Page 20 - FSUOGM Week 35 2020

FSUOGM NEWS IN BRIEF FSUOGM

Route as an alternative to a direct route to in assessing the potential of the Sakarya September the company will hike the price
China via the difficult, mountainous terrain gas field, announced with great fanfare by of gas for household consumers within the
of Altai, BCS GM reminds. Turkish President Recep Tayyip Erdogan on framework of the Annual package. From
However, BCS GM notes that project "will August 21. September 1 to September 15, the price for
be meaningless unless and until a supply "If you say this is an economic miracle 12 months can be fixed at the level proposed
agreement has been signed with China." and that it's going to have this enormous in August of UAH4.73 per cubic metre, and
"As the project of a Mongolian export impact, you have to be able to explain the from September 16 to September 30 it will
pipeline to China is still in its initial stage, dynamics behind it," he added. "We want increase by 10.8% (by UAH0.51 per cubic
and there is no firm contract with China to know the price of extraction, the price metre), to UAH5.24 ($0.19) per cubic metre.
for supplies through this pipeline (which at which you'll be able to sell it, the rate of "Gas prices all over the world are cyclical
Gazprom has mentioned is a pre-requisite extraction...." and depend on the balance of supply and
for a pipeline to be constructed) or, hence, Turkey currently relies on Russia, Iran demand," Naftogaz said. "Closer to cold
sizable capex spending, we view this news as and Azerbaijan for up to three-quarters of weather the price of gas rises, and after
not market moving," VTB Capital (VTBC) its energy needs. It is also possibly slipping the end of the heating season it falls. You
wrote on August 26. towards a second balance of payments crisis can protect yourself from price increases,
within two years and there is suspicion for example, using the Annual tariff from
that the timing of the gas discovery Naftogaz or other tariff proposals."
announcement—in which Erdogan gave Earlier, the Ministry of Economic
EASTERN EUROPE a preliminary estimation of 320bn cubic Development, Trade and Agriculture of
metres (11.3 trillion cubic feet) of natural Ukraine announced the average price of gas
Naftogaz mulls increasing gas and predicted that there would be imports in July, which amounted to $124.44
much more discovered in the vicinity—was
per 1,000 cubic metres, which is 40.8% more
hydrocarbon reserves designed to give the embattled Turkish than the price of June 2020 in dollar terms,
president a lift with an unhappy electorate
when it amounted to $88.37..
The exploration and production division and help defend the Turkish lira, facing
of Ukraine's state-run oil and gas company turbulent times on the currency markets
Naftogaz has established an expert council once more.
that will develop a strategy to increase Erdogan pledged that the first gas from CENTRAL ASIA & SOUTH
hydrocarbon reserves in Ukraine, the Sakarya would reach Turkish consumers
company said on August 28. by 2023 but given the complex nature of CAUCASUS
The first constituent meeting of the expert deepwater gas extraction that may be overly
council took place on August 27. The council optimistic. CPC says oil exports fall by
consists of 11 leading domestic scientists "The targeted start-up date already looks
and experts in the field of exploration and ambitious" as it would require a "world-class 14.8% to 4.5mn tonnes in
production of hydrocarbons. They will focus and near-unprecedented project execution,"
on the development of Naftogaz's strategy to Ashley Sherman, principal analyst (Caspian August
increase gas reserves and a programme on & Europe) at energy research house Wood
exploration and production. Mackenzie, told DW. Turkey, however, lacks Oil exports via the Caspian Pipeline
“Without a significant increase in experience of deep-sea gas production. Consortium (CPC) fell by 14.8% on the year to
hydrocarbon reserves, Ukraine cannot count Sherman also reportedly said that 4.527 million tonnes in August, the company
on the growth of gas production, as well as more wells needed to be appraised first to said in a statement on September 1.
its maintenance. By developing an updated confirm resource estimates at Sakarya and The multinational company pumps oil
strategy to increase the resource base, we to understand the geology of the field, as from the west of Kazakhstan to a terminal
seek to attract all available experience and the Black Sea posed additional logistical at the Black Sea port of Novorossiysk. The
expertise,” Oleksandr Romaniuk, director challenges. consortium’s largest shareholders are Russia
of Naftogaz’s exploration and production Some analysts think that it could take up with 31%, Kazakhstan with 20.75% and
division, said in a statement. to a decade to begin to extract the gas and Chevron Caspian Pipeline Consortium
that state-run energy firm TPAO will need Company with 15%.
to form a joint venture with a foreign energy
Analysts ponder whether giant to fully realise the project. Ankara has
insisted it will go it alone.
Turkey’s “miracle” gas

discovery could be a dud Naftogaz will raise price of

Energy import-dependent Turkey has gas for population by 45%
hailed its gas discovery in the Black Sea as a
“miracle”, insisting it has the potential to meet Ukraine's state-run oil and gas company
one-third of its natural gas needs, but some Naftogaz will increase the price of natural
analysts are sceptical that it will turn out to be gas within the Monthly package sold in
anything like as impressive. September by 45.1% (by UAH1.46 per cubic
"The find was very hastily announced metre) compared to August, to UAH4.7
after such a limited period of exploration," per cubic metre (including VAT, excluding
Nate Schenkkan, director for special research delivery), the company said on August 27.
at US think tank Freedom House, told DW In addition, in the second half of

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