Greater Caspian Region Weekly Overview - September 20th
Iran
Iran’s gas production up 5 percent
Iran produced 69.9 billion cubic meters of natural gas during in first five months of current fiscal year, commencing on March 21st, which indicates a 5 percent increase year-to-year, Abdolhossein Samari, National Iranian Gas Company's deputy managing director for operations said on September 15th.
Iran produced 202 billion cubic meters of raw gas during last fiscal year, 50 bcm more than the previous year, of which 34 bcm was re-injected to oil fields. In total, Iran produced about 178 bcm of refined gas last year.
Iran planned to increase this volume by 34 bcm in current fiscal year.
Iran has announced that the country’s total raw gas output to reach 1,100 mcm/d by late 2018.
Pakistan: No investor to fund Peace Pipeline
Pakistani Minister for Petroleum and Natural Resources says that no international institution or bank is ready to extend grant for the Pakistan-Iran gas pipeline (Peace pipeline) as long as sanctions are in place against Iran.
Iran and P5+1 (the U.S, UK, France, Russia, China + Germany) reached a comprehensive nuclear deal on July 14, which paves the ways for elimination of sanctions on Iran in late 2015.
Shahid Khaqan Abbasi said on September 18th that the project could be completed following a lifting of sanctions on Iran. The minister, however, said that the Gawadar to Nawab Shah portion of the pipeline will be completed by December 2017, which was the key component of the project.
He said that $100 million would be spent on laying 80-kilometre pipeline from Iran to Gawadar border. “Work on 700 kilometre long Gawadar-Nawab Shah pipeline will soon be started under Pakistan-China Economic Corridor project,” he added.
Iran has signed a contract with Pakistan to start gas delivery to this country from January 2015, however, Pakistan hasn’t started piping in its own soul. Shahid Khaqan Abbasi said that Iran also hasn’t completed its own section yet and yet to pipe about 250 km until Pakistani borders.
Iran, Iran talking on second gas contract
Iran and Iraq are talking to sign a new gas contract, Azizullah Ramazani, Director of the National Iranian Gas Company for International Relations said September 19th.
According to him, sealing the contract is in its final stage and Iran would deliver 25 million cubic meters per day (mcm/a) of gas to Iraq’s Basra through Shalamcheh border.
Laying about 141 km pipeline from 6th cross-country pipeline towards Shalamcheh is needed, he said.
Iran is constructing a cross-country pipeline to transit 110 mcm/d of gas towards western borders with Iran. Iran has already signed a contract to deliver 25 mcm/d of gas through this pipeline to Baghdad’s power plants.
The cross-country pipeline has been completed by 611 km starting from South Pars and is to eventually reach the Iraqi Kurdistan border. Some $2 billion is needed to complete this pipeline with 110 mcm/d transition capacity.
Initially, Iran is preparing to export 4 mcm/d of gas produced from Tang Bijar gas field in Ilam province's Naftshahr towards Iraqi’s capital, Baghdad in coming months. After completion of 6th cross-country pipeline, Iran would be able to export 25 mcm/d of South Pars to Baghdad.
Iran to unveil new designed oil and gas contract in two months
Iran is preparing to introduce its new designed oil and gas contract, named Iran Petroleum Contract, in two months.
Iran’s most common model before 2012 was the buyback deal -- a risk service contract under which foreign companies would invest in the oil sector projects without owning resources.
Iran Petroleum Contract (IPC) will be unveiled at Tehran, before a conference planned for December in London, Roknaddin Javadi, managing director of the National Iranian Oil Company announced on September 18th.
Before, it was expected that Iran unveils the IPC at a London conference.
Iran is attempting to offer more attractive terms and conditions to foreign companies, hoping to absorb $185 billion investment in oil and gas sector by 2020.
India submits $10B proposal for Iran’s Farzad B gas field
India's ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp., has submitted a $10 billion integrated proposal to Iran for developing the Farzad-B gas field in the Persian Gulf and shipping the gas to India.
A consortium of OVL, Oil India Ltd and Indian Oil Corp had discovered the 12.8 trillion cubic feet of gas reserves in the Farsi block in 2008. The discovery was named Farzad-B, PTI reported.
"In April, we met in Iran and as per discussions, we have worked out a fully integrated proposal and submitted to Iranian authorities," OVL Managing Director Narendra K Verma told reporters in New Delhi.
Iran, he said, had asked for a plan for developing the field as well as options for taking the gas.
"Fully integrated proposal with lots of options has been submitted," he said, adding that OVL has invited Iranian officials to India for discussions on the proposal.
Azerbaijan
SOCAR and Gazprom to start a temporary gas swap
SOCAR (Azerbaijan State Oil Company) and Russian Gazprom are planning to realize a temporary gas swap operations, SOCAR's president Rovnaq Abdullayev said on September 17th.
"These will be temporary operations. An agreement with Gazprom already has been reached. As part of this agreement Gazprom will transport gas to underground gas storage facilities in Azerbaijan. SOCAR will return this gas to southern regions of Russia in future," Abdullayev said.
According to him, gas supplies will begin in October 2015.
At the beginning Russia will transport 10 million cubic meters of gas per day (mcm/a) to Azerbaijan and in total, swapping 2 billion cubic meters of gas per annum (bcm/a) is schedulded," Abdullayev said.
He mentioned that SOCAR will start exporting gas to Northern Caucasus in 2016.
"We want to check the capacity of our gas reservoirs by filling them totally. Initially, their capacity has increased to 3.5 bcm/a, then to 6 bcm/a, but after injecting Russian gas, we will be sure about the real capacity of our gas storage facilities ," he said.
He also said that a an agreement will be signed with Gazprom in two weeks to realize gas swap operations.
Earlier, Azerbaijan Methanol Company (AzMeCo) signed a contract on purchasing up to 2 billion cubic meters of gas per year from Russia’s Gazprom Export LLC.
The natural gas supply will ensure the guaranteed loading of 100 percent of facilities of AzMeCo methanol plant in Garadagh. Gas supplies to the methanol plant of AzMeCo company by Gazprom Export LLC will start September 20-21.
SOCAR plans to increase gas supply to Georgia
The State Oil Company of Azerbaijan intends to bring the level of gas supply to Georgia to 82 percent, Mahir Mammadov, director general of SOCAR Energy Georgia company told Trend.
In accordance with the agreement signed with Georgian government, SOCAR Georgia Gas (subsidiary of SOCAR Energy Georgia) was supposed to supply gas at least to 150,000 new (prospective) users and invest at least $40 million in this process.
However, the period of validity of the gas supply program was extended, as the volume of investments exceeded the previously planned amount.
“The process of gas supply to Georgia continues. Currently, a new 3-year investment program is in force,” said Mammadov.
“Our operating activities cover 90 percent of Georgia’s territory, albeit it is only 45-48 percent on the customer base,” he added.
“To date, the gas supply level of Georgia is 65-67 percent for real customers and 73-74 percent for prospective customers,” he said, adding that it is a very high figure.
Earlier, SOCAR Georgia Gas said that it is planned to increase the number of users in Georgia to 480,000 by late 2015.
SOCAR and the Georgian government signed an agreement to transfer control of 30 gas distribution facilities and gas distribution networks covering such regions of Georgia as Kakheti, Mtskheta-Mtianeti, Shida and Kvemo Kartli, Adjara, Guria, Imereti, Samegrelo on December 26, 2008.
The list of gas distribution facilities was then expanded. Earlier, all these facilities were eliminated and seven regional gas facilities were created under SOCAR.
SOCAR READY TO SELL 16% OF DESFA
The State Oil Company of Azerbaijan (SOCAR) is ready for talks with European companies on selling a part of its share in Greek DESFA gas transmission system operator.
The head of Azerbaijan’s SOCAR said it could sell 16% of Greek gas grid operator DESFA to a European company.
"We are ready for negotiations with European companies over the sale of 16 percent," SOCAR President Rovnag Abdullayev told reporters in Baku on September 18th, suggesting that it wants to keep a majority stake in DESFA.
In 2013, the Hellenic Republic Asset Development Fund gave the green light to SOCAR’s purchase of a 66% share in DESFA for €400 mln.
At the moment, the Greek government holds 31% of DESFA’s share, while Hellenic Petroleum has a 35% stake.
Abdullayev also confirmed what Greek authorities said in August - the parties could reach a deal by the end of the year.
"We are determined to purchase 66 percent shares, and we do not expect a change in this matter,” Abdullayev added.
The European Commission started an inquiry into the compliance of the deal on acquisition of a stake in DESFA with the EU’s regulations In November 2014. Currently, the deal is being considered by European Commission’s Directorate-General for Competition, and the procedure will last until late 2015.
Russia will lose one gas customer next year
Russian State Duma deputy Ivan Grachev said on September 14th that Romania's refusal from Russian gas will not play an important role for Russia.
According to him, the volume of Russian gas, consumed by Romania is not significant.
Earlier the head of the Romanian Agency for Energy Regulation Niculae Havrilet said that Romania will refuse to import Russian gas in 2016.
"While in 2008, 25 percent of gas consumption in Romania relied on Russian gas, in 2015 the figure dropped to 3%. All the conditions are giving us an opportunity to refuse from Russian gas ", he said. According to him, Romania's annual gas consumption volume is 11 bcm.
Contractor hands 400 km of pipes over to TANAP
The work on construction of the Trans-Anatolian Natural Gas Pipeline (TANAP) is successfully underway, the head of SOCAR (State Oil Company of Azerbaijan) Rovnag Abdullayev told reporters Sept.18.
He went on to add that pipes along a 1,350 kilometer section of the gas pipeline have already been delivered to the construction site.
“It was only yesterday when I received information that 400 kilometers of pipes were handed over to TANAP by the manufacturer, and they were delivered to the construction site,” Abdullayev said. “Welding work for several lots has already started.”
The work runs on schedule and even ahead of it, the head of SOCAR said.
Three Turkish companies, Fernas Insaat A.S., Sicim-Yuksel-Akkord Adi Ortakligi and Tekfen Insaat ve Tesisat A.S. are the contractors for construction of TANAP’s onshore part, which is to be 1,337 kilometers long. They will construct the gas pipeline’s section running up to the Turkish city of Eskisehir.
TANAP envisages the transportation of gas of Azerbaijan’s Shah Deniz field from the Georgian-Turkish border to the western borders of Turkey. TANAP’s initial capacity is expected to reach 16 billion cubic meters of gas per year. Around six billion cubic meters of this gas will be delivered to Turkey and the rest of the volume to Europe.
Turkey will receive gas in 2018, and after the Trans-Adriatic Pipeline (TAP) is constructed the gas will be delivered to Europe in early 2020.
Turkmenistan
Ashgabat hosts Turkmenistan-China gas pipeline meeting
Ashgabat hosted the 13th meeting of the Coordination Committee of Turkmenistan-Uzbekistan-Kazakhstan-China gas pipeline on September 16th.
According to the Ministry of Oil And Gas Industry And Mineral Resources of Turkmenistan, the meeting heard a report on the current situation of the construction of the pipeline. Representatives of the Coordination Committee, Turkmengazand Chinese CNPC International Company participated in meeting.
In addition, the operation plans and schedule documents for fourth quarter of 2015 and 2016 related to the pipeline were approved.
Uztransgaz , Asia Trans Gas (Kazakhstan) and "Asia Pipeline" (China) attended the meeting of Coordination Committee as well.
The first two lines of a gas pipeline linking Turkmenistan with China (A and B) has become operational in December 2009. The branch C also launched in 2014. At present, the construction of the D line (Turkmenistan-Uzbekistan-Tajikistan-Kyrgyzstan-China) is underway. After completion of the work China would be able to import 65 bcm/a of Central Asian gas by 2020.
Uzbekistan
Gas prices to increase in Uzbekistan
Gas prices will rise in Uzbekistan for households and enterprises by 7.5 percent from 1st October 2015, said Uzbekneftegaz company.
Since 1st October price of one cubic meter of gas will increase from 194.7 som to 208.92. For households which don’t use gas meter, the price will increase from the current 336.71 som to 361.3 som.
Earlier in May gas prices in Uzbekistan increased by 7.2%.
Also from 1st October prices for cold water will increase by 8% , prices for central heating and hot water will increase by 5.2%, prices for electricity will increase by 8%.
In Uzbekistan 1$=2610.89 som.