Sunday, January 18, 2009

P19. Pick Points

Half-a-dozen or so stories of interest.

Well the Russian:Ukrainian dispute may be over, though nobody is as yet certain that the agreement will hold. The expectation is that the deal will help Prime Minister Tymoshenko’s image, as she runs for the Presidency this year, and so they cut the price of gas by 20%, though holding Ukraine to the same transit fee for the gas. (On the other hand the NYT is reporting that Ukraine will only pay somewhere around $230 per tcm). The fate of the $700 million that Ukraine owes for gas is not mentioned, however, and the deal requires the two national gas companies (Gazprom and Naftogaz Ukrainy) sign an agreement – supposedly on Monday, both Prime Ministers will be there. Ukraine is still saying it needs 8% of the transmitted gas in order to run the compressors on the pipeline. Speaking of which it is reported that the valves that remained closed last week were actually in Russia. And the fear in Ukraine grows that Gazprom’s ultimate objective is to gain control of the Ukrainian pipelines.

Oh, and given that some of the gas comes from Turkmenistan, it should be noted that the President thereof has just fired a third of his Cabinet, including the head of the state oil company . The Slovaks are now getting natural gas from the Czech Republic . Bulgaria, on the other hand is getting emergency supplies from Turkey and Greece. Russia is planning on supplying Bulgaria through the South Stream pipeline in future, and sweetened the deal that puts another nail in the Nabucco pipeline coffin, by also agreeing to build a nuclear power plant for Bulgaria (which is in the EU). The pipeline will go from Bulgaria up into Hungary.

As an aside, you may remember that I mentioned that Putin was painting – well the painting went for $1.1 million.

In the ongoing problems of under-developed power supplies, and consequent drop in power that South Africa can supply to nearby countries, Zambia is increasingly being courted by Indian and Chinese investors, both of whom realize that to maintain supplies and power in their own countries, they must find a reliable exporter of coal, in the meanwhile the country has started exploring for oil and natural gas, is improving the generators at Kafue Gorge hydro-electric plant, and is looking to expand the coal-fired power generation in the country; all to reduce the current load shedding that has been required by the cut back on South African supplies.

In the short term it does not look good for wind generated power supplies for Maine. Aroostook Wind Energy which as trying to get transmission lines so that it could connect into the Maine Power Grid has filed a letter stating that it will stop system impact studies due to the changes in the power market making the project currently uneconomic.

Meanwhile in Utah a federal judge has blocked the exploration leases on federal land that had previously been agreed by the outgoing Bureau of Land Management folk. To become final the Bureau of Land Management had to cash the checks for the bids, but that has yet to happen. Originally the BLM wanted to sell leases to much more of the land, but this was scaled back from 360,000 acres to the current 110,000 acres in 77 land parcels. The delay is for several weeks, and gives time for the Administration to change in Washington. At present natural gas production in Utah is valued at $5 per 1,000 cu. Ft. (to compare with the stories on Russian gas that is $135 per tcm.) Compressed natural gas, which is used to fuel vehicles in the state, has just seen a price rise to $1.14 a gallon with a further rise to $1.43 coming in July.

There are more stories over on the Energy Bulletin, or on Drumbeat at The Oil Drum

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