Views:2501
Pipeline

  The cuts to transit tariffs for use of the Ukrainian gas transmission network, which were announced during the final days of 2018, are a major event that was undeservedly kept out of the media spotlight.   The reductions of nearly 50% are simply a downward correction but send a message.   Here are some corners in the analysis.   The first suspected casualty would be the revenue projections for the Ukraine circumvention projects. Their business logic has been substantially compromised, while the key argument Merkel and Putin continue to use is that the Nord Stream is “just business.” The direct costs of Nord Stream-2 so far are below $10 billion and, accounting for the extra funds spent on gas fields and infrastructure development on Russian territory, the bill skyrockets

Views:3817
TurkStream1

The consequences of the choices the Bulgarian government makes on the scale and direction of the infrastructure upgrade to accommodate future flows it intends to service will be long-term. The issue at stake is whether the country will become a fully integrated member of the EU gas market, implementing key elements of the EU’s gas strategy and North-South – the Baltic to the Aegean Sea – interconnectedness, or replay the old adage of acting as proxy to Gazprom gas in the EU.   The crisis in the Sea of Azov and the Kerch Strait, among other alerts and triggers, echoes a repetitive soundbite in Russian foreign policy – Ukraine should not be trusted as a transit country, thereby Russia’s circumvention ‘streams’ serve the EU’s best interest. There is little doubt

Views:7362
Бурмистрова и Медведев

  The speculative interpretations on the secretive nature of the trip of Gazexport’s top managers to Sofia last Friday, beyond doubt, will build up due to the total absence of facts and details. This is an inevitable consequence as one compares the media frenzy around the visits of the top brass at Gazprom to the country on previous occasions.   To begin with, the decision to keep the meetings with Bulgartransgaz secretive reflects the content and the range of topics covered. The classic is: both sides need to agree to keep the exchange out of the public record. Gazprom and BTG, as hosts, have no interest in disclosing details, as the negotiations cover a very sensitive topic – the extension of Turkish Stream through Bulgaria.   Two events have marred the

Views:7587
South Stream Lite

  The fate of two key elements of Russia’s energy ‘streams’ strategy – the Nord and Turkish streams – will be decided this fall. The Damocles sword is hovering above both, and at any moment the U.S. government could impose sanctions that would immediately terminate both projects.   Although such a scenario is probable, it is by no means certain.   President Trump remained deliberately vague on the imminence of the sanctions during his recent press conference at the White House with Polish President Duda.   US Secretary of Energy Rick Perry recently visited Moscow and, among various topics, discussed the sanctions options with his Russian counterpart as part of a broader, more positive package. Both Nord and Turkish Stream have reached a decisive stage, where action is desperately needed.

Views:5002
turkish stream

  The daily Vedomosti published an article on Turkish Stream, quoting Foreign Minister Lavrov on the need for direct EC guarantees and second rating bilateral agreements, signaling  rising nervousness at the Kremlin with the project advance. It is a most revealing moment for what Russia and its main energy pivot – Gazprom – can afford these days in defying market gravity, while leveraging the Kremlin’s geostrategic moves. Russia’s gas monopoly admitted in June that it is unable to raise project financing – neither in Russia, nor abroad. The new sanctions left Gazprom without a choice but to tap into its own pocket – the 2017 capex program. Banks and investment funds ignored Gazprom’s request, fearing project uncertainty and US sanctions.   The investments associated with Turkish Stream this year, according

Views:4406
putin-gotce1

  The System Spill over   By proximity, Bulgaria mirrors Russian autocratic tendencies, including mimicking the state oligarchy model. Unlike Russia, however, the Bulgarian version can’t be sustained on “natural” resources – oil, gas, nuclear fuel-based wealth. Redistribution can be effectuated on added value and GDP growth, or thereafter on the budget accumulated taxed economic output. Bulgaria’s autocracy has limited margins for self-propelled growth and wealth sharing, which implies greater reliance on grand corruption mechanisms.   The Kremlin’s GDP sustains its dynamics even on holidays as the oil and gas industry turns round the clock. Bulgarian GDP, however, must be generated and incomes earned.   In Russia, the population exhibits extreme patience, willing to accept sacrifice in the name of “stability” (note the overlay in the jargon of the ruling

Views:4247
ERDOGAN

  The news from Ankara these days ascertain an important segment in President Erdogan’s drive for global prominence as he is borrowing heavily from President Putin’s guide for autocratic leaders. Yet it is hard to see how he will be able to profit from the Kremlin’s recipes, lacking the tsar’s resources and insatiable pool of social patience.   Russia has been seeking to build on the rifts within NATO and US-Turkish relations by enticing Erdogan into a pool of geopolitical tradeoffs and gambles.   Putin’s attempts to undermine the EU and the US are persisting. The chance to help Turkey steer away from NATO’s mainstream and turn into its weakest element seems up for grabs.   President Putin is visiting Turkey this week to talk over a new strategic framework

Views:2454
gaz

  The need to move beyond the Balkan Gas Hub “Russia-only” or “Russia-mainly” paradigm seems indispensable if the ‘hub’ project – in the broad sense – has any chance.   The talk of billions of cubic meters of natural gas from non-Russian sources deserves a serious look to the north, but mostly to the south – The Southern Gas Corridor.   Yet what seems logical to everyone, does not inspire the management of the TSO of the Bulgarian gas system. The fact that none of these routes – TANAP, TAP or the Greek-Bulgaria Interconnector – contain specific numbers for potential gas flows makes things seem pre-ordained. The BGH essentially seems to be conceived as a redistribution center for Russian gas.   The likelihood of non-Russian gas emerging both at the

Views:3641
hub balkan1

    Quod licet Jovi, non licet bovi.   The Balkan gas hub has become synonymous and in many ways a substitute for Bulgaria’s energy policy in the field of natural gas. In order to avoid speculating about the concept’s different variations, hereinafter is the official project draft, as presented by the national TSO, Bulgartransgaz, with a price tag above USD 2 billion.   Although this might not be the latest update, as it does not fully accommodate developments from Turkish Stream, the map is a fine departure point for an analytical exercise, explicitly demonstrating the virtues and the shortcomings in the conceptual design and implementation phase.     The key question is – what does Bulgaria strive to achieve?   To begin with, the country’s energy policies should not

Views:4547
gazoprovod

  Gazprom again is launching its mothballed project of bypassing Ukraine with Russia’s own version of a ‘Southern Gas Corridor’. On May 4 the Audacia pipe-laying vessel, run by Allseas Group, reached Anapa on the Russian coast of the Black Sea. Ten days later, another vessel of Allseas, the world’s largest pipe layer Pioneering Spirit, also made it to the Black Sea through the Bosporus to join the operation.   Allseas had been contracted by Gazprom in April 2014 to build the second string of the South Stream pipeline project after Italy’s Saipem had been awarded a contract for the first string. After the failure of the South Stream idea, Gazprom severed the contract with Saipem but asked Allseas replace the Italians in building the initial string of the pipeline,

This entry was posted in The Region and tagged , , , , , , by Mikhail Krutikhin.

About Mikhail Krutikhin

Analyst and consultant on the oil and gas industry and politics in Russia; co-founder of and analyst with the RusEnergy consultancy in Moscow; editor-in-chief of The Russian Energy weekly newsletter. He previously served as editor-in-chief for the Russian Petroleum Investor and as associate editor for the Caspian Investor monthly magazines. Between 1972 and 1992, he worked for the TASS news agency in Moscow, Cairo, Damascus, Tehran, and Beirut, rising from correspondent to chief of bureau. Krutikhin graduated from Moscow State University majoring in Iranian linguistics, but later obtained his Ph.D. in modern history.