Every Monday, Wildcat will give you a headstart on the coming week, as well as a round-up of what mattered in the previous week.
Monday, 3 September: Myanmar Oil, Gas & Power Summit, Yangon (until Thursday).
Tuesday, 4 September: Essar Energy AGM; Shtokman Development AG shareholders meeting.
Wednesday, 5 September: East Africa Gas Forum, Tanzania (until Friday).
Thursday, 6 September: Yemen LNG plant set to return; Deadline for Sinopec and ENN Energy Holdings’ joint takeover bid of China Gas Holdings.
Monday, 10 September: LNG Asia Pacific Summit, Singapore; Eastern Mediterranean New Frontiers, London.
Winners & Losers
Winner: Bulgaria finally closed a deal on Monday to reduce the cost of Gazprom imports for the rest of 2012 by 11%, in return for political support for the planned South Stream gas pipeline project which would run through Bulgaria on its way to Austria. The agreement was originally reached in April and will be introduced retroactively from 1 April. However, the price reduction covers nominal gas capacity only, and Bulgaria has not yet booked its gas for the last quarter of 2012.
Winner: Sinopec increased its gas output over the first half of 2012 by 14% year-on-year to 8.2 bcm – a silver lining for the company amid poor interim results that saw net profits tumble by 40.5% to RMB 24.50 billion ($3.85 billion). The rise in production is likely to continue, as output from Puguang, one of Sinopec’s core gas assets, is expected to rise to 10 bcm this year from 7.85 bcm in 2011.
Winner: The Australian government and EU’s decision to link their emissions trading schemes from 2015-2016 will likely reduce the price of carbon in the Australian market and assist the industry’s international competitiveness, analysts told Interfax following the announcement on Tuesday. The deal involves scrapping Australia’s planned A$15 ($16) floorprice and a reduction in the number of Kyoto units that can be used.
Loser: Gazprom faces troubles ahead as the shale gas revolution spreads from the United States to other countries, particularly in Europe, officials at the Russian Economic Development Ministry acknowledged this week. The turning point for Gazprom will be in 2016, when the US is expected to have the operational capacity ready to export low-cost shale gas, the ministry said in a letter.
Loser: Argentina’s state-controlled Enarsa has been stripped of its control of the country’s gas imports, after a government decree put newly nationalised producer YPF in charge of the fast-growing market. Enarsa’s future had been in doubt since April, after the government seized control of YPF. The government previously paid for all gas imports, which are expected to reach a record $4 billion this year, through Enarsa.
Loser: An Australia court on Friday fined PTTEP Australasia A$510,000 ($526,424) for the Montara oil and gas spill off the northwest coast of Australia in 2009. The company, a subsidiary of Thailand’s state-controlled PTT Exploration and Production, pleaded guilty on Thursday to the four charges related to the spill in the Timor Sea, which lasted 74 days.
Quotes of the Week
“There is no feasibility if there are no exports, because the local market in Israel is too small,” Yigal Landau, chief executive of Ratio Oil Exploration, told Interfax on Wednesday. The Israeli government is looking to create a gas export policy to justify the development of fields such as Leviathan, in which Rialto holds shares.
“With some of the numbers projecting what the cost of production could be for shale [in China], it doesn’t look sufficient to me at the moment. But it is very early days, and I think commercial volumes of shale are a long way off,” Michael Jones, business development director of Fortune Oil, told Interfax on Thursday.
“The Czech Republic is not Nevada; people are dependent on groundwater here,” Martin Bursik, a two-time Czech environment minister and former geologist, told Interfax on Thursday. Bursik is against hydraulic fracturing based on concerns that the environmental effects are not yet clear and that companies are not revealing the chemicals they use.
Week in Numbers
$6.60/MMBtu – maximum price for gas from onshore sources in Pakistan
$8/MMBtu – median price for shallow or deepwater gas produced in Pakistan
$1/MMBtu – the ‘bonanza’ Pakistan will award for the country’s first three offshore gas discoveries
Source: Pakistani Ministry of Petroleum and Natural Resources
RMB 0.26/cm – the lowest level China’s finance ministry is considering for shale gas production subsidies
RMB 0.20/cm – China’s production subsidy for CBM, introduced in 2008
60 bcm/y – China’s minimum shale gas production target for 2020, from insignificant volumes at present
Source: China’s Ministry of Land and Resources
$100 million – minimum cost of drilling each well in Israel’s offshore Leviathan field
240 bcm – the minimum amount of gas explorers said must be exported to make Leviathan viable
500 bcm – the export cap recommended by Israel’s interministerial Tzemach committee
Sources: Ratio Oil Exploration, Tzemach committee