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

Offshore

Ensco Lost 2 Petrobras Contracts

Ensco Plc has concluded discussions with Petrobras regarding revised commercial terms with respect to some rig contracts.   Ensco 6003 and Ensco 6004 had their contracts terminated effective May 1,

Offshore Casualty: Harkand Group Collapses

As the prolonged slump in energy prices continues to drag on a number of oil and gas and maritime players, word has it that Harkand Group has succumbed, according to staff reports and a report on www.

Skandi Paraty Delivered and On-hire

Skandi Paraty, owned by Norskan Offshore Ltda, has been delivered from the yard and went on-hire on a four years contract with Petrobras.   Skandi Paraty is an AHTS,

News

Louis Dreyfus, Amaggi Hire HSBC to Sell Terminal Stake

Agricultural commodity traders Louis Dreyfus Co B.V. and Amaggi Group have hired HSBC Holdings Plc to sell part or the entire 25 percent stake they hold in a terminal at the Brazilian port of Itaqui,

GPA Will Continue Weighing Containers at No Cost to Shippers

The U.S. Coast Guard announced last week that state-calibrated scales already in use at the Port of Savannah meet a new requirement of the international Safety of Life at Sea (SOLAS) Convention.

ITIC Reports on Ship Agents' Costly Transhipment Errors

International Transport Intermediaries Club (ITIC) says it continues to deal on a regular basis with claims resulting from errors by agents involving transhipment cargoes.

Government Update

Vietnam Asks Japan for Vessels to Strengthen Coastguard

Vietnam has asked Japan to provide vessels to strengthen its coastguard, a Japanese official said on Thursday, in the latest sign of growing ties among the states locked in maritime rows with China.

FMC Chairman Applauds USCG Statement on Container Weights

Federal Maritime Commission (FMC) Chairman Mario Cordero commended the Coast Guard for issuing a bulletin last week regarding container weights that he hopes allows

OMB - Subchapter M Cleared for Publication

The Office of Management and Budget (OMB) completed its review of the draft final rule entitled Inspection of Towing Vessels, also known as "Subchapter M." The

Offshore Energy

McDermott Wins Contract in Arabian Gulf

McDermott International Inc. received three separate engineering, procurement, construction, and installation (EPCI) projects in multiple Arabian Gulf fields.   The

Offshore Casualty: Harkand Group Collapses

As the prolonged slump in energy prices continues to drag on a number of oil and gas and maritime players, word has it that Harkand Group has succumbed, according to staff reports and a report on www.

DNV GL 7 JIPs in North America

In a concerted drive to find smart solutions to safely reduce complexities and cost in the North American oil and gas industry, DNV GL is leading seven new joint

 
 
Maritime Careers / Shipboard Positions Naval Architecture Offshore Oil Pod Propulsion Port Authority Ship Electronics Ship Repair Ship Simulators Sonar Winch
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: 0.1000 sec (10 req/sec)