Norway, Russia Increasingly Competing in Same Fields: Gas, Geopolitics
Norway’s Statoil and Russia’s Gazprom continue making headlines, confirming their pivotal role in Europe’s gas markets. It comes as no surprise that, despite the British anti-Russia narrative, UK’s Centrica extended gas supply contracts with both companies.
‘Centrica has today announced that it has increased the volume of gas it is buying from Statoil ASA under an existing supply agreement’ reads a note released by Centrica on Wednesday.
Centrica increase by almost 50% the volume it will buy from Statoil over the coming 6 years.
‘The new agreement will increase the volume of gas by a further 2.3 bcm per annum, taking the total volume to be delivered over the10-year period to 73 bcm. The agreement has been made at market terms and conditions’ Statoil wrote on its website.
According to the Norwegian company, the agreement confirms Statoil’s position as a reliable supplier of gas to the UK. Britain needs around 70 bcm of gas each year, and needs to import more than half this volume.
Centrica also extended its contract with Gazprom Marketing & Trading Limited.
‘The new agreement, combined with the volumes agreed in 2012, takes the average volume of gas to 4.16 bcm per annum, taking the total volume to be delivered to the UK under the agreement to 29.1 bcm.’
UKRAINE VS RUSSIA?
In a sense, Norway and Russia are increasingly competing in the same fields - gas and geopolitics. Over the last days, Oslo announced it will granted $26.3 mln to Ukraine for budget support.
“We have introduced a new form of reverse shipments and will not allow anyone to use gas supply as an instrument of imposing pressure on Ukraine in the future” Ukraine’s Petro Poroshenko said after his meeting with Norway’s Minister of Foreign Affairs Børge Brende on Tuesday.
Meanwhile, Russian companies are stepping up efforts to increase production not only in Russia, but also elsewhere.
‘Lukoil has begun production tests of two Gas Treatment Plants (GTPs) at the Northern Shady Site and the Kuvachi-Alat Field in Uzbekistan's Bukhara Region as part of the Kandym Early Gas Project, which is being implemented together with National Holding Company Uzbekneftegaz’ Lukoil wrote on Tuesday.
Meanwhile, other countries’ companies keep having problems with national legislation. Despite an increase in gas sales in the first three months of the year with respect to 2014, RWE warned on Wednesday that ‘new political risks’ are emerging in conventional power generation.
‘At the end of March, the German Ministry for Economic Affairs and Energy put forward plans for meeting the country’s climate protection targets, under which power stations more than 20 years old will be subject to an additional levy from 2017 if their emissions exceed certain annual limits. A financial burden of this nature would have a substantial negative economic impact on RWE's lignite mines and lignite-fired power stations’ RWE wrote in a note, in which confirmed earnings forecast for 2015.