Energy Sector - 2

Naresh · 11-30-2006, 03:12 AM

[center]This Oil Reserve Is 8 Times Bigger Than Saudi Arabiaâs[/center]

Some optimists believe the spike in oil prices we've seen over the last three years is merely temporary.

T. Boone Pickens isn't one of them.

The long-time oilman and current chairman of BP Capital Management was recently asked in a 60 Minutes interview when he thought we'd see $1.50 a gallon at the pump again.

"We won't ever see $1.50 a gallon again," said Pickens. "No, that's gone."

It's tough to disagree. On the demand side, citizens of the wealthy West aren't using any less oil, nor are the up-and-coming Tigers of the East.

On the supply side, just look at many of the world's biggest exporters: Iran, Nigeria, Venezuela, Saudi Arabia, and Russia. It's a virtual rogues' gallery, filled with nations that represent tyranny, corruption or instability.

Fortunately, the world's single-largest oil deposit sits right here in North America. Time magazine calls it "Canada's biggest buried treasure." It's an area with up to 2.5 trillion barrels of oil, locked in Alberta sand. That's eight times the total reserves of Saudi Arabia, enough to satisfy the world's demand for petroleum for the next century.

This is easily the worldâs most exciting energy story.

And one publicly traded company is supremely positioned to earn billions from this region in the months ahead.

The Competition For Oil Is Heating Up

In August, the International Energy Agency (IEA) revised upwards its estimate of world oil demand, squashing hopes that a significant decline in oil prices is imminent.

Demand growth this year is running at its fastest level in 24 years. Last year, world oil use was estimated at 82.6 million barrels a day. The U.S. burns a quarter of that. But competition for oil is heating up.

Emerging markets -- and particularly giants like China and India - are rapidly industrializing.

According to the U.S. Energy Information Agency, world demand for oil is expected to increase 54% over the next 25 years.

Unfortunately, American oil production has been on the downswing since 1970. And many of the world's major oil suppliers are either indifferent or downright hostile to U.S. interests. Where can Americans look for a steady, reliable source of black gold?

How about 900 miles north of Montana, in Alberta, Canada?

Jed Clampett Never Imagined...

Alberta's oil sands are the largest known reserve of oil on earth, containing between 1.7 and 2.5 trillion barrels. (Saudi Arabia, by comparison, has only 262 billion barrels of proven reserves. In fact, all OPEC nations combined have less than 900 billion barrels.)

For decades, these sands weren't even considered part of the world's oil reserves because the oil there wasn't economically extractible at prevailing prices using then-current technology.

But times have changed... And the gold rush is on.

In Alberta's oil sands, energy companies don't drill for oil. They dig it up. After excavation, giant trucks three stories high - carrying up to 400 tons of oil sands - carry it off to a processing plant. There, the sands are heated in a cell where the oil comes to the top of the water and the sand drops to the bottom.

This oil froth is then sent to an upgrader and eventually to a refiner.

Is this oil really as good as the stuff coming from Saudi Arabia?

Actually, it's better. According to Clive Matter, chief of Shell Canada, this oil is "absolutely as good as it gets. In fact, it even trades at a premium because it's high-quality crude oil."

Already a million barrels a day are coming out of the oil sands. And oil production is expected to triple within a decade. By that time it will be the single-largest source of foreign oil for the U.S. - even bigger than Saudi Arabia, which is currently sending us a million and a half barrels a day.

And hereâs the kicker: Exploration of Albertaâs oil sands is virtually risk-free. You canât drill a dry hole here. Thereâs no drilling at all. Itâs a mining operation â and the reserves are thoroughly outlined. So what you really need is a company with plenty of machinery, money and manpower to dig it up and process it as quickly as possible.

Thatâs why you should own Suncor Energy (NYSE: SU).

The Blue Chip Oil Sands Play

There are dozens of small companies flocking to Alberta for a piece of the action. But in this capital intensive business, why gamble on the small fry? We suggest you opt for the undisputed blue chip play : Suncor.

Based in Calgary, Suncor is an integrated energy company. It extracts and upgrades oil through its oil sands operations near Fort McMurray, Alberta. Its operations throughout Western Canada produce natural gas. It operates a refining and marketing business in Ontario, with retail distribution under the Sunoco
brand. And it has operations in the U.S. and retails its products under the Phillips 66 brand. It also manufactures the gasoline additive ethanol.

However, the most exciting aspect of Suncorâs business is in Albertaâs oil sands, where it operates the single largest extraction operation. CEO Rick George says the mine will be in operation for at least 25 years.

And thatâs a good thing. Over the last few months, oil prices have been impacted by escalating violence in the Middle East, ongoing concerns about Iranâs nuclear program (and the possibility of sanctions), saber-rattling in Venezuela, the threat of civil war in Iraq, and explosions at a Nigerian pipeline.

The steady rise in oil prices over the past three years and the fear of potential supply disruptions have created an environment where a triple-digit oil price is hardly unimaginable.

Fortunately, Suncor is moving full speed ahead to bring its reserves to market. Production at its oil sands facility in July averaged 225,500 barrels per day. And this summer, Suncor announced it has started production at its new $108 million St. Clair ethanol plant, which will turn corn into the gasoline additive.

Earnings are already blasting higher. Second-quarter profit rose 14-fold, from $73 million last year to $1.07 billion this year. Management gives most of the credit to higher oil sands production. But there are other factors, too.

âThe refining and marketing side just left the Street in the dust,â said oil analyst Martin Molyneaux at FirstEnergy Capital in Alberta. âIt was outstanding results.â

But the company is just gathering momentum. Suncor plans to spend $3.2 billion to boost daily output from the oil sands to about 350,000 barrels by 2008.
Increased production is lowering per-barrel operating costs, as well.

Costs are also falling because of lower natural gas prices. (Natural gas is used to help process oil sands into oil.)

And, bear in mind, oil sands excavation is not the only thing the company is doing to meet rising energy demands.

Suncor has been blending ethanol into its Sunoco-brand gasoline for 10 years now. Its Ontario plant will produce 53 million gallons of ethanol a year, making the plant the largest ethanol producer in Canada.

Ethanol and the Alberta oil sands are the two best short-term solutions we have to avoid a looming oil crisis. And Suncor is the premier play, with 87% revenue growth since last year and 20%-plus operating margins.

Given that political uncertainty in the Middle East is unlikely to change â and viable alternative energy sources are still years away â oil reserves outside the troubled region are likely to fetch a premium.

And, of course, so are shares of Suncor.

Cheers <img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' />

Naresh · 01-16-2007, 12:26 AM

[center]East coast is now world's latest hydrocarbon capital <img src='style_emoticons/<#EMO_DIR#>/clap.gif' border='0' style='vertical-align:middle' alt='clap.gif' />[/center]

India's east coast is emerging as one of the hydrocarbon hotspots in the world with 100 trillion cubic feet of gas and two billion barrels of oil in place.

The two main basins in the area -- Krishna-Godavari and Mahanadi -- have shown a potential of nearly 18 billion barrels of oil equivalent gas in place.

Recently, oil and gas discoveries in the southernmost basin in the area, the Kaveri basin, have been announced by Hardy Oil, a Canadian oil exploration company, while Oil and Natural Gas Corporation and Bharat Petroleum Corporation have chalked out extensive plans to begin drilling in the Kaveri basin.

While official sources quote a figure of 100 tcf for gas reserves in the region, unofficial estimates peg the reserves at 200 TCF. This, says a report by equity brokerage house CLSA, could put India in the league of top 10 natural gas producers in the world. <img src='style_emoticons/<#EMO_DIR#>/clap.gif' border='0' style='vertical-align:middle' alt='clap.gif' />

And these are just the finds from the pre- and early NELP (new exploration licensing policy) blocks. The big gas and oil finds in the region could well be in the ultra deep-water blocks that are just being put on the block by the Director General of Hydrocarbons, India's upstream regulator.

In the last round of NELP, the DGH had put up 24 deep-water blocks for bidding. NELP VII is likely to see more deep-water blocks put up for bidding, sources in the DGH say.

"These are ancient river systems that have been depositing sediments here for a long time. But as the basins are shallow, most sediments, and therefore hydrocarbons, would have found their way into the deep and ultra deep waters (below 400 meters depth). That is where the real potential of the region lies," said an industry analyst.

"Oil companies like Cairn, ONGC, Gujarat State Petroleum Corporation and Reliance Industries have found good working petroleum systems -- reservoir and source rocks that promise great discoveries in the coming years," he said.

Added Richard Heaton, director, exploration at Cairn India, "We were the first to find oil and gas in the deepwaters off KG and have always been upbeat on the area."

Cairn India continues to own a 10 per cent stake in the KG-DWN-98/2 block in which it farmed out to ONGC. It is from this block that ONGC's recent oil and gas discoveries have been reported.

Said Yogesh Garg, CEO of Infraline Energy, "The Indian east coast could become the Mecca for oil companies in India in the coming years. Not only do you have abundant supply of gas and possibly oil, you also have a complete set of infrastructure coming up as well as a whole lot of end-users for the gas."

Garg's reference is to the 10,000 hectare Petrochemicals and Petroleum Investment Region that is being developed by the government of Andhra Pradesh. ONGC is putting up the anchor petrochemical facility in the special investment region. The state government is in the process of identifying land for the PCPIR.

"The region could end up supplying gas to all of the southern, western and northern India," said Garg.

Cheers <img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' />

Naresh · 01-16-2007, 12:28 AM

[center]India ready to pay more for extra Iran LNG[/center]

NEW DELHI: India is willing to pay a higher price for extra quantities of liquefied natural gas from Iran if the Islamic nation honours an existing contract for five million tonnes, Oil Minister Murli Deora said on Monday.

India in June 2005 signed a deal with Iran to import 5 million tonnes of LNG annually over a 25-year period from 2009, with an option to buy an additional 2.5 million tonnes a year, to help tie up supplies for the energy-starved nation.

"We have been telling (Tehran) they should honour the first contract and then we could talk about the price," he said.

Iran in May last year told New Delhi that its Supreme Economic Council had not approved the five million tonne LNG deal, priced at $3.25 per million British thermal units, after a sharp rise in oil prices, and said it was demanding more.

Deora will be meeting his Iranian counterpart, Kazem Vaziri-Hamaneh, later this week in New Delhi.

"We are looking forward to discussing two pending matters. One is our contract with them for LNG supplies, and the second the Iran-Pakistan-India pipeline," he said.

The minister said a secretary-level trilateral meeting would take place in Tehran on Jan 20-21 to discuss the pipeline and pricing of gas to be supplied to India and Pakistan through the proposed $7-billion project.

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Naresh · 01-17-2007, 03:54 AM

[center]GSPC plans 2 LNG terminals, may spend $1.1bn[/center]

Gujarat State Petroleum Corporation (GSPC) is planning to set up two liquefied natural gas (LNG) terminals in Gujarat with an investment of $1.1 billion.

GSPC has signed an initial pact with Adani Energy, a Adani Group unit, for setting up a five million tonne per annum import and regassification terminal at Mundra port.

It has also signed a memorandum of understanding with Essar Energy, a unit of Mumbai-based Essar Group, for a similar facility at Pipavav.

Company officials said the agreements were only a statement of intent for going ahead with the project, and project structure and equity pattern will be finalised soon.

"We need to do a detailed feasibility for the two projects before arriving at final investment numbers," an official said. "We also have to look for a gas source before proceeding with the projects."

Gujarat already has Petronet LNG's five million tonne per annum LNG receipt facility at Dahej, and Shell's 2.5 million tonne per annum terminal at Hazira.

GSPC has signed a deal with Petronet for the construction of two additional storage tanks at the Dahej facility for $300 million.

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01-18-2007, 12:27 AM

China bags oil contract after backing junta

QUOTEBEIJING: Within days of China blocking a move in the United Nations to pressure Myanmar on the issue of human rights, a major Chinese company has landed a contract to explore oil and gas resources in the country.

China is now in competition with India to obtain another contract on a proven gas field in Myanmar.

Naresh · 01-18-2007, 03:10 PM

[center]ONGC confirms 2 gas finds in KG basin, Mahanadi basin <img src='style_emoticons/<#EMO_DIR#>/india.gif' border='0' style='vertical-align:middle' alt='india.gif' />[/center]

NEW DELHI : Oil and Natural Gas Corp (ONGC) on Thursday confirmed discovering natural gas in KG basin off the Andhra Pradesh coast and Mahanadi basin off Orissa coast, but said the find in KG basin posts "technological challenges" and it was on looking for a strategic partner.

"I can confirm a huge gas find in ultra deepwater in KG basin and a commercial discovery in Mahanadi basin," Petroleum Minister Murli Deora told reporters here.

ONGC Chairman R S Sharma said the KG well in water depth of 2,840 meters was still to reach its target depth but "initial testing in presence of DGH officials has confirmed presence of natural gas".

The well has reached a depth of 6,600 meters and the target depth of 7,000 meters would be reached in next two weeks. ONGC will drill four-five more appraisal wells before it can announce the size of the discovery and the reserves it holds, he said.

"Production from such deepwater is a technological challenge and we are in talks with Petrobras of Brazil, ENI of Italy, Norsk Hydro of Norway and BG of the UK for a strategic tie-up," Sharma said, adding the company was willing to offer the partner equity stake in the block KG-DWN-98/2.

On Mahanadi gas find, he said the gas discovery was of commercial nature but reserve estimate can be put only after few more wells are drilled.

Deora said: "We are 90 per cent sure that gas has been found. I was to make an announcement of the discovery at the inauguration of Petrotech conference on January 16, but since testing has not been done, we refrained from going public."

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01-20-2007, 09:35 PM

<img src='style_emoticons/<#EMO_DIR#>/specool.gif' border='0' style='vertical-align:middle' alt='specool.gif' /> Solar power eliminates utility bills in this US home
[ 19 Jan, 2007 2013hrs ISTREUTERS ]
http://timesofindia.indiatimes.com/NEWS/He...982,curpg-1.cms

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The excess is stored in the form of hydrogen which is used in the winter when the solar panels can't meet all the domestic demand to make electricity in the fuel cell.

Strizki also uses the hydrogen to power his fuel-cell driven car, which, like the domestic power plant, is pollution-free.

Solar power currently contributes only 0.1% of U.S. energy needs but the number of photovoltaic installations grew by 20% in 2006, and the cost of making solar panels is dropping by about 7% annually, according to the Solar Energy Industries Association.

As costs decline and the search accelerates for clean alternatives to expensive and dirty fossil fuels, some analysts predict solar is poised for a significant expansion.

The New Jersey project, which opened in October 2006 after four years of planning and building, cost around $500,000, some $225,000 of which was provided by the New Jersey Board of Public Utilities.

The state, a leading supporter of renewable energy, aims to have 20% of its energy coming from renewables by 2020, and currently has the largest number of solar-power installations of any US state except California.
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01-28-2007, 04:31 PM

It is reported that Russia may build 10 N-power units in India.

Quote

Sunday, 28 January , 2007, 08:41

New Delhi: The fresh impetus to Indo-Russian nuclear power collaboration could see Russia building up to 10 nuclear units across various sites in India, subject to the progress made by the country in its forthcoming negotiations with the Nuclear Suppliers Group (NSG).

Russia has already agreed to four additional units at Koodankulam atomic station, while six more units could be on the anvil across more sites here, the Russia's Federal Atomic Energy Agency (RosAtom) representatives who accompanied President Vladimir Putin have conveyed to the Indian Government during bilateral discussions.

Over 100 Russian firms are already involved in the setting up of two under-construction 1,000-MW units in Koodankulam, most of whom are looking at bagging contracts from the proposed new projects since the Russian assistance comes with the caveat that the equipment has to be of Russian design. The projects would, however, be funded by India, which would have to bear the investment risks, including the threat of fuel supply disruptions. The Russians are expected to carry out the draft documentation, supply equipment, construction and equipping process as well as train Indian operators at Russian enterprises and subsequently at the nuclear facilities.

It is likely that the 1,000 MW `VVER-1,000' water-cooled reactors, being built at Koodankulam's under-construction station, could be used for some of the new units as well. There are close to 250 water-cooled reactors in use worldwide, of which 49 are Russian VVERs.

The Koodankulam units have special devices that intercept, cool and localise core melt in case of an accident - a kind of concrete trap situated under the reactor.

â¢ Newsmakers of the week: View Slideshow

Besides, the units are protected from possible earthquakes, hurricanes, air crashes. The two existing units, located on the Indian Ocean coast, have already survived a tsunami, with the tidal waves being stopped by a special wave cutter.

Senior Government officials, who interacted with RosAtom representatives on Thursday, said though the Russian side has admitted to apprehensions about US competition in the Indian nuclear power market in the light of the Indo-US civil nuclear deal, the vast potential thrown up by the country's nuclear energy development programme is a big draw among the Russian nuclear equipment firms.
Unquote

The above news item has appeared in the Indian media immediately after the visit of the Russian President ot Inida.It is a very positive development and will go a long way in meeting the ever increasing power demand In India. However, one should not forget the fact that the other big players in the field including USA and France may also join in the game and make the process somewhat compecated in the years to come.

02-15-2007, 10:53 PM

Nareshji

Comment onlee..

http://www.rediff.com/news/2007/feb/15guest.htm

Naresh · 02-16-2007, 04:06 AM

QUOTE(rajesh_g @ Feb 15 2007, 10:53 PM)Nareshji

Comment onlee..

http://www.rediff.com/news/2007/feb/15guest.htm
[right][snapback]64466[/snapback][/right]

rajesh_g :

Bhadrakumar - an ex Indian Foreign Service man - has been an Ambassador to Uzbekistan and Turkey.

Seemingly he is the JNU "Leftist Anti-USA Type" and thus a great supporter of the Iran-Pakistan-India Natural Gas Pipe Line which I and most of the Members of this Forum are against.

In this respect I would refer you to the following Article :

A Pipeline Pipe Dream?

Regarding the Iranian Gas :

1. Iran broke the deal last time under the Pretext that the Iran Parliaments Economic committee had refused to grant approval of the deal.

The real reason was that deal committed Iran to supply the Natural Gas at USD 3.5 per MMBTU for the next 25 Years whereas, I believe, the spot prices had more than doubled.

2. Now Iran is changing the "Fields of Supply" to un-named and un-certified fields.

This does give one the "Heebie Jeebies" with a loss of faith in the Iran's ability or willingness to perform

If there was any other alternative one would opine that the Indians should not touch the Iranians with a Barge Pole.

Let us see how the Cookie Crumbles.

Cheers <img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' />

Naresh · 02-26-2007, 05:25 PM

[center]Energy corridor : myth and reality[/center]

PRIME Minister Shaukat Aziz told the third annual Oil and Gas conference that Pakistan will proceed with plans to build a gas pipeline from Iran even if India pulls out of the project because its energy needs are expected to more than double by 2020.

It has taken a few years for the government to realise that transporting gas from the Central Asian republic of Turkmenistan is not a practical option. On December 27 in 2002, Foreign Minister Kasuri signed an agreement - in the presence of Afghan President Hamid Karzai - in Turkmenistan to construct a gas pipeline that was supposed to pass through Afghanistan.

The announcement stipulated that the trans-Afghanistan pipeline would export Turkmen gas via Afghanistan to Pakistani ports, from where it could reach world markets. Nothing has happened since then because little or no thought was given to the fact that laying any pipeline through Afghanistan might not be possible for a long time to come, and Turkmenistan â a dictatorship with a rather closed economy â sells most of its nearly 60 billion cubic meters (bcm) annual output of gas to Russia and has a history of reneging on agreements.

It has been almost 15 years since the governments and the military strategists in Islamabad have been talking about the potential for trade from Central Asia and citing that as one of the drivers of their Afghan policy.

Now the prospect of building an energy corridor has been given as a principal reason for building the Gwadar port. Given the global energy security situation, Pakistanâs own gas reserves and the geo-political considerations, the country must give top priority to its own needs as a matter of national and energy security.

More specifically, while Pakistan imports about 80 per cent of its oil requirements, it may become an importer of natural gas by as early as 2010. Therefore, it can no longer afford to waste time on some far-fetched plans for building trade routes. Its hopes of becoming an energy corridor for the West or China have turned out to be just pipedreams while Turkey and China have already built or are in the process of building oil/gas supply routes to the Central Asian republics, principally Kazakhstan and Azerbaijan.

Some vested interests in the establishment appear to have exaggerated the real potential of trade/energy routes from Central Asia through Pakistan to further their own agenda. Ironically, while there was no tangible progress in the past decade toward meeting even our own energy needs let alone building energy routes for others, Turkey has emerged as the new âsilk routeâ of the 21st century and the energy corridor for Central Asia and Europe.

On the other hand, China has been working to establish direct oil/gas pipeline routes with Russia as well as with Kazakhstan - Central Asiaâs largest oil producer, estimated to account for about 3.3 per cent of worldâs proven oil reserves and 1.7 per cent of gas reserves.

Pakistan is one of the most gas-dependent economies globally. Natural gas meets more than 50 per cent of its energy needs compared to a global average of 23 per cent. Power generation sector is the largest consumer of gas at 45 per cent of the consumption, followed by fertiliser and household at 22 per cent and 18 per cent respectively. In addition, the government estimates that by 2010, Pakistan will have to increase its power generating capacity by more than 50 per cent to meet increasing demand. Hence, gas is much more critical to the economy and industry than it is in many other countries.

Over the past three years, gas has gained further prominence over oil as an energy source. The three-year annual average growth rate in demand for gas was 12.1 per cent while for oil it was actually a minus 6.4 per cent and for electricity 10 per cent. The decline in the use of petroleum products in the household, agriculture, transport and power sectors was due mainly to the availability of alternative and relatively cheaper sources of fuel e.g. liquefied petroleum gas (LPG). Furthermore, compressed natural gas (CNG) for transport has been an additional growth segment.

Although proven natural gas reserves are officially estimated at around 821 billion cubic meters (bcm), many experts believe it may need to start importing gas by 2010. Pakistanâs gas consumption rose to about 33 bcm in 2006 from 20.6 bcm in 2002. A February 7, 2007 report by Goldman Sachs â the American investment bank - states, ârecognising that Pakistan will face an imminent gas shortage, the government is currently in discussions with Iran, Qatar and Turkmenistan for potential gas importation . We believe a sub-sea pipeline or shipment of LNG from Qatar is likely to prove an expensive option, while gas ownership uncertainties make Turkmen gas imports improbable in the near-term. In our view, piped gas from Iran seems to be the most likely option although pricing disparities need to be resolved.â

According to a new formula proposed by Iran, the cost of gas will translate at the Pakistan-India border as $4.93 [India is not willing to pay more than $4] per million British thermal units (mBtu), plus $1.5 per mBtu that India would have to pay to Pakistan as a transit fee. Iran has offered to pay as much as 60 per cent of the estimated $7 billion cost of building the pipeline However, Indians have not yet come on board, as is implied in prime ministerâs remarks, and are keeping their options open including that of buying LNG from Iran under their $22 billion bilateral agreement.

Unlike oil, which is traded and transported globally, natural gas tends to have regional markets due to the obvious logistical and cost constraints. Outside North and Latin America, 60 per cent of the worldâs natural gas reserves are concentrated in just three countries â namely - Russia, Iran and Qatar who account for 29, 16 and 15 per cent respectively of the worldâs total reserves outside Americas. Turkmenistanâs proven gas reserves are barely 1.6 per cent of this total [though Turkmenistan officials claim these to be much larger] and it sells all its gas to Russia and Ukraine through the old network of pipelines from the Soviet era.

Not only that, it cannot meet Pakistanâs gas needs let alone of other western countries. According to an Asian Development Bank study, itâs small size (population of 4.8 million and GDP of $7 billion) and unstable political regime do not qualify it to be a reliable long-term source of gas for Pakistan specially given the fact that any pipeline from Turkmenistan will have to pass through Afghanistan.

It is a pity that the policy makers have only recently recognised that importation of gas from Iran is the only viable option for Pakistan after spending over a decade on the unrealistic pursuit of building an energy corridor from Central Asia through Afghanistan. Iran consumes almost all of its current gas production but is producing only a small share of its huge gas reserves. This means that Iran is one of the few countries capable of supplying much larger amounts of natural gas in the future.

While it is true that Kazakhstan and Azerbaijan have large oil reserves, they have never shown any serious interest in transporting oil through Afghanistan. In fact, secular and liberal Kazakhstan has always been weary of the Taliban and the warlords and is highly unlikely to participate in any project that involves Afghanistan. Oil and minerals exports dominate the economies of these Central Asian states and account for about 73 per cent of their exports. Much of their other trade is with Russia and other former Soviet republics according to a February 2006 World Bank report.

Historically, these states have depended entirely on Russia to export their oil but that complete dependence ended on July 13, 2006 with the inauguration of the $4 billion worldâs second longest Baku-Tbilisi-Ceyhan (BTC) pipeline, the east-west hub intended to connect energy supplies in the Caspian region and Central Asia to Western markets. Earlier in March 2005, Kazakhstan and Azerbaijan agreed to build the Aktau-Baku pipeline, connecting the Kashagan offshore oil fields in Kazakhstan to the BTC in Baku via a sub-Caspian in 2008. The Kashagan field is expected to produce 1.2 million bpd by 2016, when 600,000 bpd of its production is to be shipped across the Caspian Sea to be fed into the BTC line.

The BTC pipeline will account for only a small percentage of global oil, that is, about one million barrels/day (bpd) by 2009. However, the West considers a stable -- and not Moscow-controlled -- supply to be worth the financial and political costs. Planning for the pipeline that carries oil from the landlocked Caspian to the Mediterranean Sea -- while avoiding Russia and politically unstable areas such as Armenia -- began in 1999 and construction commenced in September 2002. The Western governments and oil firms intended for it to rival the Russian-backed Blue Stream pipeline, which sends Russian gas to Turkey and Italy.

Blue Stream gas pipeline between Turkey and Russia was officially inaugurated in November 2005. Its construction, undertaken by Russia, Turkey and Italy -- involving a joint venture between Russia's gas giant Gazprom and Italy's energy major ENI â took eight years.

Another gas pipeline project underway is the $5.8 billion Nabucco pipeline; a major part of the European Union's strategy to diversify its gas sources away from Russia. This will carry natural gas from Azerbaijan and will go through Turkey, Bulgaria, Romania, Hungary and Austria. Construction is slated to begin in 2008 and conclude in 2011. Nabucco is expected to achieve a maximum transport of 30 billion cubic meters of gas per year. In addition, Turkey is in discussions to build another pipeline that would send Russian gas through Turkey to Italy and Greece.

It is clear that Turkey by capitalising on its position as the geographic link between Europe and both Central Asia and the Middle East and on its ties with both the European Union and Russia, has emerged as the pre-eminent strategic supplier of energy routes between Central Asia, Russia and Europe.

On the other hand, China has been busy building direct supply routes from Central Asia and Russia. In December 2005, the state-owned China National Petroleum Corporation (CNPC) inaugurated an oil pipeline running from Kazakhstan to northwest China. The China-Kazakh pipeline opening is one part of a massive Chinese plan to secure as much of Kazakhstan's oil riches as possible. Earlier in October 2005, China spent $4.2 billion on acquiring PetroKazakhstan that produces 12 per cent of Kazakhstanâs oil output.

With completion of this major project, China will for the first time have secured a source of imported energy not vulnerable to US aircraft carrier battle groups, as is the case with oil deliveries from the Persian Gulf and Sudan at present.

Before opening the new pipeline, China imported only 25,000 bpd from Kazakhstan. Once the link between Kenkiyak and Kumkol is finished, connecting existing infrastructure near the Caspian with the portion inaugurated in December 2005, the project will pump one million bpd. That would be about 13 percent of China crude oil needs.

In summary, the above facts indicate that our energy policies and security strategies have been grounded on either some great misperceptions or deliberate distortion of facts to serve some vested interests. While India or China may or may not participate in building supply routes through Pakistan given their economic and geo-political considerations, the governmentâs decision to go ahead with Iran pipeline is a right one because it is eminently sensible for Pakistan to secure the future gas supplies from its next-door neighbour that also happens to have the second largest natural gas reserves in the world after Russia.

Cheers <img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' />

03-21-2007, 09:36 PM

Myanmar says no to gas exports to India; prefers ChinaQUOTEIn a major blow to India's quest for energy security, Myanmar has refused to export gas to the energy-hungry nation and instead wants to lay a pipeline to China to sell natural gas found in its offshore area.
Myanmar last week told an Indian delegation it wants to export gas from discoveries made in offshore Block A-1 and potential reserves in Block A-3 block to China, highly placed sources said.

Shining example of successful Indian diplomacy.

Naresh · 03-24-2007, 01:12 AM

QUOTE(Mudy @ Mar 21 2007, 09:36 PM)Myanmar says no to gas exports to India; prefers China<div class='quotetop'>QUOTEIn a major blow to India's quest for energy security, Myanmar has refused to export gas to the energy-hungry nation and instead wants to lay a pipeline to China to sell natural gas found in its offshore area.
Myanmar last week told an Indian delegation it wants to export gas from discoveries made in offshore Block A-1 and potential reserves in Block A-3 block to China, highly placed sources said.

Shining example of successful Indian diplomacy.
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Mudy Ji :

This has got nothing to do with the Foreign Ministry.

The Indian Ministry of Petroleum and Natural Gas has been negotiating the Iran-India Natural Gas Pipe Line without discussing the Project with :

1. Ministry of Defence

2. Ministry of External Affairs

3. Ministry of Commerce and Industry

4. Ministry of Finance

5. Ministry of Home Affairs.

At least this was the situation with Mani Shankar Aiyar!

I doubt if has changed.

Cheers <img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' />

03-24-2007, 02:48 AM

QUOTEThis has got nothing to do with the Foreign Ministry.
Nareshji: That's exactly the point. Foreign Ministry has nothing to do with Myanmar now because of how little they have done over the years in Myanmar. Our resident experts can blame this govt, that govt etc, still doesn't cut it at end of the day. Arun Shourie in his book (see book folder where I pasted link to his book) clearly states as to how Myanmar was once leaning towards India and our mandarins with their neglect, lethargy combined with high handed approach towards a small nation, literally pushed away Myanmar into China's lap.
Thanks to such policies, today Foreign Ministry has nothing to do literally.

Naresh · 03-24-2007, 05:30 PM

Pakistanis get the Heebie-Jeebies <img src='style_emoticons/<#EMO_DIR#>/Flush.gif' border='0' style='vertical-align:middle' alt='Flush.gif' />

[center]Handle pipeline politics cautiously[/center]

Another snag has cropped up in the Iran-Pakistan-India (IPI) project, which must be handled carefully. India has threatened to pull out of the $7 billion dollar gas pipeline project if Islamabad does not bring down the transit fees it wants to charge for allowing the pipeline to pass through its territory to India. The pipeline is going to be 1,036-km long inside Pakistan and the task of looking after it will be Islamabadâs. It will pass through areas that will have to be âtamedâ at great developmental expense and careful political bargaining with local stakeholders.

Normally, the middle or transit country has the upper hand in negotiations, but this power of leverage depends on how badly the consumer country wants the gas. If Pakistan wants the Iranian gas more than, or as much as, India does, then Pakistan doesnât have much leverage. But if India needs the gas for energy more than Pakistan and canât get it from anywhere else, then Pakistan can talk tough. From the start, however, India has postured as if it does not need the pipeline, and there was a reason for that.

When Iran began to think of supplying gas to Pakistan and India, the Indo-Pak equation was bad. India was moving towards a special relationship with the United States that didnât want Iran to get the project through. India was also thinking of relying on liquefied natural gas (LNG) and had a naval fleet ready for it. It thought that it could get Burma to pipe its gas to India via the narrow territory that joins the northeastern union territories to India.

India also knew that Pakistan wished to offset its expenditure on the purchase of gas from Iran by charging a significant rental from India. It was confirmed in its suspicions because all kinds of exaggerated and unrealistic rental fees were being discussed in Pakistan at the highest levels. Figures of up to US$ 1 billion a year as transit fees were once quoted by the Pakistani energy minister in the early 2000s, whereas a more realistic estimate would be a fraction of that. An impression was also created on India that Iran would be willing to sell gas only if it got the big Indian market; and that Pakistan would be willing to get the big project going only if it were a transit country and not a major consumer too. However, it has taken the gas pipeline project nearly six years to come to this stage. Now Pakistan is acutely short of energy like India and both are in line to become consumers. Thus the transit fee element should be of low significance in all cost equations.

Nonetheless, all these factors have ultimately fed into the negotiating process in the settlement of a price with Iran. But the settling of a transit fee should not be a big problem since rates of such rentals are in evidence wherever there are pipelines. The only problem is a snag over the conditions that have allowed the transit country to charge high rentals in one case and low ones in others. An India official said in New Delhi that international pipeline projects normally have a transportation tariff of $0.50 per million British thermal units (BTU) while Pakistan wants $1.57. Therefore India says the fee proposed by Pakistan will raise the cost of gas for India by about $1.50 per BTU.

Pakistan has to look at the international practice very carefully. At the same time it must keep its leverage vis-Ã -vis India in mind. It will not do to say that it is prepared to be the sole end-user of the gas if India does not accept its transit fee unless it can be sure that Iran will not react too negatively to losing India as a bigger consumer. More importantly, international fee structures should be carefully compared since there are bound to be differences in them.

Russia supplies about 8 percent of Ukraineâs annual gas requirements. This gas has in recent times been supplied at heavily subsidised prices â about US$50 per 1,000 cubic meters compared to the market rate of about US$230 per 1,000 cubic meters. Note, however, that Ukraine charges Russia transit fees for the gas that Russia sends through the Ukrainian gas pipeline network to Western customers. (When the price goes up the rental goes up too.) The transit fees were taken in the form of gas, with Ukraine taking 15 percent of the gas passing through its pipes. Other pipelines may have different methods of recovering pipeline rentals.

The Iranian pipeline is important for both India and Pakistan. India as the big regional market needs as many sources of supply as it can get. Therefore, despite the uncertainties with Iran, India must not pass up the chance of getting its gas from the west. It has lost the Burmese gas to China after investing a lot of hope in it. As for LNG, the cost of gas transported by sea goes up by 30 percent and should be incurred only if Pakistan cannot be trusted. Meanwhile, anyone familiar with Pakistanâs coming energy crisis knows that Pakistan needs the gas as much as India.

Under the circumstances, Pakistan and India must not take entrenched positions on the pipeline rental. International fee structures are not much help because they are different in different situations. Pakistan must compute its cost of looking after the pipeline carefully in consultation with India. And no one should be seen as taking the other for a ride.

Cheers <img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' />

Naresh · 03-24-2007, 09:24 PM

QUOTE(Viren @ Mar 24 2007, 02:48 AM)<div class='quotetop'>QUOTEThis has got nothing to do with the Foreign Ministry.
Nareshji: That's exactly the point. Foreign Ministry has nothing to do with Myanmar now because of how little they have done over the years in Myanmar. Our resident experts can blame this govt, that govt etc, still doesn't cut it at end of the day. Arun Shourie in his book (see book folder where I pasted link to his book) clearly states as to how Myanmar was once leaning towards India and our mandarins with their neglect, lethargy combined with high handed approach towards a small nation, literally pushed away Myanmar into China's lap.
Thanks to such policies, today Foreign Ministry has nothing to do literally.
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Viren Ji :

One cannot blame anybody else other than the Ministry of Petroleum and Natural Gas.

The Ministry of External Affairs, like every other Ministry, is under the Direction of the Political Bosses and as such blaming the âMandarinsâ will not lead to a solution.

Cheer <img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' />

04-09-2007, 09:51 AM

India losing grip on Myanmar gas to China

UPA is sleeping or join hands with China.

06-01-2007, 09:13 AM

QUOTEIgnominy of trading with India 
FT
Khaled Ahmed
Free trade may be dishonourable but it avoids death and stops poverty. Nothing is more dishonourable than povertyÂ
Â Â
Free trade destroys many orders. It destroys the âself-sufficientâ state. It destroys boundaries that maintain separated identities. It also destroys ideologies that work only in insulation. It destroys dominance of the state too.

Tribal societies, based on delimited food-scarce territories, are undermined by trade. Warriors donât like trade and traders. The national security state with a backlog of just wars to be fought for national honour is aghast at the prospect of becoming âfeminineâ through accepting the âinsertionâ of enemy imports.

Today Pakistan is on the threshold of entering the South Asian Free Trade Area (SAFTA) which really means âopening upâ with India. But it has not ratified the SAFTA treaty while everyone else in South Asia has. It might actually get out of SAFTA, as remaining inside it means making India a Most Favoured Nation.

The prevalent argument is that India must make a move on Kashmir first. What if India did make that move? Will free trade with India become safe then? Those who argue against free trade with India put forward arguments that have nothing to do with Kashmir.

They refer to the configuration of the national economy of Pakistan that will not gibe with the more powerful industrial configuration of India. Although the industrialists of Pakistan object to opening up with India less and less these days, the national security thinkers do make reference to âcompetitive disadvantageâ of opening up.

They must persuade prime minister Shaukat Aziz to graduate from his âconditionalityâ of Kashmir to actually getting out of the SAFTA agreement whose Article 8 recommends an âintegrationâ of the regional economies.

Article 8 refers to âremoval of intra-SAARC barriers to investmentâ while making it possible for the weaker economies to seek protection through ârules of fair competitionâ.

Even the Supreme Court of Pakistan did not manifest its dislike of the charge made during the Pakistan Steel Mills case that a part of the capital that sought to buy the steel mill was tainted with Indian money. A âfreeâ judiciary may not like âfree tradeâ in Pakistan.

There is nothing more unconvincing in the Pakistani stance than the Kashmir conditionality. That this conditionality was not invoked in relation to the Iran-Pakistan-India gas pipeline may actually have alerted India to the real intent of Islamabad.

The real reason goes deeper than that. It is the fear of the nature of change that might come about through the SAARC vision. Why did the âperipheralâ states of South Asia sign the treaty anyway? Today, Pakistan, standing at the threshold of a scary change through trade, may not have signed it.

No matter how well regulated, free trade will destroy all sorts of barriers, change the nature of the state as well as that of the men who live in it. Is Pakistan ready for the change? It would appear that the masses are. The power elite may be hesitant.

If completely unregulated, trade is called smuggling. It has destroyed the ânotionalâ Durand Line, and today Pakistan is losing territory in its west while in the east a similar thrust into India by Pakistanâs military has been aborted.

The national security regime is frayed at the edges. It does not live in national action but remains alive in the national mind. As a ârevisionistâ state, Pakistan is fast running out of steam.

The power elite is hesitant. This hesitation may be owing to a lack of clarity at a deeper level of consciousness. A lack of intellectual capacity will not allow proper interpretation of internationally popularised slogans like âtrade corridorsâ.

General Musharraf as an âout-of-the-boxâ leader has talked about Pakistan as a âtrade corridorâ. He must have picked it up from the economists he talks to. Nothing will destroy the supremacy of the Pakistan army as the transformation of Pakistan into a âfree-trade hubâ.

The economist of today is the most subversive philosopher in history since Socrates. Imagine India using trade routes that spread like arteries across Pakistanâs sacred territory. Pakistan is a corridor of nothing unless India violates it with its manufactures.

The cost of maintaining Pakistanâs honour has escalated. Pakistan pays into Kashmir an estimated $2.6 billion annually to keep the APHC and the jihadi organisations alive in Held Kashmir. This also includes the âinfiltration budgetâ. Pakistan gets 800 âincursionsâ annually for this money.

Pakistanâs âconflict economyâ, inclusive of military expenditures, is 10.6 percent of its GDP. This is unsustainable. In the post-Musharraf period, the politicians will find it difficult to defend this kind of spending. Their refusal to go on with it will be non-intellectual as any intellectual reformulation will mean taking on Pakistani nationalism.

Pakistan is fast losing territory and culture to a creed that can only be compared to medieval Muslim conquests. It doesnât feel it is being conquered because it is ideologically prepared for defeat. But, economically, this creeping transformation presages an end to the modern state through a retreat into Hobbesian purgatory.

The politician will breach the India-Pakistan boundary through free trade even though it may be the last one to be breached in the world. (Only North-South Korea and Israel-Syria-Lebanon borders are the last bastions remaining.) He has tried doing it in the 1990s and has been repeatedly toppled because of it.

The real death of Pakistan is coming gradually through the death of its culture. People make fun of âenlightenmentâ and âmoderationâ because they see the anti-cultural forces within and without the state winning territory on a daily basis. This is âblack humourâ rather than rejection of culture.

Free trade and culture go hand in hand. The âmonocultureâ of free trade (read globalisation) is cakes and ale compared to the âmonocultureâ of Pakistani nationalism as interpreted by the clergy and the army. Those who are scared of it call it Talibanisation.

There is no honour in heroic isolation. The pinnacle of isolation is martyrdom. Free trade may be dishonourable but it avoids death and stops poverty. Nothing is more dishonourable than poverty.

07-17-2007, 08:21 PM

RIL makes huge gas discovery off TN coastQUOTEGas reserves were found in well A-1, the first well on the block CY-DWN-2001/2, drilled by Transocean's drillship Deepwater Frontier, the officials said.

While Deepwater Frontier has moved to develop Reliance Industries' gas finds in the prolific KG-D6 block in Krishna Godavari basin, off the Andhra coast, Transocean's another drillship Actina is currently drilling a second well on the 14,325 sq km block

Naresh · 08-20-2007, 04:25 PM

[center]Pakistan Governmentt awards TAP pipeline contract to US company[/center]

ISLAMABAD : The Pakistan government has awarded the contract of laying the Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline project to the United States International Oil Company (IOC) with an estimated cost of $10 billion.

Geo News quoted a press release issued by the oil companyâs liaison office stating that the contract for the 2,200-kilometre TAP gas pipeline, scheduled for completion within three years, had been awarded to the US-based company. It said two oil refineries and four thermal powerhouses, with a capacity of 1,000 megawatts, would also be established under this project.

It further reported that the pipeline would be built up to Gwadar and would supply two million barrels of oil and four billion cubic feet of natural gas to Pakistan every day. APP quoted IOCâs press statement as saying that a $3.5-billion refinery would also be built at Gwadar under the terms of the contract.

Online reported that the project envisages the construction of a Hydro-cracker to facilitate the production of JP-1 and JP-4 petroleum products in Pakistan for the first time in the nationâs history.

According to sources in the International Oil Company, the matters of security and insurance in Afghanistan during the laying of the pipeline have been finalised between the oil company and authorities, and a signing ceremony confirming the mega-project agreement would be held shortly. agencies

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