WASHINGTON, April 27 (UPI) -- Gazprom is assessing how to produce and sell liquefied natural gas, which will gradually replace gas supplied through pipelines, as it evaluates how to break into the U.S. LNG market. Gazprom officials recently wrapped up a visit to the United States; the two sides looked at production technologies and supplies to the United States since the country poses one of the most promising LNG markets. U.S. gas production currently does not meet the country's demand. LNG imports to the United States have increased more than double since 2002; the United States imported almost 24 billion cubic yards in 2004. Figures from the U.S. Department of Energy forecasts that by 2010 U.S. demand will increase by several times and could amount to 67 million tons and 85 million tons in 2015 and in 2020 respectively. The United States currently has four LNG terminals with a total annual capacity of 60 billion cubic yards; plans are under way to construct an additional 10 terminals on the East and West coasts. Gazprom is actively looking for a swap agreement with the United States. Gazprom has already signed memorandums of understanding with ChevronTexaco, ConocoPhillips and ExxonMobil. Gazprom has also signed memorandums with Statoil, Hydro and Petro-Canada and has stepped up its efforts to identify markets after it starts developing the Shtokman gas condensate field on the Barents Sea shelf.
Officials from the Indonesian government and ExxonMobil met again on April 20 to discuss resolving a contractual dispute over an oil field on the Java Island. ExxonMobil purchased rights to the Cepu field from a company that was run by a son of a former Indonesian leader in 2000. Soon after the agreement was reached, ExxonMobil discovered large qualities of oil that Pertamina had failed to locate in its 30 years of exploration. Indonesian Coordinating Minister for Economy Aburizal Bakrie said that he hopes the two parties could reach the multi-billion dollar agreement by May 20. Since Susilo Bambang Yudhoyono has assumed the presidency in October, he has called for the two sides to settle the dispute and has assured President George W. Bush during a meeting in November that he would seek an immediate resolution. Yudhoyono expects that the United States will increase investment in Indonesia. ExxonMobil has confirmed that development of Blok Cepu would increase the country's production by some 20 percent.
The black market for oil in Iraq continues to pose many challenges for the country's reconstruction efforts. Oil thieves exhaust some 5-10 percent of Iraqi oil imports, according to Diya al-Bakka, director general of the State Organization for Marketing Oil (SOMO). Al-Bakka said on April 18: "It seems that there is an implicit alliance between the smuggling and sabotage forces aimed at increasing the rates of exhaustion of the state resources. The smuggling and sabotage operations, among other factors, have hindered the Iraqi plans to rehabilitate and modernize the oil sector in a way that would allow us to reach a ceiling of production of 6 million barrels a day by 2010."
After nearly two decades, the Chernobyl syndrome is fading, according to Alexander Rumyantsev, chief of the Russian Federal Nuclear Power Agency. Following the infamous Chernobyl nuclear power accident, the development of global nuclear power was thwarted. Rumyantsev said on Tuesday that the Chernobyl nuclear accident dampened any plans Europe may have had in constructing nuclear power reactors and other nuclear power plants currently under construction froze. Rumyantsev added that a there is a referendum to construct a new nuclear reactor at a local nuclear power plant in Finland. The United States and a number of countries in Southeast Asia are also looking into plans to construct new nuclear reactors. Russia currently has over 10 operating nuclear reactors similar to the ones operated at Chernobyl. Rumyantsev has emphasized that a number of routine technical procedures and organizational measures have assisted in improving safety standards at such facilities.
Russia began testing the new Fesco-Sakhalin icebreaker, which belongs to the Far Eastern Shipping Company, in the Gulf of Finland. The company has designed the Icebreaker to service oil and gas drilling installations in open-ice conditions. The icebreaker's propulsion system is unique; it is equipped with electric engines of a new type that were never utilized in icebreakers before. The engines ensure the vessel's high maneuverability and speed.
Georgia plans to secure revenue from gas transit from the pipeline passing through its territory and has no plans to sell the trunk pipeline, according to Georgian Prime Minister Zurab Noghaideli. Georgia had reached a $40 million agreement to repair the pipeline. Noghaideli said: "We have money to repair the gas trunk pipeline so that it is in normal working order. For the time being it is better for us to concentrate on repairing the pipeline so that gas can be supplied to Armenia and Georgia and so that instead of receiving a one-off payment from the sale of the pipeline, we receive income from transit through the pipeline. In the future we will receive 10 percent of the gas passing through the pipeline as a transit fee. It is very important to us. For example, this year we received 196 million cubic yards of gas as a transit fee and that is a lot for us." Georgia is also considering transit of Russian gas to Armenia. Noghaideli added: "We will never create barriers to the transit of gas from Russia to Armenia along this pipeline and we will not, of course, create any problems. Gas from Russia goes to Turkey via a different route, through the Blue Stream pipeline, so for the moment we need to concentrate on repairing the gas trunk pipeline for the needs of Georgia and Armenia."
Closing oil prices, Apr. 27, 3 p.m. London
Brent crude oil: $52.96
West Texas intermediate crude oil: $53.99
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