EU-DIGEST

The plans to build the politically and environmentally controversial Nord Stream pipeline have been in the air since 1997. With Finland and Sweden finally saying “yes” to the pipeline in their waters, the wheels of construction are now in full speed with the first line to be opened in the 2011. This will bring relief to Europe that is struggling with energy supply--yet not everyone is a winner.

The European Union accounts for 16% of the World's energy consumption but has only 6 % of the world's population. Natural gas comprises 24% of EU energy consumption. EU27 in 2007 consumed 505 bcm of natural gas per year according to Eurogas. This is expected to increase to 578 bcm by 2020 (estimations vary, some analysts claim that the gas consumption will decrease drastically). 40 % (128 bcm) of the natural gas is imported from Russia. The EU is also estimated to import 70% - 80 % of its energy supplies by 2030 as the North Sea gas supplies are diminishing; over 60 % of natural gas imports are expected to come from Russia. 10 % of the total EU gas demand would be covered by the Nord Stream. Natural gas will remain the fuel of preference for the EU because of its greener properties. In addition to that, phasing out nuclear power stations puts more strain on alternative energy sources. The pipelines that are running through Ukraine are aging and it is debatable at what capacity they would be running at by 2020: The EU offered Ukraine a loan of $2.5bn to revamp its pipeline infrastructure in March 2009, but it is debatable if this money went to pipeline upgrade projects as a proportion of that loan would have gone to repay existing gas debts to Russia; according to prime minister Tymoshenko, Ukraine would need an extra $3.5bn for the revamp of current pipelines.

Labels: Baltic Pipeline, Energy, EU, Gas Supplies, Russia

The permission was issued by Germany’s Federal Maritime and Hydrographic Agency in Hamburg. Earlier, Germany permitted the construction of the Nord Stream gas pipeline in its territorial wasters.

Nord Stream AG, the project operator, has already received permits from Denmark, Sweden and Russia through whose waters the pipeline will pass, and also the Finnish exclusive economic zone permit and a permit for the 50-kilometer (31-mile) section of the pipeline in German territorial waters and landfall in Lubmin near Greifswald.

Nord Stream AG only has to obtain the second and final permit from Finland for the project’s construction.

Labels: EU, Gas Supplies, Russia

Turkey eyes energy role with Russia

Turkey eyes energy role with Russia - by Sibel Utku Bila

Russian Prime Minister Vladimir Putin is to visit Ankara Thursday for talks expected to focus on energy cooperation amid a growing Turkish role in projects to carry gas and oil to Europe. "Cooperation in the field of energy will be a primary issue on the agenda," an aide to Turkish Prime Minister Recep Tayyip Erdogan said. Situated between Europe and the vast oil and gas fields of the Caspian Sea and the Middle East, Turkey has emerged as a hub for pipelines to supply the energy-hungry West. Hoping to attract Russian and Kazakh oil, Ankara is also promoting a pipeline from its Black Sea port of Samsun to Ceyhan on the Mediterranean coast, which already serves as a terminal in conduits pumping oil from Azerbaijan and Iraq. Putin's energy agenda in Ankara is likely to include also a long-delayed project to build Turkey's first nuclear power plant.

Despite sometimes shaky political ties, economic exchange between the two countries has boomed since the fall of Communism: in 2008, their trade volume hit 37.8 billion dollars, making Russia Turkey's number one trading partner. Russia supplies about 60 percent of Turkey's gas imports, and more than a million Russian holiday-makers boost Turkey's vital tourism sector each year.

Labels: Gas Supplies, Russia, Turkey

Europe gas pipeline deal agreed

Four European Union countries and Turkey have signed an agreement to construct the long-planned 3,300km Nabucco natural gas pipeline. Once completed, the line will bring up to 31 billion cubic metres of gas a year from the Caspian and the Middle East across Turkey and into Europe. It will give an important alternative energy supply to Russia, which already meets 30% of Europe's gas needs.

Labels: EU, Gas Supplies, Turkey

Deal to boost key EU gas project - by Oana Lungescu

The EU has signed an energy agreement with several countries aimed at developing a "southern corridor" for gas supplies bypassing Russia. The agreement was signed by the leaders of Azerbaijan, Georgia, Turkey and Egypt at a summit in Prague. It commits them to speeding up the construction of a long-delayed pipeline to bring Caspian gas to Central Europe. Key to this meeting was a commitment by Turkey's President Abdullah Gul to sign up to an agreement on the construction of the Nabucco gas pipeline by next month. In a symbolic gesture, the agreement is to be signed in Turkey, after years of haggling over transit rules.

Labels: EU, Gas Supplies, Russia

EU passes new rules on opening up gas and electricity markets after nearly 3 years - by Aoife White

The European Union on Wednesday approved new rules for opening up gas pipelines and electricity grids to competition — a move that regulators claim could help bring down energy prices and improve energy security. But consumers and some lawmakers said nearly three years' of negotiations on the rules had watered them down so much that they could not challenge the grip large energy firms' have over the European market.

Labels: energy supplies, EU, Gas Supplies

Pipeline talks put Turkey at center stage - by Nichole Sobecki

Recep Tayyip Erdogan's visit to Brussels last week, his first since Turkey began negotiations to join the European Union in 2005, threw the spotlight on an issue given fresh impetus by the recent gas crisis between Russia and Ukraine: the Nabucco pipeline project. Nabucco, symbolically named for Giuseppe Verdi's 1842 operatic masterpiece that became a rallying cry for a generation of Italians determined to fight off Austrian military occupation, promises a different kind of freedom — that of energy independence from Russia. Erdogan's visit, amid the distractions of the U.S. presidential inauguration, served to remind all parties to a summit beginning this week that Nabucco could become a key sticking point in negotiations over EU accession, which Erdogan described as a "top priority" for Turkey.

If construction on Nabucco begins next year, as currently envisaged, the new pipeline could be operational by 2013. Bulent Aliriza, director of the Turkey Project at Washington, D.C.-based think tank the Center for Strategic and International Studies, says the advantages for European countries, and for Turkey, are "undeniable." "Europeans need the gas, and linked to that, they want to break away from the Russian monopoly," he said. "There is gas in and around the Caspian, and Turkey wants to be the key conduit in the transportation of this gas to Europe."

Labels: energy supplies, EU, Gas Supplies, Nabucco, Turkey

Gas Transport to Europe to Resume After Deal

Natural gas may soon start to flow from Russia to Europe: the prime ministers of Russia and the Ukraine have agreed to a deal after a marathon series of talks. The deal was reached between Russian Prime Minister Vladimir Putin and his Ukrainian counterpart Yulia Tymoshenko. Ukraine would be offered a 20% discount on the market price for Russian natural gas deliveries this year, if it agrees to keep transit fees for pumping gas to Europe via its pipelines at the 2008 level.

Then from 2010 on, the two neighboring countries will switch to European market prices.

Labels: EU, Gas Supplies, Russia, Ukraine

Russia to restart gas pumps to Europe on Tuesday - by Maria Danilova

Russia's state gas monopoly has promised to resume shipping Europe-bound gas through Ukraine on Tuesday morning, nearly a week after it shut off the taps and forced countless Europeans to huddle cold and resentful in freezing homes. However, a spokesman for the Gazprom monopoly indicated lingering problems could still prolong the crisis. More than 15 countries have been the inadvertent victims of a complex and acrimonious wrangle between Russia and Ukraine over gas prices, past debts and allegations of theft. They also jockeyed over an EU-brokered deal to send pipeline monitors to ensure that restored gas shipments reach their destination.

Labels: EU, Gas Supplies, Russia

Russia, Ukraine Appeal to EU in Gas Delivery Dispute - by Stephen Bierman and Daryna Krasnolutska

Russia and Ukraine sought support from the European Union to resolve their deepening dispute over gas supplies on the fifth day of suspension of shipments to the former Soviet state as OAO Gazprom raised its price demands. Gazprom Chief Executive Officer Alexei Miller said the Russian exporter hopes an offer to deliver gas to Ukraine this month at $450 per 1,000 cubic meters, the average price in countries bordering Ukraine, excluding transport costs, would bring Ukraine back to talks. Ukraine says $201 would be fair.

Labels: EU, Gas Supplies, Russia, Ukraine

Is Europe Running Low on Natural Gas? - by Euan Mearns

OECD European gas production looks set to peak in 2008. After that, falling production combined with rising demand will see OECD European gas imports wanting to rise from current 197 BCM per annum to 442 BCM per annum by 2020. Where will this gas come from and how will rising European imports affect N America and the rest of the world?

As of 2006, OECD Europe produced 55% of its own natural gas with the majority of gas imports coming from Russia and Algeria. OECD Europe has three main gas producers - Norway, The UK and The Netherlands. Norwegian gas production is undergoing a major expansion, but this is forecast to halt at 130 BCM per annum next year for political resource conservation reasons. UK and Dutch gas production are in decline, and combined OECD Europe indigenous gas production looks set to peak in 2008.

Labels: EU, Gas Supplies, Gazprom, Russia, Ukraine

Russia and Ukraine in talks to end gas deadlock - by Roman Olearchyk in Kiev and Isabel Gorst

An energy delegation from Ukraine arrived in Moscow on Monday for last-ditch talks aimed at resolving a gas debt dispute with Russia that could disrupt the supply of gas to Europe. Gazprom, Russia’s state-controlled gas group, has demanded that Ukraine settle $2bn of arrears for gas supplies this year or face a cut-off in deliveries from January 1.

The ex-Soviet countries are gearing up for a fourth energy stand-off in as many years, but have assured consumers in Europe that supplies will not be disrupted as happened during a 2006 dispute.

Labels: EU, Gas Supplies, Russia

Bulgaria in talks to import Egyptian natural gas reducing dependence on Russian energy linking existing Turkey-Greece-Italy pipeline

Sameh Fahmy the Egyptian oil minister held talks today (Thursday) in Bulgaria about selling up to 1 billion cubic meters of natural gas a year to the EU country, which is trying to cut its dependence on Russian energy imports. Egypt's Oil Minister said deliveries could begin in 2011-2012, starting at half a billion cubic meters per year.Dimitrov said Egyptian gas could come to Bulgaria through the existing Turkey-Greece-Italy pipeline if Turkey and Egypt were to link their gas networks. Such a link, he said, would be 'crucial to guarantee Egyptian supplies for the Nabucco gas pipeline project. The Nabucco pipeline was built to ease Europe's reliance on Russian energy. The EU gets about one-third of its oil and about 40 percent of its natural gas from Russia.

Labels: Bulgaria, Egypt, EU, Gas Supplies, Greece, Italy, Turkey

Russia, Iran, Qatar discuss OPEC-style gas cartel

Russia, Iran and Qatar took their first serious steps toward forming an OPEC-style cartel for natural gas on Tuesday, a prospect that has unnerved energy-importing nations in Europe and the United States. The three countries together account for 60 percent of the world's gas reserves, and Russia and Iran have both been accused of using their hold on energy supplies to bully neighboring countries. The European Union, which is heavily dependent on Russian gas, criticized the proposal, saying "energy supplies have to be sold in a free market."

Note EU-Digest: The three countries do not control 60% of the gas supplies and the idea of a gas cartel makes little sense unless it includes at least the top ten suppliers of natural gas which are:

1. Russia … 656.2 billion cubic meters (19.9% of estimated world total)

2. United States … 490.8 billion cubic meters (14.9%)

3. Canada … 178.2 billion cubic meters (5.4%)

4. Iran … 101 billion cubic meters (3.1%)

5. Algeria … 84.4 billion cubic meters (2.6%)

6. United Kingdom … 84.2 billion cubic meters (2.6%)

7. Norway … 83.4 billion cubic meters (2.5%)

8. Netherlands … 77.3 billion cubic meters (2.3%)

9. Indonesia … 74 billion cubic meters (2.2%)

10. Turkmenistan … 72.3 billion cubic meters (2.2%).

Labels: Cartel, Gas Supplies, Iran, Quatar, Russia

EU-Energy - Turkey, EU agree on site for start of Nabucco-source - by Orhan Coskun

Turkey and the European Union have agreed on a site near Ankara for the start of the Nabucco pipeline, planned to carry natural gas to Europe, a high level Turkish energy ministry official told Reuters on Friday.

The EU will provide financial support for the planned site near Ankara at Ahiboz, the official said, which will fund the necessary natural gas facilities. Gas supplies for the project have thus far only been secured in Azerbaijan.

"The European Union's support, including financial support, will help build the physical infrastructure that will turn Ahiboz into an energy hub," said Turkish officialz. Apart from the Nabucco project, Turkey has a also said it wants to export gas to third countries.

Labels: EU, Gas Supplies, Turkey

Europe idle as US battles meltdown - by Ambrose Evans - Pritchard

It is the first time since the Great Depression that the US Fed has stepped in directly to absorb credit losses, crossing a line deemed unthinkable just months ago. The dramatic late-night move on Sunday required dredging up Article 13 (3) of the Federal Reserve Act, which allows the Fed to shower money on almost anybody it wishes by a vote of five governors in "unusual and exigent circumstances".Jean-Michel Six, chief Europe economist at Standard & Poor's, said the Europeans were in no mood to rescue America. "There is monetary war going on. The ECB view is that Fed is a victim of its own mistakes and should pay for its past crimes. Frankly, they don't see why they should be cutting rates when inflation (3.3pc) is accelerating," he said.

There are now echoes of October 1987 when the German Bundesbank (and therefore Europe) refused to ease monetary policy, even though the dollar was in freefall and Wall Street was fragile. The spat was the backdrop to the Black Monday crash.

Note EU-Digest: The ECB is on the right track, the problems of the US economy are of the US her own making. If the ECB cuts the interest rates in Europe, inflation would rise and Europe's economy would also spiral into disaster.

Labels: Britain, Christianity, Energy, EU, EU Economy, euro, France, Gas Supplies, Healthcare, Iraq war, Islam, Italy, Romance, Russia, Sarkozy, Sex Appeal, Turkey, US, US Economy

Russian president Vladimir Putin is expected to sign the agreement for South Stream gas pipeline during his visit to Bulgaria on January 17 and 18 2008. The South Stream gas pipeline, to be built by gas giants Gazprom of Russia and ENI of Italy, will deliver Russian gas to Austria, through its northern arm, and to Italy, through its southern. South Stream pipeline will be 900 km long and its annual capacity is expected to be at least 30 billion cu m of gas. The project will cost between 10 and 12 billion euro.

Labels: Bulgaria, Energy, EU, Gas Supplies, Russia

Gas pipeline stirs up Baltic fears - by Tristana Moore

Nord Stream, a consortium led by Russia's Gazprom which is building a new controversial pipeline, has several vessels moored at the quayside. For months, crew members have been out at sea, carrying out surveys of the seabed in order to ensure the route of the planned pipeline is safe. It is a huge technical and logistical challenge. The pipeline is about 1,200 kilometres (750 miles) long and it will run from Vyborg, in Russia, under the Baltic Sea, to Greifswald, in northern Germany. Once construction is completed at the end of 2010, the pipeline will supply Russian natural gas to customers all over Europe. The long-term goal is to supply up to 55 billion cubic metres of gas each year.

Labels: EU, Gas Supplies, Russia

Russia denies politics involved in Ukraine gas debt issue

Russian First Deputy Prime Minister Dmitry Medvedev denied in a television program on Sunday that there were any politics involved in the current issue of the Ukrainian payment arrears for Russian natural gas. "This problem will be solved when Russia gets the money," Medvedev, who also heads the board of directors of Russian natural gas monopoly Gazprom, told Russia's First Channel. "So we are continuing negotiations. Currently there are certain guidelines on how the Ukrainian side, our Ukrainian partners, are trying to shut off this debt problem. Next week there will be more [talks]," Medvedev said.

The gas price for Ukraine will be based on market factors, "as is done for all our partners," the deputy premier said. "It is a purely a matter of negotiation, an economic matter."

Labels: Gas Supplies, Russia, Ukraine

Iran to sell gas to Europe via Nabucco

Iran to sell gas to Europe via Nabucco

Iran will sell its gas to partner countries of the Nabucco gas pipeline, a project to pump Caspian gas to Europe via Turkey, Bulgaria, Hungary and Austria, an Iranian official told a news conference in Turkey on Tuesday. The official also said a deal with Turkey to sell gas and develop Iran’s South Pars gas fields will not affect an existing agreement made with Austria’s OMV. “We will sell our gas through Turkey to Nabucco partner countries, including Austria,” said Iranian economic relations under-secretary Ahmed Noorani.

The Nabucco pipeline, which is estimated to cost e 4.6 billion, is projected to carry 31 billion cubic metres of Caspian and Middle East gas to European markets.

Labels: EU, Gas Supplies, Iran

Gazprom flexes its muscles in Europe - Sylvia Pfeifer

The Russian state-owned gas giant that provides a quarter of Europe's gas needs, is to make its first foray into electricity generation in continental Europe in a move that underlines the scale of its ambitions in the West.

The company plans to build a combined cycle gas turbine station in Germany to supply industrial customers and trade power in what will be one of its first major projects outside Russia. It has teamed up with Soteg, Luxembourg's main power supplier, to build the €400m plant in the eastern German town of Eisenhüttenstadt. The plant will generate 800MW from 2010 but the two companies still need to get approval to build it.

Labels: Europe, Gas Supplies, Gazprom, Russia

Turkey Punishes France for Recognizing Armenian Massacre

Turkey, reacting to a French bill on the World War I massacre of Armenians, has suspended talks with Gaz de France (GDF) on the French firm's possible participation in a major pipeline project, the Anatolia news agency reported Thursday. Turkey's energy ministry and the state-owned oil and gas company BOTAS, which is part of the Nabucco consortium building the pipeline, refused to comment on the report.

The five-company consortium plans to build a 3,300-kilometre (2,000-mile) pipeline that will carry natural gas from the Middle East and Central Asia to the European Union via Turkey and the Balkans, bypassing Russia. The other partners in the venture are Austria's oil and gas group OMV, Hungary's MOL, Bulgaria's Bulgargaz and Romania's Transgaz.

Labels: Armenians, EU, France, Gas Supplies, Pipeline, Turkey

Europe's dwindling gas reserves- by Wendy Braanker

Gas will eventually run out in Europe, not this year, not next year but soon. Delegates to a European gas conference currently being held in Amsterdam have concluded that the only way to solve the gas problem is for Europe to strengthen ties with countries such as Russia and Iran. However, not everybody is happy with that conclusion.

European Union countries have to compete with the United States and Asian countries for gas supplies and the demand for gas has sharply risen throughout Asia and in the US. Solar and wind energy can meet some of Europe's energy needs but more time is needed if alternative energy is going to be a substitute for gas.Europe depends on Russia for a quarter of its gas imports. Delegates to the Amsterdam gas conference, called Flame, concluded that the demand for gas will only increase, while European gas reserves are dwindling.

Labels: Gas Supplies