BLUE FUEL Gazprom Export Global Newsletter December 2016/ Vol. 9/ Issue 4 Interview with Thilo Wieland, Wintershall’s Head of E&P in Russia, North Africa and South America Page 5 Evaluation of aggregate costs of power generation Page 9 Impressions of visiting an LNG-fuelled ship Page 14 ‘Imperial Capitals’ performance took place in St. Petersburg Page 20 www.gazpromexport.com | [email protected] +7 (812) 646-14-14 | [email protected] © Gazprom Export BLUE FUEL I n this issue Gazprom Export Global Newsletter December 2016/ Vol. 9/ Issue 4 To our readers...............................................................................................4 Interview with Thilo Wieland, Wintershall’s Head of E&P in Russia, North Africa and South America..........5 Gazprom beats all-time daily export records.................................................8 Gazprom Export’s 3rd gas auction successfully completed...........................8 Evaluation of aggregate costs of power generation........................................9 Gazprom sets up a new NGV company in Europe..........................................13 Impressions of visiting an LNG-fuelled ship................................................14 Natural gas for transport is essential for Germany’s ‘Energiewende’............16 Reflections by an old oil rat after a visit in a gas fueled ship’s engine room......................................................................................17 St. Petersburg Open ATP World Tour tournament.......................................19 ‘Imperial Capitals’ performance took place in St. Petersburg.......................20 Publishers Contact Info: www.gazpromexport.com | [email protected] +7 (812) 646-14-14 | [email protected] December 2016/ Vol. 9/ Issue 4 BLUE FUEL To our readers «I look forward to more exciting and challenging projects with our Russian partners at Gazprom» The autumn of 2016 was a season of big a greater flexibility of our exports bringing Interview with Mr. Thilo Wieland, Wintershall’s Head of E&P in Russia, North Africa and South America. records for Gazprom Group. In November natural gas to the consumption growth Gazprom harvested a series of absolute areas in North-Western Europe and THILO WIELAND, an industrial engineering and business records of daily supplies, reaching the Turkey. management graduate, has been a member of the Wintershall all-time maximum of 614.5 mcmd on Board of Executive Directors since December 2015 and is November 29th. Another achievement But will there be enough demand? responsible for Exploration & Production in Russia, North Africa was our historical monthly record – this At Gazprom we answer this question & South America. After studying industrial engineering at the November our exports grew to 17.6 bcm, pragmatically, but positively. Over the Technical University of Berlin, he began his career in 1999 at the figure which exceeds the annual gas last two years we have been witnessing Wintershall Erdgas Handelshaus in Berlin. Since then he has held consumption of Poland. We are also on a revival of natural gas sector in Europe. various positions within the Wintershall Group, among others as track to hit this year an absolute record There is no double-digit growth indeed, Head of Department Natural Gas Supply West at WINGAS. Until of annual gas exports both of Soviet rather a modest comeback of gas to 2013, he represented Wintershall’s shareholder interests in the times and the history of modern Russia. power generation.But big deals always Nord Stream and South Stream projects before becoming Moreover, the share of Gazprom’s gas start small. We believe that the European Vice President, Strategy and Portfolio Management, within the in Europe grows steadily and has almost climate policy could be a solid foothold Wintershall Group. As General Manager of Wintershall Libya, reached about 1/3rd in the European gas for the future dawn of natural gas. The Wieland has been responsible for the activities of Germany’s consumption. UK has already introduced the carbon largest internationally active oil and gas producer in the North tax, we have heard such discussions African country since 2014. What are all our records about? Aside taking place in France. We hope that the from the pricing environment (Gazprom’s recent ratification of the Paris Agreement Mr. Wieland, thank you for talking to “Blue Fuel”. You started Also the Severneftegazprom joint venture is developing contract prices were noticeably more by the EU will allow Brussels to figure a your career at Wintershall Erdgas Handelshaus. Since then you excellently. This year we have broken the 200 billion cubic attractive than hub prices this autumn) concrete set of measures to fight global have held various positions at Wintershall. You have devoted a meters mark. This is an important milestone. These are very good and weather conditions (which were warming, thus building a sustainable and lot of time to the natural gas trade. Could you please explain figures and we very much hope that we can move forward in pretty “normal” all over the year), secure energy system of the future. And the role that natural gas currently plays in Wintershall’s E&P future at a similar speed. The natural gas produced each year Gazprom remains the only supplier natural gas is destined by nature to take activities and trading business? by our joint ventures in Russia (around 30 billion cubic meters) a strategic place in it, paving the road able to securely provide significant would be enough to supply a third of all German households. for a wider use of at the moment heavily- Natural gas plays an important role for us – it comprises a additional volumes to its clients in Moreover, through our asset swap we have received 25% plus subsidized renewables. Europe. Surprisingly, the long-awaited substantial part of our total production volume. Incidentally, we a one share in blocks 4 and 5 of the Achimov formation in wave of LNG coming to Europe as the managed to increase our production last year by 13 percent to the Urengoy natural gas and condensate field. It is estimated We are confident that in trustworthy result of the vanishing “Asian premium” 153 mmboe, which was partly due to the growth at Achimgaz, that up to 274 billion cubic meters of gas and 74 million tons of dialog between the gas industry, didn’t happen. Instead, during the three our joint project with Gazprom in Western Siberia. condensate lie there. regulators and European policy-makers quarters of 2016 Gazprom’s exports grew In the coming years we want to continue expanding the we will give a birth to a truly golden age This clearly offers considerable potential. However, as you by impressive 11 bcm compared with production of oil and gas – to 190 million boe in 2018, mostly via of natural gas on European shores. And are aware, this project presents some challenges. Namely the same period of 2015, and the last the further development of Achimgaz but also our Norwegian we welcome new suppliers to Europe quarter even by the modest estimates will activities, as well as the Vega Pléyade gas project in Tierra since they spark interest towards natural increase this figure by half. Our capability del Fuego off the coast of Argentina, which commenced gas. As far as our ability to compete is to promptly react to demand fluctuations production in February 2016. is extremely important in times of the concerned – our record figures simply falling indigenous production in Europe speak for themselves. The course has thus been set for further growth at the source. and continuing inspections on ageing nuclear power plants. What role does Achimgaz play in Wintershall’s global E&P portfolio? Gazprom has huge production capacities Achimgaz is a German-Russian success story. Together with of more than 600 bcm per year and our partner Gazprom, we have been producing natural gas an extensive pipeline network, which and condensate in Novy Urengoy in Western Siberia for more means that Gazprom can easily double than 10 years. Since commercial production started in 2011, Wintershall in Argentina: Wintershall is the fourth-largest producer of its exports to Europe if there is a demand. we have jointly extracted more than 20 billion cubic meters of natural gas in Argentina with operations in Neuquén, Tierra del Fuego Our new pipeline routes will contribute to natural gas. and Mendoza provinces 4 www.gazpromexport.com | [email protected] | +7 (812) 646-14-14 | [email protected] 5 December 2016/ Vol. 9/ Issue 4 BLUE FUEL the development in adverse weather identify problems but also identify mostly on gas imports from Russia. Thus this country plays a Hence we are developing Wintershall in Argentina into conditions at the Arctic Circle, which opportunities and potential. We have special role in supplying the EU with natural gas. We are in the a competence center for unconventional resources: we demands substantial time and financial developed a problem-oriented strategy fortunate position that the majority of the world’s reserves lie at are an operator in the promising Vaca Muerta formation. resources. in this regard. We are saving, and we are pipeline distance to Europe. The expansion of the Nord Stream The formation is one of the largest shale gas and shale oil reducing costs. But we are also investing. formations worldwide: the Energy Information Administration We are confident however that with pipeline will further strengthen the security of supply. There is no contradiction here.