Bulgaria signs up Saudi-led group for TurkStream gas pipeline extension

Bulgaria’s gas pipeline contract with Arkad came after a Bulgarian court cleared legal obstacles to the $1.2 billion deal. (Reuters)
Updated 21 September 2019

Bulgaria signs up Saudi-led group for TurkStream gas pipeline extension

SOFIA: Bulgaria’s state gas company signed a €1.1 billion ($1.2 billion) contract on Wednesday with Saudi-led group Arkad to build a gas pipeline to carry mainly Russian natural gas.

The Balkan country is rushing to build the 474 km pipeline linking its southern border with Turkey to its western border with Serbia to secure a link to the Russian-backed TurkStream pipeline to Serbia, Hungary and Austria.

Russia, which is building the TurkStream to bypass Ukraine to the south, said in July that its second leg, with an annual capacity of 15.75 billion cubic meters will pass via Bulgaria to central Europe.

“This is the so-called Balkan Stream,” Bulgarian Prime Minister Boyko Borissov said at signing of the contract by state gas group Bulgartransgaz.

“We will win from transit fees, this pipeline will remain Bulgarian once it is paid off and mainly our neighbors from North Macedonia, Serbia and Hungary will have alternative gas.”

Borissov said 90 percent of the pipes for the project had already been delivered to Bulgarian ports and Sofia wants to have the first 308 km of the pipeline ready by January, a timetable which many industry observers say will be
extremely hard to achieve.

Borissov said that the pipeline, along with a gas interconnector with Greece will keep Bulgaria on the gas map and not be bypassed by all major routes in southeastern Europe.

The Arkad-led group contract comes a day before representatives of the EU, Russia and Ukraine meet to discuss the future of Russian gas transit to Europe via Ukraine when a 10-year deal expires in January.

The contract became possible after a Bulgarian court cleared legal obstacles and brought to an end a tussle between Arkad and a consortium of a Luxembourg-based unit of Russia’s pipe
maker TMK, Italy’s Bonatti and Germany’s Max Streicher.

Observers said that the court development was likely to mean that the two bidders had agreed to share the contract. 


Oil recoups losses as OPEC, US Fed see robust economy

Updated 14 November 2019

Oil recoups losses as OPEC, US Fed see robust economy

  • US-China trade deal will help remove ‘dark cloud’ over oil, says Barkindo

LONDON: Oil prices reversed early losses on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) said it saw no signs of global recession and rival US shale oil production could grow by much less than expected in 2020.

Also supporting prices were comments by US Federal Reserve Chair Jerome Powell, who said the US economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt.

Brent crude futures stood roughly flat at around $62 per barrel by 1450 GMT, having fallen by over 1 percent earlier in the day. US West Texas Intermediate crude was at $56 per barrel, up 20 cents or 0.4 percent.

“The baseline outlook remains favorable,” Powell said.

OPEC Secretary-General Mohammad Barkindo said global economic fundamentals remained strong and that he was still confident that the US and China would reach a trade deal.

“It will almost remove that dark cloud that had engulfed the global economy,” Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting.

HIGHLIGHT

  • US oil production likely to grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations.
  • The prospects for ‘US crude exports had turned bleak after shipping rates jumped last month.’

He also said some US companies were now saying US oil production would grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations — reducing the risk of an oil glut next year.

US President Donald Trump said on Tuesday Washington and Beijing were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony.

“The expectations of an inventory build in the US and uncertainty over the OPEC+ strategy on output cuts and US/China trade deal are weighing on oil prices,” said analysts at ING, including the head of commodity strategy Warren Patterson.

In the US, crude oil inventories were forecast to have risen for a third straight week last week, while refined products inventories likely declined, a preliminary Reuters poll showed on Tuesday.

ANZ analysts said the prospects for US crude exports had turned bleak after shipping rates jumped last month.