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. Last Updated: 07/27/2016

Business in Brief

China Mulls Pipeline



BEIJING (Bloomberg) -- China and Kazakhstan are studying a proposal to build a natural gas pipeline that may link up with supply grids in Russia and Iran via other Central Asian countries to boost the viability of China's $5.2 billion West-East gas pipeline, the China Daily reported Wednesday, without saying where it obtained the information.

PetroChina Co., the country's largest oil and gas company, needs to boost reserves of gas supplying its 4,000-kilometer pipeline to keep the project running throughout its proposed 45-year lifespan, the report said.

PetroChina's pipeline will start sending gas from China's northwestern province of Xinjiang, which borders Kazakhstan, to the eastern port city of Shanghai on Sept. 1.




Barents Oil Threat



MOSCOW (Bloomberg) -- The Barents Sea faces a greater risk of pollution because of a sixfold increase in oil and gas shipments in the next 16 years, the United Nations said Wednesday.

Oil and gas deposits on Russia's Arctic shelf will increase shipments from the region to 40 million tons by 2020, the UN's Environment Program said in a press release.

"The increased exploration activities for petroleum resources in the Barents Sea, the offshore developments and the shipping of oil and gas along the coasts represent significant threats to this vulnerable Arctic ecosystem," said Klaus Toepfer, UNEP's executive director.

Nuclear-waste storage and the rise of fishing is also a threat to the water's ecosystem, the UN said.

"The Murmansk region houses more radioactive waste than any other region in the world," the UN said.




Bottleneck in Belarus



MOSCOW (Bloomberg) -- Transneft, Russia's state-run pipeline monopoly, said Wednesday that a $500 million Ukrainian pipeline will ship less oil than planned because of a bottleneck in Belarus.

Ukraine wants to carry 180,000 barrels per day of crude through a pipeline built three years ago between Brody, in the center of the country, and the Black Sea port of Odessa. The former Soviet state, which says upgrades could raise shipments to 280,000 barrels per day, depends on Transneft to increase shipments through its idle export pipeline.

Oil flows may exceed 5 million tons per year (100,000 barrels per day) "by a little bit," said deputy CEO Sergei Grigoryev. "We expanded our Baltic port of Primorsk; why do we need to expand pipelines in Belarus to ship more oil across Ukraine?"




MegaFon Taps Siemens



BERLIN (Bloomberg) -- Siemens, the world's fourth-largest maker of cellphones, won an order worth 60 million euros ($73 million) to expand the cellular networks of No. 3 Russian cellphone company MegaFon.

Siemens will supply base stations and switches to Moscow- based MegaFon to help the company expand its network, based on the so-called global system for cellular communications standard, in the Volga and Ural regions, Munich-based Siemens said in an e-mailed release.




Gazprom, Botas Feud



ISTANBUL, Turkey (Bloomberg) -- Botas, Turkey's state pipeline company, is facing new obstacles to the sale of its natural gas purchase contracts because its top supplier, Russia's Gazprom, is opposing the sale method, Hurriyet daily reported Wednesday.

Gazprom will only allow its own Turkish unit, set up earlier this year, to buy some of Botas' contract obligations, Hurriyet said, without naming its source. Gazprom won't allow other potential buyers to see the details of its contract with Botas, Hurriyet said.

Gazprom's continued opposition to the sale has raised tensions between Turkey and Russia a week before President Vladimir Putin visits Turkey to showcase cooperation between the two countries, Hurriyet said.




Dagestan Power Play



MOSCOW (Bloomberg) -- Halcyon Power Investment Co., a Moscow- based fund with $26 million in assets, has bought a minority stake in Dagenergo, a hydropower plant located next to Chechnya.

Halcyon, which invests in Russia's utility industry, paid the market price for slightly less than 5 percent of the company, funder manager David Herne said Wednesday without specifying the amount paid. A 5 percent stake is worth $4.9 million, based on the company's market value.

Dagenergo generates and distributes electricity to Dagestan, one of the country's poorest regions. The utility exports power to Azerbaijan and plans to build more lines to neighboring Chechnya, where 80,000 soldiers are deployed to fight rebel insurgency, Herne said. "Good opportunities exist when there is misinformation or mispricing," he said. "The market is lumping Dagestan with Chechnya."

The Dagestan-based utility is 51 percent owned by Unified Energy Systems, the national power company. Management also owns a stake.