Cross-border energy projects and multilateral cooperation in NEA
Dadi ZHOU, Director General of ERI Shixian GAO, Director of
Center for Energy Economics and Development Strategy Energy Research Institute,
National Development and Reform Commission, PR. China
For the Workshop on
“Towards Multilateral Energy Cooperation in NEA”
September 5, 2003
Seoul
Outline
1.The cooperation potential in Northeast Asia 1.1
Outlook of Energy Demand
1.2 Outlook of oil and natural for China, Japan and Korean
1.3 Export outlook of oil and natural for Russia 2. Cross-border energy projects
2.1 The key cooperation fields
2.2 The potential cooperation projects 3. Multilateral cooperation in Northeast Asia 3.1 The dialogue at difference level
3.2 The dialogue at difference content
1. The cooperation potential in Northeast Asia
1.1 Outlook of Energy Demand-China
624. 1 765. 3
989. 6
204. 3 328. 3
497. 3
26 68. 9 137. 5
1087. 9
1441. 3
1947. 2
0 500 1000 1500 2000 2500
1999 2010 2020
Mto e
Coal
Oi l
Gas
Tot al
1. The cooperation potential in Northeast Asia
1.1 Outlook of Energy Demand-Japan
87. 4 90. 1 102. 8
266. 4 277. 1 288. 4
62. 2 78. 7 86. 1
514. 9
569. 2
624. 5
0 100 200 300 400 500 600 700
1999 2010 2020
Mto e
Coal
Oi l
Gas
Tot al
1. The cooperation potential in Northeast Asia
1.1 Outlook of Energy Demand-S. Korea
37. 6
66. 1
96. 0 99. 9
128. 8
163. 0
15. 9 32. 3 45. 7
183
274. 9
361. 4
0 50 100 150 200 250 300 350 400
1999 2010 2020
M to e
Coal
Oi l
Gas
Tot al
1. The cooperation potential in Northeast Asia
1.1 Outlook of Energy Demand- Russia
107. 8
189. 6
249. 7
127. 3 161. 4 197. 8
309. 6
395. 1
466. 5 596. 9
804. 8
1031
0 200 400 600 800 1000 1200
1999 2010 2020
M to e
Coal
Oi l
Gas
Tot al
1. The cooperation potential in Northeast Asia
1.1 Outlook of Energy Demand- 4 countries
856.9
1111.1
1438.1
697.9 895.6
1146.5
413.7 575.0 735.8
2382.7
3090.2
3964.1
0 500 1000 1500 2000 2500 3000 3500 4000 4500
1999 2010 2020
Mtoe
Coal
Oil
Gas
Total
1. The cooperation potential in Northeast Asia
1.2 Outlook of Oil and N. G. Unit: Mtoe - China +Japan+ Korea
Import demand
Import
dependence Import demand
Import
dependence
Oil Natural gas
1. The cooperation potential in Northeast Asia
1.3 Export outlook of Oil and N. G. Unit: Mtoe - Russia
O il G as
1999 183.1 166.0
2010 203.1 236.3
2020 189.9 241.7
Proven Gas Reserves
Ultimate remaining resources (including
proven reserves) are an estimated 453 - 527 tcm
World total: 164 tcm at 1 January 2001 56.7
58.5
6.4
11.6
14.9
7.7
8.2
A Global Gas Market?
Potential New Gas Supply Chains
Expanding pipeline networks and new LNG projects will promote regional & global gas market integration
North America
Latin America
Europe
FSU
Africa Middle East
Asia/Pacific
Pipeline LNG
2. Cross-border energy projects
2.1 The key cooperation fields
• Petroleum: upstream,
downstream, and pipeline
• Natural Gas: upstream,
downstream, and pipeline
• Electricity: interconnection
2. Cross-border energy projects
2.1 The key cooperation fields
Oil and N. G.
resources
Oil and N. G.
Market Pipeline
Japan,, China, S. Korea Russia
China
Petroleum/NG Industry in
NEA
2. Cross-border energy projects
2.2 The potential cooperation projects
• It is obvious that there are many as-yet-unresolved
problems associated with the Northeast Asian pipeline
projects.
2. Cross-border energy projects
2.2 The potential cooperation projects
Russia: International Oil and Natural Gas Production Projects
Name Ownership Fields/Est. Reserves Investment Status
Caspian Oil Co. Yukos, Lukoil, Gazprom
Russian sector of Caspian Sea, estimated 15-30 billion
barrels of oil equivalent --
Exploration in Russian sector of Caspian Sea
Rusia Petroleum
Sakhalin I?Chayvo, Odoptu, Arkutun-Dagi) Chayandinovskoye Field
Sakhaneftegaz (Russia), China National Oil & Gas
Development Corp. Estimated 43 tcf of gas
Preliminary agreement signed; exploration --
BP (U.K.), (31%, operator), Interros (Russia) (24%), Irkutsk Oblast Property Fund (14%), Vitra Holdings
Co. (13%), Tyumen Oil (18%)
49 Tcf at Kovykta field (Eastern Siberia)
$200 million spent on exploration so far
President Putin put Kovykta field on a list eligible for PSA (Feb. 2001),
but it still must be negotiated with the
government ExxonMobil (30%),
SODECO (consortium of Japanese companies) (30%),
Rosneft (20%), ONGC Videsh Ltd. (India) (20%)
17.1 Tcf at Chayvo, Odoptu, and Arkutun-Dagi
fields --
Drilling and appraisal continuing; first oil expected in 2003, predicted
peak of 200,000 bbl/d
2. Cross-border energy projects
2.2 The potential cooperation projects
Russia: International Oil and Natural Gas Production Projects:con’t
Name Ownership Fields/Est. Reserves Investment Status
Sakhalin II?Sakhalin Energy Invesment Co. Ltd.)
Royal Dutch/Shell (62.5%, operator), Mitsui (25%),
Mitsubishi (12.5%)
4 billion barrels of oil and more than 20 Tcf of gas at Piltun-Astokhskoye (PA)
and Lunskoye fields
$1.1 billion for Phase I; $8.9 billion for Phase II
Producing approximately 90,000 bbl/d at PA; Phase II set to begin (construction of LNG facility, development
of offshore fields)
Sakhalin V Sakhalin III (Kirinsky)
ExxonMobil, Texaco, Rosneft-SMNG
Ayyash and Eastern
Odoptu fields PSA pending
$13.5 billion. Will need an estimated $2.6 billion to
develop
BP, Rosneft will tender jointly
Estimated 4.4 billion barrels of oil and 21 Tcf of gas in
the East Schmidtovsky
blocks -- --
2. Cross-border energy projects
2.2 The potential cooperation projects
Russia: International Oil and Gas Pipeline Projects
Name Ownership Route/Capacity Investment Status
Caspian Pipeline Consortium (CPC)
(Oil)
Russia (24%), Kazakhstan (19%), Chevron (15%), LukArco
(12.5%), Rosneft-Shell (7.5%), ExxonMobil (7.5%), Oman (7%), Agip (2%), BG (2%),
Kazakh Pipelines (1.75%), Oryx (1.75%)
990-mile oil pipeline from Tengiz oil field in
Kazakhstan to Novorossiisk; Phase I 565,000-bbl/d capacity, eventually rising to Phase
II capacity of 1.34- million bbl/d (2015)
$2.5 billion for Phase 1;
$4.2 billion total when completed
First tanker loaded in Novorossiisk (10/01);
exports rising to 400,000 bbl/d by end-2002
Estimated $6 billion to
$10 billion
Preliminary agreement signed
China Natural Gas Pipeline
China National Petroleum Corp., Sakha
(Russian Republic);
Gazprom may act as operator
Approximately 1,700- mile pipeline, Chayandinovskoye gas field to Xinjiang, (about 550 miles southwest of
Beijing in northern China); planned capacity of?423-706 Tcf per year
2. Cross-border energy projects
2.2 The potential cooperation projects
Russia: International Oil and Gas Pipeline Projects,con’t
Name Ownership Route/Capacity Investment S tatus
Japan Natural Gas Pipeline
ExxonM obil, SODECO (consortium of Japanese companies)
120-mile pipeline proposed from the Sakhalin I field to
Sapporo, on Japan's northernmost island of Hokkaido; pipeline could be
extended to Tokyo --
Feasibility study being conducted Estimated $2.5 billion
Preliminary agreement signed; feasibility study
due first half of 2003, several routes being
discussed.
China-S outh Korea Natural Gas Pipeline
BP (U.K.), Tyumen Oil (Russia)
Estimated $6 billion to
$10 billion
Preliminary agreement signed, several routes
being discussed.
China Oil Pipeline
2,000-2,700-mile pipeline from Kovykta gas field in Irkutsk to northeastern .China
(possibly via M ongolia), terminating in South Korea via
a sub-sea pipeline across the East China Sea
Yukos, Transneft, China National Oil
Corp.
1,400 to 1,500-mile pipeline from Angarsk (East Siberia) to
Beijing, potentially via M ongolia; Initial 400,000- bbl/d capacity, eventually rising to 600,000 bbl/d by
2010
GDLNG
Y-13
E. China Sea Kovykta
Sakhalin
Japan S. Korea
E. China N. China
N.E. China Tarim Basin
W. Siberia Gas
Central Asia Gas
Ordos Sulige
Chayandan
WEP (Phase 2)
WEP (Phase 1)
LNG
LNG 20bcm
20bcm 20bcm
20bcm 10bcm
20bcm
6bcm 10bcm
Planned infrastructure Possible infrastructure
Existing infrastructure
Current LNG supply Future LNG supply
S. China
Map of N.G Pipelines
Map of Power interconnection in NEA
Siberia Russia Far
East Sakhalin
Mongolia
N. Korea
Northwest China
N. E. China Japan
North China S. Korea
3. Multilateral cooperation in Northeast Asia
It is necessity of energy cooperation to cope with these challenges.
An effective regional agency needs to be
organized to specifically promote cooperative activities among Northeast Asian countries.
To cooperate is better than to compete out of
order
3. Multilateral cooperation in Northeast Asia
The principle of energy multilateral cooperation in Northeast Asia:
• Promoted by enterprises;
• Government and business mixture type
exchange and cooperation simultaneously;
• Do something from the easy to difficulty gradually;
• Win-win from the cooperative project.
3. Multilateral cooperation in Northeast Asia
3.1 The dialogue at difference level
3.1.1 The dialogue among research institutions
• The common research;
• Exchange information;
• Energy, oil and natural gas forum.
(Northeast Asia Petroleum Forum)
3. Multilateral cooperation in Northeast Asia
3.1 The dialogue at difference level
3.1.2 The dialogue among enterprises
• Joint technology development
• Technology exchange in various areas such as business technology, designing, construction, operation, logistics, marketing, as well as
capacity building;
• Potential projects negotiation;
• Pre-feasibility study;
• Feasibility study.
3. Multilateral cooperation in Northeast Asia
3.1 The dialogue at difference level
3.1.3 The dialogue among governments(ASEN + 3)
• Improved investment environment in the energy industry
• Regional quick information system and emergency response
• Identification of common policy objectives
• Cooperation mechanism
• Action plans
3. Multilateral cooperation in Northeast Asia
3.1 The dialogue at difference level
3.1.4 The dialogue among all of participants
• Governments, companies, research
organizations, banks, and others
3. Multilateral cooperation in Northeast Asia
3.2 The exchange of difference content
C ountry and area
E nergy resources
Populatio n
E nergy
m arket T echnology Fund
E astern R ussia +++ + + ++ -
C hina + +++ ++ ++ +
S.K orea - + ++ ++ ++
Japan - ++ +++ ++ +++
Note: except Mongolia, N. Korea;
Source: Mitsubishi Research Institute
3. Multilateral cooperation in Northeast Asia
3.2 The exchange of difference content
•To share the information: energy security, like Y2K
