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      <>><<____________Volume 106:02-January 17-2006________________><<><><>><
           >><<<<_____Editor: Charlie Bartholomew, kryopak@qwest.net_____<>><<
                 >><<>>This issue distributes to 70 subscribers in 24 countries>><
January 17-2006
Afghanistan NASA confirms gas / mineral reserves
Argentina Sub-secretary of Fuels denied CNG rise
Azerbaijan-BP BTC pipeline pumps 4 mm barrels of oil
Bogota Dramatic increase of CNG conversions
Bolivia Tax reduction for NGVs LPG forbidden
Bolivian Government Face Off with Oil Companies
Bolivia Cleaner and cheaper public transport
Bolivian Pres. Plans to Revise Energy Contracts with Foreign Firms
China's first liquefied natural gas (LNG) carrier
China India eye alliance with Uzbekistan for oil assets
Uzbekistan looks east for new friends
China Turkmenistan and  to sign gas deal
Gazprom Aims at U.S. Market;
Seeks to Expand Reach to Chin

January 17-2006
India suggests to include Azerbaijan and Uzbekistan in TAP pipeline
Indonesia to build Kalimantan to Java gas pipeline
Iran to start LNG exports to Europe by 2011
Israel will start receiving Egyptian gas September 2007
Kazakh Leader to Inaugurate Oil Pipeline to China
Peru Refueling stations boom
Peru Seeks to methanize official fleets
Russian plan for new Siberia-Pacific pipeline construction
Russia Gazprom considers gas supplies to Israel, Italy and Greece
Gazprom wants partnership with Turkey
South American gas pipelineWorld Bank backs plans
Turkey The Samsun-Ceyhan pipeline
Venezuela to lay gas pipeline from north Colombia

China's first liquefied natural gas (LNG) carrier
Launch was in Shanghai, leading China's shipbuilding industry into a new era.
The vessel is scheduled to go into operation in October 2007, according to the Hudong-Zhonghua Shipbuilding Group a subsidiary of the China State Shipbuilding Corp (CSSC). This marks a major milestone in the China's shipbuilding history.
The LNG ships are considered to be high-tech products with high-added value, which could only be built so far in Japan, the Republic of Korea and several European countries.

China invested more than 100 million yuan in the research and technology development over the past few years in order to gain a share in the global LNG market. This commitment and efforts led to the first contract for LNG carriers in August 2004. The first LNG ship is 292 m long, 43.35 m wide and has a capacity of 147,200 cubic meters. The subsidiary group now shares an order of five LNG vessels, with the second vessel delivery expected in early 2008. The costs of the two LNG vessels approached 400 million U.S. dollars, according to the group.  
Bolivian Pres. Plans to Revise Energy Contracts with Foreign Firms
 Xinhua News Agency 12/21/2005 URL:

The newly elected president of Bolivia, Evo Morales, plans to revise energy contracts with foreign firms inked during previous governments, a Spanish newspaper quoted him as saying on Wednesday.
"The contracts were signed when a barrel of oil cost 18.0 or 19.0 dollars, whereas nowadays a barrel is more than 60.0 dollars, " Morales told Spanish newspaper El Mundo.
"All the contracts will be revised and the multinationals must understand it. Bolivia must benefit from its gas resources which will be the basis for new economic growth of the country." said the incoming leftist President.

Morales said the foreign companies would be guaranteed a return on their investment and profit "but in a more balanced relationship, not like now when they pay only 18.0 percent royalties to the state".

A total of 26 multinational gas and oil companies operate in Bolivia, which has the second-biggest gas resources in South America after Venezuela.

Morales claimed victory in the presidential race in the Andean nation on Sunday, and his right-wing chief rival, ex-president Jorge Quiroga, conceded defeat.  The result of the election is expected to be confirmed on January 13 and Morales will begin his mandate as the first indigenous president of the country on January 22.
Bolivia Cleaner and cheaper public transport
21, December 2005

A local company seeks to convert transport fleets, in order to save diesel, which is expensive and there is shortage of it in the country. According to the executives of the company Transredes, one of the main promoters of this initiative that foresees two benefits for the users. The first one has to do with the maintenance cost of the converted engine, which is lower than diesel ones; and the second one is the cost of the fuel which allows savings of up to 50 per cent.

According to the company’s estimations, the project implies converting 4 thousand vehicles among taxis and buses. Thus, “it will have redundant benefits for all elements of the chain, that is to say, distributing companies, refueling stations, transport, and manufacturers,” said Hugo Vits, marketing vice-president of Transredes.

“The main objective is to eliminate the country’s dependence on diesel imports,” the businessman added. He also said that Bolivia is located in an area where currently the neighboring countries are either balanced in accordance with their production or they are importers, therefore “the impact of this project will imply a double benefit for the nation: on one hand it will decrease diesel subsidies, and on the other, the use of a local fuel is encouraged,” he summarized.
Peru Seeks to methanize official fleets
December 2005

The Minister of Production’s private car has the first electronic chip that guarantees safety standards required for NGV refueling. Furthermore, the Peruvian state fleet will be gradually converted to this fuel. The fuel has a clear governmental support, as well as from many private sectors which are interested in it.

“Peru has a clean and cheap energy resource which is available and at competitive cost with international levels. Natural gas is definitely the cleanest and cheapest fuel in the world,” highlighted the Minister of Production, David Lemor.

Peruvian government’s objective is to gradually convert the whole state vehicle market, apart from expanding the use of CNG in vehicles in general.

Besides, the government considers that introducing the fuel will be very positive for the Peruvian economy, since “it implies energy costs and hydrocarbon trade deficit will be reduced.” He also says that this natural resource will benefit users and at the same time it will protect the environment. 
Kazakh Leader to Inaugurate Oil Pipeline to China
AFX News Limited 12/15/2005

Kazakh President Nursultan Nazarbayev was set to inaugurate a new oil pipeline to China that will help fuel the booming Chinese economy. Chinese and Kazakh officials will ceremonially begin the task of filling up the 1,000-kilometer pipeline linking Atasu in central Kazakhstan to Alashanku in western China. The US $700 million project has been jointly developed by the China National Petroleum Corporation (CNPC) and the Kazakh state energy company Kazmunaigaz.
The pipeline is due to start delivering oil from the Kumkol field in central Kazakhstan by the middle of next year, with an initial capacity of 10 million tons annually.

But today's ceremony is also a milestone on the road to a more ambitious goal for which Kazakh authorities have set a 2011 deadline: the extension of the pipeline from Kazakhstan's core oil fields on the Caspian Sea to Alashanku, in China's western Xinjiang province, a distance of some 3,000 kilometers.

Officials also plan to double the capacity by the same date.
Frustrated in some other parts of the world -- notably the US -- China's oil industry has played an growing role in Kazakhstan's rise to major oil producer status.

CNPC recently clinched the purchase of the previously Canadian-run independent PetroKazakhstan.
PetroKazakhstan is likely to be a key source of oil for the pipeline from Atasu to China as its fields lie in central Kazakhstan. CNPC is also reportedly looking into a possible purchase of another Canadian-run oil firm, Nations Energy.

China's growing role in Kazakhstan thus far appears to have caused little anxiety in Moscow, the Soviet-era center of power for the region. By contrast, Russia gave a distinctly frosty reception to the inauguration earlier this year of the Washington-backed Baku-Tbilisi-Ceyhan pipeline that runs from the Caspian to Turkey's Mediterranean coast and symbolizes the Westward-oriented leg of Kazakh oil policy.
This latest nonchalance may partly be due to the pressure Russia itself is feeling to supply oil direct to China that might fetch a better price elsewhere.

Kazakshtan's landlocked location makes a difficult balancing act all but unavoidable. Analysts have noted that the Atasu-Alashanku pipeline has the disadvantage of a single buyer at the receiving end, increasing Beijing's ability to dictate the purchase price.

The Kazakh government has set a goal of raising oil total exports from about 1.2 million barrels a day this year to 3.5 million barrels a day in 2015.
Gazprom Aims at U.S. Market; Seeks to Expand Reach to China
12/15/2005 URL:

Gazprom, the giant state-owned Russian energy company, has announced ambitious plans to become a major player in the United States and China as it starts to diversify beyond Central Asia and Europe.

Alexander Medvedev, the deputy chairman of Gazprom, said during an interview Tuesday that the company's long-term strategy involved establishing a foothold in the U.S. market. "Our aim is to gain more than 10 percent of the U.S. market share by 2010, increasing to 20 percent," he said.

The natural gas to be sold to the United States would be extracted from the Shtokman field in Russia's Barents Sea, north of the Arctic Circle. Gazprom already supplies a quarter of the European Union's natural gas, including a third of Germany's. Medvedev said Gazprom was in the final stages of choosing an international consortium to finance the project, conduct exploration and drilling, and ship the natural gas to the United States in liquefied form.

The list of contenders, reduced to five companies from nine, consists of ConocoPhillips and Chevron of the United States, Statoil and Norsk Hydro of Norway, and Total of France.
Medvedev said the selection of up to three companies would be made by April. And if the project remains on schedule, the Shtokman field could go into commercial operation in 2010 or 2011, and long-term contracts with U.S. companies could begin after 2010. Gazprom is also looking beyond the U.S. and European markets to China. The company has already started talks with the state-owned China National Petroleum to see how much natural gas the country would require.

"China has its own specifications because of how much coal it uses," Medvedev said. From 2010 to 2015, Gazprom is aiming to sell China 30 billion cubic meters, or more than one trillion cubic feet, of gas a year. But the ultimate size of the market is unknown.

Gazprom first started considering the American market after the Sept. 11, 2001, attacks on New York and Washington, as the U.S. government started seeking ways to diversify its energy supplies. Gazprom said the United States was one of the best export destinations for Russian liquefied natural gas because of rising demand. According to the U.S. Department of Energy, demand for natural gas will increase 1.5 percent a year until 2025. There are concerns that U.S. imports of liquefied natural gas will be constrained by the limited number of ports that can handle the commodity. The United States has just five, including one in Puerto Rico. But an adviser to Gazprom said Tuesday that current U.S. port facilities had the capacity to handle the company's projected exports, and he noted that there were proposals to build more liquefied natural gas ports in the United States.

It is still not clear how much it will cost to develop the Shtokman field.
But Hans-Joachim Gornig, manager of ZGG, a German company that markets Russian natural gas in Western Europe, said Gazprom was adopting a new approach by seeking foreign companies to provide expertise and support, and foreign banks to provide financing.

Medvedev said that Gazprom would hold a majority in any agreements with foreign companies.

Gazprom is not the first Russian energy company to covet the U.S. market. Lukoil, the biggest Russian oil company, has 2,000 gasoline stations in the United States and has been expanding rapidly.

Medvedev was speaking in Berlin five days after a Russian-German consortium started work on the 4.5 billion, or $5.4 billion, North European Gas Pipeline. That project, scheduled for completion by 2011, will allow Russia to export gas directly to Germany and its other West European markets through a pipeline to be laid under the Baltic Sea, reducing its dependence on the traditional transit route across Ukraine and Poland.

"The North European pipeline will allow Gazprom to diversify its transit routes, to expand volume and to increase the amounts of gas we export to Northern and Western Europe," Medvedev said. "Above all, it will give Europe stable and secure supplies of gas."

The decision to start building the North European Gas Pipeline followed extensive lobbying by Gerhard Schroder, at that time the chancellor of Germany, who left office last month and last week was appointed chairman of the company overseeing the project. Medvedev dismissed criticism that Schroder's appointment was politically motivated.

"Having Mr. Schroder heading the supervisory board of this project is so important for Europe as a whole," Medvedev said. "You need to have somebody in such a position who is in a position to make decisions on that level. We could not have found a better person."

The decision to build the pipeline under the Baltic Sea coincides with a bitter and protracted dispute between Gazprom and Naftogaz, the state-owned Ukrainian company that controls the transit pipeline now carrying Gazprom's gas to Western Europe. In January, both sides agreed to do away with a barter system in which Ukraine received Russian gas in return for waiving transit fees on gas sent to Western Europe, and to replace it with a cash-based system. But the details are still in dispute.

Medvedev said the new system meant that Ukraine would have to pay market prices for its imports of natural gas from Russia, while Russia would pay the transit fees in cash. "Our position is clear," Medvedev said. "We do not want to subsidize our gas sales to Ukraine. We want to charge Ukraine $160 per 1,000 cubic meters of gas. We are willing to pay $1.09 per 100 kilometers per 1,000 cubic meters of gas shipments. Ukraine does not want to accept this."

In Moscow, Alexei Miller, the chief executive of Gazprom, warned Tuesday that the company could cut off Ukraine's supply of gas if no deal is reached. "If no compromise over Russian gas supplies to Ukraine is found before the New Year, the supplies will be stopped," Miller said, according to Russia Today.
Ukraine, in turn, has threatened to use its leverage as a major transit route for Russian natural gas by blocking deliveries to Europe. Medvedev said this amounted to blackmail and showed just why the North European pipeline was necessary to protect Europe's energy supplies.
New Bolivian Government Will Face Off with Oil Companies
EFE News Services 12/14/2005 URL:

Hefty new taxes on the abundant natural gas from Bolivian wells has beefed up the coffers of the poorest nation in South America as it approaches general elections Sunday, but the foreign oil companies that do most of the extracting are peeved at the levies and threatening to take the Andean nation to international court.

The new revenue stream has certainly eased the task of managing the public finances in an economy where the gross domestic product is $9 billion, or $2,600 a year on a per capita basis.

Bolivian governments have long been caught between a populace chafing at budget cuts after years of austerity and demands from the International Monetary Fund for further belt-tightening as a condition of allowing La Paz to borrow more.

The source of the treasury's windfall is the 32 percent levy on oil and gas production, which brought in $235 million from May through October and is projected to generate $417 million in 2006, the first full year of the new tax regime for the energy sector.

Equivalent to nearly 5 percent of GDP, that sum could have an immense impact in Bolivia, whose meager spending on infrastructure and services contributes to keeping 63 percent of its roughly 8.5 million people living below the poverty line.

The bonanza from the tax has combined with the surge to more than $1 billion in the value of Bolivian gas and oil sold abroad in the first 10 months of 2005 - just under half of the nation's total exports - to make the hydrocarbons industry "the goose that lays the golden eggs," economist Napoleon Pacheco told EFE.

Growth in revenues from oil and gas is expected to power a 3.9 percent increase in GDP this year, while helping the government reduce its projected budget deficit from 5.2 percent of GDP to 3.5 percent.

"What happens (to the hydrocarbons sector) is of vital importance to Bolivia and, regrettably, what we see at this moment is that it is unfolding in a context of uncertainty," said Pacheco, who heads Fundacion Milenio, a centrist think-tank.

Socialist Evo Morales, the front-runner for president, has insisted that a government headed by him will make the foreign firms that control Bolivia's energy industry into decidedly junior partners of the state. The Indian leader of the country's organized coca growers misses no chance to rail against "the neoliberal model," the sort of laissez-faire market-oriented capitalism he blames for many of the country's ills.

Whatever its ideological stripe, the Bolivian government that emerges from the Dec. 18 elections will be bound to implement the sweeping energy law that imposed new taxes and terms on the multinationals.

Prior to the measure, the royalties Bolivia collected on oil and gas extracted from its soil were among the lowest in the world.

The law's provisions explicitly require changes to the contracts foreign companies signed with Bolivia in the 1990s, when a "neoliberal" government in La Paz set about privatizing most state industries.

While failing to satisfy the demands from labor and grassroots groups to nationalize the oil and gas industry, the measure did assert the state's ownership of the hydrocarbons and its leading role in the energy sector.

Some of the international firms with big interests in Bolivia, such as Spain's Repsol YPF, British Gas and French oil major TotalFinaElf, say that failing a satisfactory accord, they will cite Bolivia before international courts of arbitration for breach of contract.

In the meantime, however, the multinationals are paying the additional levies.

The Bolivian Hydrocarbons Chamber, representing local affiliates and partners of the foreign companies, says international law is on the side of the private firms, while the government recently had to acknowledge that the legislation overhauling the energy sector does not provide enforcement mechanisms or penalties for non-compliance.

Bolivia's provisional president, Eduardo Rodriguez, persuaded the multinationals to give negotiators until June 30, 2006, to try to hammer-out a mutually satisfactory agreement that would avert litigation.

The firms consented to extending the period for bargaining in exchange for Bolivia's pledge not to introduce any additional measures affecting the foreigners' investments in the Andean nation.

Yet with even conservative presidential hopeful Jorge Quiroga talking about "nationalizing the profits" from oil and gas, it is clear the multinationals will have to adjust to a new reality in Bolivia, where a majority seems ready to insist that the country's main natural resource be harnessed to lifting people out of poverty.

A 2004 World Bank study found that across Latin America, the average discrepancy in wealth between the richest and poorest fifths of the population within a country is 30:1. The comparable ratio for Bolivia is 90:1.
Bolivia Tax reduction for NGVs LPG forbidden
dec 10 2005

The Municipal Council of Tarija is working on a project for vehicles to stop using LPG and to be converted to natural gas with a 20 percent tax reduction.

Thus, the Council President, Roberto Úvila, highlighted that this proposal seeks to promote a safer and cleaner city.
Úvila said that “they must promote NGV conversions legally” and he reminded that in Bolivia there is a decree forbidding the use of LPG vehicles.
Bogota Dramatic increase of CNG conversions
10, December 2005

Now, there are 1,300 vehicles running on natural gas in the Colombian capital city. According to October’s figures, there are already 30,000 NGVs altogether in such area.

According to the National Ministry of Mines and Energy, when this fuel entered the market –back in 2000- there were only 130 converted vehicles, taxis, and buses, in the city.

Conversions increase mainly because CNG is cheaper regarding gasoline.

Fabián Suspes, taxi driver, clearly explains the reasons “In a long shift from 6 am to 6 pm I used to spend 60 thousand pesos in fuel, but since I have natural gas I barely spend 15 thousand.” There is also savings in the change of oil. “I used to change it every 4 thousand kilometers and now it lasts 6 thousand kilometers.”

There are savings also due to the high price of gasoline, that during this year it has increased 9.7 percent. This trend is so strong, that the use of natural gas for vehicles represents 13 percent of the fuel market in the capital city.
Argentina Sub-secretary of Fuels denied CNG rise
10, December 2005

The project of Gas Electronic Market (as in Spanish MEG) for the refueling stations to acquire this fuel as from January 1st 2006, is creating doubts and controversies in the sector, they fear the price per m3 may rise.

Thus, Cristian Folgar tried to clear out doubts and he said, “The maximum price will be established by the Secretary of Energy.
CNG stations will not pay more than industries and fuel prices are not foreseen to increase.”

The officer said during a television program specialized in energy, that it is “ridiculous” to think prices will increase, and he also said they will be stable until December 31st 2006.
Meanwhile, Fausto Maranca, president of the Argentinean Chamber for Compressed Natural Gas also denies a major increase for this fuel.

Beyond those who are against or in favor, if there is no delay, MEG will be a reality as from the first day of 2006. By the time being, the Sub-secretary of Fuels is trying to keep everybody calm. “If there is something about CNG to be done, that is to go on promoting it and it must continue being the cheapest among the fuel market.
Besides, refueling stations are the priority within the supply chain,” concluded Cristian Folgar.
Peru Refueling stations boom
10, December 2005
The Peruvian company of natural gas, PGN, is planning to build 17 new refueling stations by 2007.

This ambitious project will require an investment of approximately 8 million dollars. Furthermore, next year 7 new stations and 10,000 of NGV conversions are expected. One of the main market targets at this first stage are taxis.

After the opening of the first refueling station in Lima a few months ago, NGV perspectives in Peru are encouraging. This has gained business and users interest.
Venezuela to lay gas pipeline from north Colombia
Source: Diario El Universal 24-11-05

Colombian President Alvaro Uribe initialled a project by Venezuela and the Andean Development Corporation to start layout of a gas pipeline from Colombian reservoirs in the Caribbean to Maracaibo port, a Venezuelan diplomat reported.

The decision was made following meetings held in Bogotá over the last few weeks by delegates of state oil holding Petroleos de Venezuela (PdVSA) and Colombian Petroleum Company (Ecopetrol), Venezuelan ambassador to Bogotá Carlos Rodolfo Santiago said. "Now, only technical issues remain, as Presidents Hugo Chavez and Alvaro Uribe already made the political decision," Santiago told.

The project includes a gas pipeline from Colombian submarine wells in front of the Guajira peninsula to Maracaibo, to supply the Venezuelan region, where there is plenty of oil deposits, but lack of gas. The project will have about 200 km length for an estimate of $ 300 mm.
Gazprom LNG swap to Cove Point first pipeline gas
Source: Gazprom OAO 23-11-05

Gazprom has announced that it has successfully concluded its first pipeline natural gas for LNG swap with Gaz de France. The agreement was concluded between the Gazprom subsidiary, Gazprom Marketing & Trading, and Gaz de France, Med LNG & Gas and Shell.

Under this transaction, Gazprom will deliver additional pipeline gas to Gaz de France in Europe and in return will purchase an LNG cargo from Med LNG & Gas, which is a joint company of Gaz de France and Sonatrach. The LNG cargo is being sold to Shell Western LNG for delivery to the Cove Point import terminal in Maryland, United States, in early December this year.

Alexander Medvedev, Deputy CEO of Gazprom, commented: "With these agreements, Gazprom has shown that by leveraging our position in pipeline gas in Europe, we are able to access global gas markets with Russian gas by swapping pipeline gas for LNG. This is a unique way of creating LNG out of Russian pipeline gas and moving it to foreign markets.” “Building new relationshipswith LNG partners while expanding our existing partnerships in Europe has given us the platform to expand our LNG business in the years to come and will accelerate Gazprom's global growth in new markets such as the United States."

Notes:-- Gazprom is 38 % owned by the Russian Federation and employs 330,000 people across Russia. -- For more than 30 years, Gazprom has been supplying gas for mainland European countries including Germany, Austria, Italy and France. -- Gazprom provides gas direct to customers in Russia. -- Gazprom Marketing & Trading is the UK arm of Gazprom. The company was established in 1999.
Azerbaijan-BP BTC pipeline pumps 4 mm barrels of oil
Source: Kazakhstan Today 24-11-05

Four million barrels have been pumped into the Baku-Tbilisi-Ceyhan (BTC) pipeline out of the planned 10 mm, BP-Azerbaijan (project operator) has informed. The filling of the Turkish part of the pipe started earlier. In particular, the oil passed the Georgian-Turkish border and reached the first pumping station on the territory of Turkey.

"Now we are facing a period of scrupulous tests before filling of the Turkish part of the pipe. The pipe tests take much more time than it was originally planned.” “Very scrupulous tests are carried out to reduce the risk of accidents for the whole period of the pipeline operations," the company has explained.

BP-Azerbaijan also says that a ceremony on the occasion of departure of the first tanker with Azeri oil from Ceyhan will take place next spring. Originally the departure was planned before the end of 2005. The length of BTC pipeline is 1,767 km, of which 443 km are in Azerbaijan, in Georgia -- 248 km, in Turkey -- 1,076 km. The pipeline capacity is 50 mm tons of oil per annum. The construction works commenced in April 2003.

The participants of BTC project are the following: BP (30.1 %); SOCAR (25.00 %); Unocal (8.90 %); Statoil (8.71 %); TPAO (6.53 %); ENI (5.00 %); Itochu (3.40 %); ConocoPhillips (2.50 %); Inpex (2.50 %), Total (5.00 %), and Amerada Hess (2.36 %).
India suggests to include Azerbaijan and Uzbekistan in TAP pipeline
Source: Sify Ltd 27-11-05

India has suggested that Azerbaijan and Uzbekistan could also be included in the Asian Development Bank supported Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline to tap the Caspian gas. The country, which is also considering joining the project, has suggested laying a crude pipeline from Azerbaijan to the Arabian Sea to bring Caspian oil to the world's fastest growing consumption centre.

The Minister for Petroleum and Natural Gas, Mani Shankar Aiyar, after holding wide-ranging bilateral discussions with the heads of delegations from Uzbekistan, Azerbaijan, China and Turkmenistan, suggested to Idriz Rzabeyov, Head of Energy Department, Ministry of Energy, Azerbaijan that the TAP pipeline should start in Azerbaijan and culminate in India. Aiyar said India had been invited for the next meeting of the Steering Committee on TAP pipeline as observer before committing to join the project. He said that he had told the Uzbekistan Minister for Foreign Economic Relations, Investment and Trade,Rustam Sodykovich Azimov, that Uzbekistan gas reserves should also flow through the TAP pipeline.

As regards gas reserves in Turkmenistan and what would be available for TAP pipeline, Aiyar said, “the gas reserve figure told to me was very high, much beyond what was being talked about.'' Turkmenistan, he said, had assured that the country had enough gas reserves for TAP after meeting commitments to Russia. During the bilateral meetings with the three countries, Indian companies also showed interest in exploring for oil and gas and participating in downstream refining and petrochemical business. Aiyar said Indian Oil Corporation (Indian Oil) was interested in downstream oil refinery, petrochemical and LNG collaborations with Uzbekistan, while ONGC Videsh Ltd (OVL) had shown interest in acquiring stake in Turkmenistan's state-owned oil and gas company.

The Minister also said that OVL was keen on exploring for oil and gas in Uzbekistan, Azerbaijan and Turkmenistan, while Indian Oil was looking to participate in upgradation of a refinery in Turkmenistan. Aiyar also proposed to host a seminar in the first quarter of 2006-07 for the participants of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline (Azerbaijan, Georgia and Turkey).
Israel will start receiving Egyptian gas September 2007
Source: Globes Online 21-11-05

Israel will begin receiving natural gas from Egypt on September 30, 2007. Eastern Mediterranean Gas (EMG) chairman Mohammad Tawila gave the Ministry of National Infrastructures the company’s plans for building a gas pipeline from El Arish in Sinai to Ashkelon. Under the timetable, natural gas will begin flowing on September 30, 2007. EMG is due to lay the pipeline by the end of 2006, and to carry out infrastructure work at the Eilat-Ashkelon Pipeline Co. (EAPC) site in Ashkelon during 2007. The final stage of the project will link up the pipeline with Israel’s natural gas pipeline, being built by Israel Natural Gas Lines Company.

During the discussion, Ministry of National Infrastructures director general Eli Ronen said the natural gas project was an opening for additional infrastructure projects between Israel and Egypt. Minister of National Infrastructures Benjamin Ben-Eliezer said that, despite Israel’s current political situation, he was convinced that the natural gas deal with Egyptwould strengthen relations between the two countries, and become a platform for developing bilateral economic relations.
Iran to start LNG exports to Europe by 2011
Source: Mehr News Agency 13-11-05

Managing director of the National Iranian Gas Company, Rokneddin Javadi, said that Iran has signed a Memorandum of Understanding (MoU) to export natural gas to Italy. “The project of exporting LNG to Europe will be implemented by 2011,” he added.

The official also stated that Iran would export gas to China by the end of the current year. China’s oil giant Sinopec Group had signed a $ 70 bn oil field development and LNG agreement with Iran on October 28, 2004. Under the MoU, Sinopec could buy 250 mm tons of LNG over 30 years from Iran and develop the giant Yadavaran field. Iran is going to attain annual LNG export of 36 mm tons, worth $ 6 bn, by 2015, Javadi noted.
Gazprom wants partnership with Turkey
by Mirza Cetinkaya Source: 19-11-05

Russian natural gas company Gazprom, Turkey’s partner in the Blue Stream natural gas pipeline project, has hopes to secure a stronger partnership with the country through new projects.
Gazprom CEO Spokesman Sergei Kupriyanov assessed the bilateral relations, “In many fields, we would like to broaden our partnership with Turkey, who we see as our partner. We are very carefully following the investment market in Turkey.”

After Germany and Italy, Turkey is the third country Russia makes deal with regard to natural gas Kupriyanov said, and if China does not take any action, Turkey will be the number one customer of Gazprom. The company is one of the main players of a working visit by Russian President Vladimir Putin, and they have taken certain measures to increase the amount of natural gas pumped through the Blue Stream pipeline that will be officially opened at a ceremony in Ceyhan, Turkey.
Three teams sent to Krasnodar and Stavropol regions installed a system to increase the atmospheric gas pressure from 75 to 250. After the talks with the Turkish delegation, the amount of gas will be increased.

Gazprom transferred 3.2 bn cm of gas via the Blue Stream pipeline in 2004, but wants to end 2005 with a total of 4.5 bn cm gas. In line with the agreement regarding the amount of gas, this figure will be increased to 16 bn cm in the years to come. Since 1987, Turkey has received 12-14 bn cm of gas annual from Russia via Trace.
According to information Kupriyanov submitted, Putin during his meeting with Turkish Prime Minister Recep Tayyip Erdogan will discuss the natural gas storage system Gazprom plans to construct in the Salt Lake, a central Anatolian lake and the second biggest in the country, and the company’s participation in the tenders for energy distribution in Turkey. Due to increasing demands and weather conditions, a storage system is required for Turkey, Kupriyanov believes. If Turkey shows an interest in this project, the facility to be established will provide greater ease in the use of gas. Russia possesses 24 similar gas storage systems and already stores 63 bn cm gas at these facilities.

As for the rising concerns about that a Russian monopoly will occur in the Turkish natural gas sector, the spokesman said that none of the countries they currently conduct business with have expressed any upsets so far.
“We sell gas to almost all of Europe. We have many long term projects. If we apply other channels to create upsets, then we will be the one who loses business.” Besides, Gazprom officials defend, the prices they apply to Turkey are to that equal of other countries. Another Russian company has also shown interest in establishing an oil refinery in Ceyhan, Turkey.
Gazprom considers gas supplies to Israel, Italy and Greece
23-11-05 Source: RIA Novosti

Russian energy giant Gazprom is studying the possibility of natural gas deliveries to Israel, Italy and Greece, a top Gazprom manager said.
"We have plans to increase the capacity of the Blue Stream gas pipeline, and we are considering natural gas deliveries to the Middle East, Israel and other countries, and the initial calculations have shown that this project cant be effective," said Alexander Medvedev, the company's deputy CEO and general director of its subsidiary Gazexport.

He said Blue Stream was able to work at full capacity.
Speaking about possible deliveries of natural gas to southern Europe, Medvedev said he doubted any other gas could compete with Russia's.
The Samsun-Ceyhan pipeline
by Kadir Dikbas 24-11-05 Source:

Important developments took place recently.
The first was Calik Energy, which is interested in the Samsun-Ceyhan pipeline, announcing that it has reached an agreement with the Italian ENI company for this project. As we know, ENI which has an oil field in Kazakhstan, is also one of the partners of Blue Stream.
Then on November 17, the Blue Stream Natural Gas Pipeline was realized at an official opening ceremony attended by Turkish Prime Minister Tayyip Erdogan, Russian President Vladimir Putin and Italian Prime Minister Silvio Berlusconi. On the same day, the first oil from the Baku-Ceyhan pipeline crossed into Turkish territory.

It is true that the Baku-Ceyhan pipeline is about to be completed but it does not have the capacity to prevent the Turkish Straits from being an oil route. The burden on the straits will increase in the forthcoming years. Hence, relevant countries and companies, Turkey in particular, are working on alternatives that will carry oil from the Black Sea to Europe and other countries, by casting aside the Straits.
There are more than 10 projects and most of these projects include formulas without Turkey. Turkey is insisting on Samsun-Ceyhan it considers more economical and practicable. As we can still remember, there is already a pipeline operating between Kirikkale and Ceyhan. The new pipeline will follow the same route. If this project materializes, Ceyhan will turn into an oil stock exchange, it will be a centre where Iraqi, Azeri, Russian and Kazakh oil meet.

This line has two strong rivals: TransBalkan and Burgaz-Dedeagac pipelines.
The TransBalkan pipeline project stretches as far as the Adriatic Sea through Bulgaria, Macedonia and Albania. The project's feasibility studies have been completed but the construction stage has not been reached yet.
And talks on the Burgaz-Dedeagac pipeline are still continuing. Russia supports this project.

Not only countries but companies are also playing distinctive roles in these alternatives, however, it is a fact that political choices predominate over them. The "energy summit" that was held in Samsun on November 17 was very important from this perspective.
Because the official opening of a line that has been operating since February 2003 was not so important. The important thing was the cooperation to ensue after this as well as the new projects. Turkey expected strong support for Samsun-Ceyhan at this summit. But this expectation did not come true.

Italy supported the project during talks that were closed to the press. Putin carefully avoided giving any answer that would satisfy Turkey.
"Let’s first examine the feasibility and then we will talk later," he said.
Also during the ceremony, Putin gave the following message which was far from fulfilling Turkey's expectations but was important for his own country: "The Blue Stream creates new opportunities for the transfer to third countries, too. It can be extended to Italy, southern Europe and Israel through another pipeline in the bottom of the Black Sea."

Russia wants to sell more gas than Blue Stream and to reach not only Europe but also Israel and even Africa via Turkey by laying a parallel line. Besides, it also asking for the construction of a natural gas depot planned for Tuz Lake. Nevertheless, it remains cool to the project that will transfer Russian and Caspian oil to Ceyhan.
It is a fact that Blue Stream was not a "victory" for us, because this is a project that relegates Turkmen gas to the second plan, delays the arrival of Azeri gas and makes Turkey dependent on Russian gas.

At the moment, Turkey is calculating on how to turn the pipeline built and the agreements made into its own advantage. Seeking support for Samsun-Ceyhan at the Blue Stream ceremony must be taken into consideration under this framework.
Even though Erdogan says, "I think we can build a Samsun-Ceyhan bypass pipeline in the same cooperation spirit," Russia only wants its natural gas to go down to the south, not its oil, for now. It seems we must have to wait until we see the projects that will be vital to Turkey’s interests.
World Bank backs plans for South American gas pipeline
Source: AP 16-11-05

The World Bank supports plans for a natural gas pipeline that would transport natural gas throughout South America, a representative of the bank said. Venezuelan President Hugo Chavez has announced plans to construct a pipeline network to supply the continent with natural gas. The pipeline network may eventually transport Bolivian natural gas as well.

Eleodoro Mayorga, the World Bank's chief oil economist, expressed support for the proposal at a conference in Caracas, calling it a step in the right direction. Venezuela, which has the largest natural gas reserves in the region, is discussing the first stage of the pipeline project with neighbouring Brazil. A pipeline from Venezuela through Brazil and Uruguay is on the agenda for a meeting in Caracas between Chavez and Argentine President Nestor Kirchner. But Argentine officials were unable to confirm whether the idea would be discussed.

To increase gas output, Venezuela is selling exploration and production licenses to local and foreign firms. The state-run oil company Petroleos de Venezuela, or PdVSA, sold three exploration and production licenses for $ 61 mm (EUR 52 mm).

Indonesia to build Kalimantan to Java gas pipeline
Source: Asia Pulse 18-11-05 Source: Antara

The government will build a gas pipeline from East Kalimantan to Central Java even though surveys show the project is not feasible. A team of government officials has reportedly said the project is not feasible as the gas deposits in East Kalimantan are not enough to warrant the $ 1.4 bn project. Moreover, most of the province's gas production has to be exported on long term contracts with foreign buyers until 2010.

Energy and Mineral Resources Minister Purnomo Yusgiantoro told he has received the report from the team but he has returned the report and asked it to undertake further studies. The team should carry out comprehensive studies and not only based on the strength of reserves in East Kalimantan, he said. A shortfall in supply from East Kalimantan could be covered with supply from other areas, he said, citing that export commitments could be served with gas from Tangguh in Papua.

Purnomo's statement contradicted what he said earlier that the project was not a priority in the next one to two years. He was quoted as recommending thorough study on the project especially as most gas from East Kalimantan has been appropriated for exports until 2010. Oil and gas observer Ramses Hutapea said the conflicting statements by Purnomo showed that he was under pressure from one more powerful than him to go ahead with the project.

Study says Kalimantan to Java gas pipeline is not feasible

15-11-05 The $ 1.2 bn gas pipeline project from East Kalimantan to Central Java is not economically feasible because of the limited gas to be transported.
If the project has to be carried out the government has to cancel contracts with foreign buyers on exports of liquefied natural gas, a study by a team of government officials said.

The project is among the infrastructure projects included in the priority list to be implemented by the government. It is part of the government program to reduce dependence on oil fuel for industries.
The team said that the government should rely only on proven reserves of gas as there is no guarantee from indicated and inferred reserves. Proven reserves in East Kalimantan are only 4.3 tcf and it will last only for 10 years without exports.

"If we are to continue exports of LNG, the gas reserves in East Kalimantan will not be enough for Java, therefore, one of the two options has to be cancelled," team chairman Tubagus Haryono said.
Tubagus said he would senda letter to the chief economics minister to announce a clear gas policy.
Afghanistan NASA confirms gas and mineral reserves
17-11-05 Source: The PakTribune

The US-based National Aeronautics and Space Administration (NASA) has confirmed the existence of gas reserves in northern and south-western Afghan regions. The NASA also hinted at the existence of copper and gold reserves in the central Logar province and fuel reserves near Amo River, a senior official claimed.

Afghan Mines and Industries Minister Mir Mohammad Siddique told: "We were earlier unaware of the natural gas, copper and fuel reserves discovered by NASA.". An agreement on exploring these reserves involving $ 17 mm was signed between the Afghan mines minister and former US ambassador Zalmay Khalilzad in Kabul last year. The NASA launched its work of exploring the natural resources by taking aerial pictures of the mines. The minister said the US agency had provided him a map showing Afghanistan’s different mines.

He added there were gas mines in Balkh, Faryab, Badghis and Jawzjan, Farah and Helmand while copper and gold reserves were found in Logar. He said the exploration had shown fuel reserves on both sides of Amo River. Siddiqui continued the government wanted to buy modern equipment for excavating the sites. "We have contacted the Asian Development Bank, which has pledged to give us funds for the purchase of modern excavation tools."

The government planned to hand over the mines to private companies, he said, revealing the $ 33 bn copper reserves in Logar would be leased out to a firm. Also, there are mines of precious stones in Afghanistan and the US has promised to help in their excavation and cutting.
Russia publishes plan for new Siberia-Pacific pipeline construction
Source: Neftegaz.RU 14-11-05

Russia's energy ministry published a timetable for construction of 2,300-km section of a oil pipeline, from Siberia to the Pacific coast and possibly China. The project presented to Russia's cabinet sets November 1, 2008, as the completion date for a pipeline section from Taishet in Irkutsk province to Skovorodino in Amur province, as well as the necessary pumping stations and, separately, an oil terminal at the Pacific port of Perevoznaya.

Uzbekistan looks east for new friends
by Simon Tisdall 24-11-05 Source: The Guardian

It looks like Craig Murray was right all along. To the US's annoyance, Britain's former ambassador to Uzbekistan publicly criticised human rights abuses by President Islam Karimov's government.
Mr Murray lost his job last year. But even the most hard-nosed US strategists could not turn a blind eye to the massacre in the town of Andijan in May. The ensuing confrontation, all the more explosive for being delayed, has come at a high price to Washington's interests in central Asia.

Rejecting western demands for an independent inquiry into Andijan, when hundreds died, the ostensibly pro-American Mr Karimov has switched sides. He ordered the US to close its military base in Uzbekistan, a key part of its Afghan operations. And he turned to China for consolation.
Beijing, keen to expand its regional clout and discourage indigenous Muslim "splittists", unquestioningly accepted his claim to be battling an Islamist insurrection. Moscow, with Chechnya in mind, also sympathised. At a Kremlin ceremony earlier, Mr Karimov signed a mutual defence pact with Russia. NATO was also kicked out. Washington's Uzbek policy lay in tatters.

With its valuable oil, gas and mineral reserves and authoritarian political tradition, Uzbekistan is a typical battleground in what is fast becoming an epic, three-way struggle for power, influence and resources in post-Soviet central Asia.
"Its the world's last vacuum," said Kalman Mizsei, regional director of the United Nations development programme. "The region has become a playground for rival geopolitical interests." But increased cooperation rather than competition between countries should be the aim, he said.

Having "lost" Uzbekistan, the US, EU and Japan are nervously tracking unfavourable trends in two of its neighbours. As in Ukraine and Georgia, Kyrgyzstan's "tulip revolution" last March has brought disappointment in its wake. The government of Kurmanbek Bakiyev has been beset by troubles, including the killing of three MPs.
Mr Bakiyevthreatened to use troops to impose order earlier.
"Those taking up arms and attempting to speak a language of force with the authorities will be terminated, full stop," he warned in a manner reminiscent of his ousted predecessors.

Kyrgyzstan, meanwhile, wants the US to pay more for the use of its airbase there -- or face an Uzbek-style eviction. The demand follows claims that the Pentagon connived in under-the-table payments worth millions of dollars to the family and friends of the deposed president, Askar Akayev.
The integrity of Kazakhstan's presidential election on December 4 is also giving cause for concern. Visiting in October, Condoleezza Rice, US secretary of state, urged Nursultan Nazarbayev, the president, to ensure fair polls. She denied the US was soft-pedalling to safeguard its oil and security interests, an accusation also heard during Azerbaijan's flawed elections in October.

Since her departure a leading opposition figure, Zamanbek Nurkadilov, has mysteriously died of gunshot wounds amid claims of intimidation and media bias. But Mr Nazarbayev's spokesman reassuringly said there was no need to rig the polls.
"The president would win even if we sat around doing nothing," he said.

Democracy's trials in central Asia are of less concern for Russia and China, which may give them a short-term advantage. Ignoring the human rights issues highlighted by Mr Murray, both are building economic ties bilaterally and through the Shanghai Cooperation Organisation, to which most central Asian states belong. But Mr Mizsei said Russia would resist China's advances.
"All these countries are more familiar with a Soviet big brother than a Chinese one," he said. "There will definitely be a divergence of interests."
If and when that happens, the west could win in the east.
India eyes alliance with China and Uzbekistan for oil assets
Source: 26-11-05

In a bid to seek greater cooperation among the Asian nations for energy security, Petroleum Minister Mani Shankar Aiyar met representatives from China and Uzbekistan to boost the ongoing efforts towards developing an Asian oil and gas grid. A day after the meeting of the ministerial round table on co-operation between North and Central Asian producers, Aiyar called on Rustam Sodykovich Azimov, Foreign Economic Relations, Investment and Trade Minister of Uzbekistan and Chinese Ambassador Sun Yux.

The meeting came in the backdrop of India rallying to build bridges with Central Asian oil producers to secure energy supplies. "The BTC (Baku-Tbilisi-Ceyhan) is the most recent world class project involving more than one country. It has the entire documentation written in English, all of it is posted on the web so we don't have to get to these people. But it would be nice to hear what they have to say on the subject and then its for us to draw any lessons if we think there are any lessons to be drawn," said Aiyar.

Addressing the second round table conference, Aiyar had proposed to initiate a detailed scientific study to form Asian oil and gas grid.

Turkmenistan and China to sign gas deal
Source: The Associated Press  by Alexander Vershinin 23-11-05

Central Asia's Turkmenistan will sign a major agreement next year to sell natural gas to China and jointly develop Turkmen gas fields, President Saparmurat Niyazov said. China is increasingly looking abroad to secure reliable oil and gas supplies for its booming economy. Turkmenistan, a largely desert nation, has huge natural gas reserves and is the second-largest gas producer in the former Soviet Union after Russia.

Niyazov said the deal, expected to be signed during his visit to China early next year, would involve building a gas pipeline to China from eastern Turkmenistan, where the fields planned for joint extraction are located. The pipeline will be able to carry 30 bn cm (1 tcf) of natural gas a year, Niyazov told a meeting of transport officials from former Soviet republics in the capital Ashgabat.

In July, Turkmenistan and China signed an agreement on oil and gas cooperation and China extended a $ 24 mm low-interest loan to Turkmenistan for the development of its oil and gas industry. The announcement comes days after Niyazov warned Russia and Ukraine that Turkmenistan can do without their markets if they do not agree to pay more for gas supplies.

The country, citing increased production costs and higher costs of gas extraction equipment, is seeking to boost its prices for natural gas exports by about 35 %. Ukraine relies on Turkmenistan for about 45 % of its natural gas needs, and was planning to buy about 39 bn cm in 2006. Russia was expected to buy about 7 bn cm and Iran 8 bn.