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AGRI And A New Energy Future Rudolf Huber

For The Black Sea Region

TOPICS: AGRI Black Sea
POSTED BY: RUDOLF HUBER
Founder at
Methanumorph
osis
Europe Gas Supply LNG Supply Since my tender youth I
aspired to be a Homo
Universalis better known
today as a Polymath (a person
who excels in a wide variety of
subjects or elds - but not
everything). LNG came into my
life as a leftover nobody
wanted. My former employer
wanted to get into the LNG
trade but nobody wanted to
go for the hard work attached
to the business. So it was
mine for the taking. It was a
steep learning curve as most
of my assumptions were
shattered in the process. And I
MARCH 11, 2015 discovered the incredible [...]
 2011 I was brie y involved in a project called
AGRI the Azerbaijan, Georgia, Romania SOME ENERGY PRICES

Interconnector. I was intrigued, because even
if this project was daring and exotic, it had
immediate appeal to me.

But I underestimated the signs of the time.
There were big ticket pipeline projects
sucking off much-needed media exposure and
political will. There was a sky high oil price
ooding the coffers of hydrocarbon producing
countries with copious cash reserves. Russia
was still the darling of Europe and Putin was
courted assiduously. Plus, LNG as a fuel was
still a silly fad coming from those shale gas totting Gringos.

Still, from a purely logical perspective, the project made a

horrible lot of sense in 2011 already as it was the natural
conduit for gas from the Caspian region towards a gas
hungry region of Europe, the Eastern Balkans. And contrary
to conventional belief, this option would also have been
cheaper as a transport solution than any of the pipeline
options in mountainous Turkey.

But this would not have been the rst project that makes
sense and still does not get thumbs pointing up and it will
sure not be the last.
How different things are today, a mere 4 years after my
Black Sea days. The Ukrainian con ict has made Russia
showing its cards and that it would not hesitate to use the
energy weapon if it thought it would suit its political aims.
The gas lifeline of the European continent, the old Soviet
pipeline system, was running through separatist territory
now and they were threatening to blow it up at any time. It
has exposed the fatal frailness of those steel arteries for the
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security of energy supply of the continent.

But most importantly, Russia teams up with Turkey for an

energy partnership that will sure squeeze everyone else out. RECENT POSTS: RUDOLF HUBER
This does not really bode well for other energy producers
rst of all Azerbaijan. Is school as we know it torture?
I have already described this countrys options in another
post but lets slam the most important factors on the table.
Azerbaijan is a landlocked country. Stop shouting I know
its on the Caspian Shore but lets be frank. An inland water
body, as large as it may be, it has no connection to the
oceans of the world and hence vessels in it remain stuck The vast majority of those
there forever. No connection to the marine trading routes of reading those lines have enjoyed
the world. some form of schooling a time
when elementary education was
meted out in order
This means that
the only way
out for Azeri oil
and gas is the
RANDOM QUOTE
steel in earth
version. And
this limits the If you think its expensive to
options for hire a professional to do the
them as every
job, wait until you hire an
single country
amateur.
on the route
Red Adair
wants cash for
the transit
Next quote
rights pushing
up the price of
transport. The longer the way, the more of those monsters
linger and they want their stomachs lled. Limiting the
voracious gobblers on the way is, therefore, paramount.

But as long as a sky-high oil price gave everyone the feeling

that any otherwise unrealistic project would y, down to
earth options are not even on the table. When Azerbaijan
had the feeling that there would be erce competition for
their gas, they gambled around. When Nabucco and other
pipeline projects competed for their gas supply, they FOLLOW ON FACEBOOK
dithered and waited. When Romania and Bulgaria had the
feeling that rst Nabucco and then South Stream would
anyhow take care of future supply security, why bother?

A project such as AGRI, however sensibly it would possibly

be put together is not very sexy compared to those White
Elephants at least on rst looks.
However, as I said above: Times have changed and the
ThePitBullofLNG
genie wont go back into the bottle anymore. It always 23likes
made good sense to think about regional stable alliances
with physical markets that are close and similar for the
Azeris they just would not listen in the past. It always LikePage
made good sense for Eastern Balkan markets to seriously
develop supply diversi cation and a measure of lesser Bethefirstofyourfriendstolikethis
dependence on the Russian bear but as long as those
pipeline monsters were there, they would not listen. As
nobody would have.

The world over, scores of perfectly reasonable projects did

RECENT POSTS
not even stand a chance to be considered because the
general madness and high prices made energy player hatch
ever more grandiose projects and dreams, wagering that the LPG producers act now or
market would remain stellar forever and swallow whatever go away forever March 26,
folly came to be. 2017
Could Russia be importing US
But it didnt. As so very often those outrageous dreams are
exactly this outrageous. LNG soon? January 15, 2017
Who will pull the curtain on
Now, its back to the feasible, to the mundane, to the stuff the rst gas-electric 18
that makes economic sense in a world with more sensible wheeler/excavator/locomotive
prices. But those projects are hard to nd as many of the January 8, 2017
more sensible folks have either joined the bandwagon of Is LNG more expensive than
those going for LaLa land or have gone totally disheartened pipeline gas? December 19,
as they could not afford to hold out against the unrealistic
2016
twinkle of the bubbleheads.
The Ethane conundrum

But that does not mean that they are not here anymore. December 11, 2016
AGRI may have had an overblown beginning as its rst steps There is a monster waiting for
as a project were shrouded in some foolish expectations as OPEC and its not shale
well. But there is a solid core of economic good sense to it December 4, 2016
and we want to get it exposed.

One of the problems LNG always had is the colossal upfront

investments necessary. Hardly anyone can afford them and
it needs a very deep, strong and growing international
market to justify them. Those investments are so big
because everything that happens in the supply chain is big
and I mean that in a very literal sense.
Vessels are big as distances are great so you want
economics of scale in order to make them less daunting.
Tanks need to be big as one will need to ll those huge
vessels and liquefaction trains need to be big as those big
tanks need rapid lling. Harbors have to be very deep as
those super-large vessels have the draft of a multiple story
building and pumps have to be enormous as those vessels
have to be turned over rapidly.

In the Black Sea, however, distances are not vast and

vessels can be kept smaller which in turn leads us away
from the monstrous vessels and from all the other big stuff.
Because there is another world in LNG, where things are RECENT POSTS: DER LNG PITBULL
much more measured in size and hence much more
manageable. Joggen Sie ruhig neben der Autobahn
Alpenluft ist fast genauso gefhrlich.
Mid-scale modular trains start at sizes about 10 times
smaller than what one would normally nd with the
conventional type. They are modular so they are assembled
at a workshop and put in operation as plug and play as the
industry can imagine today.
Jogger kennen das Problem.
A single 1 Sobald man beim Joggen neben
million ton eine etwas strker befahrene
train on the Strae kommt, beschleicht einen
Georgian coast ein mulmiges Gefhl. All diese
would not be Abgase knnen doch
a huge
investment.
The ship
transporting FOLLOW ME ON TWITTER

the LNG could Modules rule

be 5 times
smaller than the conventional carriers and could stay away Tweetsby@DadofNicki
from expensive and hard to weld alloy membranes or even
RudolfHuber
more expensive spherical tanks. @DadofNicki
Yes,that'sagoodthing.Finally,an
Processes would be simple and no complicated spiral Austrianplayerjumpingonboard.
wound heat exchange technology necessary and even the Mythumbsareup.lnkd.in/gr8ZU7y
tank, a hugely expensive piece of equipment, could be
much more measured in size. AustriasRAG...
RAG,Austrian...
lngworldnews....
A 1 million ton project on the Georgian coast would likely
58m
cost no more than 5 or 6 hundred million USD everything
included (yes, this includes the regasi cation plant and the RudolfHuber
vessel). @DadofNicki

Finally,someoneputsthefinger
And the best is that it could be fully operational at this whereithurts.Chinabeingthe
championofthegreeniesis
scale and gradually be expanded by adding further modules
laughable.Chinadoes
and vessels. This would be signi cantly cheaper that the mlnkd.in/g9gY7zX
rst train.
08Jul

Thats 1,3 bcm for around 500 million CAPEX exposure.

RudolfHuber
What is the cost of putting up a pipeline through Turkey and @DadofNicki
then the Balkans? It'seasytoforgetthelongterm
natureofoil.Youjustdon'tdrilland
But it completely circumnavigates the Turkey issue as its haveoiltomorrow.Investment
territory will not be touched anymore. decisionsmalnkd.in/ePEaRd9

And, it provides LNG on the other side which is better than

just Natural Gas as it can do things that Natural Gas could
hardly accomplish. It would be there as a liquid helping the
heavy transport sector to make the switch from diesel to
Natural Gas. This is on the agendas of the European Union Canadaoiloutputthreaten...
Earlierinvestmentssettoke...
in its Alternative Fuels Strategy and on a host of other EU
ft.com
agendas.

30Jun
And it would help kick start a Black Sea LNG bunkering
market as there would be a reliable supply of LNG for those RudolfHuber
wanting to switch from diesel to this very clean fuel. @DadofNicki
Seehowquicklythingscanturn.
Romania and Bulgaria together could start developing a SomeyearsagoIwasinameeting
Danube LNG strategy on the lower reaches of the river withQatarisandtheyessentially
saidthatEuroplnkd.in/gtKrKzZ
barging parcels of LNG up the river as far as Serbia and
opening up the Balkans to clean fuels. RPTCOLUMN...
Butitisperhap...
AGRI could start quick and grow with the market. It would cnbc.com
start to develop some more independence from supply cuts
for Balkan countries and who knows, Ukraine and Moldova 30Jun
might be interested in joining in and it would give
Azerbaijan a much-needed safety valve for their own gas RudolfHuber
@DadofNicki
volumes.
DasultrafeinerWstensandnicht
dasproblemistsonderneherdie
Crazy times are over its time to come down to the down
chemischenBombenausden
to earth business and do what makes sense for the region. Auspufender
Dieselwagenlnkd.in/gZ3gmie
 Dieselwagenlnkd.in/gZ3gmie
If you found an error, highlight it and press Shift + Enter or
click here to inform us. 28Jun

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