'Ukraine may provoke another gas crisis with EU.' Russia’s Permanent Representative to the EU

 'Ukraine may provoke another gas crisis with EU.' Russia’s Permanent Representative to the EU. (Tass).

Ukraine may provoke another crisis in gas relations between Moscow and the European Union if it steals Russian gas meant for transit to Europe in the wintertime, Russia’s Permanent Representative to the European Union Vladimir Chizhov said on Monday.

"To live through a winter normally, there are calculations of how much gas is to be pumped to storage facilities in the summertime," he said. "I’d refrain from citing exact figures but I would say that Ukraine’s storage facilities are now holding much less gas than is minimally needed. Hence, they will not be able to use this gas from underground storage facilities, like they did it last winter - as I have already said they have not been buying Russian gas since November 2015."

Last winter, luckily for Ukraine, was warm enough, he noted. "I would not make guesses about the coming winter but even if it is mild the problem may surface all the same," Chizhov said.

"The entire experience of gas relations with Kiev suggests that the path of least resistance for them is to pump gas from the transit pipe running to Europe. In such event, we can expect another crisis."

"So, the European Commission is probably addressing this issue. Thus, [Vice-President of the European Union Commission in charge of the Energy Union Maros] Sefcovic has visited Kiev. So, let us wait and see what will come of it," the Russian diplomat said.

In the meantime, Russian Energy Minister Alexander Novak said Kiev will need about two more billion cubic meters of gas to live through the winter. Hmmm.....Sounds like the EU[nuchs] will again pay Ukraine's unpaid bills. Read the full story here.

Belgium, Turkey to be involved in Iran’s Gas, Energy Market.

Belgium, Turkey Eye Presence in Iran’s Gas, Energy Market. (IranFrontpage).

The Belgian deputy prime minister said Brussels and Ankara will cooperate on major gas and energy projects in Iran under a joint venture agreement.

Didier Reynders said Friday that Belgium and Turkey have agreed to cooperate for construction of natural gas power plants and renewable energy projects in Iran in the wake of the removal of anti-Tehran sanctions.

“With the lifting of the embargos on Iran, there will be many changes in the energy sector and we will see new investments in the country,” Reynders said as quoted by Anadolu Agency.

“Turkish and Belgian companies are already cooperating in a number of projects,” he added.

There has been growing international interest in trade ties with Iran since Tehran and the Group 5+1 (Russia, China, the US, Britain, France and Germany) on July 14, 2015 finalized a comprehensive deal on Iran’s nuclear program and implemented it on January 16.

The comprehensive nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), terminated all nuclear-related sanctions on Iran after coming into force. Hmmm.......Belgium has been planning this a long time, No wonder the Belgian king gave Erdogan a knighthood at his latest visit to Brussels.

Quoting materials from Iran Front Page is permitted only if the source is mentioned by name.

Related:  2015:  'Sanctions that Benefit' - Iranian MPs Visit Belgian Gas Transmission Firm.

               2014 - February 22 :  Belgium foreign affairs minister (in search of cheap natural gas) to meet Iranian counterpart in Tehran.

'Sanctions that Benefit' - Iranian MPs Visit Belgian Gas Transmission Firm.

'Sanctions that Benefit' - Iranian MPs Visit Belgian Gas Transmission Firm. (Fars).

Iranian lawmakers of the Islamic Consultative Assembly (Majlis) who are also members of the Iran-Belgium Parliamentary Friendship Group visited the Fluxys Belgium company which is a gas transmission operator in Europe.

The Iranian chairman of the group, Abbasali Mansouri, is heading the five-member delegation visiting Belgium on the invitation of the Belgian chairman of the group, Dirk Van der Maelen, member of the Chamber of Representatives or the lower house of the Federal Parliament.

During their stay, the Iranian MPs are scheduled to meet their counterparts as well as speakers of the Belgian legislative chambers, foreign minister, and deputy foreign minister.

Promotion of parliamentary relations, facilitation of trade and economic ties, cooperation in energy fields, and exchanging views on regional and international developments are on the agenda of visit.

Related: 

 2014 - February 22 :  Belgium foreign affairs minister (in search of cheap natural gas) to meet Iranian counterpart in Tehran.

New Russian gas deals are "enough to make even a seasoned energy observer's head spin"

New Russian gas deals are "enough to make even a seasoned energy observer's head spin". (csis).

In the twelve months since the collapse of global oil prices and the imposition of Western economic sanctions against Russia, the number of new Russian gas export project announcements has skyrocketed.

Only last month, Gazprom signed a memorandum of understanding (MOU) with three European companies to build a second large gas pipeline system under the Baltic Sea called Nord Stream II.

This was preceded by the announcement in December by President Vladimir Putin himself of the cancellation of the ambitious South Stream gas pipeline under the Black Sea to be replaced by an equally grandiose project, soon to be dubbed Turkish Stream.

In Kurdish a donkey is called: 'Kerdogan'

Both Nord Stream II and Turkish Stream are designed to bypass the critical transit route through Ukraine utilized by 40 to 50 percent of Russia’s current gas exports to Europe.

Russia and Gazprom’s position on whether gas transit through Ukraine will continue after the current agreement expires in the not-too-distant future flip-flopped within a matter of weeks recently – first proclaiming that all transit will cease after 2019, then declaring that negotiation of a new deal has been ordered by President Putin.

In the past year, we have also seen the supposed conclusion of not one but two large gas deals with China. Together with numerous previously proposed liquefied natural gas (LNG) and export pipeline projects, this picture is enough to make even a seasoned energy observer’s head spin.

To make matters worse, the mainstream press tends to report each one of these announcements, no matter how fanciful, as if they are all realistic projects that will be completed by the notional target dates even as Russia’s financial position continues to deteriorate.

The total cost of these projects is somewhere between $150 and $200 billion, and it is unlikely that Russia (even together with its prospective partners) could muster the necessary capital to complete most of them amidst Russia’s low oil revenue, budget deficits, and falling GDP.

Instead, the raft of announcements, postponements, and cancellations in June and July of 2015 suggest that Russia is groping for a viable gas export strategy. Read the full comprehensive report here.

Gazprom signs key Nord Stream-2 deal with EU companies, avoids need for gas transit through Ukraine.

Gazprom signs key Nord Stream-2 deal with EU companies, avoids need for gas transit through Ukraine. (RBTH).

Russia’s gas giant Gazprom has signed a binding shareholders’ agreement with European energy companies for the construction of the Nord Stream-2 pipeline from Russia to Germany. The landmark deal was inked at the Eastern Economic Forum, held in Russia’s far eastern city of Vladivostok on Sept. 3-5.

Gazprom will own a controlling stake, while Germany’s E.ON and BASF/Wintershall, Austria’s OMV and Royal Dutch Shell will receive 10 percent each, while France’s Engie will receive 9 percent.

Economic interests take priority

In itself, the signing of the shareholders’ agreement for Nord Stream-2 is already evidence that the EU, as before, has no common position either on relations with Gazprom as a whole or on today’s most pressing issue – that of gas transit through Ukraine.

The largest power companies in the UK, France, Germany and Austria signed the project, whose implementation will minimize the transit of gas through Ukraine, which all these states continue to support politically. However, the agreement is contrary to the position of Brussels; according to Vice-President of the European Commission Maroš Šefčovič, there is no need for any gas pipelines bypassing Ukraine.

“Germany believes that Ukraine should be supported, but the path to democracy and reform is very long, and we are losing time; the Ukrainian gas transportation system must be modernized, but no one is ready to invest,” said Alexander Rahr, research director of the German-Russian Forum, adding that plans for Nord Stream-2 do not violate EU law, including the Third Energy Package.

Southern Europe left high and dry

The shareholders’ agreement is a serious blow to the south-eastern countries of the EU, which were prevented by the United States and the European Commission last year from building the South Stream pipeline, intended to supply Russian gas to Southeast Europe via an undersea pipeline and a distribution hub in Turkey.

Now it is proposed to build a gas pipeline which, with a capacity of 55 billion cubic meters a year, which will bring billions of dollars in transit fees not to Bulgaria and Hungary, but to Germany and the Czech Republic. In addition, virtually all Russian gas will reach Europe through Germany, providing German gas pipeline companies with stable income for decades.

“The participants of South Stream – Bulgaria, Greece and Italy – are the countries that do not have enough weight to make decisions contrary to the general political line, but Germany will be able to,” said Fyodor Lukyanov, head of the Council for Foreign and Defense Policy, an independent Moscow-based think tank. Hmmm.......Guesss the Turkish stream will remain a 'Turkish dream'? Read the full story here.

Libya: Islamist militia seize Melittah gas terminal, west Libya, from where gas is pumped to Europe.

Libya: Islamist militia seize Melittah gas terminal, west Libya, from where gas is pumped to Europe. (Libyaherald).

There are reports that the Mellitah Oil’s gas processing plant at Mellitah has been seized by armed men from a group calling itself the ‘Revolutionaries of the Western Area . Read the full story here.

PT: The group confirms it targeted the joint venture between Italian oil company ENI and the Libyan NOC #Libya #ISIS

— Michael Horowitz (@michaelh992) September 1, 2015

Obama's BFF Iran fooled EU[Rabia]: Iran can't compete with Russia for Europe’s gas market.

Obama's BFF Iran fooled EU[Rabia]: Iran can't compete with Russia for Europe’s gas market. (TAZ).

Despite the nuclear deal with the P5+1, Iran has very little chance to deliver its gas to the European market in the years to come, Vladimir Yevseyev, the expert on Iran, the director of Russian Center for Public Policy Research, told Trend August 5.

“Moreover, in the medium term, Iran’s gas will not be able to compete with the Russian gas in the European market,” the expert added.

He said there are several reasons for this.

“Firstly, Iran, in order to bring its gas to the European market, needs the lifting of sanctions, and so far the matter rests in only their mitigation,” said Yevseyev. “It is premature to say that in the near future there will be the lifting of sanctions or defrosting of significant assets of Iran.”

Even in the most favorable case, the process of easing the sanctions will only begin the next year. Yevseyev added.

“And the US will for eight years only suspend the sanctions, while Europe, perhaps, may stop them. In any case, it is necessary to wait for a report of the IAEA director general, and on this basis only some proposals will be developed to mitigate the sanctions.”

Secondly, the expert said, as of now Iran has no free volumes of gas that it could deliver to Europe.
Domestic gas production, especially for electricity generation is growing very fast in Iran and in fact, the whole volume of production in the country is used in the domestic market, he said.

Some free volumes are supplied to Iraq and these supplies will be expanded, according to the expert.
Moreover, there are plans on laying an underwater pipeline to Oman and the issue of gas supply to Pakistan also remains open, he added.

“Under these conditions, I can’t see even a theoretical possibility that there can emerge any considerable volumes of Iranian gas which could be delivered to Europe,” he said.

Although Iran has huge gas reserve, considerable amount of investments - $50 billion to 80 billion – as well as new technologies will be required for processing it, according to estimations, said the expert.

He added that Iran will not be able to get them in the near future.

The expert said he is more than confident that even if the Iranian assets worth about $130 billion in the US are unfrozen, Iran won’t get this money in a short time.Unfreezing these funds will take long time, if it at all, according to the expert.

“Foreign investors will be afraid of investing in the projects in Iran as the agreement signed between Iran and the "Six" is reversible and there is no guarantee that it will not be canceled,” the expert said.
"Nobody knows what will happen in the US after the new president is elected next year,” he said.

“There is no understanding of the situation in two years. In such circumstances, big business will not work."

He said that in such circumstances, most likely, Iran would be unable to obtain Western technologies in the required quantities.

"In such circumstances, it is impossible to rapidly ramp up the production of natural gas," the expert said.

“Moreover, Iran wants to sell its gas at a high price,” he said. “The buyers, including European ones, are not pleased with this.”

“Thus, the gas pipeline from Iran to Turkey, which allows to supply at least 10 billion cubic meters, has been filled by only six billion cubic meters mainly because of the high price of Iranian gas,” he said.

"At present, if we compare the prices at which Turkey buys natural gas, the most expensive gas is Iran’s gas,” the expert said. “By its price Russia’s gas ranks second. And the cheapest gas is Azerbaijan’s gas."

“As for Iranian oil, then, its supplies to Europe are more real,” he said.

“A part of Iranian oil is located in tanks: either in tankers or in storage on the territory of Iran,” he said. “The volumes of this oil are nearly 40 million barrels per day. It could appear on the market if the oil embargo is lifted,” he said.

However, in order to further have a serious impact on the oil market, Iran will need to increase production volumes.

“Now, these volumes are about 500,000-800,000 barrels per day,” said Yevseyev. “It is not so critical for world prices. Therefore, it is premature to say that Iran will be able to have a serious impact on the oil market.”

As for any other Iranian products, in addition to oil and gas, Iran currently doesn’t produce anything that is very necessary to Europe in large volumes, according to the expert.

He went on to add that Iranian business is mainly of a regional nature and doesn’t seriously depend on Europe.

In addition, the technologies in Europe are higher than in Iran, and, accordingly, the Iranian products won’t be in great demand on the European market. However, they are popular in neighboring (Muslim) countries,  he said.


“All the production they have has relatively modest volumes,” the expert said. “Maybe, pistachios are the only exception. The only thing that Iran can export in large volumes at the moment is pistachios.” Hmmm......Kicking out Russia as energy provider seemed a great idea at the time of the Nuclear deal.