Greater Caspian Region Weekly Overview - July 26th
Iran
Iran has $1 Bln in ready documents to be signed with Turkmenistan
Iran said that some $1 billion in ready contracts exist to be signed with Turkmenistan.
Amir Hossein Zamaninia, Iran's Deputy Oil Minister for International Affairs and trade announced on July 25th that the contracts are in the export of technical and engineering goods and services spheres.
Iran already proposed a gas-for-good barter package to Turkmenistan totalling $30 billion in mid-June.
Iran’s services export increased by 22% last year to above $12 billion in total.
Iran’s Oil Minister Bijan Namdar Zanganeh and Turkmenistan Foreign Minister Rashid Meredov met in Tehran on July 25th.
Iran boosts drilling operation by 20%
Deputy of National Iranian Drilling Company (NIDC) said that Iran has completed drilling of 60 oil and gas wells during first four months of current fiscal year, which started on March 21.
Mehran Malekvandi announced on July 25 that drilling operations increased by 20% year-to-year.
NIDC drilled 121,287 meters well by 73 rigs during this period.
NIDC added Fath-39 rig to its drilling equipments in March, while Fath-94 and Fath 95 rigs are scheduled to become operational by the end of August 2015 and March 2016 respectively. All of the 73 operative rigs are on-shore, excepting three ones.
Iran to establish 5 new underground gas storage facilities
National Iranian Gas Company (NIGC) plans to establish five new underground gas storage facilities, Abdolhossein Samari, the deputy director of NIGC announced on July 22th.
Currently Iran has Shourijeh and Serajeh gas storage facilities. Last year, the country injected 2 billion cubic meters (bcm) of gas to these facilities in the summer and re-extracted that in winter, when the gas consumption reached the highest level.
During the current spring some 477 million cubic meters (mcm) of gas was injected to Shourijeh, while 543 mcm was injected to Serajeh. Iran is aimed to inject 4.2 bcm of gas to these two storage facilities by the end of September.
Iran’s housing gas consumption triples to about 550 mcm/d to 590 mcm/d in some weeks of winters, equals about 85 percent of total refined gas production level.
Iran preparing to deliver 5 mcm/d of gas to Iraq
Iran is carrying out the last stages of testing a pipeline, aimed to deliver gas to the power plants of Iraq’s capital, Baghdad.
The managing director of the Iranian Gas Engineering and Development Company Alireza Gharibi announced on July 25 that Iran will talk starting gas export with Iraq within the next few days.
According to his statements, Iran has laid 100 kilometers of pipelines related for the project and delivering 5 mcm of gas would start in the first stage.
According to a contract signed in 2013, Iran should have started 5 mcm/d of gas delivery to Baghdad last year, but the project delayed. Iran should increase this volume to 25 mcm/d by commencing 6th cross-country pipeline.
Iran also has a 35-mcm/d gas deal to with Iraq to supply Basra’s power plants with blue fuel.
Iran’s priority is exporting LNG to the EU
Iran's Deputy Oil Minister Amir Hossein Zamaninia announced on July 23th that the country prefer to export LNG to EU rather than delivering natural gas through pipeline.
He said that sanctions on Iran would be removed by November and Iran can deliver gas to the European Union in 5 to 10 years.
Iran planned to resume development of “Iran LNG” project with 10-million ton per year production capacity with Linde AG.
Iran also is in talks to use FLNG ships to deliver gas to EU in restricted volumes next year.
Zamaninia also said during Iran-EU conference held on July 23 in Vienna that Iran has $185 billion worth of upstream oil and gas projects to be offered to foreign companies by 2020.
He said that Iran petroleum contract (IPC), a new generation of contract designed by Iran would be unveiled in two to three months, which offers long-term and more attractive conditions for contractors.
During this conference Mohammad Khazaei, Deputy Minister of Economy, said that Iran held negotiations with European companies and approved projects for more than $2 billion in the past couple of weeks. He didn’t explain whether these projects are oil and gas-related or not.
India keen to develop Iran’s gas field, import gas
India ONGC Videsh Ltd (OVL), the offshore arm of Oil and Natural Gas Corporation Ltd, started new negotiations with Iran to to develop the Farzad-B gas field.
These were among the companies which discovered the mentioned field in 2008, but all of them withdrew from developing this project due to sanctions.
The Farsi Block, including Farzad B field is estimated to contain about 600 bcm of gas reserves.
Alireza Kameli, Managing Director of National Iranian Gas Exports Company also said that Tehran is ready to negotiate gas export contract with Indian company South Asia Gas Enterprise Pvt. Ltd. (SAGE India) to export gas to India through Peace Pipeline (Iran Pakistan Pipeline).
"Ever since Indians stepped out of the IPI gas pipeline projects which was supposed to transport Iran's gas to India through Pakistan, a consortium of several Indian firms governed by SAGE India has expressed willingness to buy gas from Iran," Shana quoted Kameli as saying on July 25th.
Azerbaijan
Azerbaijan eyes $8 Bln loan from Japan to develop petrochemical plants
An Azerbaijani delegation headed by the CEO of State Oil Company (SOCAR) Rovnag Abdullayev traveled to Japan. Abdullayev announced during an interview to Azeri ANS TV on July 18th that Baku has been talking with Japanese banks to receive $8 billion loan to fund its Oil and Gas Processing and Petrochemical Complex (OGPC) project with the capacity of processing 12 billion cubic meters of gas as well as producing 800,000 tons of petrochemicals annually.
Abdullayev added that Japanese companies will purchase a stake in this project.
A source from SOCAR told Natural Gas Europe anonymously on June 3th that a foreign company (or companies) can establish a joint venture with SOCAR to involve in OGPC, but according to the strategic importance of this project, SOCAR wants to have at least a 51 percent share in that.
Southern Gas Corridor project completed by 30%
As much as 30 percent of the work on the implementation of the Southern Gas Corridor project has already been completed, Economics quoted German media outlets on July 21st citing Rovnag Abdullayev, the head of the State Oil Company of Azerbaijan.
“Contracts have been signed with 162 suppliers from 23 countries with cost $10 billion euros... Drilling of 7 underwater wells in Shah Deniz field has been completed and it’s ready to transport first gas to Europe. Construction of compressor station and pipelines in Georgia rapidly continues.”
As part of the Stage 2 of the Shah Deniz development, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans-Anatolian Natural Gas Pipeline and Trans-Adriatic Pipeline.
The cost of the projects (including Shah Deniz stage 2) is estimated at $45 billion.
Turkmenistan
Gazprom files suit in Stockholm court against Turkmengaz
A week after Turkmenistan criticized Russian Gazprom over delayed gas payments for 7 months, Gazprom announced that it filed suit against Turkmengaz in a Stockholm court over high prices.
Gazprom filed a lawsuit in Stockholm Court against Turkmenistan’s Turkmengaz company June 8, demanding to revise the prices in the gas supply contract, Forbes reported citing the sources close to Gazprom.
Due to declining gas export prices in Europe, linked to the constantly falling oil prices, the previously set price for Turkmen gas at $240 per 1,000 cubic meters appeared unsatisfactory to Gazprom.
Gazprom increased gas import from Turkmenistan from 11 bcm in 2014 to 4 bcm in 2015.
Turkmenistan eyes new gas-related projects with Japan
Japanese Prime Minister Shinzo Abe met with Baimyrat Hojamuhamedov, Deputy Chairman of the Cabinet of Ministers of Turkmenistan in July 16.
According to the Turkmen government statement released on July 21st, the meetings focused on attracting Japanese investment, modernizing the oil and gas industry in Turkmenistan, and diversification of supply routes for Turkmen gas.
Before that, during Turkmen President Gurbanguly Berdimuhamedov visited Tokyo in 2013, eyeing a $10 billion energy-related investment package.
During that visit, Turkmengaz, Turkmenhimiya and Turkmenoil signed documents with Japan’s Nippon, Sojitz, Sumitomo, Chiyoda, JGC, ITOCHU, TOYO, Mitsui, Tsukishima, Mitsubishi and Kawasaki.
The construction of a Turkmenistan’s natural gas chemical complex for producing polyethylene and polypropylene started in the Caspian coast Kiyanly last year. The project with worth over $3.432 billion is developed jointly with TOYO Engineering and a consortium of companies LG International Corporation and South Korean Hyundai Engineering Corp.Ltd.
The production capacity of the complex is 386,000 tons of polyethylene and 81,000 tons of polypropylene per year.
Japan’s Kawasaki and Turkey’s Ronesans Holding are also investing in a plant to process natural gas into gasoline in Turkmenistan.
Turkmenistan implementing gas projects worth $20 billion
Currently, Turkmenistan is implementing several major projects aimed at increasing the production and export of natural gas, including the projects for deep processing of gas, reported Trend.
The total cost of the projects is $20 billion.
The projects include the second stage of Galkynysh field’s development, construction of Turkmen sector of the fourth branch of Turkmenistan-China gas pipeline with the total capacity of 30 billion cubic meters of natural gas, a plant for polyethylene and polypropylene production in Balkan province, including a plant for producing synthetic gasoline from natural gas in Ahal province.
Work is underway on starting deep chemical processing of natural gas in two directions, says the source.
The first direction envisages removing propane, ethane and other components from the natural gas and processing them to produce polyethylene, polypropylene, polyvinyl chloride and other products.
The second direction envisages chemical processing of methane to produce methanol and further processing this methanol to produce liquid fuels, or gasoline, diesel fuel, and others.
Uzbekistan
Uzbekistan, Japan inked new gas projects
Uzbek Foreign Minister Abdulaziz Kamilov on July 15th met with Japan’s Parliamentary Vice-Minister for Foreign Affairs Kentaro Sonoura in Tashkent.
During that meeting, the sides signed several investment, loan agreements as well as technical assistance projects with worth $3.8 billion.
Japan has invested $2.5 billion in this country so far. This amount in 2012 was $1.8 billion
During last years, some Japanese companies including Itochu, Mitsui, Marubeni and Mitsubishi have opened their offices in Tashkent.
Uzbekistan selling Samarkand Chemical Plant to foreign investor
Uzbekistan is selling 100% of the shares (49% state share and 51% share of authority of economic management – Uzkimyosanoat State Stock Company) of JSC Samarkandkimyo to the foreign investor, AKIpress reported on July 23.
The production capacity of Samarkandkimyo is 250 thousand tons of fertilizer per year (nitrofos), 6,000 tons of liquid suspended phosphorus nitrate per year and 1,000 tons of precipitate feed per year.
The joint Uzbek-Chinese enterprise CITIK Samarkand – NRK was organized jointly by the company and Chinese partners. The cost of the project is $20 million, as a result of which a production of 240 thousand tons of fertilizers will be produced per year.