Translated material
Remains of Nord Stream
Gaz de France and Gazprom Marketing & Trading will buy gas via the new route
Deputy head of Gazexport Sergei Yemelyanov said yesterday that the gas that will be transported along the first line of the North European Gas Pipeline has already been almost sold. The French Gaz de France and the British Gazprom Marketing & Trading, which is 100% owned by the Gazprom group, are claiming the remaining 8.3 billion cubic meters per year. Mr. Emelyanov did not disclose the share of buyers, citing the fact that negotiations are ongoing. But still, as Interfax reports, he noted that the GdF will take less than 5 billion cubic meters per year, and the volume for GMT will be “small.” The remaining 3-4 billion cubic meters per year can be reserved to expand trade on the spot market and to insure technological risks associated with gas supplies through the Ukrainian and Belarusian gas transportation systems. Moreover, 5 billion cubic meters of gas per year, which should have been exported in transit through these countries under old contracts, have already been transferred to the Baltic route.The first stage of the gas pipeline with a capacity of 27.5 billion cubic meters per year is planned to be commissioned at the end of 2010 (at the latest at the beginning of 2011). In another two years, the throughput should be doubled due to the construction of a second line. The gas pipeline, which will soon be officially renamed Nord Stream, will be built by the North European Gas Pipeline Company (it will also change its name to Nord Stream). Gazprom owns 51% of it, and the German concerns BASF and E.ON each own 24.5%. By the end of the year, the Dutch state-owned company Gasunie may enter the project (then it will buy 4.5% from the Germans).
According to Mr. Emelyanov, a capacity of 22.3 billion cubic meters per year is provided for new gas in the NEGP. The remaining part will be filled by redistributing volumes under existing contracts. First of all, those that were to be provided with transit through the territory of Ukraine. True, this does not yet mean a gross reduction in the volume of pumping through the Naftogaz system. Rather, this only indicates the abandonment of plans for its expansion at the “exit” - the Bogorodchany - Uzhgorod section. Previously, this project, worth $300-500 million, was planned to be one of the first to be implemented within the framework of an international consortium for the management and development of the gas transportation system of Ukraine. However, after Kyiv categorically refused to transfer management of existing gas pipelines to a consortium, Moscow buried the idea of participating in its development and intensively focused on the Baltic Pipe.
Of the new volumes, 14 billion cubic meters per year have already been sold under contracts signed with an eye to the NEGP. Of these, a year ago, 9 billion were contracted by Wingas (a joint venture of Gazprom and BASF), in June the Danes from DONG signed for 1 billion, and a couple of weeks ago, 100 billion for 25 years was bought by E.ON Ruhrgas. Another 4-5 billion cubic meters per year will be purchased by GdF and GM&T between them. However, the “granddaughter” of Gazprom can expand its “order” at any time if it finds the capacity to transport gas to the British market.
However, it cannot be ruled out that about 10% of the pipeline’s capacity (2.5-3 billion cubic meters per year) will be left in reserve in case of unforeseen situations in transit countries. For example, Ukraine clearly does not have enough funds to invest in maintaining the system, and in five to seven years the situation with the loss of transport capacity may become threatening. Gazprom and other companies are obviously not going to invest their money in a system that belongs to Kyiv. That is, the risks of such a development of events are great, and gas supply contracts will have to be fulfilled in any case.
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Overgas Inc., a 50% stake owned by Gazprom, decided not to participate in the competition for the sale of a thermal power plant in Varna. As reported by the Bulgarian Privatization Agency, the list of applicants for 100% of the shares of Toplofikatsiya Varna JSC included five companies: E.ON (Germany), CEZ (Czech Republic), EVN (Austria), Dalkia (France) and ENER-G (England ). The remaining companies that purchased tender documentation, including Overgas, did not submit papers to the agency to obtain permission to participate in the tender. Overgas retains its chances of acquiring another Bulgarian energy asset - Toplofikatsiya Plovdiv. The company is entering the competition for the sale of this station in a consortium with Gazprom, and CEZ, EVN and Dalkia intend to compete with it. In addition, Overgas has tender documentation for the auction for the sale of 100% of the shares of Toplofikatsiya Ruse. This station attracted the interest of several potential buyers from Russia, in particular Inter RAO UES, Mechel and Rosatomstroy. INTERFAX