No easy to break gas dominance of Russia

Reuters         Henning Gloystein


* Russia's EU market share to stay around 30 pct
* New supplies seen, mainly from overseas LNG

The European Union aims to diversify away from Russian natural gas supplies, yet Reuters research indicates the EU's biggest provider a decade from now could easily still be Russia.

Billions are to be spent on piping gas from Azerbaijan while new finds in Africa and eastern Mediterranean also promise new supply for the EU, which currently buys mostly from Russia and Norway.

Europe also gets liquefied natural gas (LNG), mostly from Qatar, and the U.S. shale boom could free up LNG exports from there in coming years, too.

But growth in Europe's demand for gas will eat up much of the new potential supply, and the Russians show little willingness to fade away as they gear up to defend their position through massive projects, such as the $35 billion South Stream pipeline to Italy.

"Russia will continue to remain Europe's primary energy supplier, including natural gas supplies, for many years and possibly decades," a U.S. congressional research paper on Europe's energy security said in March.

Reuters' own research indicates that in 2023 Russia will likely remain the dominant supplier, as it boosts exports while EU and Norwegian output declines.

OPEC's Oil Exports Revenue Breaks New Record But Split Deepens

The Wall Street Journal   Benoit FAUCON

Revenue from petroleum exports in the Organization of the Petroleum Exporting Countries broke a new record in 2012 but the earnings of some members are declining amid higher budgetary needs, underscoring a deepening rift between producers benefiting from higher oil prices and those who don't.

Mounting inequalities within OPEC come ahead of an expected debate later this year over whether it should formally cut its production for the first time in five years.

In its annual statistical report, OPEC said its oil exports revenue, which include crude, natural-gas liquids and products, rose by 9.2% to $1.261 trillion in 2012, compared to a previous record of $1.155 trillion the previous year.

Gulf Arab monarchies took advantage of higher oil prices and of a gap left by Iranian sales hit by sanctions. While Saudi oil revenue rose by 6%, Iran's earnings from the commodity fell by 12%.

But others have also been hurt by new competition from booming U.S. oil shale. Algeria's oil-export revenue fell by 6% as the price of its flagship Saharan Blend crude fell by 1.3% in 2012 amid weakening U.S. demand. The drop in revenue also stemmed from lower sales of its profitable products amid refining problems.

BP, SOCAR, Total and Fluxys join the TAP project

TAP

The Trans Adriatic Pipeline AG (TAP) today announced that BP, SOCAR and Total - members of the international consortium developing the giant Shah Deniz field in Azerbaijan - have exercised their option to join the Trans Adriatic Pipeline AG.

BP and SOCAR have each taken a 20% share while Total has acquired 10%.  In addition, Fluxys, a major gas transit operator in Europe, has opted to join TAP, taking a 16% stake in the project. TAP’s shareholders, Axpo of Switzerland, Statoil of Norway and E.ON of Germany also continue their support of the project.

TAP’s shareholding is now comprised of BP (20%), SOCAR (20%), Statoil (20%), Fluxys (16%), Total (10%), E.ON (9%) and Axpo (5%).

Kjetil Tungland, Managing Director for TAP said: “I would like to welcome the Shah Deniz shareholders and Fluxys to the TAP project. Our new shareholders will significantly enhance TAP’s strategic position in becoming an integral link between both their upstream and downstream businesses. This will further strengthen the integration of the entire Southern Gas Corridor value chain and support TAP’s delivery of the project on time and on budget. ”

TAP’s shareholders remain open to further strategic partners joining the project in the future.

Turkey's Sat-Launcher Plans Raise Concerns

Defense News     Burak Bekdil 

Turkey has approved construction of its first satellite launching center to cater for the country’s mushrooming satellite programs.

But Ankara’s western allies worry that the Turks intend to use their own launching pad to fire the long-range missiles they hope to build in the medium- to long-run.

Turkey’s procurement agency, the Undersecretariat for Defense Industries (SSM), in early July signed a contract with the country’s national missile manufacturer, Roketsan, to build the Turkish Satellite Launching System (UFS) for pre-conceptual design work.

Under the contract, Roketsan will design the UFS to be capable of launching, initially, satellites into low earth orbit (500 to 700 kilometers) through a launching center the company will build and the Turkish Air Force will operate.

“We intend to end Turkey’s foreign dependency on launching military and [civilian] communications satellites,” one Roketsan official said. “We also think Turkey may launch other nations’ satellites with its own system in the longer-run.”

An SSM official familiar with the program said one reason for the UFS project was that Turkish planners are aiming toward a compact space program, including a national launcher. “The government and military planners think that any space road map without an indigenous launcher would be incomplete,” he said.
But diplomats and analysts think that the Turks may have other reasons for their desire to have their own satellite launcher.

TAP outgunned Nabucco for Azeri gas on most fronts

 Reuters

* TAP beat Nabucco on 7 of 8 criteria

* The reason was not high gas prices in Italy, Greece
* Government continues to support South Stream
* GALSI pipeline important for Italy

The Trans-Adriatic Pipeline (TAP) project outscored rival Nabucco West on virtually all fronts to win the race to carry Azeri gas into Europe, a junior minister at Italy's Industry ministry told Reuters.

Azerbaijan's state energy company SOCAR and its partners in the Shah Deniz II gas field, including BP and Statoil , said on Friday they had selected TAP.

The project, linking a Turkish pipeline to southern Italy via Greece and Albania, plans to deliver 10 billion cubic metres (bcm) of Azeri gas to Europe each year beginning in 2019.

BP said there was a "substantial" commercial difference between the two competing pipeline projects, including the cost of shipping the Azeri gas and gas prices in the respective markets.

The head of Austria's OMV, part of the rival Nabucco project, said last week the TAP project had been chosen because of high gas prices in Italy and Greece.

"It was not for high gas prices in Italy and Greece," Claudio De Vincenti said in an interview.