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Energy Blast – June 20, 2009

Gazprom and Azeri company Socar have signed a deal to give Russia the first rights to Azeri gas that was previously seen as reserved for the Nabucco pipeline.  Medvedev referred to the deal as a ‘milestone’ for cooperation in the future.  Gazprom will buy 500 million cubic meters of natural gas from Azerbaijan annually from 2010, with plans to increase orders.  The International Energy Agency has warned that Europe’s gas supplies are at almost constant risk of disruption.  Russian and Ukrainian officials have met with international lending institutions to try and establish ways of paying for Russian gas.  Poland has signed an agreement with Qatar to receive one million tons of LNG annually from 2014.  Russian companies may invest in oil exploration and natural gas distribution in China, following an agreement between Beijing and Moscow to increase bilateral trade.  E.ON’s Russia-backed Baltic pipeline, Nord Stream, is on schedule to begin delivering gas to Germany by 2011, whilst Nabucco is still struggling with delays due to lack of steady supply and customers.