A Review of the Nigerian Energy Industry

Gas not hit by Russia sanctions

gas-pipeline04 August 2014, News Wires –   Austria’s OMV has said it has not been affected by the latest sanctions imposed on Russia over the crisis in Ukraine, and that talks are continuing on getting the EU’s approval for the South Stream gas pipeline.

Speaking to reporters in Vienna, chief executive Gerhard Roiss said: “We are not affected by sanctions and that is reasonable. Gas cannot be allowed to become a political football.”

The EU and US announced its toughest sanctions yet against Russia last week, targeting its energy, banking and defence sectors, while avoiding any move against the Russian gas exports that supply 40% of the EU’s gas needs.

Roiss said he did not expect gas prices to rise given its long-term contracts with Russian supplier Gazprom, adding that the Austrian company continued to get gas via Ukraine without disruption.

“I spoke to Gazprom on Friday. They are dealing intensely with how they can supply Europe with gas in the crisis,” he was quoted by Reuters as saying.

“Ukraine is not taking anything out. We get a daily report and so far the exact amount arrived as it should. There are no supply interruptions.”

He added that OMV’s Austrian gas storage, now 84% full, should be completely topped up by the end of September.

OMV is expecting lengthy talks with the European Commission on gaining approval for the stalled South Stream gas pipeline project led by Gazprom that aims to supply south-eastern and central European gas markets without passing through Ukraine.

OMV teamed up with Gazprom for South Stream last year after its Nabucco West project lost out to the Trans Adriatic Pipeline in the race to take volumes from BP’s Shah Deniz II giant field in Azerbaijan to European markets.

“We are negotiating with Brussels. This will not be a matter of months (but will) probably take longer. Now a new commission is coming and then we will see how it goes,” he said, referring to the new 28-member commission that is due to take office on 1 November following May’s European elections.

Earlier this year the European Commission said that the $40 billion pipeline project did not comply with European rules, placing questions over the bilateral deals reached between Gazprom and the calling points of the pipeline as well as the extent of third-party access to the pipeline.

It has also adopted an energy security policy that recommends reducing the union’s reliance on Russian gas.

The route travels from Russia, under the Black Sea and then through Bulgaria, Serbia, Hungary and Slovenia to Austria. Another branch may be built to Italy.

Gazprom’s partners for the offshore part of the project are Italy’s Eni, Germany’s Wintershall and France’s EDF.


– Upstream

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