ENI'S BETRAYAL. (Il tradimento dell'Eni)

Europe should unite efforts to secure natural gas by linking the South Stream and Nabucco pipelines, officials at Italian energy giant ENI said.

European leaders should increase investments in infrastructure needed to secure "new sources" of natural gas from locations such as Turkmenistan, Kazakhstan and Africa, said Paolo Scaroni, the chief executive at Italian energy giant ENI.

Scaroni told delegates at the CERAWeek energy conference in Houston that diversity was the key to the global energy sector of the future.

"In the decade ahead, and probably well beyond that, the world energy scene will be increasingly dominated by the consumption of gas and the supply of gas," he said.

Scaroni said European leaders would benefit from linking rival pipeline projects Nabucco and South Stream, Russia's ITAR-Tass news agency adds.

"If only all partners decided to link the two, we would reduce operating costs and increase efficiency," he said.

A troubled relationship between gas host nation Ukraine and supplier Russia prompted a race to diversify the European energy sector.

The European Commission recently allocated billions of dollars to fund the construction of the Nabucco gas pipeline to move non-Russian gas through Turkey.

Moscow, meanwhile, aims to avoid Ukrainian territory with its South Stream gas pipeline through the Balkans.

ENI is a major partner in the South Stream project along with Russian gas giant Gazprom.



Russia is not considering a proposal to combine part of its South Stream gas project with the Western-backed Nabucco pipeline, Energy Minister Sergei Shmatko said on Monday.

"We are not discussing such issues," Shmatko said.

Shmatko commented on a recent suggestion by Italy's Eni SpA, Gazprom's partner in the South Stream gas pipeline project, that combining some sections of the pipelines would cut costs and boost profits.

Eni CEO Paolo Scaroni was reported to say at a Cambridge Energy Research Associates conference in Houston on Wednesday that if all the partners decided to merge the two pipelines for part of the route, "we would reduce investments, operational costs and increase overall returns."

Shmatko also said Russia welcomed Europe's desire to diversify gas supply routes but did not consider the South Stream and Nabucco as rival projects.

Both South Stream and Western-backed Nabucco aim to supply natural gas to Southern and Central Europe. The South Stream project is designed to deliver up to 63 billion cubic meters of Central Asian and Russian natural gas under the Black Sea while Nabucco is intended to pump 31 billion cu m of natural gas from the Caspian region via Turkey.

Russian experts, however, are skeptical about the prospects of merging the two pipelines as Nabucco was originally designed to cut Europe's dependence on Russian natural gas deliveries.

(RIA Novosti)


WELCOME TO SHTOKMAN. (Benvenuti a Shtokman)

Background information

The Shtokman gas and condensate field - one of the biggest offshore fields of its kind - was discovered in 1988. The field is located in the central part of the Russian sector of the Barents Sea shelf, about 600 km northeast of the city of Murmansk at sea depths varying from 320 to 340 m.

The field’s C1+C2 reserves account for 3.8 tcm of gas and circa 37 mln t of gas condensate.

The Sevmorneftegaz - a 100 percent Gazprom subsidiary - holds the license to the project. The operator company is the Shtokman Development Company, a Swiss-registered joint venture of Gazprom (51%), Total (25%) and StatoilHydro (24%).

The Shtokman gas will be shipped partly by pipeline, partly as LNG.

According to plans, the field is to be in production from year 2013.

The village of Teriberka located northeast of Murmansk City has been chosen as the main hub for Shtokman operations.
(Barents Observer)

Shtokman postponed 3 years

The Shtokman Development AG's board of directors today decided to postpone the development of the huge field in the Barents Sea with three years.

A press release from the company confirms that a final investment decision in the project's pipeline part will be taken in March 2011, while the decision on the LNG part will be taken before the end of 2011, newspaper Vedomosti reports.

About 50 percent of the 3,8 trillion cubic meter of Shtokman gas is planned developed as LNG, the remaining shipped through pipelines. The Shtokman field, located offshore about 600 km north of Murmansk, has long been a top priority project of Gazprom. It is to be developed by the Shtokman Development AG, a company controled by Gazprom (51%) in partnership with Total (25%) and Statoil (24%).

Both the Shtokman Development AG and Gazprom has long stressed that the project will be in operation from year 2013 (the pipeline part) and 2014 (the LNG part).

As BarentsObserver has reported, several experts have recently claimed that the huge Arctic project will face serious delays, and that it might even never be developed. Among them is Oddgeir Danielsen from the Norwegian Barents Secretariat. Now, the project will not be in production before 2016, at earliest.
(Barents Observer)

Disputed waters on the agenda

Just few weeks before Russian President Dmitry Medvedev arrives in Oslo for a state visit, both Norwegian Prime Minister Jens Stoltenberg and Russia’s Vladimir Putin highlight the positive dynamics in talks over the disputed waters in the Barents Sea.

In their meeting in Helsinki yesterday, Stoltenberg and Putin confirmed the “good and productive atmosphere” in the talks over the delimitation of the Barents Sea. Both men agreed that a deal would significantly facilitate new joint projects in the two countries’ High North.

-I believe that if we manage to solve this issue, new fields of opportunities for extended economic cooperation will open, among them in the energy sector, Stoltenberg said in a press conference following the meeting, the Russian Government press service informs.

The meeting, which was held during the Baltic Sea Action Summit, lasted for about 45 minutes, and both the Shtokman field and the disputed zone were on the agenda. Both issues are highly inter-related. The huge Shtokman field is located not far from the disputed 155,000 square km zone, and is by the Norwegian side seen as a strategically key project.

In addition, the zone is believed to hide significant hydrocarbon resources. A deal on the zone delimitation and subsequent oil and gas developments in the area would have major possible impact on the Shtokman field development.

In a time with uncertainties in the world gas market, the opening of the disputed waters for oil and gas activities, would make the development of the Shtokman field more attractive. The Shtokman developers Gazprom, Total and Statoil would then not only be able to use field infrastructure in additional projects, but also have a significant chance to succeed in bids for other fields in the area.

Talking to newspaper Aftenposten after the meeting in Helsinki, Prime Minister Stoltenberg underlined that hydrocarbon developments in the Disputed Zone are impossible as long as there is no delimitation deal. He also highlighted that the oil and gas resources in the zone are located far closer to land than the Shtokman field and that they would therefore also be far easier to develop.

Talks between Norway and Russian on the delimitation of the 155,000 square kilometer zone in the Barents Sea have been going on for almost 40 years. While Norway wants to divide the zone based on a middle line principle, Russia insists that a sector line principle is applie
(Barents Observer)

Gazprom discussed Shtokman timeline

The development of the first development phase of the Shtokman project was on the agenda when Gazprom Deputy Aleksandr Ananenkov today met with owner representatives of the Shtokman Development AG.

The meeting, which took place in the Moscow headquarters of Gazprom, discussed preparations for the development of the project, and especially issues related to time schedules in the project’s first development phase, a press release from the company reads.

The company in early February announced that the project launch will be postponed from 2014 to 2016 and that a final investment decision will be made only in 2011, and not in 2010 as earlier planned.

However, as reported by BarentsObserver this week, representatives of project partner Total maintain that the project is on schedule after all. That was also stated earlier by Gazprom Deputy Aleksandr Medvedev
(Barents Observer)