The European Geopolitical Forum
Transcription
The European Geopolitical Forum
The European Geopolitical Forum www.gpf-europe.com EGF Gazprom Monitor Issue 45: Feb. 2015 A Snapshot of Key Developments in the External Relations of the Russian Gas Sector By Dr Jack Sharples, EGF Associate Researcher on the external dimensions of Russian gas and Lecturer in Energy Politics at the European University of St Petersburg Key points: Gazprom and the EU: European Commission could present the results of its antimonopoly investigation into Gazprom ‘in a matter of weeks’ Turkish Stream: Gazprom CEO and Turkish Minister of Energy and Natural Resources visit intended ‘Turkish Stream’ pipeline route; Turkish Botaş receives 10 percent discount on gas imports from Gazprom; Turkish Stream: Pro et Contra Ukraine: The ‘winter package’; A new dispute over gas supplies to the Donbass; Gazprom awaits advance payments for March gas supplies as time runs out on the ‘winter package’ Belarus: Gazprom Transgaz Belarus named ‘top taxpayer’ in Belarus; Belarus settles payments for Russian gas in roubles; Gazprom to invest in Belarusian gas transmission and gas storage China: Gazprom seeks Asian investment and loans, receives top credit rating from Chinese agency; Gazprom promises exports to China still on schedule EGF Gazprom Monitor www.gpf-europe.com Gazprom and the EU Czech Republic (RWE Transgas, Vemex), Slovakia European Commission could present the results of its antimonopoly investigation into Gazprom ‘in a matter Gaze), Lithuania (Lietvos Dujos), Estonia (Eesti Gaas), and Bulgaria (Bulgargas, Bulgartransgas, Overgas). of weeks’ Key figures from the European Commission have suggested that EU investigators are moving closer to presenting (SPP), Hungary (E.ON Magyarorszag), Latvia (Latvijas the results of their antimonopoly investigation into Gazprom, which could have a significant impact on Gazprom’s commercial strategy A year later, in the beginning of September 2012, European Commission antitrust investigators formally launched their investigation of Gazprom, with the company suspected of breaching Articles 101 (restriction of competition) and 102 (abuse of dominant position) of the Treaty on the Functioning of in the EU gas market. the EU (TFEU). According to European Commission In an interview with the Wall Street Journal on the 17th of February, the EU Competition Commissioner, sources, Gazprom is suspected of three specific sets of anti-competitive practices: Margrethe Vestager, stated: I think we can move the case forward in a hopefully relatively short time span… It’s very important for me to make sure that any company in the European market is being faced with the same set of rules and the same effort of enforcement. First, Gazprom may have divided gas markets by hindering the free flow of gas across Member States. Second, Gazprom may have prevented the diversification of gas supplies by importing states. A week later, the European Commission Vice- Third, Gazprom may have imposed unfair prices President for Energy Union, Maroš Šefčovič, hosted a on its customers by linking the price of gas to oil press conference for the launch of the EU ‘Energy prices. Union’ project. When asked about the European Between October 2013 and early 2014, a series of Commission into meetings and negotiations took place between the Gazprom, Šefčovič replied that the responsibility for Gazprom CEO, Alexei Miller, the Russian Energy the case lay with Vestager, adding: “It is her decision Minister, Alexander Novak, the (then) EU Competition when she will present the results of the investigation. Commissioner, Joaquin Almunia, and the (then) EU I understand it is a matter of weeks”. Energy Commissioner, Günther Oettinger. In February The investigation began in September 2011, when 2014, Almunia announced that progress had been European Commission antitrust investigators raided made on Gazprom’s use of destination clauses that the offices of energy companies in ten EU Member prevent the re-export of imported Russian gas, thus States, amid concerns over their contractual relations hindering the free flow of gas across Europe. Progress with Gazprom. The states under investigation include was also reportedly made on clauses in Gazprom’s Germany (E.ON, RWE, Gazprom Germania), Austria contracts that squeeze out competitors (OMV, Econgas), Poland (PGNiG, TSO Gaz-System), the preventing diversification of imports), which suggests antimonopoly investigation (thus Issue 45: Feb. 2015 - Page 2 of 8 EGF Gazprom Monitor www.gpf-europe.com negotiation over Gazprom’s ownership of pipeline roubles, with rouble-dollar exchange rate of 30-33 infrastructure, questions of Third Party Access to that roubles to $1, giving a turnover of $139-153bn. If the infrastructure, and the ‘take or pay’ clauses in fine were based on 2013 financial data, Gazprom Gazprom’s contracts. could be faced with a fine of $13.9-15.3bn. Gazprom However, the issue of gas pricing remained a major concern. In a statement, Almunia explained; “We have received good comments on two of the three concerns that can give way to formal commitments, but on prices we have not yet received what we need”. Negotiations came to a halt following Russia’s has not yet released its financial data for the full calendar year of 2014, and the dramatic shift in the value of the Russian rouble will undoubtedly have an impact on Gazprom’s turnover, so the measurement of Gazprom’s 2014 turnover in dollars or euros is thus far unclear. annexation of Crimea and the eruption of armed conflict in Eastern Ukraine. It is important to note that oil-indexed gas prices are not, in and of themselves, illegal. Indeed, oilindexation was the industry standard until the shift to spot prices in recent years. Rather, the issue is whether Gazprom used oil-indexed pricing as a means of price discrimination between companies in different EU member states, for example, by charging higher prices to energy companies in some EU member states and lower prices to companies in other EU member states. When the European Commission publishes the results of its investigation, it will do so in the form of a ‘statement of objections’. This is the document in which the European Commission informs the parties concerned (in this case, Gazprom) of the objections raised against them. The party will then have a chance to respond before the Commission makes a decision on whether the party is in breach of European antitrust rules. Turkish Stream Gazprom CEO and Turkish Minister of Energy and Natural Resources visit intended ‘Turkish Stream’ pipeline route On the 7th of February, the Gazprom CEO, Alexei Miller, and the Turkish Minister of Energy and Natural Resources, Taner Yildiz, took a helicopter flight to examine the proposed route of the ‘Turkish Stream’ pipeline. As reported in last month’s Gazprom Monitor, and illustrated in the map included on the final page of this month’s edition, the proposed route will follow much of South Stream’s intended route across the floor of the Black Sea. At the point where South Stream was planned to enter Bulgaria’s exclusive economic zone, the Turkish Stream pipeline is planned to continue on and make landfall at Kiyikoy, on the Turkish coast. From there, Gazprom plans that the onshore section of the pipeline will continue west via Luleburgaz to Ipsala. Ipsala is intended as the delivery The standard financial penalty for anticompetitive practices is 10 percent of the company’s annual point, from which gas supplies will be delivered on across the Turkish-Greek border. turnover. In 2013, Gazprom’s turnover was 4.6 trillion Issue 45: Feb. 2015 - Page 3 of 8 EGF Gazprom Monitor www.gpf-europe.com Following Mr Miller’s visit to Turkey, Gazprom Thirdly, the Turkish Stream pipeline does not involve announced that “In the near future a permit is to be Gazprom constructing pipelines on EU territory, thus obtained for conducting FEED [Front-End Engineering avoiding the regulatory issues which plagued South and Design] operations for the new Turkish offshore Stream – namely, Gazprom’s reluctance to provide section”, signalling the advancement of the project third party access to South Stream’s onshore sections towards the construction phase. in the EU, in line with current EU gas market legislation. Turkish Stream: Pro et Contra However, the Turkish Stream project faces several serious obstacles. The first is that Gazprom’s existing The ‘Turkish Stream’ project (and its proposed imminent implementation) is attractive to Gazprom for several reasons. Firstly, it will allow Gazprom to recoup some of its expenditure on South Stream. Gazprom has already invested significant sums in developing the onshore (Russian) sections of South Stream – referred to as Russia’s own ‘Southern Corridor’. Gazprom had already purchased enough contracts specify delivery points which may only be reached using Ukrainian gas transit – European energy companies may not be willing to change where they receive deliveries. As the European Commission VicePresident for Energy Union, Maroš Šefčovič, noted: “there are very clear [contractual] articles about the place of delivery and this is not the Greek-Turkish border”. steel pipes for at least one of the offshore lines of South Stream, and is currently paying for the storage of those pipes in the Bulgarian port of Varna. Finally, Gazprom has a contract with the Italian company, Saipem, for the laying of pipeline on the bed of the The second problem is the lack of cross-border connections for bringing gas from the Greek-Turkish border to the intended customers in South-East and Central Europe. Black Sea. If that contract is not utilised for the If the primary purpose of Turkish Stream is to replace construction of Turkish Stream, EU sanctions could gas transit via Ukraine, then it is worth noting that in make it very difficult to secure a new pipe-laying 2013 the transit of Russian gas via Ukraine was 82.3 contract at a later date. bcm, including 12.8 bcm delivered to Turkey and 69.5 Secondly, the Turkish Stream pipeline is intended to bcm delivered to other European countries. reduce dependence on gas transit via Ukraine for gas Bulgaria and Romania could be served by reversing deliveries to Turkey. Gazprom exports approximately the ‘Trans-Balkan’ pipeline, which delivered 19.5 bcm 26-27 bcm per year to Turkey, of which approximately of Russian gas to Romania, Bulgaria, and Turkey via 12-15 bcm per year is delivered via Ukraine and the Ukraine in 2013. If gas deliveries to Poland (3.8 bcm in remainder is delivered directly to Turkey using the 2013) are also discounted, this leaves 59.0 bcm of Blue Stream pipeline. One line of the ‘Turkish Stream’ Russian gas deliveries to Europe via Ukraine, of which pipeline would entirely remove Ukrainian gas transit 30.2 bcm was delivered to Northern Italy and 28.8 from Russian gas deliveries to Turkey. bcm was delivered to Slovakia, Czech Republic, Issue 45: Feb. 2015 - Page 4 of 8 EGF Gazprom Monitor www.gpf-europe.com Austria, Slovenia, Croatia, Bosnia & Hercegovina, Hungary, Serbia, FYR Macedonia, and Greece1. However, the South – to – North gas pipeline infrastructure to deliver gas from Greece to these target markets simply does not exist. Even if European energy companies in these target markets were willing to change their delivery points, there is currently no way for Russian gas to be physically delivered from the Greek-Turkish border to the markets of Central Europe. Therefore, the success of Turkish Stream (besides gas deliveries to Turkey and Gazprom and Ukraine The ‘winter package’ In accordance with the ‘Winter Package’ agreed on the 30th of October 2014, Naftogaz is to pay in advance for gas supplies from Gazprom. During January, Naftogaz imported 0.9 bcm of gas from Gazprom, for which it paid in advance. On the 3rd of February, it was announced that Naftogaz had paid $107m for 0.7 bcm of gas supplies at a price of $329 per thousand cubic metres, to be delivered during February. Greece), depends on European energy companies constructing new pipelines and cross-border interconnections solely for the purpose of receiving A new dispute over gas supplies to the Donbass Russian gas volumes, which they currently receive via For 24 hours, between the 18th and 19th of February, Ukraine. The construction of such new pipeline Naftogaz suspended gas supplies to the conflict infrastructure is something which Gazprom surely regions of Donetsk and Lugansk in Eastern Ukraine cannot take for granted. (collectively referred to as the ‘Donbass’ region), citing damage to pipeline infrastructure caused by the Turkish Botaş receives 10 percent discount on gas imports from Gazprom conflict. From the 20th of February, Gazprom began supplying these regions directly, stating that it would subtract the delivery volumes from the ‘balance’ for In an announcement that is probably not unconnected which Naftogaz had paid in advance. From the 22nd to to the recent Gazprom-Turkey negotiations over the the 25th of February, Naftogaz claimed that Gazprom Turkish Stream pipeline, the Turkish Energy Minister, Taner Yildiz, confirmed that the Turkish state-owned energy company, Botaş, has received a 10 percent discount from Gazprom, bringing the price down to $332 per thousand cubic metres. Gazprom Export confirmed that negotiations had resulted in a ‘win- was only delivering 34-40 percent of the agreed supplies. Gazprom replied that gas delivered to Donetsk and Lugansk was to be counted as part of Naftogaz’s overall imports from Gazprom – if volumes delivered to these regions were included, then Gazprom was fulfilling its obligations. win’ result for the two parties, but declined to give concrete details. Naftogaz then responded with the claim that this was a breach of the interim agreement, which granted Naftogaz, not Gazprom, the right to determine the _____________________ 1 border crossings at which Russian gas is delivered to All data taken from ‘IEA Gas Trade Flows in Europe’ Issue 45: Feb. 2015 - Page 5 of 8 EGF Gazprom Monitor www.gpf-europe.com Ukraine. Naftogaz then announced that it would make although such a payment is expected. no further advance payments until Gazprom proves In a press release following the meeting on the 2nd of itself willing to supply gas in accordance with the terms of the interim agreement. The dispute quickly escalated, with Gazprom warning that if further prepayment was not forthcoming from Naftogaz, then the ‘balance’ would be used in the coming days, and that supplies would then be cut off. However, on the 26 th of February, Gazprom spokesman, Sergei Kupriyanov, announced: "We are ready at the moment to exclude our gas supplies to Donbass from our discussions (with Ukraine)". March, Šefčovič proposed another trilateral meeting before the end of March. The two sides now have just four weeks until the expiry of the ‘winter package’. If no new agreement is reached at that point, the previous contractual provisions will apply: Gazprom will only supply gas for which Naftogaz has pre-paid (a regime in place since June 2014), while the ‘winter discount’ will be removed and the price will rise by $100 per thousand cubic metres. The supply and transit contract is valid until 2019, although it could be The short-lived dispute was then resolved at a revised following the outcome of the Gazprom- tripartite meeting of the Russian Energy Minister, Naftogaz arbitration tribunal, with the results of that Alexander Novak, the Ukrainian Energy Minister, case not expected until 2016. Volodymyr Demchyshyn, the Naftogaz CEO, Andriy Kobolyev, Ukraine, and the European Commission Vice-President on Energy Union, Maroš Šefčovič, in Gazprom and Belarus Brussels on the 2nd of March. At that meeting, the Gazprom Transgaz Belarus named ‘top taxpayer’ in parties agreed that only gas delivered to the agreed Belarus border crossings would be deducted from Naftogaz’s The Belarusian Ministry of Taxes and Duties has prepaid balance. announced that Gazprom Transgaz Belarus was the However, the question of who will be responsible for, largest taxpayer in Belarus in 2014, accounting for and pay for, gas supplies to the Donbass region was 4.9% of the total budget tax revenues in 2014. not made clear. Reports speculate that a ‘Transnistria’ situation could emerge: Gazprom could provide gas to the Donbass region ‘for free’, but actually chalk up the Belarus settles payments for Russian gas in roubles debt to Naftogaz, just as Gazprom supplies Moldova’s The Head of Financial and Economic Department of breakaway region of Transnistria. Gazprom, Andrey Kruglov, has announced that since the end of 2014, Belarus has been making its payments for gas supplies in Russian roubles, rather Gazprom awaits advance payments for March gas than US dollars. In light of the falling value of the supplies as time runs out on the ‘winter package’ rouble in relation to the dollar, this amounts to a Furthermore, by the 4th of March, Naftogaz had not significant discount for Belarus, in comparison with yet made a pre-payment for March gas supplies, Issue 45: Feb. 2015 - Page 6 of 8 EGF Gazprom Monitor other European importers of Russian gas. Belarus imported 20 bcm of Russian gas in 2014. Gazprom’s gas imports and gas transmission are controlled by Gazprom Transgaz Belarus – a whollyowned subsidiary of Gazprom. The price at which www.gpf-europe.com and Economic Department of Gazprom, Andrey Kruglov. He also confirmed that Gazprom is currently negotiating long-term loans with several Asian banks, noting, “When it comes to Chinese banks, we may announce good news in the near future”. Gazprom exports gas to Russia is equal to the price of In a related development, the Chinese independent gas for domestic consumers in Russia’s Yamal-Nenets ratings company, Dagong Global Credit Rating region, plus the costs of transmission, storage, and Company, granted Gazprom an ‘AAA’ (outlook: stable) marketing. This means that, in effect, Belarus benefits rating at the beginning of February, in contrast to its from gas prices equal to domestic Russian consumers. current ratings from Standard & Poor’s (BB+) and Fitch (BBB-), which offer the outlook of ‘negative’. Moody’s downgraded Gazprom from ‘negative’ (Baa3) Gazprom to invest in Belarusian gas transmission and gas storage to ‘speculative’ (Ba1) on the 26th of February. The positive outlook from Dagong is a boost for Gazprom, Reports suggest that Gazprom is making plans to at a time when it is seeking to attract investment and invest $2-2.5bn in increasing Belarus’ gas transmission loans from Asia. However, the granting of a rating that capacity and a further $1-1.1bn in increasing Belarus’ is so out of line with those given by other ratings gas storage capacity by 2020. Gazprom has yet to agencies suggests that the Dagong rating may be confirm details of its plans, but it is expected that the politically-motivated, to allow Chinese companies to move is part of Gazprom’s broader plan to increase invest in Gazprom projects, as part of Gazprom’s ties gas transport and storage capacity outside Ukraine, with the China National Petroleum Corporation for the delivery of gas to Europe. (CNPC) and the Russia-China ‘strategic partnership’ more generally. Gazprom in Asia Gazprom seeks Asian investment and loans, receives Gazprom promises exports to China still on schedule top credit rating from Chinese agency In early February, the Deputy Chairman of Gazprom In the beginning of February, Gazprom held its first (and former Director of Gazprom Export), Alexander ‘Investor Days’ in Asia. On the 3rd of February, Medvedev, issued assurances that Gazprom is still on Gazprom held an event in Hong Kong, and on the 5th schedule regarding the development of gas exports to of February, an event in Singapore. China, and that the project will not be delayed by Gazprom was listed on the Singapore Stock Exchange in 2014, and is now seeking a listing on the Hong Kong Stock Exchange, according to the Head of Financial falling international oil and gas prices: “Regarding the Chinese contract, no postponements are envisaged, and the contract’s safety margin is sufficient to work calmly and confidently”. Issue 45: Feb. 2015 - Page 7 of 8 The European Geopolitical Forum www.gpf-europe.com EGF Gazprom Monitor Issue 45: Feb. 2015 Map of proposed ‘Turkish Stream’ pipeline to replace ‘South Stream’ th Source: Gazprom, 2015. Alexey Miller and Taner Yildiz overfly intended route of onshore gas pipeline [press release], 7 th February. Available at: http://www.gazprom.com/press/news/2015/february/article217568/ [Accessed 4 March 2015] Disclaimer The information presented in this report is believed to be correct at the time of publication. Please note that the contents of the report are based on materials gathered in good faith from both primary and secondary sources, the accuracy of which we are not always in a position to guarantee. EGF does not accept any liability for subsequent actions taken by third parties based on any of the information provided in our reports, if such information may subsequently be proven to be inaccurate. EGF Gazprom Monitor Published by European Geopolitical Forum SPRL Copyright European Geopolitical Forum SPRL Director and Founder: Dr Marat Terterov Email: [email protected] Avenue Du Manoir D’Anjou 8 Brussels 1150 Belgium Tel: +32 496 45 40 49 [email protected] www.gpf-europe.com www.gpf-europe.ru Issue 45: Feb. 2015 - Page 8 of 8