Transcript Slide 1

Pipeline Politics:
The Caspian and Global Energy Security
By John Roberts,
Energy Security Specialist, Platts
KAZENERGY
Astana, Kazakhstan
4-5 October, 2011
Version 2.0
Pipeline Politics: Back Where We Started?
20 years of progress, 20 years of change….
…. but transit is still an issue
•
•
•
•
The Russian problem with oil
The Turkish problem with gas
The call for dedicated pipelines
The experience of CPC; the consequences for Nabucco
Azerbaijan’s Gas Export Pipeline Decision - 1
The issue for Azerbaijan
• The ongoing development of SD 2.
• What lies beyond SD2:
• Umid
• Absheron
• Deep Level ACG
The twin decisions
• Which pipeline?
• Which customers?
Azerbaijan’s Gas Export Pipeline Decision - 2
The Issue for Turkmenistan
• Diversification & the multiple vector approach
• Russia: 9 April 2009
• Iran: 7 November 2010. Javad Oji’s statement.
• China: Missing targets and delivery for debt
The cash crisis and the need for a fourth option
• TAPI and TCGP
• Politics VERSUS economics or politics AND economics
Turkmenistan: Fallout from the 9 April 2009 Cutoff
Turkmenistan’s gas balance in 2011 - The Classic Fields
• Productive capacity: 70–75 bcm
• Domestic consumption: 18-20 bcm
• Export to Russia: 11-12 bcm
• Export to Iran: 12-13 bcm
• Export to China: Zero in 2011; 6 in 2014. (See next slide)
STRANDED CAPACITY: 25-34 bcm.
Precision is impossible.
Consequences of 12 hours notice of pipeline shut-in before
line shot down, followed by Km-487 explosion.
Consequences of abruptly shutting down 195 fields
representing 92% of exports to Russia – or c. 40-45 bcm
of capacity.
Direct Gains: The Trans-Asia Gas Pipeline
Indirect Gains: The Beineu-Bozoi-Akbulak Main Gas Pipeline
Indirect Gains: The West Kazakhstan-West China Oil Pipeline
The Caspian’s Role in Global Energy Security
Producer:
Kazakhstan, Azerbaijan, Turkmenistan
Transit:
Kazakhstan, Uzbekistan & Azerbaijan
Exemplar:
Kazakhstan, Azerbaijan
• Energy Charter Treaty
• Extractive Industries Transparency Initiative
Caspian Gas Potential
Current and projected export availabilities (in bcm)
2008
•
•
•
•
•
Azerbaijan:
Kazakhstan:
Uzbekistan:
Turkmenistan:
Caspian Region
5.6
2.6
13.5
45.1
66.8
2009
2010*
Projected
7.0
8.0
16.5
16.5
48.0
8.5
8.3
13.6
19.8
50.2
25-30 by 2020.
20 by 2015
35 by 2018
140 by 2020
220-235 in 2020?
* 2008-2010 from BP Statistical Review 2011
Projections by Platts
Energy In The Next Decade …..
Oil
• The rise & rise of China
• The rise of shale oil
Gas
• The rise & rise of shale gas
• The transformation of Europe
• The imponderables of Russia
Unconventional Gas
European Conventional Gas Reserves (BP):
(Includes Ukraine, excludes Russia and other CIS)
Europe-14 (EIA, April 2011)
Unconventional Gas:
Old reserve paradigm:
New reserve paradigm:
(US NPC 2007)
(CERA 2007)
14 tcm
5.2 tcm
34.7 tcm
3 - 4 tcm
(EIA April 2011) Europe-14
17.9 tcm
(IHS CERA, March 2011) Up to 173 tcm
IHS CERA’s oil price assumptions place the cost of unconventional
gas on par with the long-term average price of contract gas.
IHS CERA source: Breaking with Convention, March 2011.
European Shale Gas Potential - US EIA 5 April 2011
Estimated shale gas technically recoverable resources for select basins in 32 countries, compared to existing reported
reserves, production and consumption during 2009
2009 Natural Gas Market1
(trillion cubic feet, dry basis)
Production
EUROPE
France
Germany
Netherlands
Norway
U.K.
Denmark
Sweden
Poland
Turkey
Ukraine
Lithuania
Hungary/Romania/Bulgaria
10.81
0.03
0.51
2.79
3.65
2.09
0.3
0.21
0.03
0.72
0.48
Proved Natural Gas Technically Recoverable
Shale Gas
Reserves
Imports
Consumption (Exports)
14.62
1.73
3.27
1.72
0.16
3.11
0.16
0.04
0.58
1.24
1.56
0.1
0.95
98%
84%
-62%
-2156%
33%
-91%
100%
64%
98%
54%
100%
50%
tcf
186.21
0.2
6.2
49
72
9
2.1
tcm
5.208
0.0056
0.1736
1.3720
2.0160
0.2520
0.0588
5.8
0.2
39
0.1624
0.0056
1.0920
2.71
0.0759
tcf
639
180
8
17
83
20
23
41
187
15
42
4
19
tcm
17.89
5.04
0.22
0.48
2.32
0.56
0.64
1.15
5.24
0.42
1.18
0.11
0.53
Shale Gas – European Perceptions
OLD:
• Little will happen in terms of production by 2015, or even by 2020.
Although by 2015 perceptions of the impact of unconventional gas on
future European gas perceptions will start to exercise a profound impact
on assessments and planning for European gas supplies.
NEW:
• Scenario planning 1: Prospectively as much as 35 bcm in production by
2020 (Platts unconventional gas conference, September 2011).
• Scenario planning 2: 60-200 bcm around 2025 (IHS CERA, March 2011).
• UK: Cuadrilla 5.7 tcm of gas resources in place; a 20% recovery factor?
And don’t forget conventional challenges: The Eastern Mediterranean
A lesson from the past?
Douglas Corrigan
17-18 July 1938
Where Do Central Asia’s Pipelines Lead?
Lines to the West (2015-2020)
OIL
GAS
• CPC
1.04 mb/d
Direct:
• BTC
1.2 mb/d
SCP
• Atyrau-Samara 0.3 mb/d
Az-Europe
• KCTS/BTC+
0.5-1.2 mb/d
Indirect:
• Baku-Supsa
0.15 mb/d
CA-C/Russia
TOTAL
3.2-3.9 mb/d
8 bcm/y
16-30 bcm/y
c. 40 bcm/y
24-38 or (?) 64-78
Lines to the East (2015-2020)
• West Kazakhstan-West China
Trans Asia Gas Pipeline
400,000 b/d
55 bcm/y
….And The Caspian’s Role
OIL
• The expansion of CPC
• The question of Kashagan and the KCTS
GAS
• Uncertainty over Russia-China gas relations
• The rise of Azerbaijan
• The doubts about Turkmenistan
THE BOTTOM LINE:
• The very real prospect of a new gas age in Europe
• The challenge for Kazakhstan
Questions?
[email protected]
Tel: +44-1835-863-725
Mobile: +44-7966-290-354