Reacting to news of the stiff price hike on natural gas inked by Ukraine’s outgoing government, Yulia Tymoshenko, the opposition leader who is poised to return as Ukraine’s prime minister, lambasted the deal and vowed to eliminate middleman companies in negotiating energy deals.
“This is a result of an absolutely brainless policy of setting up RosUkrEnergo as a broker,” the Associated Press reported Tymoshenko as saying on Dec. 4, the day Russian energy giant Gazprom announced stiff price hikes for Ukraine.
“There is no logic here. This is corruption,” she was quoted as saying. “Undoubtedly, if our team comes to power, we will do all we can so that Ukraine and Russia have the opportunity to work without any go-betweens,” she added.
Late on Dec. 4, Gazprom announced Ukraine would pay nearly $180 per 1,000 cubic meters of Russian natural gas beginning next year, a 40 percent increase over current prices.
Nearly all the gas Ukraine uses is imported via Russia from the energy-rich Central Asian nation of Turkmenistan. Some of the gas is also of Uzbek and Kazakh origin. The gas is imported through a Swiss-based trading company, RosUkrEnergo, half of which is owned by Gazprom and half by two Ukrainian businessmen.
RosUkrEnergo spokesman Andrei Knutov said no official documents have been signed, but that was expected to happen in the coming days.
Ukraine’s energy minister said a final deal could be inked on Dec. 5.
The deal comes one week after Gazprom announced it would pay up to 30 percent more beginning next year for natural gas from Turkmenistan, which Gazprom resells to Ukraine.
Thursday, December 6, 2007
Day Traders Failed to Manipulate Natural Gas Price
Three former El Paso Corp. traders' efforts to manipulate the price of natural gas by reporting false data were driven by greed, prosecutors told jurors Wednesday.
But defense attorneys for James Brooks, Wesley C. Walton and James Patrick Phillips told jurors the ex-traders never submitted false data and were victims of unclear policies on how to report pricing information.
Each defendant is on trial for 49 counts of conspiracy, false reporting and wire fraud related to accusations of reporting bogus trade data used to calculate natural gas index prices. If convicted, each faces up to five years in prison and a fine up to $500,000 for each count.
Natural gas price indexes are used to price billions of dollars in transactions involving natural gas and electricity in physical and financial markets each year. El Paso owns the largest network of natural gas pipelines in the country.
Prosecutor John Lewis told jurors during opening statements that the trio from 2000 to 2002 transmitted 81 reports containing false data to Inside FERC Natural Gas Report and Natural Gas Intelligence, two industry journals.
The journals conduct pricing surveys of natural gas bought and sold in the country by polling traders. The three ex-traders submitted false data to the journals in order to drive up or down the daily price of natural gas, Lewis said.
They reported the bogus trade data in order to earn more profits for their company and as a result get paid bigger work bonuses, he said.
"You can see the potential for abuse and abused this system was," Lewis said.
Brooks, who was El Paso's former head of natural gas trading, was the person most responsible for fraud at the company, Lewis said.
"He ordered (employees) to do it even when employees objected," he said. "Brooks ordered fraud to take place. Walton guided it. Phillips carried it out."
Wendell Odom, Brooks' attorney, told jurors that while his client was a "hard-driving" trader, he didn't submit false data.
"All of the (false) reporting we are accused of doing is going to be within the range of what people actually purchased and sold natural gas for," he said.
Odom denied Brooks or the others earned big bonuses for their work.
"He's a good man," Odom said.
Lewis told jurors that prosecutors would play recordings of business calls in which all three defendants talked and bragged about manipulating prices.
David Gerger, Walton's attorney, said prosecutors are taking the calls out of context.
"They are cursing like a sailor, boasting, bragging," he said. "That horrible language that traders talk is not a crime. What he's accused of, the evidence will show you he didn't do."
David Adler, Phillips' attorney, told jurors his client is a hardworking family man who never got instructions from his company or the trade journals on how to report the natural gas data.
"The information he sent was from actual trades. It's not fake information," Adler said. "Others may have sent fake numbers."
But defense attorneys for James Brooks, Wesley C. Walton and James Patrick Phillips told jurors the ex-traders never submitted false data and were victims of unclear policies on how to report pricing information.
Each defendant is on trial for 49 counts of conspiracy, false reporting and wire fraud related to accusations of reporting bogus trade data used to calculate natural gas index prices. If convicted, each faces up to five years in prison and a fine up to $500,000 for each count.
Natural gas price indexes are used to price billions of dollars in transactions involving natural gas and electricity in physical and financial markets each year. El Paso owns the largest network of natural gas pipelines in the country.
Prosecutor John Lewis told jurors during opening statements that the trio from 2000 to 2002 transmitted 81 reports containing false data to Inside FERC Natural Gas Report and Natural Gas Intelligence, two industry journals.
The journals conduct pricing surveys of natural gas bought and sold in the country by polling traders. The three ex-traders submitted false data to the journals in order to drive up or down the daily price of natural gas, Lewis said.
They reported the bogus trade data in order to earn more profits for their company and as a result get paid bigger work bonuses, he said.
"You can see the potential for abuse and abused this system was," Lewis said.
Brooks, who was El Paso's former head of natural gas trading, was the person most responsible for fraud at the company, Lewis said.
"He ordered (employees) to do it even when employees objected," he said. "Brooks ordered fraud to take place. Walton guided it. Phillips carried it out."
Wendell Odom, Brooks' attorney, told jurors that while his client was a "hard-driving" trader, he didn't submit false data.
"All of the (false) reporting we are accused of doing is going to be within the range of what people actually purchased and sold natural gas for," he said.
Odom denied Brooks or the others earned big bonuses for their work.
"He's a good man," Odom said.
Lewis told jurors that prosecutors would play recordings of business calls in which all three defendants talked and bragged about manipulating prices.
David Gerger, Walton's attorney, said prosecutors are taking the calls out of context.
"They are cursing like a sailor, boasting, bragging," he said. "That horrible language that traders talk is not a crime. What he's accused of, the evidence will show you he didn't do."
David Adler, Phillips' attorney, told jurors his client is a hardworking family man who never got instructions from his company or the trade journals on how to report the natural gas data.
"The information he sent was from actual trades. It's not fake information," Adler said. "Others may have sent fake numbers."
Wednesday, December 5, 2007
Natural Gas Bidding Tricky in Alaska
Alaska's unfolding political-corruption scandal deterred one energy company from submitting a natural gas pipeline proposal to the state, while uncertain economics precluded the proposal of another.
MidAmerican Energy Holdings Co. (MDPWN.OB: Quote, Profile , Research) and BG Group Plc (BG.L: Quote, Profile , Research), companies that had been expected to bid for a state license to build a long-awaited natural gas pipeline project under the new Alaska Gasline Inducement Act, said they declined to participate because of an unfolding bribery scandal and shaky economics, respectively.
"For a project of this magnitude to proceed, integrity must be the foundation upon which all project elements are based," MidAmerican Chairman David Sokol said a letter sent Friday to Alaska Gov. Sarah Palin.
"As you are painfully aware, the ongoing corruption investigations coupled with previous indictments, guilty pleas and convictions draw into question virtually every major Alaskan project participant and governmental levels from State to Federal," he said.
Two executives from Alaska's largest oil-services company have pleaded guilty to a variety of bribery and corruption charges resulting from the wide-ranging federal investigation. Three former state legislators have been convicted in trials held so far, and a fourth trial is pending.
BG's Managing Director Martin Houston said in a Nov. 29 letter to Palin that the company still hopes to participate in whatever gas project emerges.
MidAmerican Energy Holdings Co. (MDPWN.OB: Quote, Profile , Research) and BG Group Plc (BG.L: Quote, Profile , Research), companies that had been expected to bid for a state license to build a long-awaited natural gas pipeline project under the new Alaska Gasline Inducement Act, said they declined to participate because of an unfolding bribery scandal and shaky economics, respectively.
"For a project of this magnitude to proceed, integrity must be the foundation upon which all project elements are based," MidAmerican Chairman David Sokol said a letter sent Friday to Alaska Gov. Sarah Palin.
"As you are painfully aware, the ongoing corruption investigations coupled with previous indictments, guilty pleas and convictions draw into question virtually every major Alaskan project participant and governmental levels from State to Federal," he said.
Two executives from Alaska's largest oil-services company have pleaded guilty to a variety of bribery and corruption charges resulting from the wide-ranging federal investigation. Three former state legislators have been convicted in trials held so far, and a fourth trial is pending.
BG's Managing Director Martin Houston said in a Nov. 29 letter to Palin that the company still hopes to participate in whatever gas project emerges.
Tuesday, December 4, 2007
El Paso Corp Planning 2 Billion/Day Natural Gas Line
Another major natural gas pipeline from the Rocky Mountains to other markets was announced Monday, when El Paso Corp. said it wants to build a pipeline from southwestern Wyoming to Oregon.
El Paso is based in Houston.
It's one of several pipeline projects announced recently to expand the Industry's capacity to ship natural gas out of the Rocky Mountains.
El Paso said it's filed a right-of-way application with the Bureau of Land Management for the "Ruby Pipeline" project -- a 680-mile, 42-inch pipeline to carry natural gas from the Opal Hub in Wyoming to another hub in Malin, Ore., near California's northern border.
An El Paso spokesman said the company wasn't releasing a cost estimate on the project.
The pipeline will have an initial capacity of 1.2 billion cubic feet per day -- similar to the $4.4 billion Rockies Express pipeline that will carry natural gas from Colorado's Western Slope 1,678 miles to eastern Ohio. El Paso said the Ruby pipeline will be expandable to 2 billion cubic feet per day.
El Paso is based in Houston.
It's one of several pipeline projects announced recently to expand the Industry's capacity to ship natural gas out of the Rocky Mountains.
El Paso said it's filed a right-of-way application with the Bureau of Land Management for the "Ruby Pipeline" project -- a 680-mile, 42-inch pipeline to carry natural gas from the Opal Hub in Wyoming to another hub in Malin, Ore., near California's northern border.
An El Paso spokesman said the company wasn't releasing a cost estimate on the project.
The pipeline will have an initial capacity of 1.2 billion cubic feet per day -- similar to the $4.4 billion Rockies Express pipeline that will carry natural gas from Colorado's Western Slope 1,678 miles to eastern Ohio. El Paso said the Ruby pipeline will be expandable to 2 billion cubic feet per day.
Monday, December 3, 2007
China Petrochemical Wants Alaska Natural Gas
China Petrochemical Corp is among companies including TransCanada Corp and ConocoPhillips competing to build a pipeline that would allow the first commercial production of natural gas from Alaska's North Slope.
Five companies have applied to build the pipeline, Alaska Governor Sarah Palin said in a statement on Friday, without providing details of their plans.
ConocoPhillips said earlier it submitted a proposal for a US$30 billion conduit that would ship four billion cubic feet of gas a day to markets in the US and Canada.
Producers are reviving plans to tap gas deposits discovered in Alaska decades ago as gains in demand boosted prices for the heating and power-plant fuel and fields that are cheaper to develop become scarce.
North Slope gas reserves, estimated at 35 trillion cubic feet by the state, are currently inaccessible as there's no way to get the fuel to consumers.
"This progress demonstrates to the world that Alaska is well on our way to bringing this long sought-after necessary infrastructure to fruition," Palin said late yesterday at a briefing in Anchorage, which was broadcast over the Internet.
Five companies have applied to build the pipeline, Alaska Governor Sarah Palin said in a statement on Friday, without providing details of their plans.
ConocoPhillips said earlier it submitted a proposal for a US$30 billion conduit that would ship four billion cubic feet of gas a day to markets in the US and Canada.
Producers are reviving plans to tap gas deposits discovered in Alaska decades ago as gains in demand boosted prices for the heating and power-plant fuel and fields that are cheaper to develop become scarce.
North Slope gas reserves, estimated at 35 trillion cubic feet by the state, are currently inaccessible as there's no way to get the fuel to consumers.
"This progress demonstrates to the world that Alaska is well on our way to bringing this long sought-after necessary infrastructure to fruition," Palin said late yesterday at a briefing in Anchorage, which was broadcast over the Internet.
Sunday, December 2, 2007
ConocoPhillips Wants Alaska Natural Gas Pipeline
ConocoPhillips wants to build potentially the world's largest, most expensive energy facility — a multibillion dollar gas pipeline running from Alaska's North Slope to Midwestern states.
The project, with a price tag of up to $42 billion, would be worth it, if it can help supply North American homes and businesses with heating fuel for years to come.
ConocoPhillips, Alaska's leading North Slope oil producer, said Friday it's "prepared to make significant investments, without state matching funds, to advance this project."
It's the first proposal in the state-sponsored competition for a pipeline to tap the rich fields where the industry has identified about 36 trillion cubic feet of proved reserves that could be shipped within the next 10 to 12 years.
The project, with a price tag of up to $42 billion, would be worth it, if it can help supply North American homes and businesses with heating fuel for years to come.
ConocoPhillips, Alaska's leading North Slope oil producer, said Friday it's "prepared to make significant investments, without state matching funds, to advance this project."
It's the first proposal in the state-sponsored competition for a pipeline to tap the rich fields where the industry has identified about 36 trillion cubic feet of proved reserves that could be shipped within the next 10 to 12 years.
Saturday, December 1, 2007
Alaska Developing Natural Gas in North Slope
Five companies, partnerships and entities have submitted proposals to build a massive pipeline from Alaska's North Slope to bring the region's vast but long-languishing natural gas reserves to markets thousands of miles away, state officials announced late on Friday.
The proposals, submitted under the Alaska Gasline Inducement Act passed by the legislature earlier this year, will vie against each other for state support. Friday was the deadline for applications to be submitted.
"This is such an exciting day for Alaska and really an exciting day for America," Gov. Sarah Palin, who organized the competitive-bidding strategy, said at a news conference. "Today's progress under AGIA demonstrates to the world that Alaska is well on our way to bringing this long sought-after infrastructure, a natural gas pipeline, to fruition."
The proposals, submitted under the Alaska Gasline Inducement Act passed by the legislature earlier this year, will vie against each other for state support. Friday was the deadline for applications to be submitted.
"This is such an exciting day for Alaska and really an exciting day for America," Gov. Sarah Palin, who organized the competitive-bidding strategy, said at a news conference. "Today's progress under AGIA demonstrates to the world that Alaska is well on our way to bringing this long sought-after infrastructure, a natural gas pipeline, to fruition."
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