Russian energy industry to lose $150-200 billion on fresh sanctions (to hit the plans to develop Arctic offshore fields)

Newly adopted Western sanctions against Russia will inflict at least $150-200 billion of losses upon the Russian energy industry, head of the advisory firm Creon Energy working in this field, Fares Kilzie, told ITAR-TASS.
“These are not some random sanctions - they are solely targeted against Russia’s and Russian energy sector’s sore points,” the expert said. “These are intercorporate sanctions that hit certain companies and certain interests.” In particular, sanctions against Rosneft hit the plans to develop Arctic offshore fields and liquefied natural gas (LNG) sector, while measures against Novatek are aimed at hampering plans with Yamal LNG project.

Meanwhile, Gazprombank will have its equipment and energy plans affected, Kilzie believes.
“Gazprombank does not only hold 49% of Vladivostok LNG - one of its subsidiaries is the United Heavy Machinery Plants (OMZ) operating in import substitution. The companies’ losses will be increasing,” Kilzie said. “All major projects are monopolized by a certain group. A blow to this group’s investments leads to investment losses of others - those who wait for these offshore or LNG projects, namely logistics, transport, technological and technical companies.”
Moreover, the expert is sure sanctions will be expanded and spread onto second-and third-tier companies. 

“I have no doubt at all that the next salvo will be at the second tier. The first tier is the source of ideology and financing for all major energy projects. The second tier comprises contractors. Judging from the sanction list alone, the Russian companies will lose $150-200 billion. Novatek project alone costs more than $20 billion,” said the expert.
According to Kilzie, sanction architects have good understanding of the Russian energy sector. “The list of companies indicates good knowledge of our energy decision-making matrix. Sanctions are really proactive. Modern energy consultants in the West work consistently,” Kilzie said.
http://en.itar-tass.com/world/741115
17/7/14
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Related:

• Further US Sanctions May Hamper Russia's Yamal LNG (Report)[20/6/14]

• Απελευθερώνονται οι Εξαγωγές LNG στη Ρωσία με Απόφαση Πούτιν

• Norway overtakes Russia as Europe’s biggest gas supplier

Further US Sanctions May Hamper Russia's Yamal LNG (Report)

Photo: www.arcticgas.gov

The Yamal liquefied natural gas (LNG) project in Russia's Arctic may come under threat, if Washington sanctions technology exports to the Russian oil and gas industry, a senior executive at France’s Total told the Financial Times Thursday. 

Yves-Louis Darricarrère, the head of Exploration and Production at Total, told the FT the project’s reliance on US technology highlights the interdependence of Russia and the rest of the world.
“Yes we need US technology,” Darricarrère said. “Oil and gas industry technology comes from many countries in the world. That’s why we need co-operation not confrontation.”
The CEO of Novatek, Russia's largest independent natural gas producer, Leonid Mikhelson, said Wednesday the West’s sanctions against Russia have not affected project financing plans.

Darricarrère said the project involves many participants, including Russian and Chinese banks that have allowed it to remain on track. However, the French executive said sanctions on the use of Western technology would be a challenge, adding that the project was relying on US technology for its cooling system.

The US hinted that further sanctions against Moscow could result in restrictions on the sale of US technology to the oil and gas sector.
Yamal LNG, a proposed liquefied natural gas plant in Sabetta, northeast of the Yamal Peninsula, involves the construction of facilities to supply 16.5 million tons of LNG per year from the South Tambeyskoye resource base.

The project, which includes the construction of a seaport, airport and power plant, is valued at $26.9 billion. French oil major Total has a 20 percent stake in the project.
Earlier, the US imposed sanctions on a number of Russian officials and 17 companies, following the country’s reunification with Crimea, a former republic within Ukraine that held referendum on secession in March. Washington has also repeatedly threatened Moscow with tougher economic sanctions. Russia’s Foreign Ministry has labelled such measures counterproductive and warned of the boomerang effect they might have.
MOSCOW, June 19 (RIA Novosti)
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• Απελευθερώνονται οι Εξαγωγές LNG στη Ρωσία με Απόφαση Πούτιν

• Norway overtakes Russia as Europe’s biggest gas supplier

Putin praises Gazprom, CNPC deal on Russian gas for China

Russian investments into the infrastructure for transporting gas to China, compressor stations will total $55 billion, according to Gazprom CEO Alexei Miller...

The price of Russian natural gas for China under bilateral contract signed on Wednesday is based on the market price on oil and oil products, Russian President Vladimir Putin said.

Russian energy giant Gazprom and China National Petroleum Corporation signed a contract on Wednesday on Russia’s gas deliveries to China. The contract was signed in the presence of President Putin and his Chinese counterpart Xi Jinping.

Russian investments into the infrastructure for transporting gas to China, compressor stations will total $55 billion, according to Gazprom CEO Alexei Miller.
Russian gas supplies to China via the eastern route may begin in four to six years’ time, Energy Minister Aleksandr Novak told the media.

The gas price formula for China is developed similar to that for Europe, Russian President Vladimir Putin told reporters in this Chinese city on Wednesday. “The gas price formula as in other our contracts is pegged to the market price of oil and oil products,” Putin said.
“This is linked to it as a formula of computing the price for European consumers. This is a formula which is pegged to the market price of oil and oil products,” Putin said.
The Russian president called the reached agreements on Wednesday as the largest ever in the history of the Russian and Soviet natural gas sector.

He said it would take four years to implement the contract, while investments into the project would exceed $70 billion both from China and Russia.

Putin added that Russia and China began joint work on the development of the western route of natural gas supplies to China with possible diversification of the route.
The major contract signed on Wednesday was negotiated for several years. Gazprom expected to get $400 as a starting price for 1 thousand cu. m. of gas for China. The Chinese side wanted to buy gas for $350-360.

The price of Russian gas for China would be no less than $400 for 1,000 cubic meters, an expert of the Eurasian Development Research Center of the Chinese State Council said in April. Inclusive of infrastructure costs, supplies to China would cost no less than $400 for 1,000 cubic meters, given Russia’s export price of $380 for 1,000 cubic meters, he said.
Deputy Director of the Institute of Energy Strategy Alexei Belogoryev then estimated the contract price at $350-400 for 1,000 cubic meters. Director of the Energy Development Fund Sergei Pikin predicted a price of about $380.
 [itar-tass.com]
21/5/14
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Related:

• China-Russia natural gas deal on the way

• Negotiations ongoing for long-awaited gas deal. - Xi, Putin vow to push ties to ‘new phase’

China-Russia natural gas deal on the way

Russia has agreed to "finalize" a prolonged negotiation on natural gas with China in a meeting between the leaders of the two countries on Tuesday.

According to a joint statement, the two countries will "establish a comprehensive energy cooperation partnership". The deal is still pending, despite of the huge progress claimed in the protracted negotiation. Sinopec, China's top oil refiner, signed a framework agreement about the east route of the natural gas project with Russia's Gazprom, the world's largest gas company, in September of 2013.

The east route pipeline is scheduled to start providing China with 38 billion cubic meters of natural gas annually from 2018. Feng Yujun, an expert on Russia with the China Institute of Contemporary International Relations, said that the key hinderance is price.

"Whether the natural gas price will be linked to the oil price or to liquefied natural gas (LNG) is still not settled," Feng said.

Liu Yijun, professor with China University of Petroleum, believes the deal will affect the pricing systems of other projects in the Asian-Pacific region. "The huge supplies from Russia and vast demands from China do not make for a quick and easy agreement," Liu said.

Natural gas has become an important option for China's sustainable development. Consumption of natural gas stood at 167.6 billion cubic meters in 2013, up 13.9 percent year on year, while the natural gas imports rose 25 percent from a year ago.

The new popularity of shale gas has reduced Russia's exports to Europe, which forced Russia turned its strategy to the Asian-Pacific market.

Chen Weidong, senior energy researcher with China National Offshore Oil Corporation, said that the global energy structure is changed as the United States became a natural gas exporter, Iraq saw larger oil production and China stressed development of shale gas and coal bed gas.

Liu suggests a new cooperation method rather than being entangled in the pricing mechanism, such as exploring breakthroughs from the entire industry chain.

"The energy partnership reflects the wishes for energy cooperation," Feng added, "but the final price will be determined by the market." 
  [globaltimes.cn]
21/5/14
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• Negotiations ongoing for long-awaited gas deal. - Xi, Putin vow to push ties to ‘new phase’

Negotiations ongoing for long-awaited gas deal. - Xi, Putin vow to push ties to ‘new phase’

Chinese President Xi Jinping and Russian President Vladimir Putin's meeting Tuesday yielded a "substantial" joint statement, which vowed to push the all-round strategic partnership to a "new phase," though the two countries have yet to finalize a key gas supply agreement.

The trip to Shanghai marks Putin's first state visit to China after Xi took office last year.

Following their meeting, the two leaders witnessed the signing of a series of deals in fields including trade, energy, aviation and aerospace.

A comprehensive energy partnership was highlighted in the joint statement signed by Xi and Putin, as the two agreed to jointly develop coal mines in Russia and consider jointly building power plants in Russia to increase power supply to China.

• Russia's second largest gas producer Novatek signed an annual 3 million-ton liquefied natural gas deal with China National Petroleum Corp (CNPC) on Tuesday.

• However, the two sides failed to seal a highly anticipated gas supply deal between Gazprom and CNPC Tuesday, which was widely considered to crown the visit.

The deal, once settled, will see 38 billion cubic meters of natural gas piped annually from Russia to China for 30 years, and is seen as Russia's attempt to transfer its energy export focus away from Europe under the current tension.

With the price for gas still the major obstacle, a compromise is being sought so "the contract can be signed on a mutually beneficial basis," Gazprom CEO Alexei Miller said Tuesday, according to a Gazprom press release.

Senior Russian leaders, including Prime Minister Dmitry Medvedev and Energy Minister Alexander Novak, Tuesday both denied political concerns behind the gas deal, stressing its long-term strategic significance with China.

"Today, I wouldn't look for politics behind this, but I have no doubt that supplying energy to the Asia-Pacific region holds out a great promise in future," Medvedev said in an interview with Bloomberg Television.

Although an important move, energy agreements do not equate with politics and it is still acceptable if the gas deal is not signed during Putin's visit. The two sides have agreed to seal it by the end of the year under Russia's inevitable energy diversification trend, said Wang Xianju, a professor with the Development Research Center of the State Council.

Russia will make decisions on the gas price after weighing the economic influences caused by Western sanctions, said Li Xing, a professor of Russian studies with Beijing Normal University.

The joint statement also stressed security cooperation under the complicated and changing regional and international situations to safeguard stability in the two countries and in the Asia-Pacific region.

The Chinese and Russian militaries should deepen cooperation in joint drills, training and the fight against terrorism, Xi said.

Such emphasis on defense issues signals a high stage of political mutual trust between the two powers, especially when the two leaders personally attended a joint naval exercise in the East China Sea on Tuesday after the talks, said Wang.

"Previous drills only saw military leaders present from the two nations. Military cooperation is the most sensitive area that symbolizes the level of political trust," said Wang, noting the drill location also indicates Russia's support and recognition of China's Air Defense Identification Zone in the East China Sea.

The two countries will jointly commemorate the 70th anniversary of World War II along with other allies.

Observers said such security cooperation will help improve regional stability when the two permanent members of the UN Security Council support each other in major regional issues, including the post-war order.

Russian Ambassador to China Andrey Denisov told the Global Times earlier that he believes bilateral relations will only continue to improve.

When asked if Putin's visit is viewed as a signal for Russia's strategic incline to the Asia-Pacific region, Denisov said "yes and no." 

 "The current complicated international situation encouraged China and Russia to boost cooperation, but we will strengthen the partnership no matter [if Western] sanctions exist as we have reached a significant height," Denisov said.

The statement also urged all parties concerned in the Ukraine crisis to exercise restraint, avoid escalating the conflict and seek a peaceful and political settlement for the current problems.
 [globaltimes.cn]
20/5/14
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Related:

• Gazprom to sign monumental gas deal with China

Russia and China about to sign gas deal. --"Base price is the only problem to be solved”

“We have discussed co-operation in the coal sphere, agreeing to develop deposits, supply equipment and build electric power plants,” Russian Deputy Prime Minister Arkady Dvorkovich says.

 Russia's Gazprom and China are poised to conclude a gas supply contract in coming weeks, the first in a series of energy projects planned between the two countries.

“We’re working now to sign a gas contract in May," said Deputy Prime Minister Arkady Dvorkovich. "Consultations are continuing and Gazprom's leaders are holding talks with Chinese partners on the contract terms. We hope to conclude the contract in May and believe it should come into effect by the year end."


"Base price is the only problem to be solved,” Dvorkovich said on Wednesday at a session of a Russia-China intergovernmental commission on energy co-operation, co-chaired by Chinese Vice-Premier Zhang Gaoli.

In other plans, Russian company Novatek’s Yamal region LNG (liquefied natural gas) project was near ready for signing, Drovkovich said. Russia's Rosneft had several interesting plans "seeking to increase maritime supplies by several million tonnes per year,” he said.
“Russia and China have agreed to jointly develop gas fields in (Russia's far eastern) Sakhalin and East Siberia,” Dvorkovich said. “We have discussed co-operation in the coal sphere, agreeing to develop deposits, supply equipment and build electric power plants as well as providing China with additional electricity supplies”.
“We’re finding mutually advantageous decisions on certain projects that will allow us to implement them in the shortest period of time,” Dvorkovich added. Conditions were right to speed the Tianjin oil refinery project and to build a petrochemical facility, he said.
[itar-tass.com]
9/4/14
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Related:

• Διευρύνει το δίκτυο πώλησης υγροποιημένου φυσικού αερίου η Gazprom. - Η Gazprom έχει και άλλους αγοραστές φυσικού αερίου, όχι μόνο την Ευρώπη

• Gas prices in Europe to rise 50%, if it abandons Russia’s supplies. -- Are the economies of European countries ready to supply and consume gas at such a price?

Απελευθερώνονται οι Εξαγωγές LNG στη Ρωσία με Απόφαση Πούτιν

Ο Πρόεδρος της Ρωσίας, Βλάντιμιρ Πούτιν, υπέγραψε νόμο με τον οποίο απελευθερώνονται οι εξαγωγές υγροποιημένου φυσικού αερίου (LNG), δίνοντας δικαίωμα αδειοδότησης και σε άλλες εταιρείες, πέραν της Gazprom.
Όπως μεταδίδει το ρωσικό πρακτορείο ειδήσεων ITAR-TASS, η νομοθεσία ψηφίστηκε από τη Δούμα στις 22 Νοεμβρίου και επικυρώθηκε από την Άνω Βουλή λίγο αργότερα, στις 27 Νοεμβρίου.

Ο νόμος που υπογράφηκε από τον Πρόεδρο Πούτιν στις 30 Νοεμβρίου και δημοσιοποιείται τη Δευτέρα στον επίσημο ιστοτόπο, έχει ημερομηνία έναρξης ισχύος την 1η Δεκεμβρίου.

Σύμφωνα με το ITAR-TASS, δικαίωμα εξαγωγής LNG αναμένεται να έχουν, πέραν της Gazprom και των θυγατρικών της, και άλλες εταιρείες όπως οι Rosneft και Yamal LNG project, που υλοποιείται με τη συμμετοχή της Novatek.

Προστίθεται ότι στόχος της ρωσικής Κυβέρνησης είναι η φιλελευθεροποίηση των εξαγωγών LNG, να αυξήσει το μερίδιο της χώρας στην παγκόσμια αγορά φυσικού αερίου και να συμβάλει στη διατήρηση σταθερών τιμών των φυσικών πόρων.
energia.gr
2/12/13
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ΣΧΕΤΙΚΟ:

•  Law Ending Gazprom's Gas Export Monopoly Enters Into Force....

Στην αγορά πετρελαίου «μπαίνει» η ρωσική εταιρεία φυσικού αερίου Novatek.

Στην παραγωγή πετρελαίου στρέφεται η ρωσική ιδιωτική εταιρεία φυσικού αερίου Novatek σε μια ένδειξη ταχείας επέκτασης των επιχειρησιακών της δυνατοτήτων, όπως αναφέρει σήμερα η εφημερίδα Vedomosti.

Η Novatek θα αρχίσει μέσα στο 2015 την άντληση αργού πετρελαίου από την περιοχή  Γιαρντέισκι, στο Γιάμαλ- Νετετς, και στοχεύει στην παραγωγή  3,5 εκατομμύριων τόνω ετησίως, από το 2016, γράφει η εφημερίδα, επικαλούμενη πηγές της εταιρείας. Συνιδιοκτήτης της Novatek είναι ο ρώσος μεγιστάνας Γκενάντι Τιμτσένκο, ο οποίος είναι επίσης  συνιδιοκτήτης της διεθνούς εταιρείας πετρελαίου Gunvor.

Η  Novatek επεκτείνεται ραγδαία τα τελευταία χρόνια στις επιχειρήσεις φυσικού αερίου, κυρίως σε βάρος του ρωσικού κρατικού ενεργειακού κολοσσού  Gazprom.
Σύμφωνα με τη λίστα Forbes, η περιουσία του Τιμτσένκο , παλιού γνώριμου του προέδρου Πούτιν καθώς είναι συν-ιδρυτής του συλλόγου τζούντο που πηγαίνει ο Πούτιν, - και , μεταξύ άλλων, προέδρου του Οικονομικού Συμβουλίου του Γαλλ-ρωσικού εμπορικού και βιομηχανικού επιμελητηρίου -  ήταν αξίας περίπου 400 εκατομμυρίων δολαρίων πριν από τέσσερα χρόνια, ενώ φέτος «εκτοξεύτηκε» στα 14,1 δισεκατομμύρια δολάρια.
 Πηγές: RIA Novosti, rbth.gr
8/11/13
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ΣΧΕΤΙΚΟ:

• Στο LNG Στρέφονται οι Ρώσοι.

• Russia's gas exports to Asia will expand dramatically if the construction of two new LNG terminals goes ahead: Gazprom's Vladivostok and Novatek's Yamal projects.