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Kazakhstan will continue to increase oil production under OPEC+ agreement

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Kazakhstan will continue to increase oil production in May, June and July of 2021 following the 15th meeting of OPEC (Organisation of the Petroleum Exporting Countries) and non-OPEC ministers meeting that took place virtually, the Kazakh Ministry of Energy press service reported, writes Abira Kuandyk in Business.   

“On 1 April, a ministerial meeting of the countries participating in the OPEC+ agreement took place. Collectively countries decided to increase the current production level of OPEC+ countries by 350,000 barrels per day in May and June and by 450,000 barrels per day in July,” said the Kazakh Ministry of Energy in a press statement. 

Kazakhstan’s obligation under the OPEC+ agreement states that oil production will amount to 1.46 million barrels per day for May and June and 1.47 million barrels per day for July. 

The data on the trading platform illustrates that the cost of Brent crude oil has risen in price by almost 3.6 percent and rose to US$65 per barrel. 

The Meeting welcomed the positive performance of participating countries. “Overall conformity reached 115 per cent in February 2021, reinforcing the trend of aggregate high conformity by participating countries,” said OPEC in a press statement.  

On 4 March, Kazakh Energy Minister Nurlan Nogayev participated in the 14th meeting of OPEC and non-OPEC ministers after which Kazakhstan and Russia were allowed to increase oil production to 20,000 barrels per day and 130,000 barrels per day, respectively, in April. 

Energy

US and Germany strike Nord Stream 2 pipeline deal to push back on Russian 'aggression'

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Workers are seen at the construction site of the Nord Stream 2 gas pipeline, near the town of Kingisepp, Leningrad region, Russia, June 5, 2019. REUTERS/Anton Vaganov/File Photo

The United States and Germany have unveiled an agreement on the Nord Stream 2 gas pipeline under which Berlin pledged to respond to any attempt by Russia to use energy as a weapon against Ukraine and other Central and Eastern European countries, write Simon Lewis, Andrea Shalal, Andreas Rinke, Thomas Escritt, Pavel Polityuk, Arshad Mohammed, David Brunnstrom and Doyinsola Oladipo.

The pact aims to mitigate what critics see as the strategic dangers of the $11 billion pipeline, now 98% complete, being built under the Baltic Sea to carry gas from Russia's Arctic region to Germany.

U.S. officials have opposed the pipeline, which would allow Russia to export gas directly to Germany and potentially cut off other nations, but President Joe Biden's administration has chosen not to try to kill it with US sanctions.

Instead, it has negotiated the pact with Germany that threatens to impose costs on Russia if it seeks to use the pipeline to harm Ukraine or other countries in the region.

But those measures appeared to have done little to calm fears in Ukraine, which said it was asking for talks with both the European Union and Germany over the pipeline. The agreement also faces political opposition in the United States and Germany.

A joint statement setting out the details of the deal said Washington and Berlin were "united in their determination to hold Russia to account for its aggression and malign activities by imposing costs via sanctions and other tools."

If Russia attempts to "use energy as a weapon or commit further aggressive acts against Ukraine," Germany will take steps on its own and push for actions at the EU, including sanctions, "to limit Russian export capabilities to Europe in the energy sector," the statement said.

It did not detail specific Russian actions that would trigger such a move. "We elected not to provide Russia with a road map in terms of how they can evade that commitment to push back," a senior State Department official told reporters, speaking on condition of anonymity.

"We also will certainly look to hold any future German governments accountable for the commitments that they have made in this," the official said.

Under the agreement, Germany will "utilize all available leverage" to extend by 10 years the Russia-Ukraine gas transit agreement, a source of major revenues to Ukraine that expires in 2024.

Germany will also contribute at least $175 million to a new $1 billion "Green Fund for Ukraine" aimed at improving the country's energy independence.

Ukraine sent notes to Brussels and Berlin calling for consultations, Foreign Minister Dmytro Kuleba said in a tweet, adding the pipeline "threatens Ukraine's security." Read more.

Kuleba also issued a statement with Poland's foreign minister, Zbigniew Rau, pledging to work together to oppose Nord Stream 2.

Ukrainian President Volodymyr Zelenskiy said he was looking forward to a "frank and vibrant"discussion with Biden over the pipeline when the two meet in Washington next month. The visit was announced by the White House on Wednesday, but press secretary Jen Psaki said the timing of the announcement was not related to the pipeline agreement.

German Chancellor Angela Merkel spoke by phone with Russian President Vladimir Putin hours before the release of the agreement, the German government said, saying Nord Stream 2 and gas transit via Ukraine were among the topics.

The pipeline had been hanging over US-German relations since former President Donald Trump said it could turn Germany into a "hostage of Russia" and approved some sanctions.

German Foreign Minister Heiko Maas said on Twitter he was "relieved that we have found a constructive solution".

Russian Foreign Minister Sergei Lavrov, asked about the reported details of the agreement earlier on Wednesday, said any threat of sanctions against Russia was not "acceptable," according to the Interfax news agency.

Even before it was made public, leaked details of the agreement were drawing criticism from ome lawmakers in both Germany and the United States.

Republican Senator Ted Cruz, who has been holding up Biden's ambassadorial nominations over his concerns about Nord Stream 2, said the reported agreement would be "a generational geopolitical win for Putin and a catastrophe for the United States and our allies."

Cruz and some other lawmakers on both sides of the aisle are furious with the Democratic president for waiving congressionally mandated sanctions against the pipeline and are working on ways to force the administration's hand on sanctions, according to congressional aides.

Democratic Senator Jeanne Shaheen, who sits on the Senate Foreign Relations Committee, said she was not convinced the agreement would mitigate the impact of the pipeline, which she said "empowers the Kremlin to spread its malign influence throughout Eastern Europe."

"I’m skeptical that it will be sufficient when the key player at the table – Russia – refuses to play by the rules," Shaheen said.

In Germany, top members of the environmentalist Greens party called the reported agreement "a bitter setback for climate protection" that would benefit Putin and weaken Ukraine.

Biden administration officials insist the pipeline was so close to being finished when they took office in January that there was no way for them to prevent its completion.

"Certainly we think that there is more that the previous administration could have done," the US official said. "But, you know, we were making the best of a bad hand."

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Belarus

Belarus powers ahead with nuclear project despite some opposition

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Despite opposition in some quarters, Belarus has become the latest in a growing number of countries using nuclear energy.

Each insist nuclear produces clean, reliable and cost-effective electricity.

The EU supports safe nuclear production and one of the newest plants is in Belarus where the first reactor of the country’s first ever nuclear power plant was connected last year to the national grid and earlier this year started fully-fledged commercial operation.

The Belarusian Nuclear Power Plant, also known as the Astravets plant, will have two operating reactors with a total about 2.4 GW of generation capacity when completed in 2022.

When both units are at full power, the 2382 MWe plant will avoid the emission of more than 14 million tonnes of carbon dioxide each year by replacing carbon-intensive fossil fuels generation.

Belarus is considering construction of a second nuclear power plant which would further reduce its dependency on imported fossil fuels and move the country closer to net-zero.

Currently, there are about 443 nuclear power reactors operating in 33 countries, providing about 10% of the world's electricity.

About 50 power reactors are currently being constructed in 19 countries.

Sama Bilbao y León, Director General of the World Nuclear Association, the international organisation that represents the global nuclear industry, said: “Evidence is mounting that to keep on a sustainable and low-carbon energy path we need to rapidly accelerate the amount of new nuclear capacity built and connected to the grid globally. The 2.4 GW of new nuclear capacity in Belarus will be a vital contribution to achieving this goal.”

The Belarus plant has faced continued opposition from neighbouring Lithuania where officials have voiced concerns about safety.

The Belarusian energy ministry has said the plant when fully operational will supply about one-third of the country’s electricity requirements.

The plant is reportedly costing about $7-10 billion.

Despite concerns by some MEPs, who have mounted a strong lobbying campaign against the Belarusian plant, international watchdogs, such as International Atomic Energy Agency (IAEA) have welcomed project’s completion.

The IAEA team of experts recently has completed a nuclear security advisory mission in Belarus, carried out at the request of the Belarus government. The aim was to review the national security regime for nuclear material and associated facilities and activities and the visit included a review of physical protection measures implemented at the site, security aspects related to the transport of nuclear material and computer security.

The team, which included experts from France, Switzerland and the UK, concluded that Belarus had established a nuclear security regime in compliance with the IAEA’s guidance on the fundamentals of nuclear security. Good practices were identified that can serve as examples to other IAEA Member States to help strengthen their nuclear security activities.

IAEA’s Division of Nuclear Security Director Elena Buglova said: “By hosting an IPPAS mission, Belarus has demonstrated its strong commitment and continuous efforts to enhance its national nuclear security regime. Belarus has also contributed to refining IPPAS methodologies in recent months, in particular by conducting a pilot self-assessment of its nuclear security regime in preparation for the mission.”

The mission was, in fact, the third IPPAS mission hosted by Belarus, following two which took place in 2000 and 2009 respectively.

Despite efforts to offer reassurances, concerns do persist about the safety of the nuclear industry.

French energy expert Jean-Marie Berniolles concedes that accidents at nuclear plants over the years have “deeply changed” Europe’s perception of nuclear plants, “turning what should have been one of the most sustainable electricity generation sources into a lightning rod for criticism”.

He said: “This is proof of an increasingly ideologically tainted viewpoint entirely divorced from scientific facts.”

France is one country that has fallen out of love with the nuclear technology, culminating in the 2015 Act on the energy transition for green growth that envisions the share of nuclear in France’s energy mix to fall to 50% (down from roughly 75%) by 2025.

There are many who argue that this will be impossible to achieve. 

Berniolles says the Belarus plant is “another example of how nuclear safety is leveraged to prevent NPPs from achieving full and timely operability”.

He said, “Although not a member state of the European Union, several MEPS, at the urging of Lithuania, demanded in February 2021 that Belarus suspend the project over supposed safety concerns.”

Such demands continue to be voiced fervently, even after the European Nuclear Safety Regulators Group (ENSREG) said that the safety measures at Astravets are squarely in line with European standards. The peer reviewed report – published after extensive site visits and safety evaluations – said that the reactors as well as the NPP’s location are “no cause for concern”.

Indeed, IAEA Director General Rafael Grossi stated in a recent European Parliament hearing that: “We’ve been engaging with Belarus for a long time,” “we are present in the field all the time”, and the IAEA has found “good practices and things to improve but we have not found any reason for that plant not to operate”.

The Belarus plant’s opponents continue to draw comparisons to Chernobyl but Berniolles says that “one of the fundamental lessons gleaned from Chernobyl was that complete core melt-throughs needed to be thoroughly contained”.

“This is usually carried out with a device called a core-catcher, and every VVER-1200 reactor – two of which are in Astravets – is equipped with it. The core-catcher’s cooling system must be able to cool the core debris where a thermal power of about 50 MW is generated during the first days following the nuclear accident. No neutronic excursion occurs under these circumstances, in what is another fundamental difference to Chernobyl. Given that European safety experts have not raised these issues during their analyses of Astravets indicates that there are no problems with these measures,” he added.

He and others note that while Lithuania and some MEPs may have spent years criticising the plant’s safety measures “the fact is that they were never found to be seriously lacking”.

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Energy

Joint statement of the US and Germany on support for Ukraine, European energy security and climate goals

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The US and Germany have issued a joint statement following German Chancellor Angela Merkel's recent visit to Washington to meet bilaterally with US President Joe Biden. The statement addresses the controversial Nordstream 2 project, which has divided opinion in the EU.

"The United States and Germany are steadfast in their support for Ukraine’s sovereignty, territorial integrity, independence, and chosen European path. We recommit ourselves today (22 July) to push back against Russian aggression and malign activities in Ukraine and beyond. The United States pledges to support Germany’s and France’s efforts to bring peace to eastern Ukraine via the Normandy Format. Germany will intensify its efforts within the Normandy Format to facilitate the implementation of the Minsk agreements. The United States and Germany affirm their commitment to tackling the climate crisis and taking decisive action to reduce emissions in the 2020s to keep a 1.5-degree Celsius temperature limit within reach.

"The United States and Germany are united in their determination to hold Russia to account for its aggression and malign activities by imposing costs via sanctions and other tools. We commit to working together via the newly established US-EU High Level Dialogue on Russia, and via bilateral channels, to ensure the United States and the EU remain prepared, including with appropriate tools and mechanisms, to respond together to Russian aggression and malign activities, including Russian efforts to use energy as a weapon. Should Russia attempt to use energy as a weapon or commit further aggressive acts against Ukraine, Germany will take action at the national level and press for effective measures at the European level, including sanctions, to limit Russian export capabilities to Europe in the energy sector, including gas, and/or in other economically relevant sectors. This commitment is designed to ensure that Russia will not misuse any pipeline, including Nord Stream 2, to achieve aggressive political ends by using energy as a weapon.

"We support the energy security of Ukraine and Central and Eastern Europe, including the key principles enshrined in the EU’s Third Energy Package of diversity and security of supply. Germany underscores that it will abide by both the letter and the spirit of the Third Energy Package with respect to Nord Stream 2 under German jurisdiction to ensure unbundling and third-party access. This includes an assessment of any risks posed by certification of the project operator to the security of energy supply of the EU.

"The United States and Germany are united in their belief that it is in Ukraine’s and Europe’s interest for gas transit via Ukraine to continue beyond 2024. In line with this belief, Germany commits to utilize all available leverage to facilitate an extension of up to 10 years to Ukraine’s gas Transit agreement with Russia, including appointing a special envoy to support those negotiations, to begin as soon as possible and no later than September 1. The United States commits to fully support these efforts.

"The United States and Germany are resolute in their commitment to the fight against climate change and ensuring the success of the Paris Agreement by reducing our own emissions in line with net-zero by 2050 at the latest, encouraging the strengthening of climate ambition of other major economies, and collaborating on the policies and technologies to accelerate the global net-zero transition. That is why we have launched the U.S.-Germany Climate and Energy Partnership. The Partnership will foster U.S.-Germany collaboration on developing actionable roadmaps to reach our ambitious emission reduction targets; coordinating our domestic policies and priorities in sectoral decarbonization initiatives and multilateral fora; mobilizing investment in energy transition; and developing, demonstrating, and scaling critical energy technologies such as renewable energy and storage, hydrogen, energy efficiency, and electric mobility.

"As part of the US-Germany Climate and Energy Partnership, we have decided to establish a pillar to support the energy transitions in emerging economies. This pillar will include a focus on supporting Ukraine and other countries in Central and Eastern Europe. These efforts will not only contribute to the fight against climate change but will support European energy security by reducing demand for Russian energy.

"In line with these efforts, Germany commits to establish and administer a Green Fund for Ukraine to support Ukraine’s energy transition, energy efficiency, and energy security. Germany and the United States will endeavor to promote and support investments of at least $1 billion in the Green Fund for Ukraine, including from third parties such as private-sector entities. Germany will provide an initial donation to the fund of at least $175 million and will work toward extending its commitments in the coming budget years. The fund will promote the use of renewable energy; facilitate the development of hydrogen; increase energy efficiency; accelerate the transition from coal; and foster carbon neutrality. The United States plans to support the initiative via technical assistance and policy support consistent with the objectives of the fund, in addition to programs supporting market integration, regulatory reform, and renewables development in Ukraine’s energy sector.

"In addition, Germany will continue to support bilateral energy projects with Ukraine, especially in the field of renewables and energy efficiency, as well as coal transition support, including the appointment of a special envoy with dedicated funding of $70 million. Germany is also ready to launch a Ukraine Resilience Package to support Ukraine’s energy security. This will include efforts to safeguard and increase the capacity for reverse flows of gas to Ukraine, with the aim of shielding Ukraine completely from potential future attempts by Russia to cut gas supplies to the country. It will also include technical assistance for Ukraine’s integration into the European electricity grid, building on and in coordination with the ongoing work by the EU and the U.S. Agency for International Development. In addition, Germany will facilitate Ukraine’s inclusion in Germany’s Cyber Capacity Building Facility, support efforts to reform Ukraine’s energy sector, and assist with identifying options to modernize Ukraine’s gas transmission systems.

"The United States and Germany express their strong support for the Three Seas Initiative and its efforts to strengthen infrastructure connectivity and energy security in Central and Eastern Europe. Germany commits to expand its engagement with the initiative with an eye toward financially supporting projects of the Three Seas Initiative in the fields of regional energy security and renewable energy. In addition, Germany will support projects of common interest in the energy sector via the EU budget, with contributions of up to $1.77 billion in 2021-2027. The United States remains committed to investing in the Three Seas Initiative and continues to encourage concrete investments by members and others."

Robert Pszczel, senior officer for Russia and the Western Balkans, Public Diplomacy Division (PDD), NATO HQ, was not overly impressed with the agreement:

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