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 October 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Energy

EU Regs on Ship CO2 Reporting Complicates IMO Agreement

ICS Concerned that EU will Preempt IMO CO2 Negotiations.   The global trade association for shipowners – the International Chamber of Shipping (ICS) – is disappointed

Asia VLCC Rates Could Could Climb Even More

Owners see rates climb by nearly $22,000 per day; Rates could peak as more tonnage comes free. Rates for very large crude carriers (VLCCs) on key Asian routes

New Players in Singapore Markets in OW's Absence

The downfall of a leading marine fuel supplier that prompted sellers to tighten credit terms in Singapore is skewing the post-OW Bunker jostle for market share

News

EU Regs on Ship CO2 Reporting Complicates IMO Agreement

ICS Concerned that EU will Preempt IMO CO2 Negotiations.   The global trade association for shipowners – the International Chamber of Shipping (ICS) – is disappointed

World’s Largest Boxship is DNV GL classed

CSCL Globe, the world’s largest containership and the first of a series of five 19,100 TEU containerships ordered by China Shipping Container Lines (CSCL) in 2013,

New Players in Singapore Markets in OW's Absence

The downfall of a leading marine fuel supplier that prompted sellers to tighten credit terms in Singapore is skewing the post-OW Bunker jostle for market share

Government Update

EU Regs on Ship CO2 Reporting Complicates IMO Agreement

ICS Concerned that EU will Preempt IMO CO2 Negotiations.   The global trade association for shipowners – the International Chamber of Shipping (ICS) – is disappointed

NATO Unconcerned by Russian Warships in English Channel

A squadron of Russian warships entered the English Channel on Friday but a NATO official dismissed a Russian media report that they were there to conduct military exercises.

Japan Military Wants China "Crisis Management" Pact

Japan's highest-ranking military officer on Friday urged an early start to a "crisis management" mechanism with China amid conflicting claims to a group of tiny East China Sea islands.

Offshore Energy

Japan Military Wants China "Crisis Management" Pact

Japan's highest-ranking military officer on Friday urged an early start to a "crisis management" mechanism with China amid conflicting claims to a group of tiny East China Sea islands.

Wärtsilä Integrated Solutions for Maersk's AHTS Vessels

A new series of six Anchor Handling Tug Supply vessels to be built at the Kleven Verft AS in Norway for the Danish based Maersk Supply Service A/S - part of the A.

Drillsearch Discovers Gas at Varanus South-1

Drillsearch Energy Limited announced a new wet gas discovery on the Western Cooper Wet Gas Fairway of the Cooper Basin. The Varanus South-1 well in PEL 513 (Drillsearch

 
 
Maritime Standards Naval Architecture Offshore Oil Pipelines Pod Propulsion Port Authority Ship Electronics Shipbuilding / Vessel Construction Sonar Winch
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: 0.3201 sec (3 req/sec)