Greater Caspian Region Weekly Overview - June 21
Iran
Iran increase trans-country gas transition capacity by 100 mcm/d
Managing director of the Iranian Gas Transmission Company Mohammad Ali Emam announced on June 16th that Iran has increased trans-country gas transition capacity by 100 million cubic meters per day (mcm/d) during last fiscal year, ended on March 20.
He said that the gas transition capacity inside the country would reach 1,100 mcm/d in three years.
Iran has several major cross-country pipelines, all of them starts from the South Pars gas field and would be stretched to the country’s borders with neighbors. The 6 th (towards Iraq borders), 7 th (towards Pakistan borders), 9 th (towards Turkey borders), and 11th (towards Turkmenistan borders) cross-country gas pipelines, respectively, will require $2, $2, $6, and $4 billion dollars worth of investments to come on stream. The capacity of all of these pipelines are 100 mcm/d each one.
Iran’s gas delivery to power sector increases significantly
Iran increased gas delivery to power plants by more than 17 percent during last three months. Power sector consumed about 28 percent of Iran’s total gas production last year, but the country wants to increase gas feed to power plants to curb liquid fuel consumption in electricity generation sector.
According to a weekly report of Iran Energy Ministry, published on June 21th, Iran delivered 14.146 billion cubic meters (bcm) of natural gas to power plants from March 21 to June 12, which indicate a 17.7 percent increase year-to-year.
Iran delivered about 49 bcm of natural gas to power plants during last year, which experienced a 13.7 percent increase compared to the previous year. Iran planed to increase this volume to 57 bcm in the current fiscal year.
Iran talks gas export to Afghanistan
Iran is talking with its eastern neighbor to export gas.
The Director for international Affairs of National Iranian Gas Company (NIGC) Azizollah Ramezani said on June 17th that Iran and Afghanistan has involved a gas export negotiations.
He said that Afghanistan doesn’t have any gas transition infrastructures and there are doubts for Iran to enter this market, but we started gas export talks with Afghanistan last year and the negotiations continue. Iran is preparing to start construction of 11th cross-county pipeline with $4 billion worth to deliver 100 mcm/d of gas from the South Pars in eastern regions towards north-eastern regions in neighboring with Afghanistan and Turkmenistan.
Iranian company to construct Iran-Oman gas pipeline
An Iranian giant construction company would construct a $1 billion worth under-water pipeline, aimed to deliver 28 mcm/d of Iranian gas to Oman by 2017.
Rahim Tabrizi an official of Iranian Offshore Engineering and Construction Company (IOEC) said on June 17th that this company would construct the under-water Iran-Oman gas pipeline.
Iran and Oman have signed a memorandum of understanding and agreement in 2013 and 2014 to realize a 25-year gas deal.
Azerbaijan
Azerbaijan exports 3.84 bcm gas in Jan-May
The State Customs Committee of the Republic of Azerbaijan says the country’s total gas export reached 3. 842 billion cubic meters (bcm) in first five months of 2015. The volume indicates 4.1 percent increase year-to-year.
According to this report, the State Oil Company of Azerbaijan Republic’s (SOCAR) own gas export volume in Jan-May reached 795 million cubic meters with worth a little more than $127 million. This volume in the same period of the last year was $189.3.
SOCAR's gas export doesn't include the natural gas which is produced from Shah Deniz field.
SOCAR adds 1.25 mcm/d of gas to output
The State Oil Company of Azerbaijan (SOCAR) commenced a new well in Bulla-Deniz field, which able to produce 1.25 million cubic meters per day (mcm/d) of gas.
SOCAR’s official website reported on June 16th that the well No 124 was conducted from the platform No 122 in the Bulla-Deniz field. Some 61 bcm of natural gas has been extracted from this filed since 1975.
Gazprombank agree to fund SOCAR with $0.5 B loan
The State Oil Company of Azerbaijan (SOCAR) and Russia’s Gazprombank signed an agreement to finance the construction of polypropylene and high density polyethylene production plants by SOCAR Polymer company in Azerbaijan.
The agreement was signed on June 19th during the St. Petersburg International Economic Forum (SPIEF), SOCAR’s website announced. The amount of loan is $ $489 million with the repayment period of 10 years.
The implementation of these plants will allow to produce 180,000 tons of polypropylene and 120,000 tons of polyethylene per year.
Russia ready to provide Azerbaijan with gas
While Azerbaijan cut the gas delivery to Russia in 2015, the Russian state gas company says it is ready to provide Azerbaijan with natural gas. A source in Azerbaijan government told Natural Gas Europe on June 9th that Baku suspended gas delivery to Russia due to increasing of domestic gas consumption.
The chairman of Management Board of Gazprom Alexei Miller told during a meeting with the President of SOCAR Rovnag Abdullayev on June 19 that “due to the increasing domestic gas consumption and economic growth in Azerbaijan, Gazprom is ready to satisfy the country’s demand for gas import in required volumes.”
Kazakhstan
Gazprom prolongs gas purchase agreement with Kazakhstan
Russian Gazprom Company prolonged the agreement of purchasing gas from Kazakhstan.
Gazprom Company and Karachaganak Petroleum Operating B.V. have prolonged a long-term agreement on the annual purchase and sale of 9 billion cubic meters of gas from Kazakhstan's Karachaganak gas condensate field.
Gazprom said on June 16 that the agreement was extended until January 2038.
An important step in the further development of the giant Karachaganak field, the extension of the GSA will result in the supply of additional 120-135 billion cubic meters of gas to OrenburgGasProm until the end of the contract period.
Currently, over 8 billion cubic meters of untreated Karachaganak gas is exported to the Orenburg Gas Processing Plant in Russia.
India keen to import Kazakhstan gas
India and Kazakhstan agreed to conduct a feasibility study on the transportation of crude oil, natural gas and LNG from Kazakhstan to India, Indian oil minister Dharmendra Pradhan said on June 18th.
The study would look at importing natural gas through pipelines or as LNG.
Indian ONGC Videsh, the overseas arm of state-owned Oil and Natural Gas Corp., already has a presence in Kazakhstan through its 25% stake in the Satpayev Block, northwest of the Kazakhstani sector of the Caspian Sea.
ONGC Videsh has invested $150 million in the Satpayev Block and will invest a total of $400 million in exploration, the Press Trust of India reported, quoting N.K. Verma, managing director of the company.
ONGC Videsh this year lost out on its bid to buy ConocoPhilips' 8.4% stake in the Kashagan oilfield as Kazakhstan exercised its right to buy the stake and later sold it to China National Petroleum Corp.
Kazakhstan to invest $3.5 B to expand gas grid inside country
The government of Kazakhstan planned to allocate $3.5 Billion to build new cross-country pipelines as part of its national General Gas Supply Scheme. First Deputy Prime Minister, Bakytzhan Sagintayev said on June 14th that 56 percent of the population will have access to gas in their homes by 2030. Currently 42 percent of Kazakh citizens access to natural gas. Overall gas consumption will rise from 12.4 bcm in 2014 to 18 bcm by 2030.
Uzbekistan
Lukoil invests $160 M in exploration and mining in Uzbekistan in 1Q
Russian oil company LUKOIL invested US$160 million in the exploration and mining in Uzbekistan in the first quarter of 2015, the company’s financial report, released on June 16th indicates.
According Uzbekistan’s Uzdaily newspaper, the investment level increased by 20.3 percent, compared to the same period in 2014.
LUKOIL noted that the company increased gas extraction in Uzbekistan. At the same time, the company did not reveal the volume of extracted gas in Uzbekistan.
Currently, LUKOIL implement three product-sharing agreements in Uzbekistan – Kandym-Khauzak-Shady-Kungrad, Southern-Western Gissar and exploration of the Uzbek part of Aral. So far, LUKOIL produced over 20 billion cubic meters of gas in Uzbekistan.
The company will produce about 17-18 billion cubic meters of gas a year in Uzbekistan by 2020.