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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter January 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

News

Innovative Equipment Will Help Unload Listing Ship

Following Smit Salvage’s salvage of the stricken ship Modern Express in the Gulf of Biscay, another Rotterdam company has now become involved in the rescue operations.

Sea IT, Veritas Tankers Ink Long-term Software Deal

Sea IT has entered a long term ICT agreement with Veritas Tankers. The agreement comprises installation of BlueCORE Generation 4, an ICT platform specifically developed for the marine industry,

Interior Facelift for Queen Mary 2

Cunard’s luxurious flagship, the iconic 2,620 passenger ocean liner Queen Mary 2, will undergo an interior refit at the hands of McCue Marine during a 25-day multimillion-pound

Government Update

NATO Launches Sea Mission Against People-Smugglers

NATO, EU mission to help target traffickers in Aegean Sea. NATO ships are on their way to the Aegean Sea to help Turkey and Greece crack down on criminal networks smuggling refugees into Europe,

Greeks at Frontline of Migrant Crisis Angry at EU Critics

ABOARD THE AGIOS EFSTRATIOS, Aegean Sea, Feb 11: Greek Captain Argyris Frangoulis lifts his binoculars and with eyes fixed on the Aegean Sea horizon, steers his

Liberia to Receive Preferential Flag Status with Respect to Chinese Tonnage Dues

Pursuant to the Maritime Transport Agreement signed between the Republic of Liberia and the People’s Republic of China on 3 November 2015, Liberia will be added

Offshore Energy

Neptune Awarded Kitan Contract

Neptune has been awarded an air diving services contract by Technip Oceania Pty Ltd (“Technip”) for the Kitan disconnection project. The project is offshore

SBM Offshore: US Authorities Reopen Corruption Probe

SBM Offshore, the world's top oil production ship leasing company, said on Wednesday that U.S. authorities had re-opened an inquiry into bribery allegations involving the Dutch company.

FSRU Golar Tundra Sold to Golar LNG Partners

Golar LNG Limited has entered into a purchase agreement to sell the Golar Tundra, a floating storage and regasification unit (FSRU), to Golar LNG Partners LP for a sale price of $330 million.

 
 
Maritime Contracts Maritime Security Naval Architecture Offshore Oil Pipelines Port Authority Salvage Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | 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: 0.0938 sec (11 req/sec)