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Energy news
Bulletine Energy 

2017 July 03 ( Monday )  10:24:30
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Why Did Head of Gazprom Hold Talks with President of SOCAR on Sunday?

Baku/03.07.17/ Turan: Alexey Miller, Chairman of the Management Committee of PJSC Gazprom, held talks with the President of SOCAR Rovnag Abdullayev in St. Petersburg yesterday.

According to the press service of Gazprom, the speech, in particular, was about supplies of natural gas to Azerbaijan.

It should be noted that Azerbaijan imported Russian gas in the period from October 2000 to December 2006. Then the supplies were stopped in connection with the launch of the giant gas condensate field Shah Deniz. A third of the produced gas from this field is supplied to the domestic market of Azerbaijan.

Gazprom appeared in the Azerbaijani market in 2004. Prior to this, Russian gas was supplied by the private company Itera.

The delivery of Russian gas to Azerbaijan was resumed only in the fall of 2015. Then, Gazprom Export (a Gazprom subsidiary) supplied only 108 mcm of Russian gas for the needs of the Azerbaijan Methanol Plant (AzMeCo).

It should be noted that the Gazprom press service, under the official announcement of the meeting of Miller and Abdullayev, placed reference information on the agreement between Gazprom Export and AzMeCo (currently SOCAR Methanol, which was established in November 2016), signed September 11, 2015. According to the document, it has a long-term character and the Azerbaijani side has the right to import annually up to 2 bcm of natural gas.

Judging by the background information, at the meeting, Miller and Abdullayev talked about supplying the methanol plant with raw materials.

According to the results of the first five months of this year, SOCAR Methanol produced 70,252.7 tons of methanol. According to the General Director of the enterprise Elnur Mustafayev, this year the plant plans to produce 250 thousand tons of methanol.

The annual production capacity of SOCAR Methanol is about 700 thousand tons. To achieve these indicators, it is necessary to supply the plant with natural gas in a volume of about 450-500 mcm.

Note that in 2016 Azerbaijan imported small volumes of natural gas (296 mcm), but not of Russian origin. In the first quarter of this year, imports almost remained at the same level, despite a slight increase in production in the country.

* According to Turan estimates, since 2000 Azerbaijan has imported 25.8 bcm of Russian gas for about $ 1.67 billion.

Export of Gas from Shah Deniz to Turkey Falls by 4%

Baku/03.07.17/ Turan: The export of Azerbaijani gas produced within the framework of the Shah Deniz-1 project in January-April 2017 amounted to 2,173.71 mcm.

According to the Council on Regulation of the Energy Market of Turkey (EPDK), this is 3.8% lower than the same period of 2016.

In April 2017, the export of Azerbaijani gas to Turkey amounted to 576.84 mcm. At the same time, in the total volume of gas supplies to Turkey in April, Azerbaijani gas accounted for 13.57%.

In general, during the reporting month, gas exports to Turkey amounted to 4,250.26 mcm (an increase of 19.61%).

According to the EPDK, in 2016, Azerbaijani gas supplies to Turkey amounted to 6,479.87 mcm. -12D-

SOCAR Plans to Produce 1.3 Mcm of Gas Daily from Two Wells

Baku/03.07.17/ Turan: SOCAR plans to commission two production wells in the Bulla Deniz seabed gas condensate field within three months.

According to SOCAR, Well No. 78, which is being drilled from Offshore Platform No. 6, will be put into operation in July. The daily production rate of this well is expected to be 150 tons of condensate and 500,000 cubic meters of gas.

In September, it is planned to commission Well No. 123 from Offshore Platform No. 122. The daily production rate of this well is expected to be 150 tons of condensate and 800,000 cubic meters of gas.

According to SOCAR, in 2018 it is planned to commission two more production wells in the Bulla Deniz field.

In addition, in 2018, it is planned to commission new stationary Offshore Platform No. 12, construction of which began in Bulla Deniz in the first quarter of this year, SOCAR reports.

Platform No. 12, designed to drill 5 production wells, will be installed at a depth of 30 meters. The expected total daily production from the wells will be 2.5 mcm of gas and 500 tons of condensate.

The offshore field Bulla Deniz was discovered in 1973 and put into operation in 1975. In August 2013, in exploration drilling at a depth of 5,900 - 6,100 meters, new gas layers were discovered. The development of the field is handled by the Oil and Gas Production Department named after N. Narimanov (a unit of Azneft Production Association). -12D

SOCAR Receives Permission to Trade Natural Gas in Ukraine

Baku/03.07.17/ Turan: The National Commission for Regulation of Energy and Communal Services (NCRECS) of Ukraine issued a license for natural gas supplies to the company Trade House SOCAR Ukraine (SOCAR"s daughter), Oil News reports.

From July 1, 2017, according to Ukrainian legislation, the operator of the gas transportation system, Ukrtransgaz, will not be able to accept applications for transportation of gas from companies that do not have a license from NCRECS.

It should be noted that Trade House SOCAR Ukraine started trading gas in the Ukrainian market at the beginning of 2017. On December 30, 2016, the company entered into an agreement with the company ERA Trading on the purchase of up to 131 mcm of gas for delivery in 2017. Before this, on December 14, 2016 the company signed an agreement with Ukrtransgaz for the transportation of 180 mcm of natural gas from January to December 2017, the publication notes.

SOCAR Ukraine owns a network of filling stations in Ukraine and manages 60 of them. -0-

Gas Production in Russia Increased by 11.3% in H1 of 2017

Baku/03.07.17/ Turan: The volume of gas production in Russia in January-June of 2017 increased by 11.3% compared to the same indicator of 2016 and amounted to 342.543 bcm. Such data are contained in the operational summary of CDU TEK.

It should be borne in mind that in February 2017 there is 1 day less than in February 2016, CDU TEK notes.

In June, Russia produced 51.282 bcm of gas (an increase of 20.6% compared to June last year, when 42.510 bcm was produced).

CDU TEK does not publish data on Gazprom"s extraction separately. They are included as "account" ones in the line Other Subsoil Users, which for the first half of the year produced 257.052 bcm of gas (37.967 bcm in June).

One of the largest independent gas producers, NOVATEK produced 23.367 bcm in six months (in June - 3.645 bcm). Operators of the PSA in January-June produced 12.494 bcm (in June - 1.725 ​​bcm).

Of the oil companies, the following ones produced the largest volumes of "blue fuel" during the period under review: Rosneft - 23.776 bcm (in June - 3.715 bcm), LUKOIL - 10.421 bcm (1.771 bcm), Surgutneftegaz - 5.026 bcm (0.811 bcm), and Gazpromneft - 7.224 bcm (in June - 1.114 bcm). -0

Rosneft Also Wants to Become Exporter of Gas to Europe

Baku/03.07.17/ Turan: Rosneft sees prospects for exporting its gas to Europe in connection with the antimonopoly measures taken by the European Commission against Gazprom, Vlada Rusakova, Vice President of Rosneft said, according to Interfax.

She noted that "the strategic priorities of the company in the field of gas business development are Russian and foreign LNG projects, monetization of natural gas and associated petroleum gas in the east of the country, both through access to the prospective infrastructure, and through the production of products with a high value added."

In this regard, Rusakova said: "It is also possible to arrange additional supplies of Russian gas to Europe in connection with the antimonopoly restrictions imposed on Gazprom, provided that it enters new markets and new consumers for whom Gazprom is not the supplier." -0

Gas Prices in Uzbekistan Increase by 7%

Baku/03.07.17/ Turan: In Uzbekistan, since July 15, the tariffs on natural gas for the population will increase by 7%.

In particular, the cost of 10 cubic meters of gas in the presence of a meter since July 15 will be 2634 soums ($ 0.67) instead of the current 2461 soum (growth - 7%). This information is available on the website of the National Holding Company Uzbekneftegaz.

If there is no meter, then for 10 cubic meters of gas used for cooking and hot water supply, it will be necessary to pay 4,555 soums ($ 1.15) instead of 4,225 soums (growth - 7.8%), and for heating - 2,112 soums instead of 1,973 soums (growth - 7%).

Recall that the tariffs for utilities last rose on October 1, 2016.

For comparison, we note that currently in Azerbaijan, 10 cubic meters of gas for the population costs $ 0.58, if during the year the consumer does not exceed the limit of 1,700 cubic meters. -12D

Iran and Total to Sign Gas Agreement for $ 4.8 Billion July 3

Baku/03.07.17/ Turan: Iran and French Total on July 3 will sign a gas agreement for 4.8 billion dollars, reports AFP.

"The international agreement on the development of Phase 11 of the South Pars field will be signed on Monday in the presence of the Oil Minister, the heads of Total, the Chinese company CNPCI and the Iranian Petropars," the representative of the Iranian Oil Minister told the agency.

South Pars is a giant oil and gas field located on the shelf of the central part of the Persian Gulf, 100 kilometers from the Iranian coast. Its total gas reserve is 12 tcm.

In November 2016, Iran signed a preliminary agreement with Total on the development of Phase 11. -0-

Trump Promises to Increase Export of US Energy Resources

Baku/03.07.17/ Turan: US President Donald Trump promised a "golden era" to the US energy business by increasing exports of natural gas, coal and oil.

"We are meeting here today to launch America"s new energy policy," Trump said during an event at the Energy Ministry, which was attended by representatives of the oil and coal industry, as well as workers" unions that build pipelines.

"We will export US energy resources around the world," said the President quoted by the Voice of America.

The so-called "energy dominance" policy, in fact, represents a rebranding of the efforts begun with the previous administration to export liquefied natural gas (LNG) to the markets of Eastern Europe and Asia. The US will also offer to export coal to Ukraine. -0

Transit of Gas through Ukraine Increased by 21% in H1 of 2017

Baku/03.07.17/ Turan: Transit of natural gas through the territory of Ukraine increased by 21% in the first half of 2017 compared to the same period in 2016 - up to 45.7 bcm. This was announced on Sunday by the adviser of the Minister of Energy and Coal Industry of Ukraine Maxim Bilyavsky.

"If such regimes are maintained, by the end of the year we can expect about 90 bcm of transported gas for European consumers," he said, referring to the data of the company Trunk Gas Pipelines of Ukraine.

Bilyavsky also said the import of natural gas to Ukraine (from the EU countries by reverse schemes) in the first half of the year more than doubled, to 7 bcm. Gas production within the country reached 10.3 bcm in this period (growth of 3%). The injection of gas into underground gas storages also increased to 3.7 bcm.

It should be noted that the head of Gazprom Alexei Miller said at a June 30 press conference that the maximum volume of Russian gas transit through Ukraine after 2019, when the gas transit contract between Naftogaz Ukraine and Gazprom from 2009 will expire, will not exceed 15 bcm.

* According to Gazprom, as of the end of 2016, 82.2 bcm of Russian gas was pumped through Ukraine on transit compared to 67.1 bcm in 2015.

Societe Generale Reduces Forecast of Oil Prices for Second Time

Baku/03.07.17/ Turan: Analysts of Societe Generale for the second time since the beginning of June have lowered the forecast for oil prices for WTI and Brent for the next two years against the backdrop of increased production in the US, Libya and Nigeria.

According to their estimates, the average cost of WTI in 2017 will be $ 49.45 per barrel against the previously expected $ 53.8 per barrel, and next year - $ 51.5 per barrel instead of $ 57.5.

It is expected that the average price of Brent this year will be $ 52 per barrel, and next year - $ 54 per barrel. Earlier, the forecast was $ 56.4 and $ 60 per barrel, respectively. -0