A Snapshot of Key Developments in the External Relations of the Russian Gas Sector
Key points:

• Gazprom hasn’t given up on its attempts to break into South-East Asian gas markets. Its proposal for a potential trans-Korean pipeline has found support in both North and South Korea. However, North Korea’s change in leadership casts a shadow of doubt over the situation
• Gazprom’s purchase of the remaining 50 percent share in Beltransgaz brought a sigh of relief to European consumers, with transit disputes and Belarusian debts for Russian gas seemingly laid to rest. The purchase is one of several measures designed to bring Russia and Belarus closer together, and demonstrate to Ukraine the potential benefits of selling its gas transportation system to Gazprom
• Nord Stream was launched with great fanfare. The launch has a substantial impact on the current transit situation, with Ukraine looking like the loser of the piece as its transit volumes are increasingly likely to fall
• Gazprom intensified negotiations with Kiev over the possible sale of Ukraine’s gas transit system. Given the sale of Beltransgaz to Gazprom and the announcement that South Stream will go ahead as planned, there is a fair chance that Kiev will give up shares in its gas transport system
• The Turkish national gas pipelines operator, Botaş has refused to renew its 26-year contract to purchase 6 billion cubic metres (bcm) of Russian gas annually, which expired on the 31st of December 2011. Gazprom’s subsequent attempts to circumvent the national supplier have failed: The Turkish Ministry of Energy has refused applications by 26 companies for licences to import Russian gas
• PGNiG has filed an arbitration case against Gazprom for lower gas prices and greater spot-price element in contracts. Even if the Polish company ultimately succeeds in its aim, the process could drag on for months
• Gazprom plans to pay record dividends, estimated to be 200bn Roubles. However, shareholders should not expect such generosity from Gazprom next year: The size of Gazprom’s declared investment programme precludes similar profits next year.

• EGF Editorial  |  Опубликовано на EGF: 19.01.2012  |  Energy
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A Snapshot of Key Developments in the External Relations of the Russian Gas Sector
Key points:

• In a somewhat surprising development for Gazprom, Turkish state-owned gas pipeline operator, Botaş, has declined to extend its contract for 6 billion cubic metres (bcm) of gas per year. The move is seen by some as an attempt by Ankara to obtain gas price discounts.
• The Polish state-owned energy company, PGNiG, has joined its European counterparts in pressing for lower gas prices from Gazprom. Warsaw wants to change the gas price formula and tie it to spot gas market prices.
• Another recent, unpleasant surprise for Gazprom was the launch of an investigation into its European partners carried out by the European Commission (EC). Officially, the EC investigation concerns the potential violation of antimonopoly legislation, although some commentators see the investigation as an attempt to strengthen the position of European consumers in their negotiations with the Russian gas giant.
• Belarus has agreed terms with Gazprom for the sale of the remaining 50 percent stake in Beltransgaz. In return, Belarus President, Alexander Lukashenko, is demanding guarantees of transit through the Belarusian pipeline network and a reduction in gas import prices to the level of internal Russian prices.
• Ukraine President, Viktor Yanukovich’s attempt to destroy his political rival, Yulia Timoshenko, is playing into Gazprom’s hands. As Brussels toughens its stance towards Kiev, Ukraine is forced to be more amenable in its negotiations with Russia, especially those over the future of Ukraine’s Gas Transit System (GTS)
• Prime Minister Vladimir Putin’s visit to China failed to produce a breakthrough in negotiations over the Altai gas pipeline and potential Russian gas deliveries to China. The price of gas exports via the Altai pipeline remains the main stumbling block, as Gazprom is currently seeking other ways of exporting gas to China, namely via the Sakhalin-Khabarovsk-Vladivostok pipeline.

• EGF Editorial  |  Опубликовано на EGF: 13.11.2011  |  Energy
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A Snapshot of Key Developments in the External Relations of the Russian Gas Sector
Key points:

• Gazprom partners raided by European Commission Anti-trust Inspectors
• The dispute between Moscow and Kiev continues. Ukraine knows that it has a weak bargaining position and is in no hurry to make concessions to Russia
• Prime Minister Vladimir Putin launched the first string of Nord Stream, meaning Ukraine is now in danger of losing its status as the main transit country for Russia’s European gas exports
• Gazprom has signed roadmap with South Korea's Kogas for the construction of a pipeline from Vladivostok to South Korea
• Gazprom may suspend its project in Nigeria because of the lack of a law governing the oil and gas industry, although experts say Gazprom may have lost interest in this project because of potential difficulties in selling Nigerian gas
• Gazprom is looking to acquire two state-owned oil and gas companies in Kyrgyzstan
• The Gazprom affiliate Vemex has acquired a 51% stake in RSP Energy, marking the first time a Gazprom Group company will sell gas and electricity to Czech households
• Gazprom has signed a legally-binding agreement with its European partners on the implementation of the South Stream project, but has attracted criticism from the EU. According to Russian sources, EU Energy Commissioner, Guenther Oettinger, views South Stream as an attempt by Moscow to derail the ‘Southern Corridor’ gas supply diversification concept
• In line with new oil production projects in the region, Gazprom Neft is considering the construction of a new oil refinery near Murmansk
• Gazprom expects a doubling of the Mineral Extraction Tax by 2013.

• EGF Editorial  |  Опубликовано на EGF: 12.10.2011  |  Energy
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Issue 7: June-July 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

This year, Gazprom is likely to report an income of about $60 billion from the export of 158 bcm of gas to Europe, according to expert estimates. This represents a 12 percent growth in income compared to the previous year and, according to Alexander Medvedev, Deputy Chairman of Gazprom’s Board of Executive Directors, the company’s profits will be close to the record-breaking levels of 2008, when its income from exports reached $65 bn. READ MORE

• EGF Editorial  |  Опубликовано на EGF: 21.08.2011  |  Energy
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Issue 6: May 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

The President of Belarus, Alexander Lukashenko, seems to be optimistic about the possibility of obtaining Russian credits to rescue the Belarusian economy. On May 17, he stated that Moscow was ready to lend Minsk $6 billion in 2011. However, the Kremlin responded by suggesting that it will only lend $1 billion and that even this amount will only be possible in combination with the sale of a number of Belarusian assets, notably a 50 percent stake in Beltransgas. Gazprom already holds a 50 percent stake in the company. READ MORE

• EGF Editorial  |  Опубликовано на EGF: 13.06.2011  |  Energy
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Issue 5: April 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

On April 25 of this year Gazprom head, Alexei Miller, predicted that the price of gas sold to European gas consumers would increase to $500 per 1,000 cubic metres by the end of 2011. This suggests a price hike of almost 40 percent as currently the average European gas price is $350 per 1,000 cubic metres. While Gazprom officials do make public references to limitations to increases in the gas price, most such comments tend to refer to Russian domestic gas prices. READ MORE

• EGF Editorial  |  Опубликовано на EGF: 01.05.2011  |  Energy
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Issue 4: March 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

The dispute between the Lithuanian Government and Gazprom continues. As we wrote in the preceding issue of the Gazprom Monitor, the dispute flared up after the Russian monopoly refused to give Vilnius the same gas price discount that it grants to the other Baltic States. Consequently, the Lithuanian side is forced to pay high gas prices. In response, Vilnius is trying to use the implementation of the Third Energy Package, in relation to the gas transport system of the country, as a lever of pressure against Gazprom. In the end this may bring about both a rupture in the agreement on the privatisation of Lietuvos dujos (37 percent of which belongs to Gazprom) and the separation of control over gas transmission pipelines from companies which own them. READ MORE

• EGF Editorial  |  Опубликовано на EGF: 29.04.2011  |  Energy
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Mikhail Roshchin, EGF Affiliated Expert

While many in Russia have become accustomed to gas disputes with Ukraine as the flagship event hailing in the New Year, the start of 2011 brought with it a far more tragic security crisis when a major bomb blast ripped through the crowded halls of Moscow’s Domodedovo airport. The attack occurred in the arrivals area of the airport at 4.32 pm, on 24 January 2011, claiming the lives of 36 individuals and injuring 116 more. An act of terrorism was immediately assumed by many security experts, possibly involving a suicide bomber, who employed an explosive device containing 5-7 kilogrammes of Trinitrotoluene (TNT). Among the victims was Anna Yablonskaya, a 29-years-old Ukrainian playwright and poet who had come to Moscow to receive a prize from the magazine Art of the Cinema for her recent play. This attack follows the March 2010 suicide bombing in which two women, originally from Dagestan, blew themselves up in Moscow’s underground causing the death of 40 commuters. As was the case in the March 2010 attack, separatist-terrorists from the Russian North Caucasus were suspected of involvement in the Domodedovo attacks. These suspicions appeared to be confirmed earlier this month, when Chechen rebel leader, Doku Umarov, claimed responsibility for the bombing on February 4. In his video broadcast confirming responsibility for the attack, Umarov justified his actions on the basis of Russian state policy in the North Caucasus. READ MORE

• Mikhail Roshchin  |  Опубликовано на EGF: 25.04.2011  |  Security
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Issue 3: February 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

The dispute over the implementation of the EU Third Energy Package in Lithuania continues: the question of Europe’s energy security topped the agenda of the first ever EU energy summit which took place in Brussels on 4 February (2011). The summit began with a speech on the integrated EU energy market and general energy policy towards third countries. Special attention is being given to Russia and the dispute between Gazprom and the Government of Lithuania, which has arisen from plans to nationalise gas transmission pipelines belonging to Lietuvos Dujos. READ MORE

• EGF Editorial  |  Опубликовано на EGF: 17.03.2011  |  Energy
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Issue 2: January 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

According to export plans for 2011 revealed by Aleksei Miller, Gazprom will export more gas than in 2010, but still less than during the pre-crisis period. Gazprom plans to enter the Portuguese and Spanish markets, having arranged deliveries of gas from Africa. READ MORE

• EGF Editorial  |  Опубликовано на EGF: 29.01.2011  |  Energy
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