Gazpromneft Sakhalin (a subsidiary of Gazprom Neft) has begun drilling the first exploratory well at the Ayashsky licence block, located on the continental shelf of the Sea of Okhotsk. Leading Russian and international companies have been engaged in implementing the project, and extensive preliminary activities essential to project completion successfully undertaken. Drilling and well testing in 2017 will be performed by a semisubmersible drilling rig (the HAKURYU-5), delivered to the field in mid-June, its equipment having undergone extensive modernization and further adaptations in line with the climatic conditions of the Sea of Okhotsk in 2016.,Gazprom%20Neft%20begins%20exploratory%20drilling%20at%20the,in%20the%20Sea%20of%20Okhotsk&text=Gazpromneft%20Sakhalin%20(a%20subsidiary%20of,of%20the%20Sea%20of%20Okhotsk.

Address of the Ambassador of the Russian Federation to the Commonwealth of Australia Grigory Logvinov

I would like to extend my sincere congratulations to Mr. Eden Paki on his election as President of the Australia Russia Dialogue (ARD). I am confident that it will boost the process of this organization’s revival, which is utterly important for bilateral relations of our countries.

As we know, the establishment of the ARD was initiated by the Minister for Foreign Affairs of the Russian Federation Sergey Lavrov in January 2012 in the framework of the high-level agreements aimed at intensification of the Australian-Russian contacts in the trade and economic sphere, support and promotion of the Russian commercial interests in Australia as well as the Australian high-tech business in Russia. The Australian-Russian Dialogue had successfully carried out its mission until the interaction in a number of areas was suspended under the pressure of the political conjuncture.

It is comforting to admit that ARD is gaining momentum due to the tireless efforts of its not numerous, but still highly energetic and professional staff. I firmly believe that under the leadership of Mr. Paki the ARD will successfully restore its potential for promoting the interests of the Russian and Australian business and scientific circles.

Grigory Logvinov

Address of the Ambassador of the Commonwealth of Australia to the Russian Federation Peter Tesch

I join my colleague Ambassador Logvinov in Canberra in welcoming Eden Paki to the role of President of the Australia Russia Dialogue. I also thank Dr Alexey Goncharov for the energy and commitment he brings to trying to build the profile of the organisation and encourage greater economic and scientific co-operation between Russia and Australia.

This year is the 75th anniversary of the establishment of bilateral diplomatic relations. At times our relationship has been strained by political tensions reflecting the broader state of global affairs as well as specific elements in our bilateral dealings. Economic ties have been affected, too, but they have not been severed. Indeed, despite the impact of sanctions and counter-sanctions imposed by both governments, business and academia continue to engage, especially in the mining (also METS), education and agribusiness sectors.

University ties are numerous, and I have been struck by the keen interest in both countries in further developing these.

So, while we deal realistically with current challenges and limitations, we must keep in mind that Russian and Australian interests intersect and focused engagement can generate mutual benefit. The ARD has a role to play in fostering this awareness and collaboration, and I wish the organisation well in its endeavours.

Peter Tesch

Dr Konstantin Simonov, National Energy Security Fund (Moscow) and Australia Russia Dialogue, presented a keynote address at the APPEA Conference in Perth on May, 15, 2017.

by Angela Macdonald-Smith, Australian Financial Review

Russia’s huge gas export ambitions and cheap costs set it up to snatch an increasing share of the Asian LNG market, beating both the United States and Australia on costs, according to a Russian energy expert.

But the claims by Konstantin Simonov, director of the National Energy Security fund in Moscow, were in part countered by Martin Houston, vice-chairman of emerging US-based LNG trader Tellurian Investments, who said the US would be “dangerously competitive” in the LNG market, able to supply at much lower costs than was being envisaged.

The jostling between the pair reflects a potential scenario set out by Dr Simonov in which Russia, Qatar, the US and Australia “cannibalise” each other as they slug it out for customers in Asia, the world’s biggest LNG market.

Dr Simonov, the first Russian speaker in the APPEA conference’s 57-year history, said potential gas development plans put Russia’s export capacity as high as a massive 130 million tonnes a year, but a more realistic figure was 70 million to 75 million tonnes a year of additional Russian exports over the next 15 years, given some plants wouldn’t be economic.

“It’s a huge amount,” Dr Simonov said. “That is why it is an important question what will be the competition between Russian gas and Australian gas.”

“The main question is if we will see this scenario of cannibalism and gas battles between Russia, Australia, the United Sates and Qatar. The main question will be what will be the cost of production in these countries.”

Russia is set to launch its large new Yamal LNG venture this year, with potentially about half of the state-backed project’s 16.5 million tonnes a year of capacity likely to go to Asia, Dr Simonov said. An expansion of the producing Sakhalin project in eastern Russia is also likely to proceed as are new pipelines from Russia to China.

Dr Simonov said that on a capex per unit basis, the Power of Siberia pipeline under construction from Russia to China was “three times cheaper” than Australian LNG. He suggests Australia won’t be able to meet all its LNG contract delivery obligations due to project delays and low prices.

But Dr Simonov’s assertion that US LNG would be “very expensive” based on a US domestic gas price of $US3-$US3.50 per million British thermal units was rejected by Mr Houston, a former chief operating officer at BG Group. Mr Houston said the model of basing US LNG prices on the Henry Hub price plus costs would be transformed by the emergence of a huge volume of “zero-cost” gas from the Permian Basin where gas is produced as a by-product alongside oil.

Mr Houston said Tellurian’s Driftwood project would be able to get gas “on the boat” in Louisiana at just under $US2.50 per MMBTU, well below the Henry Hub price.

“That makes us dangerously competitive and able to access a market which is clearly going to have steep and deep price volatility going forward both in winter and summer,” he said.

President Trump’s supportive policies for the LNG industry and firm endorsement of trade with China would provide further impetus for US exports, Mr Houston added.