The NGLs would be transported via approximately 230 miles of new pipeline and KMP’s existing Cochin pipeline system. Subject to regulatory approvals and necessary capital investments, Marcellus NGL shipments could begin as soon as mid-2012. Given appropriate levels of shipper support, Kinder Morgan could move over 150,000 bpd at a rate as low as nine cents per gallon.
“We have developed our proposal based on discussions with Marcellus producers and gas processors and believe that Kinder Morgan offers the quickest and most efficient solution for the delivery of NGLs to the premium Ontario market,” said Don Lindley, vice president of business development for KMP’s Products Pipeline group. “We also anticipate, at some point in time, reversing a section of Cochin to offer service to Chicago area refiners, fractionation plants and petrochemical facilities.”
Thursday, June 24, 2010
Kinder Morgan announces Marcellus Lateral
Kinder Morgan Energy Partners, L.P. has launched a 30-day non-binding open season to further gauge shipper interest for its Marcellus Lateral Project, which would enable the company to offer a new service for moving natural gas liquids (NGL) from the Marcellus Shale Basin to fractionation plants and petrochemical facilities near Sarnia, Ontario.
Meeting Today’s Critical Energy Challenges: Utility Operations
Today’s energy utility is seeking ways to leverage new technologies to meet competitive challenges, reduce costs, and provide safe and reliable service to customers. Through our extensive R&D initiatives and education and training programs, GTI is actively working to help utilities understand and respond to the impact of climate change, fuel supply diversity, and regulatory changes.
GTI supports utility operations every step of the way.
Our Delivery R&D programs focus on addressing the strategic concerns of current gas transmission and distribution infrastructures – including cost reduction and security
We’re helping utilities deploy the technologies and products needed to help maintain the infrastructure
Our education and training programs meet the need to train the energy workforce in new technologies and changing regulations.
GTI supports utility operations every step of the way.
Our Delivery R&D programs focus on addressing the strategic concerns of current gas transmission and distribution infrastructures – including cost reduction and security
We’re helping utilities deploy the technologies and products needed to help maintain the infrastructure
Our education and training programs meet the need to train the energy workforce in new technologies and changing regulations.
Meeting Today’s Critical Energy Challenges: Energy Supply
To meet the long-term demand for natural gas while maintaining environmental stability and reducing energy costs, new, carbon-neutral energy solutions are needed.
GTI is at the forefront of research initiatives, developing innovative technologies, solutions, and options for expanding the availability of cost-competitive energy supplies –
GTI researchers and program managers are finding better ways to explore for and produce unconventional natural gas resources
GTI’s testing facilities serve as platforms for the exploration of gasification of coal and biomass
GTI is exploring alternative fuels to expand the nation’s energy supply.
GTI is at the forefront of research initiatives, developing innovative technologies, solutions, and options for expanding the availability of cost-competitive energy supplies –
GTI researchers and program managers are finding better ways to explore for and produce unconventional natural gas resources
GTI’s testing facilities serve as platforms for the exploration of gasification of coal and biomass
GTI is exploring alternative fuels to expand the nation’s energy supply.
Meeting Today's Critical Energy Challenges: Climate Change
The global scientific community has reached consensus about climate change. According to the majority opinion, global warming is largely due to the growing emissions of carbon dioxide and other greenhouse gases caused by human activities. As a result, carbon management is at the top of the priority lists of private industry, government agencies, and any organization seeking cost-effective, technology-based solutions for reducing carbon impacts.
GTI is at the forefront of carbon management initiatives. By leveraging our broad portfolio of technologies, we’re working to enhance the environmental performance of the energy sector and to contribute new climate change solutions that will –
GTI is at the forefront of carbon management initiatives. By leveraging our broad portfolio of technologies, we’re working to enhance the environmental performance of the energy sector and to contribute new climate change solutions that will –
Gas Technology Services
Gas Technology Services is one of the acknowledged leaders in the supply of support services to the Australasian energy industry.
Our mission is to add value to business through the provision of innovative and practical support in the areas of energy utilisation, energy management, gas marketing, distribution and transmission.
Services range from field and laboratory testing to consulting, training and information research. Our expertise is built on more than 150 years of gas industry experience with a staff who collectively represent the greatest concentration of gas technology knowledge in Australia. The NATA accredited and ISO9001 endorsed laboratory and educational facilities set the industry standard while the extensive International network of technology and information services provides an essential resource to the entire energy industry.
Gas Technology Services offers:
Expertise in all facets of the Gas Industry;
Experience in all forms of energy management;
Australasia's premier Gas Industry technical, educational and laboratory facilities;
NATA accredited Laboratory;
Accreditation to ISO 9001;
Institution of Engineers (Aust) approved energy auditor;
Local, national and international technical consulting and education experience;
National Standard for gas flow measurement;
Extensive Australian and International network of Energy Industry information resources and in-house reference materials via the GTS Library facility.
For the Domestic and Commercial Sectors, GTS provides:
Appliance testing and advice on Codes, Standards and Regulations;
Appliance development;
Energy Labeling;
Field support (advice and investigations);
Prediction modeling of residential energy use;
Technical support for medium and high density residential development;
Access to the world wide energy information network via the Gas Industry Information Centre.
For the Industrial and Large Commercial Serctors, GTS profides:
Energy utilisation studies;
Tariff analysis and advice on energy purchases (for all energy forms);
Energy demand profiles and load management;
Advice on Gas Safety Codes and Regulations;
Energy advice on industrial and commercial processes, plant and equipment;
Access to the world wide energy information network via the Energy Information Library service;
Education programs on gas and energy utilisation and management for industrial, commercial and public sector organisations and personnel.
For the Gas Distribution and Transmission Industry and Industiral / Commercial sectors where physical, chemical and environmental testing isrequired, GTS offers:
Measurement, Calibration, Testing and Analysis services including :
Flow, Pressure, Temperature, Gas and Material Properties
Advice on material selection
Environmental Management Consulting including analysis and auditing;
Field Investigations.
For Businesses seeking Gas and Energy Technology Information, GTS provides:
Technical Information in electronic and hardcopy formats;
Commercial and Technical evaluation reports on energy technology, both current and emerging;
Feasibility Studies for specific technology installations;
Energy related Project Management including implementation.
Our mission is to add value to business through the provision of innovative and practical support in the areas of energy utilisation, energy management, gas marketing, distribution and transmission.
Services range from field and laboratory testing to consulting, training and information research. Our expertise is built on more than 150 years of gas industry experience with a staff who collectively represent the greatest concentration of gas technology knowledge in Australia. The NATA accredited and ISO9001 endorsed laboratory and educational facilities set the industry standard while the extensive International network of technology and information services provides an essential resource to the entire energy industry.
Gas Technology Services offers:
Expertise in all facets of the Gas Industry;
Experience in all forms of energy management;
Australasia's premier Gas Industry technical, educational and laboratory facilities;
NATA accredited Laboratory;
Accreditation to ISO 9001;
Institution of Engineers (Aust) approved energy auditor;
Local, national and international technical consulting and education experience;
National Standard for gas flow measurement;
Extensive Australian and International network of Energy Industry information resources and in-house reference materials via the GTS Library facility.
For the Domestic and Commercial Sectors, GTS provides:
Appliance testing and advice on Codes, Standards and Regulations;
Appliance development;
Energy Labeling;
Field support (advice and investigations);
Prediction modeling of residential energy use;
Technical support for medium and high density residential development;
Access to the world wide energy information network via the Gas Industry Information Centre.
For the Industrial and Large Commercial Serctors, GTS profides:
Energy utilisation studies;
Tariff analysis and advice on energy purchases (for all energy forms);
Energy demand profiles and load management;
Advice on Gas Safety Codes and Regulations;
Energy advice on industrial and commercial processes, plant and equipment;
Access to the world wide energy information network via the Energy Information Library service;
Education programs on gas and energy utilisation and management for industrial, commercial and public sector organisations and personnel.
For the Gas Distribution and Transmission Industry and Industiral / Commercial sectors where physical, chemical and environmental testing isrequired, GTS offers:
Measurement, Calibration, Testing and Analysis services including :
Flow, Pressure, Temperature, Gas and Material Properties
Advice on material selection
Environmental Management Consulting including analysis and auditing;
Field Investigations.
For Businesses seeking Gas and Energy Technology Information, GTS provides:
Technical Information in electronic and hardcopy formats;
Commercial and Technical evaluation reports on energy technology, both current and emerging;
Feasibility Studies for specific technology installations;
Energy related Project Management including implementation.
Wednesday, June 2, 2010
Cheap gas for Pak-American Fertiliser Limited: industries ministry fails to get Tarin s nod
ISLAMABAD : The Ministry of Industries and Production has failed to get the nod of Finance Minister Shaukat Tarin on a proposal intended to benefit Pak-American Fertilizer Limited (PAFL) by charging less feed gas tariff as no other ministry, except Minfa, came forward to support it, official sources told Business Recorder.
Sources said that when the issue came under consideration in the meeting of the Economic Co-ordination Committee (ECC) of the Cabinet on February 9, 2010, several ministries opposed it. The ECC directed the Ministry of Industries to refer the matter to Ministry of Law, seeking opinion on the point as to whether Fertilizer Policy 2001 was applicable in this case or not?, sources said.
Industries Ministry, which was secretly in the process of preparing this controversial proposal, briefed the ECC that Pak-American Fertilizer is undertaking Balancing, Modernisation and Replacement (BMR) of the fertiliser plant with an investment of $60 million to expand urea production. The Ministry claimed, on behalf of the company, that BMR would enhance urea production by 136,867 tons per year. Currently, urea is produced, using gas, both as fuel and feed.
The BMR would introduce shift to using coal as fuel also, and use the gas, freed from fuel and from the BMR generated efficiency, to produce additional urea. Therefore, it had requested to be allowed to avail 2001 Fertilizer Policy concession for BMR, which allows use of feed gas at full concessional rates, for a period of seven years for the additional urea to be produced post-BMR.
Ministry of Industries further said that domestic gas shortfall compared to its demand was steadily increasing. Therefore, Pak-American proposal seemed feasible, due to (i) consumption of urea increasing steadily is around 5.4 million tons as against production of around 49 million tons and its annual growth rate is 3 percent. (ii) Fatima Fertilizer has set up a urea and phosphatic fertiliser project having capacity of around one million tons of fertilisers of which 0.5 million tons is urea. Engro Chemical Pakistan Limited is establishing a new fertiliser plant to produce around one million tons of urea alone, that will come into production during October 2010.
In spite of these additions, demand for urea will continue to outstrip its supply. (iii) Scarce foreign exchange is spent on import of urea. The Government is providing subsidy on the import of fertiliser and during 2008-09, incurred a sum of Rs 27 billion as subsidy for DAP @ Rs 2200 per 50 kg, as well as for other Phosphatic fertilisers, while at conservative estimates Rs 17 billion will be required to import urea in the next five years. (iv) Concession is on the feed gas, then ultimately, money spent remains in the economy in terms of subsidy passed on to growers and growth in the economy, while an incentive is extended to the industry.
The Ministry proposed that 9 MMCFD of gas generated from switch to feed from fuel and from the BMR generated efficiency to produce additional urea subject to actual post BMR confirming concessionary feed gas rate for seven years as provided for in the 2001 Fertilizer Policy and the review of Fertilizer Policy on June 17, 2004.
According to sources, during discussion, it was noted that this case was not covered under Fertilizer Policy 2001; rather this case falls under Fertilizer Policy 2009. It was however, pointed out that since fertiliser was an essential ingredient for the agriculture production; therefore, case of Pak-American Fertilizer should be considered in the light of Fertilizer Policy 2001.
It is pertinent to mention here that the Industries Ministry was facing stiff resistance from Ministries of Petroleum, Finance, and Water and Power and the Planning Commission on the proposal.
Ten years period available for concessionary pricing of Rs 36.77 per million British thermal unit (mmbtu) expired on September 12, 2008 and any concession in rate would be in direct conflict with the existing Fertiliser Policy, sources quoted Petroleum Ministry as saying in its comments.
Planning Commission in its observations has stated that the Industries Ministry should also assess the revenue loss to government by freeing up of 9 mmcfd gas from fuel and convert it into feed gas on account of BMR. It is estimated that 9 mmcfd gas per day will result in total Rs 2821500 loss per annum.
Sources said that when the issue came under consideration in the meeting of the Economic Co-ordination Committee (ECC) of the Cabinet on February 9, 2010, several ministries opposed it. The ECC directed the Ministry of Industries to refer the matter to Ministry of Law, seeking opinion on the point as to whether Fertilizer Policy 2001 was applicable in this case or not?, sources said.
Industries Ministry, which was secretly in the process of preparing this controversial proposal, briefed the ECC that Pak-American Fertilizer is undertaking Balancing, Modernisation and Replacement (BMR) of the fertiliser plant with an investment of $60 million to expand urea production. The Ministry claimed, on behalf of the company, that BMR would enhance urea production by 136,867 tons per year. Currently, urea is produced, using gas, both as fuel and feed.
The BMR would introduce shift to using coal as fuel also, and use the gas, freed from fuel and from the BMR generated efficiency, to produce additional urea. Therefore, it had requested to be allowed to avail 2001 Fertilizer Policy concession for BMR, which allows use of feed gas at full concessional rates, for a period of seven years for the additional urea to be produced post-BMR.
Ministry of Industries further said that domestic gas shortfall compared to its demand was steadily increasing. Therefore, Pak-American proposal seemed feasible, due to (i) consumption of urea increasing steadily is around 5.4 million tons as against production of around 49 million tons and its annual growth rate is 3 percent. (ii) Fatima Fertilizer has set up a urea and phosphatic fertiliser project having capacity of around one million tons of fertilisers of which 0.5 million tons is urea. Engro Chemical Pakistan Limited is establishing a new fertiliser plant to produce around one million tons of urea alone, that will come into production during October 2010.
In spite of these additions, demand for urea will continue to outstrip its supply. (iii) Scarce foreign exchange is spent on import of urea. The Government is providing subsidy on the import of fertiliser and during 2008-09, incurred a sum of Rs 27 billion as subsidy for DAP @ Rs 2200 per 50 kg, as well as for other Phosphatic fertilisers, while at conservative estimates Rs 17 billion will be required to import urea in the next five years. (iv) Concession is on the feed gas, then ultimately, money spent remains in the economy in terms of subsidy passed on to growers and growth in the economy, while an incentive is extended to the industry.
The Ministry proposed that 9 MMCFD of gas generated from switch to feed from fuel and from the BMR generated efficiency to produce additional urea subject to actual post BMR confirming concessionary feed gas rate for seven years as provided for in the 2001 Fertilizer Policy and the review of Fertilizer Policy on June 17, 2004.
According to sources, during discussion, it was noted that this case was not covered under Fertilizer Policy 2001; rather this case falls under Fertilizer Policy 2009. It was however, pointed out that since fertiliser was an essential ingredient for the agriculture production; therefore, case of Pak-American Fertilizer should be considered in the light of Fertilizer Policy 2001.
It is pertinent to mention here that the Industries Ministry was facing stiff resistance from Ministries of Petroleum, Finance, and Water and Power and the Planning Commission on the proposal.
Ten years period available for concessionary pricing of Rs 36.77 per million British thermal unit (mmbtu) expired on September 12, 2008 and any concession in rate would be in direct conflict with the existing Fertiliser Policy, sources quoted Petroleum Ministry as saying in its comments.
Planning Commission in its observations has stated that the Industries Ministry should also assess the revenue loss to government by freeing up of 9 mmcfd gas from fuel and convert it into feed gas on account of BMR. It is estimated that 9 mmcfd gas per day will result in total Rs 2821500 loss per annum.
Pak-Iran Gas Pipeline
The Pak-Iran gas pipeline project was signed by the Petroleum Secretaries of both countries in the historical city of Istanbul. According to the agreement, Iran will provide 750 million cubic feet gas to Pakistan daily and Pakistan will be able to get gas till 2 years according to this agreement. This gas will be pumped daily from Iran and 1000 mega watt electricity can be generated because of this. This project will be completed by 2014. Iranian gas will come through Balochistan
Physical survey will complete within a year and Inter Estate Company will lay the pipeline from Paris gas field to Nawab Shah. The agreement will be valid till 25 years and the cost involved amounts to seven billion dollars. Iran has the world’s largest gas resources after Russia .However there were certain obstacles like sanctions by the West, political agitation and construction delays which slowed its development as an exporter
Large gas reserves were discovered in Iran in 1988. This motivated the Iranian Government to export natural gas and earn foreign exchange. The dearth of energy in the neighboring Pakistan and India promised good markets for this venture. In 1995, Pakistan and Iran signed a preliminary agreement for a natural gas pipeline. Later Iran proposed this pipeline to extend to India. Because of this gas pipeline Pakistan would have a huge annual income as transit fees.
Many other resources of energy were available like domestic coal and hydropower. The question arose why both countries opted for natural gas. The proper justification can be the fact that there were large resources of natural gas in the immediate neighboring countries. The fact remains that natural gas is a clean and cheap source of energy. Therefore as compared to other alternatives it is a preferred source.
At the end of 1999, General Pervez Musharraf visited Iran and discussions were held on the pipeline project. In 2000 Iran expressed keen desire to complete the project speedily. It also gave Pakistan the incentive of additional transit fees in case pipeline was completed within three years. The project was planned since the 1990s and originally it was extended from Pakistan to its old rival India .But India was hesitant not to join this pact because of certain reasons. There was a distant factor regarding Pakistan. Then there were security concerns regarding gas interruptions in case of any conflict with Pakistan. Iran agreed that in case Pakistan cuts supply to India, Iran will immediately cut off gas supplies to Pakistan and Iran will supply an equal amount of Liquefied natural gas (LNG) to India at the same price.
Another reason can be the fact that our rival India does not want that Pakistan should get a regular source of income in the shape of transit fees, (app $500-700 a year) for gas to be transported through its territory. India did not participate in talks since 2008. Thus he showed a negative response and the project delayed. This was detrimental to Iran and Pakistan. Still other reason might be the American pressure on India for not joining this project.
Successful implementation of this project will not only increase the credibility of Pakistan’s government but also entail positive gains for us with reference to mutual economic independence. 900 kilometer pipeline is expected to meet the energy crisis in Pakistan that is going to mar the development of Pakistan. Cheap and reliable energy resource in the garb of this gas pipeline will meet the growing energy demands of both Iran and Pakistan.
The gas pipeline will build up the mutual trust between the two countries. This may change the nature of regional politics in South Asia. Politico-social discourse between Iran and Pakistan will be transferred through these CBMs and economic collaborations. Meager economy will improve and modernize in this way Pakistan badly needs gas and electricity .Our industries are terribly suffering because of this reason. Pakistan did not bow down to American pressure. America had strict pressure on Iranian gas pipeline.
Because of low gas supply for domestic and commercial uses there were huge economic crisis, political turmoil and it also cast a slur on the popularity of democratic government. The power generation is affected. There is a prominent low production. The quality of work is marred. All these factors in turn lead to inflation and the resultant failure in competing in the global world. Industrialization, rapidly rising urban population, hyper info-transmission age, increased energy demands and associated with them was the greater ratio of both the country’s population to primary energy net.
Indeed the decision on this agreement was direly needed. Although Pakistan has large reservoirs of natural gas, yet the widening gap between energy demand and supply went on growing. This gap could be bridged only by import of natural gas through pipeline. Likewise Pakistan used to import oil for meeting its energy needs. Import bill amounted to almost 3 billion dollars in the fiscal year 2004. Such type of spending will be drastically minimized through import of cheap natural gas. This measure will also attract FDI (foreign direct investment). The healthy environment for investment will be provided in this way by the government .The positive image of Pakistan will be uplifted abroad. The confidence of international community will enhance. These types of agreements will have inherent tendency to pave way for regional reform. Bilateral relations between two countries will also invite co-operation on other key issues and will definitely exercise a positive influence.
Pakistan’s geo-strategic location is above board and it is a geographical compulsion for any pipeline from the West to pass through the Pakistani territory on land off shore. There will be cheaper gas for domestic needs. The additional gas will be available to each country for future needs without taxing the domestic reservoirs. There are very fair chances of improved trade and economic relations with Iran.
Critics fear that there can be a risk of sabotaging the pipeline by nefarious elements, may it be individuals or groups, especially in the explosive Balochistan. This risk can be overcome or at least reduced by patrolling and remote monitoring. Some power plants using the natural gas should supply electricity to both Iran and Pakistan. The location of these power plants must be demarcated in such a precise way to ensure its provision. The ways must be devised to ensure the constant supply without any disruption.
The spade work for Turkmenistan Afghanistan-Pakistan gas pipeline must be continued by Pakistan. This will provide our country a direct access to Central Asian Republics trade provided the peace in Afghanistan prevails. We also need to be vigilant regarding India .It can create bad blood between Iran and Pakistan to hinder this project Now the need of the hour is the successful implementation without any interruption. Even if the Government changes the projects in the national interest should continue with a consistent policy. But the fact remains that Pak-Iran gas project is in the great interest of our economy. This also bears witness to our transparent foreign policy.
Physical survey will complete within a year and Inter Estate Company will lay the pipeline from Paris gas field to Nawab Shah. The agreement will be valid till 25 years and the cost involved amounts to seven billion dollars. Iran has the world’s largest gas resources after Russia .However there were certain obstacles like sanctions by the West, political agitation and construction delays which slowed its development as an exporter
Large gas reserves were discovered in Iran in 1988. This motivated the Iranian Government to export natural gas and earn foreign exchange. The dearth of energy in the neighboring Pakistan and India promised good markets for this venture. In 1995, Pakistan and Iran signed a preliminary agreement for a natural gas pipeline. Later Iran proposed this pipeline to extend to India. Because of this gas pipeline Pakistan would have a huge annual income as transit fees.
Many other resources of energy were available like domestic coal and hydropower. The question arose why both countries opted for natural gas. The proper justification can be the fact that there were large resources of natural gas in the immediate neighboring countries. The fact remains that natural gas is a clean and cheap source of energy. Therefore as compared to other alternatives it is a preferred source.
At the end of 1999, General Pervez Musharraf visited Iran and discussions were held on the pipeline project. In 2000 Iran expressed keen desire to complete the project speedily. It also gave Pakistan the incentive of additional transit fees in case pipeline was completed within three years. The project was planned since the 1990s and originally it was extended from Pakistan to its old rival India .But India was hesitant not to join this pact because of certain reasons. There was a distant factor regarding Pakistan. Then there were security concerns regarding gas interruptions in case of any conflict with Pakistan. Iran agreed that in case Pakistan cuts supply to India, Iran will immediately cut off gas supplies to Pakistan and Iran will supply an equal amount of Liquefied natural gas (LNG) to India at the same price.
Another reason can be the fact that our rival India does not want that Pakistan should get a regular source of income in the shape of transit fees, (app $500-700 a year) for gas to be transported through its territory. India did not participate in talks since 2008. Thus he showed a negative response and the project delayed. This was detrimental to Iran and Pakistan. Still other reason might be the American pressure on India for not joining this project.
Successful implementation of this project will not only increase the credibility of Pakistan’s government but also entail positive gains for us with reference to mutual economic independence. 900 kilometer pipeline is expected to meet the energy crisis in Pakistan that is going to mar the development of Pakistan. Cheap and reliable energy resource in the garb of this gas pipeline will meet the growing energy demands of both Iran and Pakistan.
The gas pipeline will build up the mutual trust between the two countries. This may change the nature of regional politics in South Asia. Politico-social discourse between Iran and Pakistan will be transferred through these CBMs and economic collaborations. Meager economy will improve and modernize in this way Pakistan badly needs gas and electricity .Our industries are terribly suffering because of this reason. Pakistan did not bow down to American pressure. America had strict pressure on Iranian gas pipeline.
Because of low gas supply for domestic and commercial uses there were huge economic crisis, political turmoil and it also cast a slur on the popularity of democratic government. The power generation is affected. There is a prominent low production. The quality of work is marred. All these factors in turn lead to inflation and the resultant failure in competing in the global world. Industrialization, rapidly rising urban population, hyper info-transmission age, increased energy demands and associated with them was the greater ratio of both the country’s population to primary energy net.
Indeed the decision on this agreement was direly needed. Although Pakistan has large reservoirs of natural gas, yet the widening gap between energy demand and supply went on growing. This gap could be bridged only by import of natural gas through pipeline. Likewise Pakistan used to import oil for meeting its energy needs. Import bill amounted to almost 3 billion dollars in the fiscal year 2004. Such type of spending will be drastically minimized through import of cheap natural gas. This measure will also attract FDI (foreign direct investment). The healthy environment for investment will be provided in this way by the government .The positive image of Pakistan will be uplifted abroad. The confidence of international community will enhance. These types of agreements will have inherent tendency to pave way for regional reform. Bilateral relations between two countries will also invite co-operation on other key issues and will definitely exercise a positive influence.
Pakistan’s geo-strategic location is above board and it is a geographical compulsion for any pipeline from the West to pass through the Pakistani territory on land off shore. There will be cheaper gas for domestic needs. The additional gas will be available to each country for future needs without taxing the domestic reservoirs. There are very fair chances of improved trade and economic relations with Iran.
Critics fear that there can be a risk of sabotaging the pipeline by nefarious elements, may it be individuals or groups, especially in the explosive Balochistan. This risk can be overcome or at least reduced by patrolling and remote monitoring. Some power plants using the natural gas should supply electricity to both Iran and Pakistan. The location of these power plants must be demarcated in such a precise way to ensure its provision. The ways must be devised to ensure the constant supply without any disruption.
The spade work for Turkmenistan Afghanistan-Pakistan gas pipeline must be continued by Pakistan. This will provide our country a direct access to Central Asian Republics trade provided the peace in Afghanistan prevails. We also need to be vigilant regarding India .It can create bad blood between Iran and Pakistan to hinder this project Now the need of the hour is the successful implementation without any interruption. Even if the Government changes the projects in the national interest should continue with a consistent policy. But the fact remains that Pak-Iran gas project is in the great interest of our economy. This also bears witness to our transparent foreign policy.
Natural Gas Investment Taxation Law
Article 1:
Natural Gas Investment Tax will be imposed on any natural or legal person (referred to hereinafter as a "Taxpayer"), working in the field of natural gas, liquids and condensates in the Kingdom or within its economic territories or continental shelf.
Article 2:
1- The activity of natural gas investment means upstream, downstream applications which include exploitation/drilling, collection, refinery, processing, fractionation, production and collection of gas condensates, Transmission of gas, liquids and condensates.
2- Transmission means to transport the gas condensates or natural gas from refining to processing and fractionation plants or to the consumers' facilities. This excludes the local distribution networks and pipelines constructed by the non-producers beyond the main sales outlets.
3- The Gas condensates are the mono - gaseous hydrocarbons naturally available in the locations with a temperature ranging between critical and highest degrees. They are usually produced with natural gas, which are liquid at normal pressure and temperature.
Article 3:
he return of natural gas investment is the total revenue of sale, exchange or conversion of natural gas, liquids or condensates including sulfur and other products or any income earned by the taxpayer, as a result of extraneous or non operational revenues related to his main activity whatsoever or from any source. This encompasses the return out of the surplus energy optimization in any facility subject to the natural investment taxation.
Article 4:
The Gas Investment taxing base (taxable income) is the total revenue referred to in Article 3 herein deducting the applicable expenses under the income taxing act issued by the Royal Decree no (17/2/28/3321) dated 21/1/1370H, amended by Royal Decree No (M/19) dated 1/7/1390H and the terms of the cabinet resolution No (3) dated 5/1/1421H. The surface rents and yields are considered as deductible expenses.
Article 5:
The natural gas investment tax for every taxation year will be based on the internal rate of return (IRR) for the annual accrued cash flows of the taxpayer. The rate for the taxable base is as follows:
IRR
(%)
Tax
Rate
(%)
IRR
(%)
Tax
Rate
(%)
IRR
(%)
Tax
Rate
(%)
IRR
(%)
Tax
Rate
(%)
8 or
less 30 11 32.61 14 57.50 17 82.29
8.1 30.15 11.1 32.87 14.1 58.87 17.1 82.693
8.2 30.17 11.2 33.15 14.2 60.24 17.2 82.85
8.3 30.18 11.3 33.46 14.3 61.59 17.3 83.04
8.4 30.2 11.4 33.8 14.4 62.93 17.4 83.22
8.5 30.22 11.5 34.17 14.5 64.24 17.5 83.39
8.6 30.25 11.6 34.57 14.6 65.51 17.6 83.54
8.7 30.27 11.7 35.01 14.7 66.75 17.7 83.67
8.8 30.3 11.8 35.49 14.8 67.95 17.8 83.80
8.9 30.33 11.9 36 14.9 69.10 17.9 83.91
9 30.37 12 36.56 15 70.21 18 84.01
9.1 30.41 12.1 37.16 15.1 71.26 18.1 84.10
9.2 30.45 12.2 37.8 15.2 72.27 18.2 84.19
9.3 30.51 12.3 38.5 15.3 73.22 18.3 84.26
9.4 30.55 12.4 39.24 15.4 74.12 18.4 84.33
9.5 30.6 12.5 40.02 15.5 74.97 18.5 84.40
9.6 30.67 12.6 40.88 15.6 75.76 18.6 84.45
9.7 30.74 12.7 41.78 15.7 76.50 18.7 84.50
9.8 30.81 12.8 42.73 15.8 77.20 18.8 84.55
9.9 30.9 12.9 43.74 15.9 77.84 18.9 84.59
10 30.99 13 44.79 16 78.44 19 84.63
10.1 31.09 13.1 45.9 16.1 79.00 19.1 84.67
10.2 31.2 13.2 47.05 16.2 79.51 19.2 84.70
10.3 31.33 13.3 48.25 16.3 79.99 19.3 84.73
10.4 31.046 13.4 49.49 16.4 80.43 19.4 84.75
10.5 31.61 13.5 50.76 16.5 80.83 19.5 84.78
10.6 31.78 13.6 52.07 16.6 81.20 19.6 84.80
10.7 31.096 13.7 53.41 16.7 81.54 19.7 84.82
10.8 32.15 13.8 54.76 16.8 81.85 19.8 84.83
The accrued cash flows are the total annual cash flows of the taxpayer, subject to the natural gas investment taxation, starting from the first year of the subject taxing statement to the preceding year of the next statement. The internal rate of return (IRR) is the discount rate that results in a net present value of zero then it approximates to one tenth percent ( 0.1% ) of the annual accrued cash flows ( after deductions are made to the early first year of the cash flows ) .
Article 6:
The annual cash flows will be calculated by modifying the taxable base of the natural
gas investment as follows:
1- Reincorporate the operational loss carried over from the precedent years as per the cabinet resolution no (3) dated 5/1/1421h.
2- Reincorporate the non cash items deducted to set the taxpayer's taxable base.
3- Reincorporate all funding fees and other banking services.
4- Deduct the capital cash expenditures except the funding fees or any other banking services.
5- Deduct the taxes paid on the natural gas investment and income.
Article 7:
1- An income tax of 30% will be imposed on the natural gas investment taxable base of the taxpayer under the article 11 vested in the Royal Decree No (17/2/28/3321) dated 21/1/1370 amended by The Royal Decree No (M/19) dated 1/7/1390 and the provisions of the cabinet resolution No (3) dated 5/1/1421h.
2- The income tax amount paid by the taxpayer under paragraph (1) of this article
shall be deducted from the due investment tax.
Article 8:
1- For computation of the tax on the natural gas investment, the subject taxable base of the taxpayer for each contract or agreement made with the government for gas exploitation or production shall be independent from any other taxable base of such works. The taxpayer shall submit final, audited and separate statements for every contract or agreement for gas exploitation and production.
2- The subject taxable base of the taxpayer shall be independent from the taxable base of the other activities irrelevant to the gas investment. The taxpayer shall submit final and audited statements for his works in natural gas investment separately.
Article 9:
1- An income tax of 30% will be imposed on the taxpayer, for the natural gas processing and fractionation at his independent licensed plants, under the article 11 vested in the Royal Decree No (17/2/28/3321) dated 21/1/1370 amended by The Royal Decree No (M/19) dated 1/7/1390 and the provisions of the cabinet resolution No (3) dated 5/1/1421h.
2- An income tax of 30% will be imposed on the taxpayer , for the natural gas transmission by his independent licensed pipeline, under the article 11 vested in the Royal Decree No (17/2/28/3321) dated 21/1/1370 amended by The Royal Decree No ( M/19) dated 1/7/1390 and the provisions of the cabinet resolution No (3) dated 5/1/1421h .
Article 10:
The provisions of this law don't apply to any company operating in petrol production or both petrol production and natural gas production in relation with its activity within the operation or concession area when this law is put in force .
Article 11:
The provisions of the Royal Decree no (M/65) dated 13/11/1394H don't apply to the taxable base of the natural gas investment of any taxpayer subject to these taxes.
Article 12:
Unless otherwise stated herein, the terms of the income taxing Act issued under the Royal Decree No (17/2/28/3321) dated 21/1/1370H and revisions will be enforced till the new income law is issued and acted accordingly.
Article 13:
The implementing rules of this law will be issued by the decision made by the Minister of Finance.
Article 14:
This law is to be published in the Gazette and will be in force as of its publishing date.
Natural Gas Investment Tax will be imposed on any natural or legal person (referred to hereinafter as a "Taxpayer"), working in the field of natural gas, liquids and condensates in the Kingdom or within its economic territories or continental shelf.
Article 2:
1- The activity of natural gas investment means upstream, downstream applications which include exploitation/drilling, collection, refinery, processing, fractionation, production and collection of gas condensates, Transmission of gas, liquids and condensates.
2- Transmission means to transport the gas condensates or natural gas from refining to processing and fractionation plants or to the consumers' facilities. This excludes the local distribution networks and pipelines constructed by the non-producers beyond the main sales outlets.
3- The Gas condensates are the mono - gaseous hydrocarbons naturally available in the locations with a temperature ranging between critical and highest degrees. They are usually produced with natural gas, which are liquid at normal pressure and temperature.
Article 3:
he return of natural gas investment is the total revenue of sale, exchange or conversion of natural gas, liquids or condensates including sulfur and other products or any income earned by the taxpayer, as a result of extraneous or non operational revenues related to his main activity whatsoever or from any source. This encompasses the return out of the surplus energy optimization in any facility subject to the natural investment taxation.
Article 4:
The Gas Investment taxing base (taxable income) is the total revenue referred to in Article 3 herein deducting the applicable expenses under the income taxing act issued by the Royal Decree no (17/2/28/3321) dated 21/1/1370H, amended by Royal Decree No (M/19) dated 1/7/1390H and the terms of the cabinet resolution No (3) dated 5/1/1421H. The surface rents and yields are considered as deductible expenses.
Article 5:
The natural gas investment tax for every taxation year will be based on the internal rate of return (IRR) for the annual accrued cash flows of the taxpayer. The rate for the taxable base is as follows:
IRR
(%)
Tax
Rate
(%)
IRR
(%)
Tax
Rate
(%)
IRR
(%)
Tax
Rate
(%)
IRR
(%)
Tax
Rate
(%)
8 or
less 30 11 32.61 14 57.50 17 82.29
8.1 30.15 11.1 32.87 14.1 58.87 17.1 82.693
8.2 30.17 11.2 33.15 14.2 60.24 17.2 82.85
8.3 30.18 11.3 33.46 14.3 61.59 17.3 83.04
8.4 30.2 11.4 33.8 14.4 62.93 17.4 83.22
8.5 30.22 11.5 34.17 14.5 64.24 17.5 83.39
8.6 30.25 11.6 34.57 14.6 65.51 17.6 83.54
8.7 30.27 11.7 35.01 14.7 66.75 17.7 83.67
8.8 30.3 11.8 35.49 14.8 67.95 17.8 83.80
8.9 30.33 11.9 36 14.9 69.10 17.9 83.91
9 30.37 12 36.56 15 70.21 18 84.01
9.1 30.41 12.1 37.16 15.1 71.26 18.1 84.10
9.2 30.45 12.2 37.8 15.2 72.27 18.2 84.19
9.3 30.51 12.3 38.5 15.3 73.22 18.3 84.26
9.4 30.55 12.4 39.24 15.4 74.12 18.4 84.33
9.5 30.6 12.5 40.02 15.5 74.97 18.5 84.40
9.6 30.67 12.6 40.88 15.6 75.76 18.6 84.45
9.7 30.74 12.7 41.78 15.7 76.50 18.7 84.50
9.8 30.81 12.8 42.73 15.8 77.20 18.8 84.55
9.9 30.9 12.9 43.74 15.9 77.84 18.9 84.59
10 30.99 13 44.79 16 78.44 19 84.63
10.1 31.09 13.1 45.9 16.1 79.00 19.1 84.67
10.2 31.2 13.2 47.05 16.2 79.51 19.2 84.70
10.3 31.33 13.3 48.25 16.3 79.99 19.3 84.73
10.4 31.046 13.4 49.49 16.4 80.43 19.4 84.75
10.5 31.61 13.5 50.76 16.5 80.83 19.5 84.78
10.6 31.78 13.6 52.07 16.6 81.20 19.6 84.80
10.7 31.096 13.7 53.41 16.7 81.54 19.7 84.82
10.8 32.15 13.8 54.76 16.8 81.85 19.8 84.83
The accrued cash flows are the total annual cash flows of the taxpayer, subject to the natural gas investment taxation, starting from the first year of the subject taxing statement to the preceding year of the next statement. The internal rate of return (IRR) is the discount rate that results in a net present value of zero then it approximates to one tenth percent ( 0.1% ) of the annual accrued cash flows ( after deductions are made to the early first year of the cash flows ) .
Article 6:
The annual cash flows will be calculated by modifying the taxable base of the natural
gas investment as follows:
1- Reincorporate the operational loss carried over from the precedent years as per the cabinet resolution no (3) dated 5/1/1421h.
2- Reincorporate the non cash items deducted to set the taxpayer's taxable base.
3- Reincorporate all funding fees and other banking services.
4- Deduct the capital cash expenditures except the funding fees or any other banking services.
5- Deduct the taxes paid on the natural gas investment and income.
Article 7:
1- An income tax of 30% will be imposed on the natural gas investment taxable base of the taxpayer under the article 11 vested in the Royal Decree No (17/2/28/3321) dated 21/1/1370 amended by The Royal Decree No (M/19) dated 1/7/1390 and the provisions of the cabinet resolution No (3) dated 5/1/1421h.
2- The income tax amount paid by the taxpayer under paragraph (1) of this article
shall be deducted from the due investment tax.
Article 8:
1- For computation of the tax on the natural gas investment, the subject taxable base of the taxpayer for each contract or agreement made with the government for gas exploitation or production shall be independent from any other taxable base of such works. The taxpayer shall submit final, audited and separate statements for every contract or agreement for gas exploitation and production.
2- The subject taxable base of the taxpayer shall be independent from the taxable base of the other activities irrelevant to the gas investment. The taxpayer shall submit final and audited statements for his works in natural gas investment separately.
Article 9:
1- An income tax of 30% will be imposed on the taxpayer, for the natural gas processing and fractionation at his independent licensed plants, under the article 11 vested in the Royal Decree No (17/2/28/3321) dated 21/1/1370 amended by The Royal Decree No (M/19) dated 1/7/1390 and the provisions of the cabinet resolution No (3) dated 5/1/1421h.
2- An income tax of 30% will be imposed on the taxpayer , for the natural gas transmission by his independent licensed pipeline, under the article 11 vested in the Royal Decree No (17/2/28/3321) dated 21/1/1370 amended by The Royal Decree No ( M/19) dated 1/7/1390 and the provisions of the cabinet resolution No (3) dated 5/1/1421h .
Article 10:
The provisions of this law don't apply to any company operating in petrol production or both petrol production and natural gas production in relation with its activity within the operation or concession area when this law is put in force .
Article 11:
The provisions of the Royal Decree no (M/65) dated 13/11/1394H don't apply to the taxable base of the natural gas investment of any taxpayer subject to these taxes.
Article 12:
Unless otherwise stated herein, the terms of the income taxing Act issued under the Royal Decree No (17/2/28/3321) dated 21/1/1370H and revisions will be enforced till the new income law is issued and acted accordingly.
Article 13:
The implementing rules of this law will be issued by the decision made by the Minister of Finance.
Article 14:
This law is to be published in the Gazette and will be in force as of its publishing date.
Dealing With the Best Natural Gas in Powerhouse Countries
When fuel and coal emerged, gas became part of man’s everyday living. Gas is needed to make a gas stove work for cooking, to fill up the tank of your car, and to make every other machinery perform. It’s no wonder that hundreds of companies around the world invest and purchase fuel and natural gas from the best world country leaders.
One of the biggest power houses in natural gas by 2006 is Qatar. Ranked #3, is has been known that this country has a reserve of 911 trillion cubic feet. According to statistics, this country has beaten Malaysia as the largest exporter of LNG in the world. The country’s revenue of natural gas amounts to 60 percent of its GDP.
Now, the country’s primary income relies from oil and natural gas exports. The country has 12 billion barrels while gas reserved is estimated between 800 trillion feet to 80 trillion cubic feet. Through the gas reserve, Qatar has become one of the least taxed sovereign states with the highest GDP per capita in the Arab world.
Ranked number two is the country Iran, with an estimated reserve of 971 trillion cubic feet. Iran is the second largest reserve with around 62 percent of the reserve located in non-associated fields.
This country’s gas fields include South and North Pars, Tabnak, and Kangan-Nar. Although there has been news that the country’s exports will be minimal due to the rising domestic demands which led to the British Petroleum (BP) and Chile’s Sipetrol divest in Iran’s natural reserve sector. Still, this may be the only country that reached the peak of LNG exports with 1, 462 Bcf.
Russia has garnered number 1 in the 2006 Greatest Gas Natural Reserves by Country. This country’s economy rose due to their gas reserve, as well as oil exports. They all amount up to 80% of exports abroad. Despite of the increased high prices, oil and gas contributed to Russia’s GDP with 5.7% and it is expect to drop to 3.7% in the year 2011.
In 2007 alone, Russia’s GDP rose by 8.1 percent, which surpassed other countries. Since the country relies on their natural gas for exports, its economy boomed internally. Natural gas contributed to 55% to the country, along with 16% of coal, hydroelectric power with 6%, nuclear with 5%, and oil on 19%. To further manage economic downfall in the future, the Russian government created a stabilization fund in 2004, and is expected to grow with a net worth $158 billion.
Together with these three powerhouse countries that reserve the best natural gas, our world will never run out of gas. If other countries can go beyond what Russia, Iran and Qatar can do, those countries can compete worldwide and help the economy as well.
One of the biggest power houses in natural gas by 2006 is Qatar. Ranked #3, is has been known that this country has a reserve of 911 trillion cubic feet. According to statistics, this country has beaten Malaysia as the largest exporter of LNG in the world. The country’s revenue of natural gas amounts to 60 percent of its GDP.
Now, the country’s primary income relies from oil and natural gas exports. The country has 12 billion barrels while gas reserved is estimated between 800 trillion feet to 80 trillion cubic feet. Through the gas reserve, Qatar has become one of the least taxed sovereign states with the highest GDP per capita in the Arab world.
Ranked number two is the country Iran, with an estimated reserve of 971 trillion cubic feet. Iran is the second largest reserve with around 62 percent of the reserve located in non-associated fields.
This country’s gas fields include South and North Pars, Tabnak, and Kangan-Nar. Although there has been news that the country’s exports will be minimal due to the rising domestic demands which led to the British Petroleum (BP) and Chile’s Sipetrol divest in Iran’s natural reserve sector. Still, this may be the only country that reached the peak of LNG exports with 1, 462 Bcf.
Russia has garnered number 1 in the 2006 Greatest Gas Natural Reserves by Country. This country’s economy rose due to their gas reserve, as well as oil exports. They all amount up to 80% of exports abroad. Despite of the increased high prices, oil and gas contributed to Russia’s GDP with 5.7% and it is expect to drop to 3.7% in the year 2011.
In 2007 alone, Russia’s GDP rose by 8.1 percent, which surpassed other countries. Since the country relies on their natural gas for exports, its economy boomed internally. Natural gas contributed to 55% to the country, along with 16% of coal, hydroelectric power with 6%, nuclear with 5%, and oil on 19%. To further manage economic downfall in the future, the Russian government created a stabilization fund in 2004, and is expected to grow with a net worth $158 billion.
Together with these three powerhouse countries that reserve the best natural gas, our world will never run out of gas. If other countries can go beyond what Russia, Iran and Qatar can do, those countries can compete worldwide and help the economy as well.
RUSSIA DESPERATE TO SECURE ITS MONOPOLY FOR GAS TO EUROPE
Russia criticizes EU for taking gas transit issues into their own hands
Does Russia try to dictate how its gas should be transported to the European market, or is it rightfully intervening in order to tell Europe how it can get its gas most effectively to the European market?
Does EU have a sole responsibility to secure its import of gas by taking actions without the intervention of the seller of gas?
What role should the seller of imported gas have, and what is stated in the gas delivery contracts?
All these questions are in the mind of energy concerned Europeans as well as Ukrainians at the moment as Russia launched its attack on the EU deal with Ukraine to upgrade its gas network.
First, we need to look into some historic facts before we can answer some of these questions.
GAS TRANSIT CONFLICTS
The last two years repeating conflicts between Russia and Ukraine regarding the transit of gas through Ukraine territories has revealed that Russia and Ukraine does not act as best friends in this business area. Several accusations from both sides on who is to blame for the conflicts have been launched both between the parties, but also towards the ultimate client for Russian gas, the European politicians.
European politicians have not taken any side to who is to blame, but has decided that enough is enough and has begun to realize its need to secure its import of gas from its various sources, amongst them the Russian imported gas. As 80% of the Russian gas import to Europe, goes through Ukraine, it has become an important question, how can this transit route be secured, both from a technical, but also political standpoint of view.
It was obvious from both of the conflicts, both in 2008 and in 2009, which EU could not do anything and was helpless to the battle between seller and transit countries, Russia and Ukraine. EU stated at one point that Russia had the sole responsibility to ensure gas delivery, and EU could not do anything in this matter.
To get an insight to this problem, one needs access to the gas delivery agreement between Russia and EU. So far, no one has been willing to give details on how this contract is constructed and how the responsibility of transit should be solved.
But given the standings of EU during both conflicts, it is certain that EU understand this is Russia’s problem to solve.
However, EU has grown impatient to Russia and its lack of willingness to come to a permanent solution for existing pipeline transport of gas. Instead EU see that Russia grows more interest to alternative gas transit routes, and has questioned the economics of these alternatives together with environmental concerns, especially for the northern alternative. This has made EU to look into the cost and benefits of upgrading the existing Ukrainian gas pipeline network, and has apparently found this alternative to be a good solution seen both from an economic but also ecological background.
NORD STREAM UNDERLYING THE BALTIC SEA
Russia has politically whole heartedly supported Germany’s efforts in launching the northern Stream pipeline system through the Baltic Ocean, directly into Germany, in order to bypass the Ukrainian network. The cost of this project is estimated to around 14 9 billion Euros. The project has cased concern by involved countries, when it comes to environment and national security issues. The project will also give Russia a proportional stake in the project, hence income.
The capacity of the pipeline is estimated to be around 27.5 bllion cubic meters (bcm) per annum.
SOUTH STREAM UNDERLYING THE BLACK SEA
Parallel to this Russia press hard for the Southern stream pipeline system that will ensure the south eastern part of EU dependencies needs attention from Brussels as well, including Italy’s needs. Parts of this line have to pass Ukrainian continental shelf, and will require extensive environment studies and therefore environmental permits from Ukraine
The last estimated cost for this project was around 20 billion Euros, more than double of either Nabucco or Nord Stream projects. The project will give Russia a proportional ownership, and hence income from transit through this line.
The capacity is estimated to be 31 billion cubic meters (bcm) of gas annually and it may be expanded to 47 bcm.
NABUCCO GAS PIPELINE
The two Russian supported projects outlined above are both competing with the U.S.- and EU-backed prospective Nabucco pipeline that bypasses Russia.
Russia turned down an offer to participate in this project, as it presses for the two above mentioned projects instead.
The cost of this project is estimated to around 8 billion Euros.
The project will introduce new partners on the transit side, such as Turkey, Georgia and Azerbaijan.
It opens for delivery of gas not only from Turkmenistan, but also Iran, which can give Europe even more legs to stand on.
Capacity of the pipeline will be between 4.5 and 13 billion cubic meters (bcm) per annum.
UPGRADE OF UKRAINE GAS PIPELINE SYSTEM
The EU has promised Ukraine billions of Euros enable Ukraine to upgrade the aging pipeline network which pumps Russian gas for the European consumers. 20% of gas consumption in the EU comes through the Ukraine from Russia.
Moscow lashed out at Brussels for entering into a deal with Ukraine to modernize its aging gas transit pipeline network system.
The Russian argument is that the agreement between EU and Ukraine makes no sense without Moscow's involvement.
Russia has stated that the agreement raises a number of questions and said that the EU and Ukraine had failed to discuss the agreement with Russia.
The prime minister of Russia, Putin, argued that the volume of gas to be pumped is a key factor, and this gas can only come from the Russian territory, but no one has discussed the issue with the Russians.
The deal struck between EU and Ukraine followed after a Russian gas cutoff in January to Europe due to a price and contract dispute between Russia and Ukraine which underlined the EU's energy dependence on Russia.
An upgrade of the pipeline will potentially give a capacity of around 60 billion cubic meter per annum. This is by far the largest transit system of all alternatives evaluated so far.
RUSSIAS INVOLVMENT IN GAS TRANSIT SYSTEMS IN UKRAINE
It has been argued from various sources, both officially and unofficially that Russia through Gazprom and other companies has tried to acquire network capacity through direct ownership of parts of the Ukrainian network.
Only in the later stages, after EU came on the track with an agreement, Russia says they would also like to assist with money to modernize Ukraine’s gas pipeline network.
Yushchenko and his officials have accused Moscow of wanting to take control of the nation's gas pipeline network, allegations that Russia has denied.
THE UNDERLYING POLITICAL ARENA IN UKRAINE AND BETWEEN UKRAINE AND RUSSIA
Prime minister of Russia Putin suggested that Ukraine's Prime Minister Yulia Tymoshenko's visit to Moscow be delayed until the gas agreement is clarified.
Tymoshenko's visit was expected to focus on her push for a $5 billion Russian loan to help shore up the Ukrainian economy, among the hardest-hit in the global financial meltdown. The postponement of her visit suggests the loan could now be jeopardized.
Tymoshenko on Tuesday rushed to reassure Russia that it wasn't being shut out of the energy deal with the European Union.
Ukrainian prime minister stated that the agreement opens for all to participate in the investment process, allowing Gazprom and the Russian Federation intend to either invest in this process or attract Russian companies, which could take part in reconstruction and modernization work without intermediaries.
Ukraine's President Viktor Yushchenko, has opposed the efforts to secure a Russian loan, saying it would make Ukraine overly reliant on a huge neighbor determined to bolster its influence over the country and keep it out of NATO.
Volodymyr Omelchenko, an energy analyst with the Kiev-based Razumkov Center said the EU-Ukraine agreement dealt a blow to Russia's hopes to get a stake in Ukraine's pipelines network through the creation of an international consortium. "They got offended because this declaration allows Ukraine to deal directly with the European Union without Russian participation," he said.
Yushchenko's energy adviser Bohdan Sokolovsky said that Russia was welcome to join in modernizing Ukraine's pipelines along with other investors, but reaffirmed that Ukraine will not give up control of its gas transit network. Sokolovsky said the creation of an international consortium of the type Russia had pushed for would violate Ukrainian law.
ANSWERS TO EU’S ALTERNATIVES
Given that EU has a multi-fold challenge on its hands;
Secure transport and need for diversifying the delivery for it energy needs. It also has to think of the economy and ecology of these alternatives. EU also has to think about their use of alternative energy sources in the various time aspects.
When it comes to diversifications of EU’s energy need, it will is clear that in the short and mid term, EU will depend upon Russian gas, as it will take time for alternative energies to play a significant role in Europe’s energy need supply.
EU will not achieve any diversification by building the new nord and southern stream pipelines. It will only create a semi-security for delivery of gas from its sole source of delivery, Russia. Still EU will be very dependent upon Russia and its political stability towards Europe. It will also give Russia a stronghold for other political questions, since Europe will need to play along with Russia, as Ukraine has to do today. The only new pipeline alternative that creates real diversification is the Nabucco project, which bypasses Russia totally.
EU’s alternative of upgrading the Ukrainian gas pipeline network is a real alternative and should be addressed as soon as possible, and the political will to support such a modernization of their network came at the right time. Failure of Russia to be more pro-active in securing its existing transit route, has bloomed out in EU’s effort to take the matter into its own hands. Moscow has argued that the new northern and southern pipelines are needed to reduce the EU's dependence on the dilapidated Ukrainian network. The EU-funded modernization and expansion of Ukraine's pipeline system could call that argument into question. Also one has to question Russia motives as both alternatives supported by Russia, still only will deliver Russian gas, and leave no room for alternative sources in the future. Therefore seeds the doubt about diversification argument totally.
If Ukraine's transit capacity is increased, it will no longer be necessary to build alternative routes, seen from a security standpoint of view alone. The capacity and security of the pipeline will be taken care of as Ukrainian authorities stated that modernizing Ukraine's outdated gas pipelines, which span 37,600 kilometers and comprise 73 compressor stations with 13 underground storage facilities, will cost approximately 5.5 billion Euros. This will become cheaper compared to building alternative northern and southern stream pipelines, as the EU is contemplating.
The European Commission has provisionally estimated Ukraine's modernization program at approximately 2.5 billion Euros, but has not committed a sum to the project.
Therefore, EU need to make a strategy in short to mid term aspect to modernize the Ukrainian gas network at the same time as it builds the Nabucco gas pipeline network. This will secure and diversify EU’s energy needs for traditional energy sources. It will also release EU from having to rely too much on a sole source for its majority of gas needs, and be less prone to blackmailing by sellers of energy.
In the longer term, EU need to address the focus on use of alternative energy sources, such as wind, solar and geothermal sources. A strong focus on these areas will enable EU to reach a diversified and sustainable energy delivery for its needs by 2030, no earlier.
Read more: http://www.articlesbase.com/international-business-articles/russia-desperate-to-secure-its-monopoly-for-gas-to-europe-837144.html#ixzz0pgv6q3tg
Under Creative Commons License: Attribution
Does Russia try to dictate how its gas should be transported to the European market, or is it rightfully intervening in order to tell Europe how it can get its gas most effectively to the European market?
Does EU have a sole responsibility to secure its import of gas by taking actions without the intervention of the seller of gas?
What role should the seller of imported gas have, and what is stated in the gas delivery contracts?
All these questions are in the mind of energy concerned Europeans as well as Ukrainians at the moment as Russia launched its attack on the EU deal with Ukraine to upgrade its gas network.
First, we need to look into some historic facts before we can answer some of these questions.
GAS TRANSIT CONFLICTS
The last two years repeating conflicts between Russia and Ukraine regarding the transit of gas through Ukraine territories has revealed that Russia and Ukraine does not act as best friends in this business area. Several accusations from both sides on who is to blame for the conflicts have been launched both between the parties, but also towards the ultimate client for Russian gas, the European politicians.
European politicians have not taken any side to who is to blame, but has decided that enough is enough and has begun to realize its need to secure its import of gas from its various sources, amongst them the Russian imported gas. As 80% of the Russian gas import to Europe, goes through Ukraine, it has become an important question, how can this transit route be secured, both from a technical, but also political standpoint of view.
It was obvious from both of the conflicts, both in 2008 and in 2009, which EU could not do anything and was helpless to the battle between seller and transit countries, Russia and Ukraine. EU stated at one point that Russia had the sole responsibility to ensure gas delivery, and EU could not do anything in this matter.
To get an insight to this problem, one needs access to the gas delivery agreement between Russia and EU. So far, no one has been willing to give details on how this contract is constructed and how the responsibility of transit should be solved.
But given the standings of EU during both conflicts, it is certain that EU understand this is Russia’s problem to solve.
However, EU has grown impatient to Russia and its lack of willingness to come to a permanent solution for existing pipeline transport of gas. Instead EU see that Russia grows more interest to alternative gas transit routes, and has questioned the economics of these alternatives together with environmental concerns, especially for the northern alternative. This has made EU to look into the cost and benefits of upgrading the existing Ukrainian gas pipeline network, and has apparently found this alternative to be a good solution seen both from an economic but also ecological background.
NORD STREAM UNDERLYING THE BALTIC SEA
Russia has politically whole heartedly supported Germany’s efforts in launching the northern Stream pipeline system through the Baltic Ocean, directly into Germany, in order to bypass the Ukrainian network. The cost of this project is estimated to around 14 9 billion Euros. The project has cased concern by involved countries, when it comes to environment and national security issues. The project will also give Russia a proportional stake in the project, hence income.
The capacity of the pipeline is estimated to be around 27.5 bllion cubic meters (bcm) per annum.
SOUTH STREAM UNDERLYING THE BLACK SEA
Parallel to this Russia press hard for the Southern stream pipeline system that will ensure the south eastern part of EU dependencies needs attention from Brussels as well, including Italy’s needs. Parts of this line have to pass Ukrainian continental shelf, and will require extensive environment studies and therefore environmental permits from Ukraine
The last estimated cost for this project was around 20 billion Euros, more than double of either Nabucco or Nord Stream projects. The project will give Russia a proportional ownership, and hence income from transit through this line.
The capacity is estimated to be 31 billion cubic meters (bcm) of gas annually and it may be expanded to 47 bcm.
NABUCCO GAS PIPELINE
The two Russian supported projects outlined above are both competing with the U.S.- and EU-backed prospective Nabucco pipeline that bypasses Russia.
Russia turned down an offer to participate in this project, as it presses for the two above mentioned projects instead.
The cost of this project is estimated to around 8 billion Euros.
The project will introduce new partners on the transit side, such as Turkey, Georgia and Azerbaijan.
It opens for delivery of gas not only from Turkmenistan, but also Iran, which can give Europe even more legs to stand on.
Capacity of the pipeline will be between 4.5 and 13 billion cubic meters (bcm) per annum.
UPGRADE OF UKRAINE GAS PIPELINE SYSTEM
The EU has promised Ukraine billions of Euros enable Ukraine to upgrade the aging pipeline network which pumps Russian gas for the European consumers. 20% of gas consumption in the EU comes through the Ukraine from Russia.
Moscow lashed out at Brussels for entering into a deal with Ukraine to modernize its aging gas transit pipeline network system.
The Russian argument is that the agreement between EU and Ukraine makes no sense without Moscow's involvement.
Russia has stated that the agreement raises a number of questions and said that the EU and Ukraine had failed to discuss the agreement with Russia.
The prime minister of Russia, Putin, argued that the volume of gas to be pumped is a key factor, and this gas can only come from the Russian territory, but no one has discussed the issue with the Russians.
The deal struck between EU and Ukraine followed after a Russian gas cutoff in January to Europe due to a price and contract dispute between Russia and Ukraine which underlined the EU's energy dependence on Russia.
An upgrade of the pipeline will potentially give a capacity of around 60 billion cubic meter per annum. This is by far the largest transit system of all alternatives evaluated so far.
RUSSIAS INVOLVMENT IN GAS TRANSIT SYSTEMS IN UKRAINE
It has been argued from various sources, both officially and unofficially that Russia through Gazprom and other companies has tried to acquire network capacity through direct ownership of parts of the Ukrainian network.
Only in the later stages, after EU came on the track with an agreement, Russia says they would also like to assist with money to modernize Ukraine’s gas pipeline network.
Yushchenko and his officials have accused Moscow of wanting to take control of the nation's gas pipeline network, allegations that Russia has denied.
THE UNDERLYING POLITICAL ARENA IN UKRAINE AND BETWEEN UKRAINE AND RUSSIA
Prime minister of Russia Putin suggested that Ukraine's Prime Minister Yulia Tymoshenko's visit to Moscow be delayed until the gas agreement is clarified.
Tymoshenko's visit was expected to focus on her push for a $5 billion Russian loan to help shore up the Ukrainian economy, among the hardest-hit in the global financial meltdown. The postponement of her visit suggests the loan could now be jeopardized.
Tymoshenko on Tuesday rushed to reassure Russia that it wasn't being shut out of the energy deal with the European Union.
Ukrainian prime minister stated that the agreement opens for all to participate in the investment process, allowing Gazprom and the Russian Federation intend to either invest in this process or attract Russian companies, which could take part in reconstruction and modernization work without intermediaries.
Ukraine's President Viktor Yushchenko, has opposed the efforts to secure a Russian loan, saying it would make Ukraine overly reliant on a huge neighbor determined to bolster its influence over the country and keep it out of NATO.
Volodymyr Omelchenko, an energy analyst with the Kiev-based Razumkov Center said the EU-Ukraine agreement dealt a blow to Russia's hopes to get a stake in Ukraine's pipelines network through the creation of an international consortium. "They got offended because this declaration allows Ukraine to deal directly with the European Union without Russian participation," he said.
Yushchenko's energy adviser Bohdan Sokolovsky said that Russia was welcome to join in modernizing Ukraine's pipelines along with other investors, but reaffirmed that Ukraine will not give up control of its gas transit network. Sokolovsky said the creation of an international consortium of the type Russia had pushed for would violate Ukrainian law.
ANSWERS TO EU’S ALTERNATIVES
Given that EU has a multi-fold challenge on its hands;
Secure transport and need for diversifying the delivery for it energy needs. It also has to think of the economy and ecology of these alternatives. EU also has to think about their use of alternative energy sources in the various time aspects.
When it comes to diversifications of EU’s energy need, it will is clear that in the short and mid term, EU will depend upon Russian gas, as it will take time for alternative energies to play a significant role in Europe’s energy need supply.
EU will not achieve any diversification by building the new nord and southern stream pipelines. It will only create a semi-security for delivery of gas from its sole source of delivery, Russia. Still EU will be very dependent upon Russia and its political stability towards Europe. It will also give Russia a stronghold for other political questions, since Europe will need to play along with Russia, as Ukraine has to do today. The only new pipeline alternative that creates real diversification is the Nabucco project, which bypasses Russia totally.
EU’s alternative of upgrading the Ukrainian gas pipeline network is a real alternative and should be addressed as soon as possible, and the political will to support such a modernization of their network came at the right time. Failure of Russia to be more pro-active in securing its existing transit route, has bloomed out in EU’s effort to take the matter into its own hands. Moscow has argued that the new northern and southern pipelines are needed to reduce the EU's dependence on the dilapidated Ukrainian network. The EU-funded modernization and expansion of Ukraine's pipeline system could call that argument into question. Also one has to question Russia motives as both alternatives supported by Russia, still only will deliver Russian gas, and leave no room for alternative sources in the future. Therefore seeds the doubt about diversification argument totally.
If Ukraine's transit capacity is increased, it will no longer be necessary to build alternative routes, seen from a security standpoint of view alone. The capacity and security of the pipeline will be taken care of as Ukrainian authorities stated that modernizing Ukraine's outdated gas pipelines, which span 37,600 kilometers and comprise 73 compressor stations with 13 underground storage facilities, will cost approximately 5.5 billion Euros. This will become cheaper compared to building alternative northern and southern stream pipelines, as the EU is contemplating.
The European Commission has provisionally estimated Ukraine's modernization program at approximately 2.5 billion Euros, but has not committed a sum to the project.
Therefore, EU need to make a strategy in short to mid term aspect to modernize the Ukrainian gas network at the same time as it builds the Nabucco gas pipeline network. This will secure and diversify EU’s energy needs for traditional energy sources. It will also release EU from having to rely too much on a sole source for its majority of gas needs, and be less prone to blackmailing by sellers of energy.
In the longer term, EU need to address the focus on use of alternative energy sources, such as wind, solar and geothermal sources. A strong focus on these areas will enable EU to reach a diversified and sustainable energy delivery for its needs by 2030, no earlier.
Read more: http://www.articlesbase.com/international-business-articles/russia-desperate-to-secure-its-monopoly-for-gas-to-europe-837144.html#ixzz0pgv6q3tg
Under Creative Commons License: Attribution
What Gas Stations Accept Gas Credit Cards?
The price of gas has been exemplifying high for the past months already. It has become unstoppable with the price of gas going at its peak. People have been at rage upon haring the news that it will still continue to rise in the coming days. They have been in shock that one day the price is this and the next thing they know is that it is already way higher. The increase is not just at its smallest but the increase is a leap. A big leap to say. The amount that it is reaching is not just nothing it is something that people are now reacting about it. Its all over the news, the paper, the radio, and the internet it is presenting itself to us that we are left with no choice but to face it. A reality that all must wake up into, a fact that everyone is believing and a word of truth that is spreading that is how the increase in gas price have been affecting each and every one of us.
Credit card companies have seen and have felt how this is affecting everyone since the people behind this credit card companies are also consumers of gas. They came and launched gas credit cards. They thought that this will be a help that everyone would need. A help that will allow consumers to save money as they fuel up their engines. They have made benefits to make this goal possible. Rebate is one of the benefits that this gas cards come with. Every time a consumer fuels up his engine using the gas card he gets a certain percent of rebate basing on the amount of his purchase. This rebate may be converted to cash, gift rewards or may be forwarded to the credit card for future purchases of the consumer. It guarantees to have no annual fee, consumers are not required to pay a certain amount annually which will be a big saving to them. Every time consumers show their gas card, gas stations will give you a lower price of the gas compared to the standard. Now that spells savings for everyone. This gas credit card offers a low interest rate that will be affordable to everyone.
The question now that everyone is asking is that where can they use this gas credit card. Well if you applied a gas credit card under a gas company then your gas card will be accepted on gas stations under that gas company. Here is the advantage, that if you applied for a gas card on a gas credit card company it will be accepted at all gas stations that is accepting credit cards. This way you don’t have to go searching for the gas station just so you can avail the benefits because whatever gas station that you will be fuelling in, it will be accepted as long as the station accept credit cards. It will be a big shrug on your shoulder since you can gas up anywhere and everywhere with your gas credit card. You just have to show your gas credit card and it will be good as cash.
Credit card companies have seen and have felt how this is affecting everyone since the people behind this credit card companies are also consumers of gas. They came and launched gas credit cards. They thought that this will be a help that everyone would need. A help that will allow consumers to save money as they fuel up their engines. They have made benefits to make this goal possible. Rebate is one of the benefits that this gas cards come with. Every time a consumer fuels up his engine using the gas card he gets a certain percent of rebate basing on the amount of his purchase. This rebate may be converted to cash, gift rewards or may be forwarded to the credit card for future purchases of the consumer. It guarantees to have no annual fee, consumers are not required to pay a certain amount annually which will be a big saving to them. Every time consumers show their gas card, gas stations will give you a lower price of the gas compared to the standard. Now that spells savings for everyone. This gas credit card offers a low interest rate that will be affordable to everyone.
The question now that everyone is asking is that where can they use this gas credit card. Well if you applied a gas credit card under a gas company then your gas card will be accepted on gas stations under that gas company. Here is the advantage, that if you applied for a gas card on a gas credit card company it will be accepted at all gas stations that is accepting credit cards. This way you don’t have to go searching for the gas station just so you can avail the benefits because whatever gas station that you will be fuelling in, it will be accepted as long as the station accept credit cards. It will be a big shrug on your shoulder since you can gas up anywhere and everywhere with your gas credit card. You just have to show your gas credit card and it will be good as cash.
Environmentally Friendly Advancements In Technology
Refinery technology has advanced with the times. Oil can be refined to gas and gasoline products quicker and cleaner. Waste, polluting by-products and accidents are a thing of the past.
Oil rigs that are located off the coasts of many states now can boast the usage of high-tech gear that allows them to penetrate into the oil reserves without damaging the surrounding areas. Land-based drilling equipment can contain their spillage and environmental damage so well now that no one can tell they are pumping. Pipelines for oil and natural gas have been retrofitted to comply with all of the new environmental standards, and new technology helps the companies using these lines maintain their quality.
By taking advantage of all of these new and clean technologies, oil and gas companies can produce more without damaging surrounding areas. The effect this has on the economy is profound. If the ability to put more products on the market, cleanly and efficiently, flows over to the population, there will be a drop in prices that everyone is sure to enjoy. With home heating costs currently skyrocketing as well as the cost of automobile fuel, the need for full usage of clean technology to pump and refine oil into gas is increasing.
Oil and gas are needed to run most of our economy in one form or another. People use gas and oil to heat their homes, run their cars and power their offices. Companies rely on gas and oil products to create and transport their goods. Converting any remaining refineries or pumping stations to new, cleaner technology not only increases production, but adds jobs to the economy.
With the advancement of refining procedures, cleaner burning engines and other related technologies, oil companies can now produce more environmentally-friendly products that can be used in clean energy devices
Oil rigs that are located off the coasts of many states now can boast the usage of high-tech gear that allows them to penetrate into the oil reserves without damaging the surrounding areas. Land-based drilling equipment can contain their spillage and environmental damage so well now that no one can tell they are pumping. Pipelines for oil and natural gas have been retrofitted to comply with all of the new environmental standards, and new technology helps the companies using these lines maintain their quality.
By taking advantage of all of these new and clean technologies, oil and gas companies can produce more without damaging surrounding areas. The effect this has on the economy is profound. If the ability to put more products on the market, cleanly and efficiently, flows over to the population, there will be a drop in prices that everyone is sure to enjoy. With home heating costs currently skyrocketing as well as the cost of automobile fuel, the need for full usage of clean technology to pump and refine oil into gas is increasing.
Oil and gas are needed to run most of our economy in one form or another. People use gas and oil to heat their homes, run their cars and power their offices. Companies rely on gas and oil products to create and transport their goods. Converting any remaining refineries or pumping stations to new, cleaner technology not only increases production, but adds jobs to the economy.
With the advancement of refining procedures, cleaner burning engines and other related technologies, oil companies can now produce more environmentally-friendly products that can be used in clean energy devices
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