Eurasia Energy News
Welcome to our news page. Here you will find reports on developments in the Eurasian energy sectors, covering nuclear, oil and natural gas. Updates are made available regularly.
South Stream's winding road to Baumgarten
It was in 2007 that Russian Gazprom and Italian ENI announced their joint plans for the South Stream pipeline. The 63 BCM/year pipeline is supposed to contribute to Europe's energy security by diversifying supply routes of Russian gas to Europe. By December 2015, less then five years from now, South Stream AG expects the first gas to reach the EU. Besides supplying South Eastern and Central Europe, part of South Stream should also reach Southern Italy. Judging by all the intergovernmental agreements, the South Stream project has received much political and diplomatic support from the Russian state. Meanwhile Gazprom has succeeded, in addition to ENI, to attract some other strong European partners, such as French EdF and German BASF subsidiary, Wintershall. In light of the 'Arab Spring' and the Fukushima nuclear catastrophe, the case for gas in the EU, in particular for Russian gas, has grown stronger. Moreover, gas is the ideal clean complementary source of energy that can back up renewable energy. The South Stream integrated feasibility study is due in September, however, the pipeline's realisation is not a given yet. Many actors are involved and quite a few hurdles are left on the road to Baumgarten. The EEO looks into how the project progressed in its search for partners and what the roles are of countries such as Ukraine, Bulgaria, Turkey and Serbia.
Germany sees no need for third Nord Stream string
Founded with the support of former Russian President Vladimir Putin and then German Chancellor Gerhard Schroeder more then ten years ago, the Saint Petersburg Dialogue has turned into an annual event where, amongst others, representatives of Russian and German major companies meet. As a result of the German decision to phase out nuclear energy by 2020, the business debate was mostly dominated by energy. Russian First Deputy Prime Minister Victor Zubkov stressed Russia’s willingness to increase gas supplies to Germany and suggested to build a third string of the Nord Stream pipeline if needed. German Chancellor Angela Merkel, however, does not see any need to increase gas supplies from Russia, arguing that renewable energy would replace most of the nuclear power plants.
Are higher gas prices raising the 'pressure' on Ukraine's gas transit system?
Gas prices in Europe are on the rise again, both on spot markets and within long term contracts (LTC). Volatile economies in the CIS-region, such as Ukraine, are the first to sense the impact of higher gas prices. Gazprom expects a gas price of $ 400 for Ukraine in the fourth quarter. This has lead Ukraine to revive the discourse with Russia on a revision of the gas price for some time now. Meanwhile, the Ukrainian Parliament is taking measures that would legalise the privatisation of one of Ukraine's most valuable state assets, its gas transport system (GTS). Gazprom is prepared to revise the gas price only after a merger with Ukrainian Naftogaz. Are these signs of a new deal between the two or is it the usual muscle flexing?
Does German 'Ausstieg' mean more Russian gas?
Germany has set out a daunting challenge for itself to come up with a sustainable solution for finding an alternative to almost a quarter of its electric power mix, after its government decided to phase out nuclear energy by 2020. As part of the solution, the push for renewable energy in Germany will undoubtedly become even stronger. We will similarly witness a strong push for gas as a flexible and cleanest of all fossil fuels. At first glance the case seems simple. Additional gas demand could be covered with more gas from Russia with the first string of Nord Stream becoming operational this year. While German politicians appear to be in favour of this, German energy majors, such as RWE, seem to see things differently.
The end of Japan's nuclear era. A new opportunity for Russian gas?
It has been little over week since Japan was hit by a tsunami causing an unprecedented natural catastrophe in Japan. The disaster is of apocalyptic scale and will have many implications for the energy future of Japan. Its consequences are also reaching beyond Japan and affecting world's energy markets and the way policy makers are rethinking the price of a nuclear renaissance. In the case of Japan, already many believe nuclear energy will no longer be sustainable. Low carbon alternatives to nuclear energy are few. Since renewable energy cannot provide sufficient energy for decades to come, the only low carbon alternative seems to be gas. In this sense a new window of opportunity could emerge for the hydrocarbon development of Russia's Far East, a region abundant in gas and geographically near to Japan. Political relations have, however, been overshadowed by a dispute over the South Kuril Islands, a dispute that dates back to World War II. Russia remains the only country with whom Japan did not conclude a peace treaty after World War II. The EEO wonders whether this tragic chapter in Japan's history could result in an opening towards closer cooperation on hydrocarbon production between these two neighbours.
The European gas market finds itself at cross roads, while investments in production and infrastructure are on hold
There is an air of uncertainty hovering over the Eurasian 'gas continent'. The availability of Eurasian gas, in particular Russian gas, was taken for granted for many decades. Even at the height of the Cold War, gas from the Soviet Union’s gigantic Siberian and Central Asian gas fields flowed uninterruptedly to European homes and industries. The foundations for this stable flow of gas from East to West had been laid in the sixties and seventies of the 20th century. The EEO spoke with Russian gas expert Irina Akimova, member of the Russian Gas Society's Expert Council and Corresponding Member of Academy of Technological Sciences of the Russian Federation. She argues that now is the time to decide on massive investments in the development of new gas fields in Russia and the building of additional transport capacity. Only then can future supplies to the European market be secured at reasonable prices for its consumers.
The 3rd Energy Package and the concerns of non-EU gas producers: An interview with Dr. Andrey Konoplyanik
Turkmen gas into the Southern Corridor: Transcaspian or CNG?
Azerbaijan and Turkmenistan, both regarded as key suppliers to the EU’s Southern Corridor, recently were in the centre of the European Commission’s (EC) attention, when the EC’ President, Emmanuel Barroso, and Energy Commissioner, Gunther Oettinger, paid a visit to both countries in mid January. Their objective was clear, to convince both countries to commit their rich gas reserves to the Southern Corridor. Has Turkmen gas come any closer towards the Southern Corridor? A source from Turkmen diplomatic circles gave us some valuable insights into the Turkmen perspective. The EEO also consulted Dr. Najia Badykova, CEO of Washington-based Antares Strategy, for her opinion.
Russian Ministry of Natural Resources wants to open shelf to foreign companies
Yanukovich might offer Gazprom and European companies share in Ukrainian GTS
