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Energy news
Bulletine Energy 

2017 June 23 ( Friday )  10:35:54
Print version


SOCAR to Receive AZN 250 Million of Subsidies from State Budget to Cover Gas Expenses

Baku/23.06.17/ Turan: The Azerbaijani government decided to revise the state budget for 2017.

Speaking yesterday before the deputies, Finance Minister Samir Sharifov said that this was caused by the need to ensure the stability of the banking and financial system of the country.

Revenues of the revised state budget are projected at 16.766 billion manat, which is 511 million manat more than the initial forecast for this year. Expenses are projected at the level of 17.941 billion manat, which is 1.041 billion manat more compared to the initial forecasts. The deficit of the state budget is 1.175 billion manat (an increase of 530 million manat) - 1.8% of the expected GDP in 2017.

The increase in expenses is also connected with the allocation of additional funds to the Azerbaijan Deposit Insurance Fund and the State Oil Company of Azerbaijan (SOCAR).

In 2016, the produced natural gas of SOCAR when sold in the domestic market (the cost is determined by the Tariff Council - 100 manat per 1,000 cubic meters) turned out to be below the cost price. Therefore, to cover losses of SOCAR, it was considered expedient to allocate subsidies from the state budget in the amount of AZN 250 million.

Note that after two devaluations in 2015, the local currency decreased almost twofold. To cover the needs of the domestic market SOCAR acquires one-third of the gas produced in the Shah Deniz-1 project, starting from 2007. With high oil prices, when the local currency was more expensive than the US dollar, it was very profitable to purchase gas from a financial point of view. However, since early 2016, natural gas in the volume of 3.5 bcm supplied to the local market (which is purchased for currency), has suddenly become a commercially inefficient business for SOCAR. SOCAR purchases gas from Shah Deniz at an attractive price, but, in transferring to manat and taking into account the costs of transportation and distribution, it incurs losses.

Therefore, starting from January 1, 2017, the Government of Azerbaijan decided to apply differential tariffs for consumed gas for the population. For those who use more than 1,700 cubic meters of gas, the new tariff is 200 manat per 1,000 cubic meters for the excessive volume. For the energy sector, for the consumed gas, the fee was increased by 20% (earlier, they paid 100 manat).

In Azerbaijan in 2016, the population used 3.1 bcm of gas, the energy sector used 4.5 bcm, and other consumers used 2 bcm. Another 0.8 bcm was technical losses (these figures also include debts of the consumers to SOCAR). In the country at the beginning of 2017 there were 2 million gas consumers. -0-

SOCAR Methanol Names Factors Restraining Production Growth

Baku/23.06.17/ Turan: The SOCAR Methanol plant in Baku expects to reach 500 thousand tons of methanol capacity per year by 2019, Elnur Mustafayev, General Director of the company, said during the conference Methanol 2017 in Moscow, Plastinfo reports.

"Since October last year - since the State Oil Company of Azerbaijan got a methanol plant for management - the enterprise has produced 80 thousand tons of products, and the plan for the current year is 250 thousand tons." In general, the design capacity of the plant is 650-700 thousand tons / year," Mustafayev said.

Mustarfayev said the main factor restraining the growth of production volumes is restrictions on the raw materials and the demand. "The expected increase in gas production in Azerbaijan in 2019 will significantly increase the volume of output." "To this end, the company will already have capital repairs in 2017," the company's CEO said.

In the future, according to him, the company expects to make preventive maintenance not annually, but once in two years.

"Speaking about the increase - and even the launch - of production, we must necessarily realize from whom the final demand will come," the expert argues. "Of course, all manufacturers prefer to work under long-term contracts, but sometimes they have to go out to the spot market," he said.

In this regard, Mustafayev stressed the role of local sales - it is necessary to increase their share at least to 10-15%.

He also noted the importance of logistics channels. Transportation of methanol by SOCAR takes place according to the scheme "railroad-trans-shipment-sea-final consumer". -0-

SOCAR to Complete 2D Seismic Survey in Offshore Field in August

Baku/23.06.17/ Turan: Azneft Production Association (SOCAR's production entity) plans to complete 2D seismic survey in August 2017 at the Sangachal Deniz-Duvan Deniz-Khara-Zira offshore field.

According to SOCAR, the 2D seismic survey in this field began in March this year. Fieldwork is planned to be completed in August this year. The investigations are carried out to determine the residual reserves of the Sangachal Deniz-Duvan Deniz-Khara-Zira deposit, to refine its tectonics and geological structure, to create a new model and to predict the distribution range of hydrocarbons.

According to SOCAR, after the field works are completed, the processing and interpretation of the results of the received seismic data will begin.

* The Sangachal Deniz-Duvani-Deniz-Khara-Zire mine was discovered in 1963.

Part of Baku and Absheron Region to Remain without Gas Today

Baku/23.06.17/ Turan: Today there will be restrictions in supplying natural gas in three districts of Baku.

According to the Azerigaz PA, in connection with the maintenance work on June 23 from 09:00 until completion of work in the Yasamal, Sabunchu and Binagadi districts of Baku, there will be restrictions in the supply of natural gas.

It is noted that the work carried out can also affect the gas supply to the villages of Chisek and Mushvigabad of the Absheron district, as well as parts of the city of Khirdalan. It is reported that the work will be completed within a day and the gas supply will be restored.

PA Azerigaz therefore requests all consumers to be cautious when consuming natural gas and observe the rules of technical safety. -12D-

Azerbaijan Increased Electricity Production by 3% in January-May

Baku/23.06.17/ Turan: The volume of electricity generation in Azerbaijan in January-May 2017 amounted to 9 billion 591.1 million kW / h, which is 3% higher than the same period last year.

As Turan was told in the State Statistics Committee, the production of commodity electricity in the country for the reporting period amounted to 9 billion 196.2 million kW / h (an increase of 3.4%).

The thermal power plants of Azerenergy JSC (state monopoly for the production of electricity) in January-May 2017 produced 8 billion 313.9 million kW / h of commodity electricity (an increase of 3.4%), and the hydroelectric power plants produced 857.5 million kW / hour (growth By 3.9%).

In addition, in January-May 2017, the republic produced wind power in the amount of 7.4 million kW / h (6.3% decline) and solar power - 17.4 million kW / h (24% decline).

In 2016, electricity production in Azerbaijan amounted to 23 billion 73.9 million kW / h. -0

Representatives of Glencore and Qatar Foundation in Board of Directors of Rosneft

Baku/23.06.17/ Turan: Rosneft shareholders elected a new board of directors at the annual meeting, which included two new members - the Chief Executive Officer of Glencore Plc. Ivan Glazenberg and the President for Research and Development of Qatar Foundation Fayzal Al Suvaydi, Interfax reported from the meeting.

Meanwhile, the head of the Ministry of Energy Alexander Novak and the Chairman of the Board of Gazprombank Andrei Akimov left the company's Board of Directors.

At the end of 2016, the Swiss trader Glencore in a consortium with the sovereign Qatar Foundation, in the framework of privatization, bought a 19.5% stake in Rosneft. In addition, the largest shareholders of Rosneft are state-owned Rosneftegaz (50% + 1 share) and British BP Russian Investments Limited (19.75%).

From BP the new composition of the Board includes its former members: BP President Robert Dudley and the President for the region of Brazil, Uruguay, Venezuela and Colombia Guillermo Quintero. -0-

Gazprom Solved Problem with Quality of Gas Supplied to Europe

Baku/23.06.17/ Turan: Gazprom resolved the problem with the quality of gas supplied through the Yamal-Europe gas pipeline to Poland and Germany, Deputy Chairman of the Board of Gazprom Alexander Medvedev said to Bloomberg in Prague.

"It was a one-time situation, and it has already been corrected," he said.

At the same time, Medvedev called the reaction of the Polish side "an attempt to make a mountain out of a molehill".

As it was reported, on the morning of June 21 the Polish operator of the Gas-System gas main suspended reception of gas from Yamal-Europe due to its inadequate quality. The German Gascade also reported on the reduction of gas reception in Germany"s gas main system by 8%.

According to Interfax, it is about the increased level of moisture in the supplied gas. The reason for the jump in the level of water in the commodity flow could be a violation of the standards for repair work carried out in the Russian territory. -0