Moscow law firms: new star in the east

Activity in the Oil and Gas sector (including regulatory)

EnBW offers Novatek 25 pct stake in VNG – paper

FRANKFURT, July 20 (Reuters) - German utility EnBW is offering Russia's Novatek a stake of up to a quarter in natural gas supplier Verbundnetz Gas (VNG), German daily Handelsblatt said.

EnBW, short for Energie Baden-Wuerttemberg, holds an option to buy 48 percent in VNG and has offered to hand parts of that stake on to Novatek, the newspaper said on Wednesday, citing company sources.

EnBW is also mulling transferring the remaining stake in VNG to a joint venture with Novatek.

It is under political pressure not to sell the entire stake to Novatek because that would effectively mean putting VNG under Russian control, since Novatek's larger Russian peer Gazprom already holds 10.5 percent in VNG.

EnBW was not available for comment. VNG declined to comment.

The deal has not been signed yet but talks are at an advance stage, Handelsblatt said.

Stuttgarter Zeitung reported this week that Novatek, Russia's largest independent natural gas producer, was negotiating a cooperation deal worth 800 million euros ($1.1 billion) with EnBW.

Larger German competitor RWE said last week it was in exclusive negotiations with Russia's Gazprom over forms of cooperation. (Reporting by Ludwig Burger; Editing by David Holmes) ($1=.7043 Euro)

Russia Mulls Freezing South Stream Gas Line – Report

Moscow could soon freeze temporarily its gas pipeline project "South Stream" and increase gas export to Europe thanks to Germany as a reliable partner.

The information was reported by the Russian news agency RIA Novosti, citing the Russian daily Kommersant and an unnamed source from the Russian cabinet.

In August 2009, Russian Prime Minister, Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan signed an agreement to have the pipeline pass under Turkish Black Sea waters.

In exchange, Moscow was to build the "Samsun-Djeihan" oil line, which is very favorable for Turkey, and to the detriment of the Russian "Burgas-Alexandroupolis" oil line, along with the first Turkish Nuclear Power Plant to be built by the Russian State company Rosatom.

Despite all of the above, and Ankara's initial commitment to a December 2010, deadline, Russia is yet to receive a green light for "South Stream" to go under Turkish waters.

The new deadline for the Turkish side to give an answer is November 2011, but according to same Russian cabinet source, it is very likely this deadline would end up not being adhered to.

For the execution of South Stream, which is a competitor to EU-sponsored pipeline Nabucco, Russia has signed bilateral cooperation agreements with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia, and Austria. Bulgaria's neighbors Romania and Macedonia are also to be included.

The South Stream pipe will start near Novorosiysk on the Russian Black Sea coast, and will go to Bulgaria's Varna; the underwater section will be 900 km long.

In Bulgaria, the pipe is supposed to split in two - one pipeline going to Greece and Southern Italy, and another one going to Austria and Northern Italy through Serbia, Croatia and Slovenia.

The project was initiated by Gazprom and the Italian company Eni, with French company EdF and German BASF to join as shareholders.

Bulgaria's Bulgargaz, a subsidiary of the Bulgarian Energy Holding, and Gazrpom signed a road map for the construction of the Russian sponsored South Stream pipeline in Varna in July 2010, and during Putin's visit in Sofia in November 2010, they signed a shareholders' agreement for the project company, which is to construct the Bulgarian section of South Stream. Both parties will have 50% of the shares in the joint venture.

The preliminary survey for the Bulgarian section of South Stream is expected to be completed by the end of March 2011, and after that Bulgaria will make a final decision on an EUR 500 M investment in its section of the South Stream project.

Gazprom

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8137436

Turkey has received no official contact from Gazprom regarding a tender opened by state gas importer Botas to transfer 6 billion cubic meters/year from the 16 Bcm/yr it supplies via the Blue Stream pipeline to private sector companies, a spokesman for Turkey's energy ministry told Platts Tuesday.

"If they have a problem with the tender presumably it will become clear after September 8," he said referring to the deadline for bids and to the need for winning companies to negotiate their own "Seller's Consent Protocol" with Gazprom.

Turkish daily Zaman Tuesday quoted unnamed Botas officials as claiming that Gazprom had informed the company that it would not negotiate with private companies for the transfer of volumes from the Blue Stream contract as it regarded the Blue Stream contract between Botas and Gazprom Export LLC signed in 1997 as an intergovernmental agreement which cannot be amended.

Botas opened a tender in May offering private companies the chance to bid for 24 blocks of 250 million cu m/yr each of gas from the 16 Bcm/yr which arrives in Turkey via the Blue Stream pipeline under the 1997 contract. The deadline on the tender is September 8.

Speaking to Platts last month Botas CEO Fazil Senol reported that more than 10 companies had purchased bid documents for the tender.

Interest in the sale had been expected to be intense with as many as 20 companies planning to construct Botas is reported to be paying Gazprom for gas it has not taken under the take-or-pay clause of the 1997 agreement, due to Turkey's gas demand having grown more slowly than predicted.

Three previous volume transfer tenders held over 2005-07 failed to elicit any bids for gas from the Blue Stream contract and succeeded only in selling a total of 4 Bcm/yr of gas from Turkey's 8 Bcm/yr contract with Gazprom for gas delivered via the Transbalkan pipeline.

Turkey's oldest gas import contract, for 6 Bcm/yr also via the Transbalkan line which is also operated by Botas ends its 25 year term at the end of this year with Turkish energy minister Taner Yildiz stating on several occasions that Botas will not renew the contract and that he expects it to be renewed by the private sector.

Under the terms of the agreement gas supply will continue on the same terms for another 5 years unless terminated by either side.

Turkish energy company Aksa confirmed in early June that it had opened talks with Gazprom with the intention of taking over all or some part of the 6 Bcm/yr contract.

But, speaking to Platts last month Botas CEO Fazil Senol stated that the transfer of the contract to the private sector could only be achieved through a volume transfer tender. --David O'Byrne, newsdesk@platts.com

The Return of Gazprom

http://oilprice.com/Energy/Natural-Gas/The-Return-of-Gazprom.html
Written by John Daly   

Tuesday, 19 July 2011 13:22

The December 1991 collapse of the USSR was an unmitigated disaster for all 15 nations emerging from the desiccated carapace of the Soviet Union.

Now, like a plate of mercury smashed with a hammer, rivulets of the former USSR member state’s energy assets two decades later are trickling back under the control and influence of Eurasia largest energy concern, Gazprom.

All the new post-Soviet states faced the triple problems of raging hyperinflation, evolving ad hoc nationalistic policies and, perhaps most importantly, coping with the detritus of Union-wide systems that suddenly deposited fragments of their former selves on the territories of the new nations.

Of these debris fields, the three most important were the former USSR’s communications, transport and energy grids. Working out new relationships between the nations emerging from the USSR’s demise was a long, convoluted process, given that all three systems as a whole had been designed to serve the Soviet Union as a whole, rather than its constituent republics.

Of the three above-mentioned legacies, the communications and transport networks were relatively easy to resolve – slap a new coat of paint on the railway carriage, name it after the new national railway, problem solved.

The real trauma amongst the post-Soviet states began over the USSR’s energy infrastructure. Designed originally to benefit the USSR as an autarkic entity, the Soviet Union only began in the late 1970s to export its energy riches, the energy resources and natural gas and oil pipelines and electrical transmission lines suddenly became national assets, to be exploited for maximum benefit, even if it meant hammering the neighbouring economy of a former fraternal Soviet socialist republic.

And the organization with the 800-lb hammer is the Russian Federation’s state-owned national gas company, Gazprom.

Of the pot-Soviet space’s energy assets, two loomed above all of interest to Gazprom.

In the energy-poor former western republics of the USSR, their extensive pipeline networks, particularly those of Ukraine and Belarus, that had been developed beginning in the mid-1970s not only to supply their indigenous needs but to transmit soviet gas to the burgeoning markets of Europe, despite the disapproval of the Reagan administration.

Farther east, the item of interest were the natural gas assets of the Soviet Central Asian “Stans,” which could be used to meet heavily subsidized Soviet domestic requirements while natural gas produced in the Russian SSR could be shipped westward to the rich capitalist Europeans.

Two recent developments have indicated that Gazprom has advanced on the chessboard in both directions.

First, as regards Belarus, earlier this month Belarusian Prime Minister Mikhail Myasnikovich stated that Minsk is prepared to sell the country’s Beltransgaz pipeline network to Gazprom, a development which the Belarus government had resisted for two decades.

The reason? The crushing debt, even at subsidized prices, owed by Belarus for Gazprom natural gas shipments.

Farther east, Gazprom has extended its influence in Kazakhstan, the second biggest energy producer in the former Soviet Union and Russia’s closest Central Asia ally, despite the vast country being a darling of Western energy companies for its Caspian reserves. Earlier this month Gazprom announced that it had appointed Timur Kulibayev, son-in-law of Kazakh President Nursultan Nazarbayev, to its board of directors. Gazprom CEO Aleksei Miller noted that Kulibayev was a good choice because Russia and Kazakhstan have common oil and gas interests and that Gazprom was planning large projects in Kazakhstan. Given Kazakhstan’s landlocked nature, that can mean only one thing – pipelines.

Kulibayev, who is chairman of the board at KazMunaiGas, is also chairman of the supervisory board of Samruk-Kazyn, the Kazakh National Welfare Fund, which controls the state’s stakes in a swathe of the country’s key industries, including KazMunaiGas and has assets of $80 billion.

What does this mean for Western energy companies, which have ploughed more than $80 billion into developing Kazakh energy assets over the past two decades? Unclear – but as one analyst observed, “Americans play checkers, and the Russians play chess.”Under this metaphor, it would seem that Putin is moving closer to declaring “checkmate” over Western penetration of the energy assets of the post-Soviet space.

By. John C.K. Daly of OilPrice.com

Directory: gifiles -> attach
attach -> British Forces – Akrioti, Greece Griffin Fighter Squadron (84 Squadron raf) MoD announced possible Typhoon and Tornado arrivals to the base France
attach -> Russia 110204 Basic Political Developments
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attach -> Russia and Islam are not Separate
attach -> Chapter 13: The Northern Caucasus
attach -> Russia 100209 Basic Political Developments
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attach -> The devolution

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