Ukraine's Black Sea Gas Ambitions Seen at Risk over Crimea

MarineLink.com
Friday, March 07, 2014

By Henning Gloystein, Reuters

Ukrainian plans for expanding Black Sea natural gas output have been thrown into doubt by Russia's seizure of Crimea, a region linked to most of Ukraine's offshore developments.

Past price disputes between Russia and Ukraine have led to the Russians cutting off supply, prompting Kiev to spur development of its own resources including onshore shale gas and Black Sea fields.

Ukraine failed to pay Russian gas company Gazprom $440 million by a deadline on Friday, sparking fresh concerns Gazprom could switch off supplies like it did in 2009.

Ukraine's Black Sea push has attracted energy majors as investors, including Exxon Mobil, Royal Dutch Shell , ENI and OMV.

Promising developments include the Odessa gas field where plans call for output of more than a billion cubic metres of gas by 2015.

But uncertainty clouds such plans after Russia effectively seized control of Crimea following last month's ouster of Ukraine's pro-Russian President Viktor Yanukovich.

Escalating the crisis further, Crimea's parliament, dominated by ethnic Russians, voted on Thursday to set a March 16 referendum on the region joining Russia.

Exxon Mobil has put its offshore activities in Ukraine on hold due to the circumstances, Senior Vice President Andrew Swiger told investors this week.

"Their (Ukraine's) high hopes of increasing offshore gas production may fade with the Crimea referendum," Mikhail Korchemkin at East European Gas Analysis told Reuters.

Ukraine uses more than 50 billion cubic metres of gas a year, worth around $20 billion at current European market prices, with more than half of it coming from Russia.

European Union countries also receive Russian gas piped via Ukraine and were impacted by the shutting off of supplies in 2009.

As Ukraine is a member of the EU's energy community, the European Commission also supports Kiev's efforts to develop its fuel resources and storage.

In the event Crimea does join Russia, analysts said Ukraine's Black Sea gas could end up in Russian hands though be connected to Ukraine's gas infrastructure. They say Ukraine would then likely cut off supplies to Crimea.

That in turn could prompt Russia to use the Odessa field and other Ukrainian developments in the Black Sea to supply Crimea, they said.

"Taking into consideration all logistics ...it is hard to predict how Crimea can live without normal relationships and connections with Ukraine," said Arthur Nitsevych, a partner at Interlegal, a Ukraine-based transport and shipping law firm.

(Additional reporting by Jonathan Saul and Oleg Vukmanovic; editing by Jason Neely)

Maritime Reporter March 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

China Unveils Action Plan on Maritime Silk Road

China has unveiled the principles, framework, and cooperation priorities and mechanisms in its Maritime Silk Road initiative in a bid to enhance regional connectivity

JV Wins $2bln Freeport LNG Contract in US

A joint venture (JV) between CB&I, Chiyoda International and Zachry Industrial has won a contract worth over $2bn from FLNG Liquefaction 3 for a liquefied natural

Feds Delay LNG’s Port Ambrose Application

The US Coast Guard and the US Maritime Administration (MARAD) have temporarily suspended their review of the proposed Port Ambrose deep-water LNG import terminal.

Energy

USA Urged Not to Delay Arctic Drilling

The U.S. should immediately begin a push to exploit its enormous trove of oil in the Arctic waters off of Alaska, or risk a renewed reliance on imported oil in the future, reports AP.

Feds Delay LNG’s Port Ambrose Application

The US Coast Guard and the US Maritime Administration (MARAD) have temporarily suspended their review of the proposed Port Ambrose deep-water LNG import terminal.

Austal Graduates 48 4-Yr Apprentices

Austal USA combined two classes to graduate a total of 48 members of Austal’s cutting-edge four-year apprenticeship program yesterday at a formal ceremony held at the Arthur R.

News

Gulf Bridge Express Service to End

The Gulf Bridge Express Service will shortly be terminated with the last roundtrip voyage being MV Saint Nikolaos voyage 00008S, ETA New Orleans on April 22, 2015.

Obangame Express 2015 Concludes in the Gulf of Guinea

Maritime forces from Gulf of Guinea nations, Europe, South America, and the United States and several regional and international organizations concluded the multinational maritime exercise,

Scandlines Ferry Back in Service by End June

The damaged Scandlines ferry M/V Prinsesse Benedikte is being repaired at the Polish shipyard Remontowa and is expected to be ready before the end of June 2015.

Government Update

Obangame Express 2015 Concludes in the Gulf of Guinea

Maritime forces from Gulf of Guinea nations, Europe, South America, and the United States and several regional and international organizations concluded the multinational maritime exercise,

Greece Will Sell Piraeus Port Stake in Weeks

The Greek government will sell its majority stake in the port of Piraeus within weeks, the country's deputy prime minister told China's official Xinhua news agency,

China Maritime Silk Road to Touch India for Namesake

Chinese officials on Saturday fleshed out some details for the country's ambitious 21st Century Maritime Silk Road (MSR) project in its “one belt, one road,” action plan.

Offshore Energy

Nations Convene for Arctic Maritime Discussion

Citing an increasing need to ensure safety, security and stewardship of Arctic waters, member countries of the Arctic Council gathered at U.S. Coast Guard Headquarters

Advanced Drillships a Burden for Owners as Business Slows

Not so long ago, advanced drillships costing more than half a billion dollars each and capable of operating in ever-deeper waters practically guaranteed big profits for oil-rig operators.

Russia May Allow More Firms to Offshore Oil

Russia may allow more oil companies to access its offshore projects, Energy Minister Alexander Novak said on Friday.   "In general, the access can be extended," Novak told reporters in Moscow.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Navigation Offshore Oil Pipelines Salvage Ship Repair Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1337 sec (7 req/sec)