Results - BP’s replacement cost profit (RCP) was up 6% in the second quarter to $6.853 billion (EUR 4.366 billion), compared to $6.488 billion in the previous year, on the back of bullish oil and gas prices. RCP for the first six months of the year was $13,441 million, an increase of 23% on the previous year. RCP is calculated by taking out the effect of fluctuating prices (oil and gas).
Average UK gas market prices in the second quarter were 60.72 p/th, compared to 20.24 p/th, in the second quarter of 2007. For the first six months of 2008, the UK gas price was 56.86 p/th, up from 21.31 p/th last year. A spokesman from BP said long-term UK gas contracts out to 2015 and 2018 had a negative non-operating impact of $347 million, as they were currently priced below forward market prices.
UK gas production was down slightly from 20.71 million cubic metres/day (Mm3/d) in the second quarter of 2007, to 20.48 Mm3/day in the second-quarter of 2008.
Debt - Beltransgaz, the state gas company of Belarus, has announced it has no outstanding debts to Gazprom. “At the moment, Belarus owes no debt to Gazprom… that sums it up,” Vladimir Chekov, Beltransgaz’s spokesman said.
Gazprom has threatened to take legal action against Beltransgaz should the company fail to clear its outstanding balance after a meeting in Moscow this month. ICIS-Heren was unable to contact Gazprom to find out the level of the alleged debt. Belarus is supposed to be paying the Russians on a price formula which discounts from international prices. This year it is thought the price is at a 67% discount from that paid by Poland. Belarus was meant to be paying $128 per thousand cubic metres for Russian gas in the second quarter this year but Gazprom said it had only been paying the first quarter price of $119/Km3. It is not clear what the price Belarus is supposed to be paying at the start of the third quarter.
The country plans to import 21-22 Gm3 Russian gas in 2008 and transit around 48 Gm3 to Europe, some of it through the Yamal-Europe pipeline which then crosses Poland into Germany. At the start of 2007 Gazprom agreed to purchase 50% of Beltransgaz for $2.5 billion to be spread over four years as part of Belarus’ settlement for past gas debt.
TPA - German project company OPAL NEL Transport submitted an application this month to federal regulator BNetzA to exempt the OPAL and the NEL pipelines from TPA regulation, parent Wingas said. According to German and European energy laws, new larger infrastructure projects can be exempt, partly to minimise investment risks.
The OPAL and NEL pipelines pipelines would pick up gas from Russia in Lubmin in northeast Germany where the Nord Stream pipeline beaches. OPAL (Ostsee-Pipeline-Anbindungs-Leitung) would transport the gas 470 km to Olbernhau on the German-Czech border. The 440 km-long NEL (Norddeutsche Erdgas-Leitung) would run to Rehden in Lower Saxony.
Investment - GDF Suez, the newly merged Franco-Belgian energy group, has agreed to join forces with Greek state-owned company Depa in “the field of gas supply infrastructure, including LNG”, a GDF Suez spokeswoman confirmed to ICIS Heren. Electricity production was also mentioned, but there are neither concrete details nor a specific timeline.
“The agreement is similar to the one we signed with Bulgaria earlier this month in so far as we’re going to look at what we can do together,” she said. The Greek press mentioned plans to build an LNG terminal that would be fed with Algerian and Tunisian gas.
Imports - Total Italian gas demand fell in June for the second consecutive time following a series of previous year-on-year rises, according to the latest data published by the Italian Ministry of Economic Development (Mse).
Total consumption hit 5.14 billion cubic metres (Gm3) last month, down 3.1% from the same period last year. Imports, however, continued to increase in June, totalling 5.69 Gm3. This marked a 5% year-on-year rise. Production continued to decline last month, falling 5.9% to 764 Mm3.
All main routes, except Gries Pass, posted a year-on-year increase in imports, with the smaller sites reporting a decline.
The sharpest year-on-year rise in imports was reported at Mazara del Vallo, where Algerian gas arrives. Imports rose by 31.9% to 1.99 Gm3 last month. The border remained the largest import route.
At Tarvisio on the Austrian border, where Russian gas enters Italy through the TAG pipeline, imports rose less markedly, by 2.9% to 1.78 Gm3. Imports into Gela from Libya climbed 1.5% to 825 Mm3, while at Gries Pass on the Swiss border, volumes fell by 14% to 955 Mm3. Panigaglia, Italy’s only LNG regasification terminal, recorded a 51% fall in imports, to 89 Mm3.
During the first half of 2008, demand still rose 7.5% to 45.79 Gm3, while total import volumes for the six months rose to 40.90 Gm3, up 10.2% year-on-year. National production was down 7.4% to 4.63 Gm3.
Acquisition - Italy’s Hera Group finalised its acquisition of Megas Trade as part of its expansion strategy in surrounding regions of Emilia-Romagna in Italy this month. Based in Urbino, Megas Trade supplies gas and power to around 40,000 customers, and closed 2007 with an annual revenue of EUR 26.3 million. It sold about 78 million cubic metres of gas last year.
Megas Trade will be renamed HeraComm Marche.
Demand - Consumption of electricity in Moscow could double by 2025, according to Yvgeni Sklyarov, the head of capital city’s energy department. As a result, Moscow’s gas consumption could rise from 30 billion cubic metres (Gm³) per year to 38 Gm³ (50 Gm³ to 67.4 Gm³, including the entire Moscow region). By way of comparison, the current level of gas consumption in France is about 45 Gm³ per year.
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