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    Russian Oil and Gas Industry: News

    kvs
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    Post  kvs on Mon Jun 24, 2019 3:04 pm

    owais.usmani wrote:https://oilprice.com/Energy/Natural-Gas/A-Watershed-Moment-For-Gazprom.html


    A Watershed Moment For Gazprom





    In Russia, oil stands for money and gas for power. The extensive pipeline infrastructure connecting gas fields in Siberia with consumers in primarily Europe has been the source of interdependency and relative political power. In this context, no company is more powerful and essential than Gazprom, which is sometimes referred to as “a state within a state”. It also means, however, that the energy giant is no ordinary company as it has to deal with different KPIs than its peers.

    Gazprom controls some of the world’s largest gas fields which dwarf the assets of competitors. The seemingly unlimited production capacity is the source of the energy company’s power and influence. Gazprom’s 10 percent share of the Russian economy is a token of its importance for the country’s economy. Furthermore, the company’s activities make up the bulk of Russia’s total fixed investments.

    Before the financial crisis of 2007-2008, Gazprom’s market value stood at $360 billion. The company’s management even promised to raise the valuation to $1 trillion. Instead, things went from bad to worse, and share prices fell to a mere fraction of their previous value. The energy giant had lost approximately $300 billion of its value by 2015 when market capitalization stood at $51 billion.

    Gazprom stocks, however, soared to unseen heights last month, rising 30 percent as the gas major decided to double its dividend to 16.6 rubles from 8 rubles previously. According to several sources, the Russian Finance Ministry has been pushing state-owned enterprises (SOE) such as Sberbank, VTB, Gazprom, and Rosneft to increase the pay-out ratio to at least 50 percent. This, in turn, raised investors’ profitability expectations.

    Gazprom was rewarded with a sharp rise of its valuation by almost $25 billion to $71.4 billion within a couple of days. At the end of May, the company’s share value had risen sufficiently to break through the $75 billion mark for the first time in years. Gazprom’s performance had been lagging behind most SOEs in 2018, which the management ascribed to the company’s substantial investments in new pipeline infrastructure for markets in Europe and Asia. The Kremlin, however, seems to be losing its patience
    when it comes to improving the efficiency and performance of the energy giant.

    The Kremlin has launched 12 national projects to reinvigorate the Russian economy. One of the stated goals is to improve the efficiency of SOEs. An earnest effort has been made to curb spending on tenders and procurements, including the massive investment programs for the expansion of pipeline infrastructure to China and Europe. One of the measures to keep spending in control is organizing all projects under a single contractor, Gazstroyprom.

    According to the World Bank, Gazprom is the most unproductive company in Russia. After the collapse of the Soviet Union, the company suffered from mismanagement and corruption. One of Putin's first battles was to reform the company and change the management. However, in recent months, it seems that the current leadership is at risk of being sacked. Since February, three high-ranking employees have left the company.

    According to specific sources, CEO Alexei Miller is also under threat of being sacked. His departure could be one of the reasons for investors’ believe that the current drive for efficiency is a firm intention to reform.

    The Kremlin’s push for sustained profitability is music in the ears of private investors. The end of 2019 and the beginning of 2020 could be a watershed moment for the company as the construction Nord Stream 2, Turk Stream, and Power of Siberia near their end. It would benefit Gazprom’s position in two ways: sales should improve due to additional export capacity and the completion of the projects will reduce the financial burden concerning investments. Therefore, it seems likely that the company’s profitability will significantly rise in the next couple of years. The Kremlin’s intention seems to cash in after a long period of significant spending and infrastructure expansion. Furthermore, improving Gazprom’s efficiency and effectiveness should boost the company’s public standing and credibility.

    The stock valuation of Gazprom is based on NATO propaganda and not on objective metrics. Look at the stock worth of Exxon. Exxon is a company in decline but you would
    think it was vastly more important than Gazprom even though in terms of BTU, Gazprom has vastly more reserves than Exxon. And natural gas is more valuable than oil since it
    is in high demand for clean power generation and is a feedstock for the the plastics and fertilizer industries. It can also be used as a transportation fuel.
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    Post  Hole on Mon Jun 24, 2019 3:58 pm

    The stock price of Gazprom went down as soon as the western "investors" learned that Russia wouldn´t sell of the company for change.

    An article that names the world bank, one of the most corrupt entities in the world, as a source shouldn´t be taken to seriously.
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    Post  kvs on Mon Jun 24, 2019 5:45 pm

    Hole wrote:The stock price of Gazprom went down as soon as the western "investors" learned that Russia wouldn´t sell of the company for change.

    An article that names the world bank, one of the most corrupt entities in the world, as a source shouldn´t be taken to seriously.

    The whole Magnitsky affair is about the crook Bill Browder trying to sell Gazprom shares to foreigners when the law prevented it.
    Russia can do not right. "All its resource are belong to us", think western self-anointed masters of the universe.
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    Post  calripson on Mon Jun 24, 2019 10:48 pm

    kvs wrote:
    Hole wrote:The stock price of Gazprom went down as soon as the western "investors" learned that Russia wouldn´t sell of the company for change.

    An article that names the world bank, one of the most corrupt entities in the world, as a source shouldn´t be taken to seriously.

    The whole Magnitsky affair is about the crook Bill Browder trying to sell Gazprom shares to foreigners when the law prevented it.
    Russia can do not right.   "All its resource are belong to us", think western self-anointed masters of the universe.

    I worked for a major Russian brokerage company during that time period. There was a prohibition against foreigners owning local shares of Gazprom. (They could own ADR/GDR shares registered abroad). The local shares traded for 20-30% of the value of the ADR/GDR shares. Same shares just not convertible. The Moscow brokerage community thought it kosher to create synthetic derivative Gazprom shares by creating a local Russian entity to hold local shares and then to sell interests in that entity to foreigners. That is what Browder invested in. When the "ring fence" came down as everyone knew it would, the discount evaporated.
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    Post  kvs on Mon Jun 24, 2019 11:10 pm

    https://www.rt.com/news/magnitsky-browder-gazprom-hermitage-848/

    Browder was yet another crook working over Russia and treated as a saint by NATO.
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    Post  owais.usmani on Tue Jun 25, 2019 4:18 pm

    https://uk.reuters.com/article/uk-russia-total-lng/frances-total-says-know-how-for-russian-arctic-lng-2-to-slash-costs-idUKKCN1TQ190

    France's Total says know-how for Russian Arctic LNG-2 to slash costs


    ST PETERSBURG (Reuters) - Russia’s Arctic LNG-2 project will be around a third cheaper to build than the country’s Yamal LNG plant thanks to technology being built by Italy’s Saipem, stakeholder Total said on Tuesday.

    Arnaud Le Foll, Total’s head officer in Russia, said Saipem was building so-called gravity-based structure platforms (GBS) for gas liquefaction for the Arctic plant. GBS platforms have been used often in North Sea and other gas projects but not in Russia.

    “There will be three such structures,” Le Foll told Reuters on the sidelines of a conference in St Petersburg. “They are being built in Murmansk by Novatek’s shipyard, it’s contracted with (Italy’s) Saipem.”

    Russian natural gas producer Novatek owns a 70% stake in the Arctic project, while Total and China’s CNPC and CNOOC each own 10%.

    The GBS platforms will be located near the Arctic Ocean coast and held in place on the seabed by ballasts.

    Novatek has estimated that the project will cost $20 billion-$21 billion, whereas the Yamal plant, operating since December 2017, cost $27 billion (21 billion pounds). The plant in the Arctic Gydan peninsula is due to start operations in 2022-2023, with a total annual capacity for 19.8 million tonnes of LNG, the largest such plant in Russia.
    Novatek and Total were also in the consortium that built the Yamal plant.

    “We are targeting the project that will be more economic by 20% to 30% comparing to Yamal,” Le Foll said, when asked how the GBS technologies will impact the costs of Arctic LNG-2.

    He declined to comment on Total’s exposure to contaminated Russian oil discovered two months ago. Total actively trades Russia-sourced oil.
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    Post  owais.usmani on Tue Jun 25, 2019 4:23 pm

    https://www.offshore-mag.com/pipelines/article/14035275/nord-stream-2-pipelay-nears-60

    Nord Stream 2 pipelay nears 60%


    MOSCOW – Gazprom has issued progress reports on its two current offshore gas pipeline projects in Eastern Europe.

    To date, around 1,450 km (901 mi) have been laid of the Nord Stream 2 pipeline in the Baltic Sea (more than 59% of the total length).

    Pipelay is currently taking place in Finnish waters, while construction continues of the Russian and German sections.

    Also in Russian territory, Gazprom continues to work on development of facilities (including compression) for the northern gas transmission corridor that will feed gas into Nord Stream 2.

    The new pipeline will have an annual capacity of 55 bcm from Russia to Germany. ENGIE, OMV, Royal Dutch Shell, Uniper, and Wintershall Dea are financing 50% of the total project cost.

    As for TurkStream in the Black Sea, installation has finished of the pipeline’s offshore section and the Russkaya compressor station and the landfall in Russia are both in the start-up phase.

    A reception terminal for the gas in Turkey is more than 80% complete.

    The two strings of TurkStream will each have throughput capacity of 15.75 bcm/yr.
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    Post  owais.usmani on Tue Jun 25, 2019 4:26 pm

    https://jamestown.org/program/political-scandal-has-not-stopped-austrian-purchases-of-russian-gas/

    Political Scandal Has Not Stopped Austrian Purchases of Russian Gas


    The dominant player in Austria’s oil and natural gas sector, OMV, has signaled that a Russia-related political scandal that recently toppled the government in Vienna will not halt the Austrian company from deepening its ties with Russian energy firms. This became apparent in early June, with OMV signing amendments to an agreement under which it will acquire a quarter of Gazprom’s massive Urengoy gas field in Russia’s Yamal Peninsula (Gazprom.com, June 7).

    The agreement, expected to be finalized by the end of 2019, will give OMV 24.98 percent ownership of Blocks 4A and 5A at Urengoy, the world’s second-largest conventional gas field. Gazprom will retain majority control of this Arctic gas field—50.01 percent. Meanwhile, German Wintershall Dea, Gazprom’s main partner on the Nord Stream One and Two (under construction) pipelines running from Russia to the European Union, already owns the remaining 25.1 percent of Urengoy. OMV is also a Nord Stream Two partner (Gazprom.com, June 7).

    The Austrian energy giant signed the Urengoy amendments on June 7, less than a month after Vice Chancellor Heinz-Christian Strache, the Russia-friendly head of Austria’s right-wing Freedom Party, became embroiled in the so-called Ibiza-gate scandal. In a secret recording made on the Spanish island of Ibiza and later publicly released, Strache promises government contracts to the niece of a wealthy Russian businessman with close ties to the Kremlin in exchange for her support in his next election campaign (EurActiv, May 21). Although the woman turned out to be an impostor, the scandal brought down the Freedom Party–led governing coalition, forcing early parliamentary elections in September.

    Most of the Russian gas that serves Europe comes from the Urengoy and Bovanovenskoe reservoirs. Urengoy has been one of the world’s most productive fields for 40 years, but the gas closest to its surface is running out (Gazprom.com, accessed June 24). Gazprom has decided to find international partners for the expensive, more complicated drilling needed to remove gas from Urengoy’s depths. The company has already extracted 6 trillion cubic meters from the upper formations of the field—Blocks 1A, 2A and 3A. It calculates that a further 10 trillion cubic meters are available at deeper locations. Gazprom, OMV and Wintershall will have to drill down 4 kilometers (about 2.5 miles) to reach 280 billion of the 10 trillion cubic meters.

    Once all five blocks reach their maximum production levels, Urengoy will be producing 36.8 billion cubic meters (bcm) of gas a day—a fourth of Russia’s combined exports to Europe and Turkey. The gas will transit to Western Europe via Gazprom’s Brotherhood pipeline running through Ukraine and Slovakia (Gazprom.com, accessed June 24).

    Wintershall, Germany’s largest oil and gas producer, acquired its stake in Urengoy in an asset-swap deal in 2015, when it was a subsidiary of BASF (Wintershall.com, September 4, 2015). It also obtained another German oil and gas company, DEA, from LetterOne, a firm owned by Russian billionaire Mikhail Fridman (LNG World News, May 2). LetterOne had acquired DEA from another German petroleum company, RWE, in March 2015 (Letterone.com, January 16, 2015). The swap gave Gazprom access to important North Sea offshore gas assets and key gas storage and trading companies in the European Union.

    OMV also owns the Baumgarten gas transmission facility, a linchpin of Gazprom’s European supply network and one of the European Union’s key gas hubs. Located around 10 miles east of Vienna, Baumgarten is a transit and storage facility for the 40 billion cubic meters of gas a year that Gazprom sends to the continent. The Austrian hub will also be a key European transit point for Russian gas that flows through Gazprom’s existing TurkStream pipeline to Turkey and on to the EU. Before TurkStream gas can end up in the continent, however, Gazprom will have to build a pipeline that connects this pipeline to the EU network.

    Neither Austria’s political scandal nor the United States’ threats to sanction the Nord Stream Two partners appears likely to prevent OMV from completing its acquisition of a stake in Urengoy. Washington opposes the Nord Stream pipeline expansion on the grounds that it will make Europe more dependent on Russian gas.

    Austria was the first Western European country to import gas from Russia—in 1968, when Russia was part of the Soviet Union. Many Austrians see the more than half-century partnership as a plus. Thus, Vienna is unlikely to bow to outside political pressure to weaken or scrap its Russian gas ties, even if a government that is less enamored of Moscow emerges in September.

    OMV sees the Urengoy deal as strictly business, increasing its profits by giving it access to assets along the entire petroleum-business value chain. The acquisition is also a defensive play. OMV believes substantial gas reserves will strengthen its ability to cope with growing gas-market competition. Hence, in the Austrian case, interrelated economic considerations are providing unbending support within the EU to Gazprom’s politically motivated Nord Stream Two project.
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    Post  owais.usmani on Wed Jun 26, 2019 2:56 pm

    https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/062619-arctic-lng-2-supply-deal-with-fourth-buyer-imminent-novatek

    Arctic LNG 2 supply deal with fourth buyer imminent: Novatek


    London — Russia's Novatek expects to complete negotiations with a buyer, likely from Asia, for the Arctic LNG 2 project by the end of June and take the final investment decision in the third quarter, CFO Marc Gyetvay said Wednesday.
    "Customers in the Asia Pacific markets have been very interested in our project," Gyetvay said on the sidelines of the 11th Asia Pacific Summit in Singapore. "We would like to have [the deal] closed by the end of this quarter." He declined to comment further.
    Novatek officials have earlier named Japanese companies among those interested in the project, while LNG trader Mitsui said earlier this month it was in talks with Novatek over Arctic LNG 2.

    The new buyer would become the fourth foreign investor and equity offtaker in the 19.8 million mt/year LNG export project in the Russian Arctic Gydan peninsula.

    Novatek is also planning two transshipment centers -- one in the east in Kamchatka and one in the west at Murmansk -- to optimize shipping. Operations at Murmansk are due to commence in the second half of this year, while the Kamchatka start-up was aimed for 2022-2023, Gyetvay said.

    Novatek plans to commission the first train of Arctic LNG 2 in 2023, the second train in 2024, and the third train in 2025, before reaching full capacity in 2026.

    The company has already reached binding agreements with two Chinese companies -- CNPC subsidiary China National Oil and Gas Exploration and Development Company, and CNOOC -- for each to buy a 10% stake in the project. France?s Total also bought a 10% stake in the project earlier this year.

    The project leader said previously it planned to retain a 60% stake in the project, while selling the remaining interest to foreign partners to share financial risks and secure markets for its future LNG.
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    Post  owais.usmani on Wed Jun 26, 2019 3:03 pm

    https://www.urdupoint.com/en/world/nord-stream-2-construction-may-be-theoretica-654270.html

    Nord Stream 2 Construction May Be 'Theoretically' Delayed By Denmark - OMV CEO


    MOSCOW (UrduPoint News / Sputnik - 26th June, 2019) The construction of the Nord Stream 2 pipeline for delivering Russian natural gas to Europe could be theoretically delayed over Denmark's reluctance to approve its construction in the country's territorial waters, while the construction currently proceeds as scheduled, the CEO of Austrian OMV energy company, Rainer Seele, said on Wednesday.

    The pipeline is set to pass either through territorial waters or exclusive economic zones of Denmark, Finland, Germany, Russia and Sweden. Denmark remains the only country that has not given its consent to the construction of the Nord Stream 2 pipeline so far.

    "This is theoretically possible, while the Nord Stream 2 is currently able to stick to the time framework.

    We don't know when permission will be provided ... Of course, commissioning of the pipeline may really be delayed, but I cannot confirm whether it will become a reality or not," Seele told reporters.

    Seele refuted media reports suggesting that "certain states" were happy to see that the Danish government was not giving its consent. He also stressed that the Danish government was acting professionally.

    Nord Stream 2 is a joint venture of Russian gas giant Gazprom and five European companies, including OMV. The pipeline is expected to deliver 55 billion cubic meters (1.9 trillion cubic feet) of Russian natural gas annually to the European Union through the Baltic Sea.
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    Post  PapaDragon on Sun Jun 30, 2019 3:47 pm


    Mitsui to join LNG project in Arctic Ocean off Russia

    https://www.japantimes.co.jp/news/2019/06/30/national/mitsui-join-lng-project-arctic-ocean-off-russia/
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    Post  owais.usmani on Mon Jul 01, 2019 9:33 am

    https://www.reuters.com/article/us-gazprom-nordstream-denmark/nord-stream-2-withdraws-2017-application-for-route-in-danish-waters-idUSKCN1TT2KS

    Nord Stream 2 withdraws 2017 application for route in Danish waters


    MOSCOW (Reuters) - Russia’s Nord Stream 2 natural gas pipeline project said on Friday it has withdrawn its 2017 application for a route through Danish territorial waters south of Bornholm, ending a process that has lasted for more than two years.

    “The withdrawal of the original application is necessary to protect Nord Stream 2’s shareholder and the European investors from Austria, France, Germany and the Netherlands against the risk of further delays and financial losses,” Nord Stream 2 said in a statement.

    Nord Stream 2, a project led by state gas producer Gazprom, said second and third applications for routes north-west and south-east of Bornholm international waters remain unchanged.
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    Post  owais.usmani on Mon Jul 01, 2019 9:36 am

    https://www.hellenicshippingnews.com/gazprom-expects-to-export-up-to-201-1-bcm-of-gas-to-europe-in-2019/

    Gazprom expects to export up to 201.1 Bcm of gas to Europe in 2019


    Russian gas group Gazprom expects natural gas exports to Europe and Turkey of up to 201.1 Bcm this year, CEO Alexei Miller said.

    Gazprom also expects gas import demand growth in Europe up to 2035 to exceed forecasts, Miller also said.
    “Today our forecast for gas pipeline deliveries in 2019 to Europe and Turkey is between 198.6 and 201.1 Bcm,” Miller said in a speech at the company’s annual general meeting. Gazprom exported 201.9 Bcm to Europe in 2018, accounting for around 36.8% of the market.

    “Taking into account the reality that demand for Russian gas has reached a new level, a new height of around 200 Bcm/year, our share on the market is between 35.5 and 37.5%,” he said. “Furthermore it is worth nothing that we increased this by 5.4 percentage points in just three years.”

    Gazprom is also considering increasing volumes of gas supplied for European storage above the current planned level of 11.4 Bcm.

    “The target volume for pumping into European storage is not less than 11.4 Bcm. What does ‘not less than’ mean? If we have the opportunity to pump more, then we will pump more. We will pump as much as we can,” Miller said.

    Gazprom traditionally fills European storage in the summer, but this year is keen to increase volumes, due to uncertainty over transit via Ukraine next year. The current transit contract is due to expire at the end of 2019 and a new one has yet to be agreed.

    Representatives of the EU, Ukraine and Russia are due to meet to discuss the issue in September.

    Miller said that under EU law it will not be possible to sign a new contract by the end of the year. He said Gazprom was willing to extend the existing transit contract, but it should be economically worthwhile for Russia.

    Earlier Friday Miller said that Gazprom expects gas demand growth in Europe up to 2035 to exceed forecasts.

    “Three years ago at the AGM we said that by 2035 demand in Europe for additional gas imports may be 150 Bcm. Today we see that in the last three years alone imports to Europe have increased by 67 Bcm,” Miller said.

    “We expect that this trend will continue and the reality will exceed forecasts,” Miller said, adding that the main drivers behind the growth were declining domestic gas production, declining nuclear power generation and a fall in the role of coal in power generation.

    Local media reported that Gazprom expected output to exceed expectations this year, citing deputy chairman of the management committee Vitaly Markelov.

    “Last year, Gazprom produced 497.6 Bcm of gas. The plan for this year includes gas production of 495 Bcm…today we have already produced 252.6 Bcm of gas, which is 7.6 Bcm higher than the plan for this period. We expect to exceed the plan by the end of the year,” Markelov said, according to the Prime news agency.

    Miller said Gazprom planned to purchase around 20 Bcm/year of gas in Central Asia in the near term.

    “This year we are planning to buy slightly more than 20 Bcm of Central Asian gas, and in 2020 also slightly more than 20 Bcm. In 2021 we will see, but I think that this figure will be very, very close,” Miller said.
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    Post  owais.usmani on Mon Jul 01, 2019 9:39 am

    https://www.worldoil.com/news/2019/6/26/lukoil-says-its-making-headway-in-the-caspian-sea

    Lukoil says its making headway in the Caspian Sea


    MOSCOW -- Lukoil is successfully evolving its priority projects in the north of the Caspian Sea. The company continues to construct facilities at Vladimir Filanovsky, Yury Korchagin and Rakushechnoye fields.

    Thus, the company has commissioned the eighth and ninth production wells at V. Filanovsky field as part of Phase 2 of the project development. The former has the bottom hole as deep as 5,153 m and a 3,439-m long horizontal section. The bottom hole of the latter is 2,540 m deep; its horizontal section is 629 meters long. Both wells are monobore wells with a daily initial flow rate exceeding 1,000 metric tons each. The field's production is maintained at the planned level of 6 million metric tons a year since 2018.

    As part of Phase 2 of the construction plan for Yury Korchagin field, the company has completed the fourth well at the wellhead platform with a bottom hole 6,390 m deep and a horizontal section 4,276 m long. An intelligent completion system run down the hole of the well, allows real-time control of operation depending on actual conditions, which contributes to higher efficiency of the recovery of hydrocarbons. As a result of the drilling program implemented as part of Phase 2 of the Yury Korchagin development plan, production of oil went up 27% in the first quarter of 2019 as against the same period of the previous year.

    As for Rakushechnoye field, the company performs construction and assembly works, develops technical documentation, procures equipment and materials, and performs hull works on the topsides and substructures of the fixed ice resistant platform and of the accommodation platform. Commercial production of oil at Rakushechnoye field is to begin in 2023. The planned annual production rate is estimated 1.2 million metric tons of oil.
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    Post  George1 on Fri Jul 05, 2019 3:04 pm

    Finnish Neste sells its gas stations chain in Russia to Tatneft


    The deal is expected to be closed by 2019 year-end

    MOSCOW, July 5. /TASS/. The Finnish Neste negotiated sale of its chain of 75 retail sites and a terminal in St. Petersburg to Tatneft, the Russian oil producer said on Friday.

    "Neste signed an agreement on sale of its retail fuel business consisting of 75 retail sites and a terminal in St. Petersburg to Tatneft," the Russian company said.

    The transaction price is not disclosed. The deal is expected to be closed by 2019 year-end after the approval by the Russian antimonopoly regulator.

    The retail chain of Tatneft comprises more than 600 retail sites and is among the top five refueling chains in Russia.

    https://tass.com/economy/1067208
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    Post  owais.usmani on Mon Jul 08, 2019 9:07 am

    https://thebarentsobserver.com/en/industry-and-energy/2019/07/quiet-norwegian-arctic-port-reloading-russian-lng-comes-end

    Quiet in Norwegian Arctic port as reloading of Russian LNG comes to end


    «It has become more quiet,» harbour inspector Øyvind Larssen admits.

    «We especially feel that the tugboats are gone, they had become a part of the town,» he says to the Barents Observer.

    Larssen is harbor inspector at the North Cape seaport, the site that over the last half year has handled several million tons of liquified natural gas from Russia’s Yamal LNG plant.

    Since late last year, the north Norwegian town has hosted the major reloading operations of liquified natural gas for Russian natural gas company Novatek

    The last LNG tanker left Honningsvåg on the 29th June, Larssen says. And they will not come back, he makes clear.

    «It looks like they will move to Murmansk,» he says.
    The first Russian LNG carrier came to Honningsvag and the North Cape port on the 21st November 2018. Since then, more than 300 tankers have sailed into the local Sarnes Fjord and reloaded several million tons of LNG.

    At most, six LNG carriers were simultaneously involved in reloading in the Sarges Fjord, the bay outside Honningsvåg. At the same time, a number of additional tankers were waiting in nearby waters for their turn to reload.

    It is Norwegian company Tschudi Shipping that has handled the reloading operations. The company late summer 2018 entered into agreement with Novatek. The deal enabled the Russian energy company reduce costs for the export of gas produced in the remote Arctic field. Ice class tankers have shuttled from LNG terminal Sabetta to Honningsvag where the LNG has been reloaded to conventional tankers that subsequently have transported the gas to the markets.

    Jon Edvard Sundnes, Chief Executive Officer of the Tschudi Group, confirms to the Barents Observer that the agreement with Novatek has come to an end.

    The deal between the two companies came as Novatek was is dire need of increased export capacity. The second train of the Yamal LNG was launched in November 2018, several months ahead of schedule, and there were still not a sufficient number of ice breaking tankers to bring the gas to the markeds.

    The agreement reportedly had a time frame of up to 2-3 years, but Novatek early 2019 clearly signaled that it would move the ship-to-ship reloading operations to Russian waters in the course of 2019.

    Before the end of the year, the operations will start up near the Kildin Island, by the Kola Bay, Novatek said.

    Since reloading in Honningsvåg ended on 29th June, the ice-class tankers have sailed all the way from LNG terminal Sabetta to the marked without reloading.

    The ship-to-ship operations will in any case be temporary. Ultimately, Novatek intends top build a permanent terminal in the Kola Peninsula. That terminal is likely to be located in Ural Guba, the militarized bay located about 50 km west of Murmansk city and will have a capacity to handle 20 million tons per year.

    Novatek in August discussed the Ural Guba project with the Ministry of Defense and top government officials.

    It will reportedly by French company Total that will take the lead in the development of the Ura Guba terminal.
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    Post  owais.usmani on Tue Jul 09, 2019 7:57 am

    https://oilprice.com/Energy/Natural-Gas/Heres-Putins-Answer-To-The-US-Shale-Boom.html

    Here’s Putin’s Answer To The U.S. Shale Boom


    Last week saw Japan’s Mitsui and Japan Oil, Gas and Metals National Corporation agree to buy a 10% stake in Novatek’s Arctic LNG (liquefied natural gas) 2 project for an officially undisclosed price, although Russia’s President Vladimir Putin independently stated that the investment would be around US$3 billion. The fact that Putin himself commented on the deal underlines how important the exploration and development of the Arctic region is for the Russian state as a source of potentially vast new oil and gas resources and the accretion of further geopolitical influence, akin to the game-changing shale industry for the U.S. Russia’s current development of the Arctic region is centred around the Yamal Peninsula and led principally Novatek but further developments are in the offing from Gazprom and Gazprom Neft, even in the face of current and future U.S. sanctions.

    Novatek’s main Arctic project, the Yamal LNG (unofficially referred to as ‘Arctic 1’) last week announced that it produced 9.0 million tons of LNG and 0.6 million tons of stable gas condensate in the first half of this year, with all three LNG trains running above the 5.5 million tons per annum (mtpa) nameplate capacity over that period. This resulted in 126 LNG tanker shipments being dispatched in the six month period via trans-shipment from the ice-class LNG carriers to conventional vessels in Norway and delivered onto the global markets, mostly to Russia’s key target markets in Asia. Overall, the Yamal LNG project consists of a 17.4 mtpa natural gas liquefaction plant comprised of three LNG trains of 5.5 mtpa each and one LNG train of 900 thousand tons per annum, utilising the hydrocarbon resources of the South-Tambeyskoye field in the Russian Arctic.

    “Novatek is the exception in terms of global LNG companies in that it has always been very accurate in terms of delivering its projects on time and on budget, as it is a very Western-style operation run by a very capable CEO, Leonid Mikhleson,” Andrey Polischuk, senior oil and gas analyst from Raiffeisenbank, in Moscow, told OilPrice.com last week. “Additionally supportive of success for further developments is that the Arctic is an absolute priority for the government, aimed at bringing Russia’s LNG standing in the world market into line with its status as a global gas superpower, as its LNG capability has always been way behind what its gas production power would warrant,” he said.

    In this context, U.S. sanctions imposed after Russia took over Crimea in 2014 only made Putin more determined that the Arctic LNG program would not fail. Moscow not only initially bankrolled Yamal LNG from the beginning with money directly from the state budget but also later in 2014 supported it again by selling bonds in Yamal LNG (the program began on 24 November 2015, with a RUB75 billion 15-year issue). It further provided RUB150 billion of additional backstop funding from the National Welfare Fund. After that, and months of wrangling, April 2016 saw two Chinese state banks agree to provide US$12 billion to the Yamal LNG project in euros and roubles. The project was helped by a tumble in the rouble in late 2014 that effectively cut the cost of Russia-sourced equipment and labour at a key moment in the construction.
    Having insulated itself from U.S. financial sanctions, Novatek is busy doing the same for its technology requirements. Novatek has already indigenised as much of the technology and machinery involved with the Yamal LNG project as it can and last year received a federal patent for its ‘Arctic Cascade’ natural gas liquefaction technology. This is based on a two-stage liquefaction process that capitalises on the colder ambient temperature in the Arctic climate to maximise energy efficiency during the liquefaction process and is the first patented liquefaction technology using equipment produced only by Russian manufacturers. The overall goal of Novatek, as the company itself has stated more than once, is to localise the fabrication and construction of LNG trains and modules to decrease the overall cost of liquefaction and develop a technological base within Russia, so that the Arctic LNG operations are not subject to the whims of other countries and future sanctions.

    Given this backdrop, Novatek’s second Yamal LNG project – officially ‘Arctic LNG 2’ - aims for three LNG trains of 6.6 mtpa each, based around the oil and gas resources of the Utrenneye field, which has at least 1,138 billion cubic metres of natural gas and 57 million tons of liquids in reserves. Novatek plans to commission the first train in 2023, the second train in 2024, and the third train in 2025, before reaching full capacity in 2026. To this end, it has already secured three other partners in the venture, aside from the Japanese. Two are from the key target market of China itself – the China National Petroleum Corporation subsidiary China National Oil and Gas Exploration and Development, and China National Offshore Oil Corporation, with a joint 10% stake – and France’s supermajor, Total, also with 10%. Novatek has said that it plans to keep 60% for itself, with the remaining 10% likely to go shortly to Saudi Aramco, OilPrice.com understands form various Russia analysts. Novatek will make the final investment decision on the project in the third quarter of this year.

    In the same vein, Russian gas giant, Gazprom, recently announced the full scale development of the giant Kharasavey gas field in the Bovanenkovo production zone on the northern Yamal peninsula. This is part of the company’s continuing shift in its production base northward, in line with Russia’s other major tangential strategy of building out the gas capacity of Yamal to compensate for reserves depletion in West Siberia. Kharasavey is estimated to hold 2 trillion cubic metres of gas and is set to produce first gas in 2023 with plateau output of 32 billion cubic metres per year. Given the outlook for gas demand in the key markets of Europe and Asia, and the geopolitical ramifications of being the major gas supplier to these regions, Gazprom’s oil producing subsidiary, Gazprom Neft, is also looking at producing its own LNG from its Arctic operations.

    Monetising its gas resources in the Arctic would be a relatively straightforward task for Gazprom Neft, allowing the company to recoup more of the RUB400 billion (US$6.4 billion) that it plans to spend on developing its Novoportovskoye field (estimated to have recoverable reserves of more than 320 bcm of gas) over the next five years earlier than would otherwise be the case. Part of this development cost is planned to go on the construction of a key gas pipeline to run from Novy Port across the Gulf of Ob to Yamburg, which will carry at least 10 billion cubic metres of gas per year from the Novoportovskoye oil and gas field into Gazprom’s main gas delivery system.
    This infrastructure is also likely to be utilised by the third of Novatek’s own Arctic projects – Ob LNG - which commenced development in June. Based on the resources of the Verkhnetiuteyskoye and Zapadno-Seyakhinskoye fields, located in the central part of the Yamal Peninsula, the two fields hold a total of 157 billion cubic metres of natural gas and the projected new plant will produce up to 4.8 mtpa of LNG. The main plant, built exclusively with Russian-made technology in Sabetta, will cost US$5 billion and is set to come into operation in 2023. That a key point in adding such production from this the Arctic region is to dominate the Asian markets, particularly that of China, was tacitly acknowledged by Novatek’s Mikhelson recently when he stated that he expected at least 80% of Novatek’s future LNG production to go to the Asian market. This was further highlighted by the fact that Novatek is moving forward with the trans-shipment LNG facility on the Russian Far East coast in Kamchatka, Anna Belova, senior Russia and FSU oil and gas analyst for GlobalData, in New York, told OilPrice.com.

    Even more tellingly, perhaps, Mikhelson added that future sales to China denominated in renminbi is under consideration. This is in line with his recent comment that U.S. sanctions accelerate the process of Russia trying to switch away from U.S. dollar-centric oil and gas trading and the damage from potential sanctions that go with it. “This has been discussed for a while with Russia’s largest trading partners such as India and China, and even Arab countries are starting to think about it... If they do create difficulties for our Russian banks the all we have to do is replace dollars,” he said. “The trade war between the U.S. and China will only accelerate the process,” he added.

    Such a strategy was tested in 2014 when Gazprom Neft tried trading cargoes of crude oil in Chinese yuan and rubles with China and Europe. “This idea of an alternate principal trading currency for oil and gas, away from the U.S. dollar was also discussed for the BRIC [Brazil, Russia, India, and China] countries, and was work-shopped again recently by Iran, Iraq, Russia, and China, and China’s launch of the yuan-denominated Shanghai International Exchange can be seen as a move in this direction,” Mehrdad Emadi, head of risk analysis and energy derivatives markets consultancy, Betamatrix, in London, told OilPrice.com. “The more the U.S. uses the US dollar sanction against major suppliers in the oil market, like Iran, Venezuela, and Russia, and major buyers, like China, then the more momentum will build to replace the oil market with a new currency benchmark,” he concluded.
    Big_Gazza
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    Post  Big_Gazza on Tue Jul 09, 2019 3:33 pm

    owais.usmani wrote:https://oilprice.com/Energy/Natural-Gas/Heres-Putins-Answer-To-The-US-Shale-Boom.html

    So good to see the Monkey Empire with shit all over its face... Very Happy

    Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil
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    Post  owais.usmani on Wed Jul 10, 2019 9:21 am

    Big_Gazza wrote:
    owais.usmani wrote:https://oilprice.com/Energy/Natural-Gas/Heres-Putins-Answer-To-The-US-Shale-Boom.html

    So good to see the Monkey Empire with shit all over its face...  Very Happy

    Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil Twisted Evil

    Interesting comment on the above article:

    Mamdouh Salameh on July 09 2019 said:
    President Putin is not only the most astute statesman currently on the international stage but he is also a master of the geopolitics of oil and energy. He regards the Arctic as the equivalent of America’s ‘Wild West’ and not US shale oil as the the author of this article maintains. Putin knows that the US shale oil industry is a bankrupt one which will be no more in less than 10 years.

    Russia regards the Arctic as a strategic area where it is willing to invest significantly to secure the largest and most important share of oil and gas reserves for itself. Notable successes are Novatek’s Yamal LNG and Gazprom Neft’s Novy Port project. To complete such projects, unique and extensive Arctic infrastructure was needed along with a new breed of vessel: the LNG ice-breaker tanker which can sail in ice of up to 2.1 metres thick.

    These plans aim to exploit the vast oil and gas recoverable reserves in the Arctic estimated at 90 billion barrels (bb) of oil and 47 trillion cubic meters (tcm) of natural gas of which Russia has the largest share estimated at 48 bb of oil and 43 tcm of gas as well as developing the so-called Northern Sea Route—a shipping lane through Russian Arctic waters stretching from Europe to the Far East. Moreover, abundant oil and gas reserves in the Arctic will help compensate for reserves depletion in West Siberia.

    Alongside these developments is a shift away from US dollar. Novatec’s future sales to China could be denominated in Chinese renminibi. Moreover, the petro-yuan is growing in importance as a global oil currency in competition with the petrodollar. It already accounts for 32% of global traded oil.

    Since the imposition of US sanctions on Russia after the annexation of the Crimea in 2014, President Putin has been planning his retaliation against the petrodollar and he seems to have got the weapon for his retaliation, namely the petro-yuan.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
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    Post  kvs on Wed Jul 10, 2019 3:19 pm

    Compared to the USA, Russia has vast untapped oil and gas resources. Shale fracking is literally extracting the dregs from beer barrel. These
    fracking plays were ignored for 50 years because they had no economic sense: too expensive to extract and too little volume of gas or oil
    to extract. The lifetime production curve from shale fracking play gas wells is substantially different from conventional gas wells. They
    fracked wells have thin tails and much lower lifetime integrated production. So companies have to drill many more wells and those wells
    do not stay productive for long. It is like the "Red Queen" in Alice: running to stay in place.

    US shale fracking plays have been way over-hyped. These tight deposits do not have the scale of the conventional deposits that have
    been depleted. There is indication that the non-conventional oil and gas production in the USA is already peaking.

    By contrast, the Yamal peninsula and adjacent Arctic seabed has trillions of cubic meters of gas in conventional deposits that supply
    the EU market for decades.
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    Post  kvs on Wed Jul 10, 2019 4:13 pm



    The US is selling LNG at a loss (it has a natural 30% markup over piped gas due to all the liquefaction and associated industrial activity
    such as loading and unloading tankers) to con the EU into dropping Russian exports. The retarded claim is that when the EU buys
    Russian gas (at a good price) it is surrendering its freedom and enabling Russian meddling and control. Apparently, Europe is not
    swallowing this propaganda BS.

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    Post  GarryB on Thu Jul 11, 2019 7:27 am

    The irony is that even if the EU said no to Russian gas, the US does not have the capacity to meet the needs of the EU now let alone the expanding needs of the near future.

    If the piped gas is thwarted Russia can still liquify its gas and sell it to the EU at rather less than the US can so Russia would still be supplying the gas, but the EU would be paying rather more, and the supply would obviously be rather less reliable having to be shipped by tanker...

    Nord Stream II is the best deal the EU could possibly hope for, but it is not ideal for Russia... in many ways the EU is also a rival for Russia so if it has to pay rather more for energy then that is going to make things in the EU harder and make them rather less competitive than Russia globally.

    Personally I think Russia should orient itself towards Asia and just pipe gas to the EU to Turkey... sell all the gas to Turkey and let them decide on prices and conditions to sell it on to the EU and then they might realise that Russia has not used gas supply as leverage and the only problems they ever had was via Ukrainian pipes where gas was being stolen by the Orcs, but Russia got the blame.

    Screw them.
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    Post  owais.usmani on Tue Jul 16, 2019 12:09 pm

    https://www.hydrocarbons-technology.com/news/novatek-lower-achimov-urengoyskoye/

    Novatek reports Lower Achimov development at Urengoyskoye field


    A joint venture (JV) between Russian natural gas producer Novatek and Gazprom Neft, Arcticgas, has completed horizontal well number ‘U2802’, which targets the lower Achimov formation of the Urengoyskoye field.

    The development saw the completion of an eight-stage hydro-fracturing programme. It used a proppant volume of 2,187t at well number ‘U2802’, with a total length of 5,624m and a horizontal section of 1,500m.

    Distinct wireless inflow monitoring technology that uses marked proppant was implemented for the lower Achimov formation.

    Furthermore, Novatek said that permanent down-hole pressure and temperature gauges are used in production to monitor real-time data.
    Making use of the advanced technologies, the well achieved a daily flow rate of more than one million cubic metres of natural gas and 500t of gas condensate, thereby confirming significant possibilities to develop the lower Achimov deposits.

    The first phase of the Urengoyskoye field development was launched in April 2014, followed by the second in December 2014.

    In 2016, a methanol production unit with a processing capacity of 50Mtpa was launched at the Urengoyskoye field.

    The most prospective portion of the Achimov deposits is approximately 3,700m deep and is characterised by an ultra-high content of gas condensate in the hydrocarbon flow.

    Novatek was established in 1994 and is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons.

    The company undertakes upstream activities primarily in the Yamal-Nenets Autonomous Region, which is said to be the world’s largest natural gas producing area and produces around 80% of Russia’s natural gas.
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    Post  owais.usmani Today at 11:41 am

    https://worldview.stratfor.com/article/despite-looming-us-sanctions-nord-stream-2-pipeline-will-likely-proceed

    Despite Looming U.S. Sanctions, the Nord Stream 2 Pipeline Will Likely Proceed

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      Current date/time is Thu Jul 18, 2019 11:54 am