Here is what is going on in the natural gas industry around the world:
Kyrgyzstan’s state-owned natural gas company says it is to be sold to Russia’s energy monopoly Gazprom, raising hopes of an end to debilitating energy shortages in the impoverished Central Asian nation.
Kyrgyzgaz general director Turgunbek Kulmurzayev said Friday that the sale of the company to the Russian gas giant would be completed by April 1.
Last week, gas and electricity supplies to thousands of Kyrgyz households were suspended.
The crisis was provoked by a shortage in natural gas deliveries from neighboring Kazakhstan, which had to hold onto its own reserves after failing to receive imports from Uzbekistan. Kyrgyzstan, a mountainous nation of 5 million on China’s western border, also has substantial unpaid debts to Kazakhstan.
Residents in the capital, Bishkek, and nearby towns were hits by days of gas and power shortages just as temperatures dropped to around minus 20 Celsius (minus 4 Fahrenheit). Failure in gas deliveries pushes people into using more electricity for heating, which in turn leads to blackouts.
The inability of former President Kurmanbek Bakiyev to fulfill basic energy needs led to his violent overthrow in 2010.
The sale of a major national asset to a company owned by a foreign government is likely to raise concerns. Russia has made similar efforts to gain control over important energy infrastructure in other former Soviet republic, such as Ukraine and Belarus.
Kyrgyzgaz’s Kulmurzayev traveled to Moscow this week to hold a new round of talks with Gazprom, which offered to buy up the entire company. Kyrgyzgaz is currently 87 percent owned by the state. Another 4.5 percent is held by social investment funds, with the remainder belonging to private investors.
“The Russians now want to buy the entire stock, even from private shareholders,” Kulmurzayev said in Bishkek.
Kulmurzayev gave no figure for the sale, but the sum is expected to be nominal due to the company’s outstanding debts of around $31 million. He added that Gazprom officials said they plan to invest $650 million over five years on modernizing Kyrgyzstan’s gas pipeline network.
“The price for fuel will be substantially cheaper than what is paid to Kazakhstan – $224 per thousand cubic meters – or Uzbekistan – $290 per thousand cubic meters,” Kulmurzayev said. “We hope Gazprom will solve the fuel delivery problem in 2013.”
Kyrgyzstan also expects Gazprom to begin exploration for new gas fields.
Eni has signed a Heads of Agreement (HOA) with Anadarko Petroleum Corporation, establishing foundational principles for the coordinated development of common natural gas reservoirs in the offshore Mozambique.
The HOA will facilitate a development program whereby Eni and Anadarko will conduct separate yet coordinated offshore activities, spanning both Area 4, operated, by Eni and Area 1, operated by Anadarko.
Furthermore, the two companies will jointly plan and construct common onshore LNG liquefaction facilities in the Cabo Delgado Province of northern Mozambique.
Eni is the operator of Area 4 with a 70% participating interest. The other partners of the joint venture are GalpEnergia (10%), KOGAS (10%) and ENH (10%, carried through the exploration phase).
Norway’s Statoil and partner ExxonMobil have made a third gas discovery offshore Tanzania, Statoil said Friday.
The well in block 2 is part of a four-well drilling program. The next well will be the appraisal of Zafarani discovery, Statoil said. The company said it would announce updated total volumes in block 2 next year.
“These three discoveries continue to support our confidence in the Block 2 potential in Tanzania. The Lavani-2 well tested the deeper Saffron target and this new discovery looks promising,” senior vice president in Exploration International, Nick Maden, said.
Statoil is operator of block 2 with 65% working interest; ExxonMobil holds the remaining 35%.
Statoil was awarded the block 2 license in 2007.
Pakistani Foreign Minister Hina Rabbani Khar said on Thursday President Asif Ali Zardari will soon visit Iran and the gas pipeline project would be completed according to the schedule.
Speaking to media representatives outside the Parliament House, she said Pakistan and Iran have been enjoying good relations and the present government has further strengthened its ties with the neighboring countries.
Demand for natural gas in Pakistan has outstripped supply in recent years, putting existing reserves under immense pressure.
The total consumption of natural gas in the country stands at 3480 MMCFD million cubic feet per day of which the power sector consumes 959 mmcfd, with 747 mmcdf being consumed in the domestic sector. Meanwhile 578 mmcfd of gas is consumed by the fertilizer industry, four mmcfd by the cement industry. While 107 mmcfd is consumed commercially. 327 mmcfd is consumed by CNG cylinders which are widely installed in locally manufactured vehicles in Pakistan.
The 2700-kilometer long IPI pipeline was to supply gas for Pakistan and India which are suffering a lack of energy sources, but India has evaded talks. Last year Iran and Pakistan declared they would finalize the agreement bilaterally if India continued to be absent in the meetings.
According to the project proposal, the pipeline will begin from Iran’s Assalouyeh Energy Zone in the south and stretch over 1,100 km through Iran. In Pakistan, it will pass through Baluchistan and Sindh, but officials now say the route may be changed if China agrees to the project.
The gas will be supplied from the South Pars field. The initial capacity of the pipeline will be 22 billion cubic meters of natural gas per annum, which is expected to be later raised to 55 billion cubic meters. It is expected to cost 7.4 dlrs billion.
The Pakistani government has on many occasions reiterated its resolve to push ahead with the 1.5 dlrs billion Iran-Pakistan (IP) gas pipeline project.
A special team has been set up in the Iranian oil ministry to specify the method of investment and credit line for the pipeline on Pakistan’s soil.