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Energy Blast – May 22, 2009

‘In principle we can come to the conclusion that we are on the verge of a crisis‘.  Could a row about stockpiling lead to a new gas war between Russia and Ukraine?  Prime Minister Vladimir Putin will meet his Ukrainian counterpart Yulia Timoshenko to elucidate the situation regarding Ukraine’s payments for Russian gas.  President Medvedev apparently has doubts about Ukraine’s ability to pay’, and is recommending that the EU help the state to get a syndicated loan.  One of the founders of Gazprom has said that to maintain Ukraine’s pipeline system, which was one of the first in the USSR, requires yearly investment of $1.5-2 billion.  Gazprom has paid Ukraine in advance for all of its gas transit for 2009.  TNK-BP saw first-quarter earnings drop 58% after crude prices declined.  Have relations between Russia and OPEC soured?  Gazprom’s Sakhalin-2 project has apparently lost more than $1.2 billion as the result of a delay in starting liquefied natural gas deliveries.  Sakhalin Energy Investment expects worldwide demand for liquefied natural gas to grow at an annual rate of 6-8% on average ‘for the next few years’