EU more dependent on Russian gas despite bid to diversify

EU more dependent on Russian gas despite bid to diversify
Warships of Ukrainian navy fleet, which remained in Crimea after it was annexed by Russia from Ukraine in 2014, moor at Streletskaya Bay in the Black Sea port of Sevastopol. The conflict has unsettled European gas markets. (Reuters)
Updated 15 January 2018

EU more dependent on Russian gas despite bid to diversify

EU more dependent on Russian gas despite bid to diversify

MOSCOW: Despite repeatedly vowing to reduce its energy dependency on Moscow, Europe is more reliant on Russian gas than ever before — and there are few signs of this trend reversing.
Russian gas giant Gazprom said this month it had completed record deliveries to Europe and Turkey in 2017 at a total of 193.9 billion cubic meters — 8 percent higher than its previous record, set in 2016.
This result was not only a financial victory for the company, whose exports are its main source of profit, but also a political one at a time when diplomatic relations between Russia and the EU are at their worst since the Cold War.
The numbers “show the increasing demand from European countries for Russian gas, but also the reliability of these deliveries in the required amount,” Gazprom’s chairman Alexei Miller said.
Deliveries to Germany and Austria reached a historic high and exports to France rose by 6.7 percent from 2016, according to Gazprom’s figures.
Brussels set goals to diversify its energy sources following a series of gas crises between Moscow and Kiev that affected deliveries to Europe. But the percentage of Russian gas in Europe has only increased in recent years and now represents a third of the total gas consumption in the EU.
That goal was reinforced by tensions between Brussels and Moscow following the start of the Ukrainian crisis in 2014 that led to fears of Moscow using its gas leverage for geopolitical means.
According to Valery Nesterov, an oil and gas analyst at Russian bank Sberbank CIB, EU demand for gas is rising because of “economic recovery” in Europe and thanks to gas prices being “more competitive” than those of coal.
Other factors pushing up demand include cold winters, the decline of European (mainly Dutch) gas output and the closure of nuclear power plants, such as in Germany.
If Nesterov envisages a possible reduction of Russian exports to EU this year after record results in 2017, he nonetheless says the general tendency will not change: “Gazprom will likely keep its market share in the EU.”
Strong European demand has allowed Gazprom to increase production after weak results in recent years because of decline of its market share on its home market and the loss of Ukraine, an important client which stopped buying Russian gas in 2015.
Gazprom is also looking to develop new pipelines with the support of major European companies to maintain its part in the market. But the EU is wary.
Brussels blocked South Stream, a Russian project to ease exports to southern European nations, and has been resisting other projects such as TurkStream, a pipeline planned via Turkey, and North Stream 2, via the Baltic Sea, which Gazprom justifies as necessary for the increased European demand in the future.
“A sort of schizophrenia exists between Europe’s diplomacy and its market. The market chooses the cheapest gas to produce and use in Europe, which is Russian gas. Europe is said to be too dependent but nothing has been done to change this,” said Thierry Bros, researcher at the Oxford Institute for Energy Studies.
“We could say that the speed limit signs are in place but they are ineffective because there is no speed check. There are mechanisms for regulation but there is nothing to verify that they are respected,” he added.
And Russia is not content with just pipelines. The country recently took a major step into the liquefied natural gas (LNG) market by launching the Yamal LNG terminal in the Arctic, financed by Russian gas producer Novatek with the help of France’s Total. The Yamal project will supply both Europe and Asia via sea routes.
Diversification for the EU is prevented by a simple obstacle, said Thierry Bros: It “requires additional costs and the question is: who is going to pay?”


Israel and Greece sign record defense deal

Israel and Greece sign record defense deal
Updated 34 min 48 sec ago

Israel and Greece sign record defense deal

Israel and Greece sign record defense deal
  • The agreement includes a $1.65 billion contract for the establishment and operation of a training center for the Hellenic Air Force

JERUSALEM: Israel and Greece have signed their biggest ever defense procurement deal, which Israel said on Sunday would strengthen political and economic ties between the countries.
The agreement includes a $1.65 billion contract for the establishment and operation of a training center for the Hellenic Air Force by Israeli defense contractor Elbit Systems over a 22-year period, Israel’s defense ministry said.
The training center will be modeled on Israel’s own flight academy and will be equipped with 10 M-346 training aircraft produced by Italian company Leonardo, the ministry said.
Elbit will supply kits to upgrade and operate Greece’s T-6 aircraft and also provide training, simulators and logistical support.
“I am certain that (this program) will upgrade the capabilities and strengthen the economies of Israel and Greece and thus the partnership between our two countries will deepen on the defense, economic and political levels,” said Israeli defense minister Benny Gantz.
The announcement follows a meeting in Cyprus on Friday between the UAE, Greek, Cypriot and Israeli foreign ministers, who agreed to deepen cooperation between their countries.


Dubai Islamic Bank sees no impact from NMC law suit

Dubai Islamic Bank sees no impact from NMC law suit
Updated 18 April 2021

Dubai Islamic Bank sees no impact from NMC law suit

Dubai Islamic Bank sees no impact from NMC law suit
  • Last week it emerged that NMC was suing a Dubai bank in the Abu Dhabi courts in a dispute that could complicate the company’s multi-billion-dollar debt restructuring

DUBAI: Dubai Islamic Bank (DIB) said on Sunday it does not expect any “negative impact” from a case against it brought by the administrators of hospital operator NMC Group.
It made the disclosure in a letter to the Dubai Financial Market posted on the website of the bourse.
Last week it emerged that NMC was suing a Dubai bank in the Abu Dhabi courts in a dispute that could complicate the company’s multi-billion-dollar debt restructuring and potentially delay payouts to creditors, Reuters reported.
It was the latest twist in the tale of the UAE ‘s biggest hospital group which last year disclosed more than $4 billion in hidden debt. Its UAE operations were placed into administration and creditor claims are understood to now exceed $6.4 billion.
“It is a matter of public record that an application has been filed by the administrators of the NMC Group in the Abu Dhabi Global Markets Court, in which Dubai Islamic Bank and 12 insurance companies and third party service providers are respondents,” DIB CEO Hassan Al-Serkal said in the statement to the Dubai financial Market, where it’s shares are listed. “DIB does not anticipate any material negative impact arising from this application. As this is an ongoing legal matter, we can comment further at this time.”


Pandemic and property prices weigh on UAE banks says S&P

Pandemic and property prices weigh on UAE banks says S&P
Updated 18 April 2021

Pandemic and property prices weigh on UAE banks says S&P

Pandemic and property prices weigh on UAE banks says S&P
  • Residential real estate prices have declined more than 40 percent since the peak in the second-quarter 2014
  • The credit ratings agency expects prices to remain under pressure in 2021

DUBAI: The COVID-19 pandemic, lower oil prices, and continued pressure on the real estate sector have increased risks for UAE banks, S&P Global Ratings said in a report on Sunday.
It expects the sector’s problem loans to increase further once current regulatory forbearance measures are lifted and banks start to account for the impact of the economic shock. However the process is expected to be gradual, minimizing the overall impact.
After the pandemic started, the UAE Central Bank (CBUAE) implemented a Targeted Economic Support Scheme (TESS), which helped ease the pressure on corporate issuers and small and mid-size enterprises, S&P said. But it did not reduce credit risk on the banking system’s balance sheet.
“The UAE has a wealthy economy with strong fiscal and external positions. The strength of the government’s net asset position has helped counteract the negative impact of lower oil prices on economic growth since late 2015,” S&P said in the report authored by credit analysts Puneet Tuli and Mohamed Damak.
It said that the pandemic has presented a new challenge to the economy and real estate sector.
S&P estimates the banking system’s total exposure to the real estate and construction sectors stood at 28 percent as of year-end 2020, assuming that one-third of personal loans for consumption purposes are channeled to real estate.
Residential real estate prices have declined more than 40 percent since the peak in the second-quarter 2014.
The credit ratings agency expects prices to remain under pressure in 2021.
Another 20 percent of the banking sector’s total lending covered sectors such as trade, transport,storage, communication, and personal loans for business purposes at year-end 2020.
A portion of these loans are at risk, which in addition to stress in real estate may lead to increased credit losses for UAE banks, it said.

 


Dubai Customs transactions reach 5 million in Q1

Dubai Customs transactions reach 5 million in Q1
Updated 18 April 2021

Dubai Customs transactions reach 5 million in Q1

Dubai Customs transactions reach 5 million in Q1
  • This high traffic “reflects the sustainability and resilience of Dubai and UAE’s economy”

DUBAI: Dubai Customs completed five million transactions in the first quarter of this year – up by 20 percent from the same period in 2020.
Customs declarations grew 24 percent over the period, with 50,000 average daily declarations.
The agency also recorded 238,400 payment requests, 141,800 certificate and report requests, 76,700 inspection service requests, and 59,600 business registration service requests, it said in a statement.
This high traffic “reflects the sustainability and resilience of Dubai and UAE’s economy,” Abdullah Mohammed Al-Khaja, executive director of the agency’s client management division, said.“We will target new international markets and attract more foreign investments to achieve Dubai vision of raising trade to $2 trillion in the next five years,” he added.

 


Saudi Arabia’s EIC buys assets from bust Belgian power firm

Saudi Arabia’s EIC buys assets from bust Belgian power firm
Updated 18 April 2021

Saudi Arabia’s EIC buys assets from bust Belgian power firm

Saudi Arabia’s EIC buys assets from bust Belgian power firm
  • The assets include machinery, equipment, inventory and software for designing transformers and mobile substations

DUBAI: Saudi Arabia's Electrical Industries Company has agreed to buy some assets of CG Power Belgium from its liquidator for about €5 million.
The assets include machinery, equipment, inventory and software for designing transformers and mobile substations, the Dammam-based company said in a stock exchange filing on Sunday.
It also revealed it was in the final process of establishing a unit in Belgium to hold the newly acquired assets.

Electrical Industries Company (EIC) is a holding company that provides electrical products and services in Saudi Arabia and the Middle East.

It owns Saudi Transformers Co, popularly known as STC and Wahah Electric Supply Company of Saudi Arabia, also known as WESCOSA.

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