58% share in the project; Turkey’s Botas owns a 30% stake and BP owns a 12% stake.

ENDS

(News report from Issue No. 310, published on Dec. 23 2016)

Azerbaijan’s SOCAR signs deal with Lotos

DEC. 22 2016 (The Conway Bulletin) — SOCAR Trading, part of the Azerbaijani state-owned energy company, has agreed to send crude oil, liquefied petroleum gas (LPG) and liquified natural gas (LNG) to Poland’s Lotos Oil, media reported. Lotos Oil is listed on the Warsaw stock exchange and is the country’s second largest oil producer. This year it also bought 2m barrels of crude oil from Iran.

ENDS

(News report from Issue No. 310, published on Dec. 23 2016)

FDI in Azerbaijan falls by 5.3%

DEC. 19 2016 (The Conway Bulletin) — Foreign direct investment into Azerbaijan fell by 5.3% in the first nine months of the year, the Azerbaijani central bank said, more evidence of the country’s sharp economic decline. Oil revenues form the backbone of the Azerbaijani economy. These have collapsed over the past couple of years, mirroring a sharp drop in prices. Oil majors have been less willing, too, to invest in Azerbaijan’s oil sector because of the price fall.

ENDS

(News report from Issue No. 310, published on Dec. 23 2016)

Chinese win LNG contract in Kazakhstan

DEC. 20 2016 (The Conway Bulletin) — Wison Engineering, a Chinese construction company that specialises in the oil and chemical sectors, said it had been awarded a contract to build a liquefied natural gas (LNG) facility in the Zhambyl region of southern Kazakhstan by Astana Trans Oil, a Kazakh state- linked company. Wison said the deal was part of China’s Belt and Road economic policy to develop trade and transport links through Central Asia. It said the plant would be operational by 2018 but gave no financial details.

ENDS

(News report from Issue No. 310, published on Dec. 23 2016)

Seimens eyes up Turkmenistan

DEC. 19 2016 (The Conway Bulletin) — German manufacturer Seimens is reportedly eying up extending credit to Turkmenistan to build the TAPI gas pipeline that will run to India across Afghanistan and Pakistan. Media said that the $2.5b loan deal would hinge around Turkmenistan buying Seimens equipment for its compressor stations. Turkmenistan considers the TAPI pipeline deal to be vital for its future economic success.

ENDS

(News report from Issue No. 310, published on Dec. 23 2016)

Kazakh energy company confirms deal with China’s CEFC to sell refinery

ALMATY, DEC. 15 2016 (The Conway Bulletin) — Shrugging off a Romanian investigation into the privatisation in 2003 of its main refinery asset, KMG International, the Black Sea orientated subsidiary of Kazakhstan’s state-owned energy producer Kazmunaigas, reaffirmed its commitment to sell a 51% stake in the company for $680m to China’s CEFC.

If the deal, first put together in May, does go ahead it will be a relief to the Kazakh government which has been trying to raise much needed cash to see it through a steep economic downturn linked to a sharp drop in oil prices.

For China, the 51% stake in KMG International would give it control over the Petromida refinery on Romania’s Black Sea coast near Constanta, which has a refining capacity of 5m tonnes of oil a year. The company also controls hundreds of petrol stations across Romania, Bulgaria, Moldova and Georgia through the Rompetrol brand.

KMG International’s CEO, Zhanat Tussupbekov, said the financial backing of CEFC would allow the company to expand.

“The strategy of KMG International with its new major shareholder aims at developing major projects, Romania being the business priority,” he said.

“We plan to increase the refining capacity to 10m tonnes of crude per year, to build up to 200 new fuelling points, to develop industrial services in upstream and downstream areas, as well as to build a co-generation plant on Petromidia platform.”

Importantly, though, the deal still needs regulatory approval from the EU, Romania and China.

The original deal for the sale had stalled because of a Romanian investigation into the purchase of Rompetrol, which owned the Petromida refinery, by Dinu Patriciu in 2003 for $760m. He sold the refinery four years later for $1.6 to Kazmunaigas. Patriciu died in 2014. The investigation into the deal doesn’t appear to be concluded.

Kazmunaigas International owns 55% of the company that owns the Petromida refinery. The Romanian government owns the other 45% of Petromida.

ENDS

(News report from Issue No. 310, published on Dec. 23 2016)

Kazakh energy ministry forecasts Kashagan production

DEC. 14 2016 (The Conway Bulletin) — A report from Kazakhstan’s energy ministry forecast total production at Kashagan to reach 308m tonnes in total by 2041, the KazTAG news agency reported. This is important because it shows the size of the oil field and just how much oil the consortium developing it can expect to produce during the lifespan of the production sharing agreement. ENI, Shell, Kazmunaigas, Inpex, Total, ExxonMobil and CNPC are the consortium members.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Tethys’ Kazakh subsidiary resumes sales

DEC. 12 2016 (The Conway Bulletin) — London-listed Tethys Petroleum said its Kazakh subsidiary had restarted gas sales to the state- owned distributor Intergas Central Asia after a seven-week suspension. Intergas Central Asia cut the gas supply contract with Tethys Aral Gas in October. At the time, Tethys was locked in a row with Kazakh investors who had promised to deliver a cash injection.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Russia argues with Georgia over gas

DEC. 15 2016 (The Conway Bulletin) — At a meeting in Vienna on Dec. 13, Gazprom chiefs told Georgia that a long-standing deal by which it could take a 10% chunk of gas that Russia exports to Armenia via Georgian territory should be scrapped, Georgian energy minister Kakha Kaladze told media. The two sides held similar negotiations last year. Russia wants the gas deals to move onto a monetised basis, Georgia wants to swap deal to remain. Last year a swap deal was retained.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Stock market: OPEC

DEC. 16 2016 (The Conway Bulletin) — The collapse in oil prices since 2014 has hit the economies of Central Asia and the South Caucasus. Every now and then, though, a new touted solution emerges, be it maximising oil output to earn as much as possible or freezing output and waiting for sunnier days.

Both Azerbaijan and Kazakhstan, the main producers in our region, have played with the idea of “freezing” oil production, although this is more a reflection of a drop in production at aging oil fields rather than a conscious choice. An agreement reached between members of OPEC and other producers seems to have solved the headache in the medium-term. The parties pledged to cut output, forcing prices up.

This measure, however, lasted just a few days.

After the US Federal Reserve raised interest rates for the first time in one year on Wednesday, the US dollar soared against all commodities, cancelling out the progress made after the OPEC-sponsored meeting.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)