Blog – Full Width | AEA-Albania Energy Association

December 14, 2015

by AEA

Game of Pipelines: Bulgaria and Russia’s Energy Diplomacy

Over the past several decades Bulgaria has been attempting to establish itself as the center of the natural gas route in the Balkans, but so far it has achieved limited success.

Natural gas plays a small role in the country’s domestic energy consumption. Its share of electricity generation stands at 13%, but it is widely used for district heating in urban areas. With very limited domestic supplies of gas, more than 95% of it comes from Russia. The route of the Trans-Balkan pipeline, delivering all imported gas, passes through Ukraine, Moldova, and Romania, and that is a major concern for Bulgaria’s energy security.

In the mid-2000s, Russia’s Gazprom and Ukraine found themselves in a battle over late payments and unfulfilled contractual agreements. Gazprom reduced gas deliveries to Ukraine in order to force them to pay their obligations. Ukraine then diverted volumes for domestic consumption that were supposed to be transited for Europe and the dispute reached a crescendo on January 1, 2006, when Gazprom cut down the entire supply passing through Ukraine. This resulted in disruptions for the European market in the middle of the winter heating season.

Russia controls a 30% share of the total European gas market, but for eastern and southeastern Europe, which are 100% dependent on Russian gas, this disruption was much more severe. There were other similar cut-offs in subsequent years driven by economic and political disputes even before the Crimea crisis.

Ukraine sits in the middle of the gas-transit network that delivers Russian gas to Europe – almost half of the volume supplied to western and southern Europe pass through Ukrainian territory (159.5 bcm capacity). After the disputes over eastern Ukraine and Crimea escalated into an all-out military confrontation in 2014, Gazprom announced that it plans to stop gas deliveries through Ukraine by 2019. There are several alternatives for bypassing Ukraine, but all of them require building new pipelines or expanding existing capacities.

Russia has been working on several projects: Nord Stream 2 – delivering gas directly to Germany through the Baltic Sea; South Stream – delivering gas to southern Europe through the Black Sea and Bulgaria, as well as expanding the pipeline through Belarus (31.5 bcm capacity). At the end of 2014, Russia announced a freeze on its work on South Stream, citing EU regulatory obstacles and at the same time signed a memorandum with Turkey to commence building the Turkish Stream (63 bcm/year). The new project bypasses Bulgaria and sends gas to Europe through Turkey, Greece, Macedonia, Serbia and Hungary. If the project is developed as planned, Bulgaria’s dream of becoming a transit hub will not materialize. After the announced halt of transit through Ukraine in 2019, Bulgaria will also have limited options for securing gas for domestic consumption.

South Stream follows the fate of another widely touted project in the mid-2000s – the Nabucco pipeline, which was supposed to diversify European supply by bringing gas from Azerbaijan. The project was shelved, not unlike South Stream, amidst EU regulatory requirements for third party access (TPA) and by fear that Azeri supply will not be enough to meet the project requirements. The Caspian Sea connector, linking Nabucco to Turkmenistan, would have guaranteed a diversified and plentiful supply for the European market but the project never took off amidst soaring cost estimates and rival Russia-backed projects in the region. Russian opposition for the Caspian Sea connector and the fallout between Azerbaijan and Turkmenistan doomed Turkmeni access to European markets. Another possible player, albeit not in the foreseeable decade, could be Iranian gas. An additional connection between Erzrum in Turkey and Iran will have to be built, but it is not guaranteed that Russia will not use the Turkish Stream project as a leverage to prevent Turkey from bringing Iranian gas into the mix. The required pipeline will also have to pass through the restive Kurdish area, where Turkey is waging a mini-war with its Kurdish minority. Both security and political reasons may prevent the building of Iran-Turkey connections. Russia announced a few months ago that Turkish Stream gas would be delivered at 10.25% discount for domestic Turkish consumption. But there is a high probability that the Turkish Stream project will follow the fate of Nabucco or South Stream and that Russia is only using such “virtual” pipelines for political reasons. The fate of Turkish Stream is still unclear amidst the downing of a Russian military plane by Turkey near the Syrian border. Last week, the Russian energy minister Novak announced that talks with Turkey on the future pipeline are suspended. Turkey said that it was seeking alternatives for Russian gas and is looking for other suppliers, referring to Azerbaijan and Qatar. In a joint press conference, Azerbaijan’s President Aliyev and Turkish premier Davutoglu announced the speeding up of the Trans Anatolian Natural Gas Pipeline Project (TANAP). The TANAP will be connected to the Trans-Adriatic Pipeline (TAP) and will deliver gas to Europe through Greece, Albania and Italy.

Both the U.S. and the EU have interests in the diversification of European suppliers of natural gas. Cutting dependence on Russian supplies will give Europe economic and political leverage in dealing with a more aggressive and assertive Russia. Director of the Office of Energy Policy and System Analysis at the US Department of Energy Melanie Kenderdine recently met with the Bulgarian Energy Minister T. Petkova to discuss diversifying Bulgaria’s gas flow from Gazprom. The projects that were discussed involve building inter-connectors with neighboring Greece (IGB) and Romania, allowing hydrocarbon explorations along the Bulgarian coast of the Black Sea and the inclusion of Bulgaria in the Trans-Adriatic Pipeline (TAP). Russia on the other hand announced that the cancelled South Stream is not dead and Gazprom will continue certain activities on it. The problem with South Stream stemmed from the EU’s Third Energy Package requirements for allowing competitive access to the pipeline by third parties, rules prohibiting ownership of the gas, transit lines, and land by the same operator. Corruption scandals in Bulgaria also contributed greatly to the demise of the project and even forced the EU to cut financial packages for the Bulgarian government. The energy policy of Bulgaria is highly politicized and energy projects are usually dictated by pro-Russian or pro-Western interests. The press has revealed that the entire legislation accompanying the South Stream project passed by the Bulgarian Parliament has been written by Gazprom lawyers. Lack of transparency in contract allocations and project financing forced the EU to take actions against Bulgaria. The day the South Stream was cancelled by Russia, a mysterious run on Corporate Commercial Bank (KTB) ensued. It was the bank responsible for handling the government budget transactions and the financing for the South Stream pipeline. The bank became insolvent and was forced into bankruptcy. The major stakeholder and Chairman of the Supervisory Board Tsvetan Vassilev fled to Serbia and so far has avoided accountability and prosecution in Bulgaria.

Corruption scandals have long plagued Bulgarian politics and they may derail any new major infrastructure projects involving gas pipelines. It is common practice for new governments to terminate contracts signed by previous ones. Lack of political stability and continuity might prove to be the biggest threat to Bulgarian energy security.

The EU’s need for diversifying gas supply away from Russia is no more pressing than in Bulgaria. The country imports almost all of its gas from Russia via the Trans-Balkan pipeline. The route runs through Ukraine and the announcement by Gazprom that they will discontinue shipments through Ukrainian territory after 2019 will have serious consequences for Bulgaria. It is not guaranteed that Russia can afford to bypass Ukraine for now. The Ukrainian pipeline capacity of 159 bcm needs to be replaced. Nord Stream 2 will add about 55 bcm but there are no guarantees that the project will not face the same fate as South Stream. Nord Stream has been concluded as a bilateral project between Russia and Germany and has so far avoided the EU Third Energy Package requirements for competitive third party access.

The lack of interconnections between the North and South European energy markets poses a serious challenge for Bulgaria. If all the other proposed projects (South Stream, Nabucco, Trans-Adriatic Pipeline and TurkStream) remain “virtual,” then Bulgaria will be faced with limited options for securing gas supplies. The interconnector with Greece will allow it to access the LNG port in Kavala (Greece) and the TAP line bringing Azeri gas to Europe, but the 183 km section has been slow to materialize. The bad economic situation in Greece will prevent it from investing in costly new infrastructure projects. Another choice for Bulgaria will be to lift the ban on shale exploration. The ban was instituted thanks to the heavy influence of Russia through its friends in the ultra-nationalistic Ataka party. Northern Bulgaria sits on top of the Carpathian-Balkanian shale basin and there could be significant commercial quantities of domestic gas. The U.S. Energy Information Administration has estimated Bulgarian and Romanian technically recoverable shale gas at 37 Tcf. But the Russia-backed Ataka party managed to institute a ban on shale exploration through fear-mongering, organized protests, and cooperation with environmentalist groups. This virtually sealed the fate of Bulgaria as a guaranteed customer for Russian gas. Russia is also trying to stir up anti-EU frustration in Bulgaria after businesses suffered financial losses. Under pressure from the West, Bulgaria withdrew from two other major Russian-linked projects – the Belene nuclear power plant and the Burgas-Alexandroupolis oil pipeline. This has imposed heavy losses both for investors and for the government. The country needs to take a second look into its shale deposits and develop domestic sources of natural gas. Preliminary exploratory work in the Black Sea basin is being carried out currently by Royal Dutch Shell, BP and Statoil ASA. If that produces commercially viable quantities of natural gas, it will alleviate Bulgaria’s energy needs, but in the meantime the government should work to link the country to Greece and Romania in the so called ‘vertical gas corridor.’ In April 2015, the three countries signed an agreement to complete the project by 2018. It will cost about €220 million and will allow the region to work on diversification of supply.

Natural gas accounts for only 13% of Bulgaria’s energy consumption, but nonetheless the country dependence on Russia as a single source to cover the majority of its needs creates a host of energy security implications. Even if relations between the two states remain friendly, Gazprom’s decision to stop gas transit through Ukraine after 2019 poses a serious risk. None of the proposed pipeline projects – South Stream, TurkStream, Trans-Adriatic Pipeline, TurkStream or Nabucco, have so far materialized. In order to diversify its supply, the country should consider lifting the ban on shale exploration, working with Greece and Romania on the vertical gas corridor, exploring its offshore fields, trying to leverage EU funds and lobby for the connecting of the North and South European gas markets through Slovenia.

Even if some of the Russian projects move from the realm of virtual to actual gas pipelines, a diverse supply will only increase the energy security of the country.

By : Boyan Dobrev

November 26, 2015

by AEA

China’s ‘Belt and Road’ Reaches Europe

China will build railways and ports in Central and Eastern Europe as part of its “Silk Road Economic Belt.”

Chinese Premier Li Keqiang hosted 16 European leaders in Suhzou on Tuesday and Wednesday, for the fourth China-Central and Eastern Europe (CEE) summit. The format, which held its first summit in 2012 in Warsaw, Poland, brings together leaders from China and 16 Central and Eastern European states: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia. While this was the fourth annual meeting in the “16+1” format, it was the first to be held in China. Chinese media described the meeting as a “golden opportunity” to deepen cooperation.

For China, Central and Eastern Europe represents its “bridge to Europe” (although individual countries in the region might vie over holding that title for themselves). That’s true in both a political and logistical sense. Diplomatically, China hopes that building up better relations with the CEE states, most of whom are also members of the European Union, can help push forward its overall relations with the EU. Logistically, meanwhile, Central and Eastern Europe will play a crucial role in making sure China’s “Silk Road Economic Belt” reaches its final destination: Western Europe.

As Li put it in his remarks at the summit, “Located at the east gateway to Europe and along the routes of the Belt and Road initiative, CEECs enjoy a distinct advantage for enhancing connectivity.” China wants to work with these states “to build the China-Europe land-sea express line and promote connectivity in Europe.”

With that in mind, it’s no surprise that the China-CEE summit placed a heavy emphasis on infrastructure building. Xinhua, in its summary of the summit, even spoke of “infrastructure-led all-round cooperation” between China and the CEE states. Although it’s received far less attention than China’s offer to build up infrastructure at the other end of the “Belt and Road” (in Central and Southeast Asia, for example), China is also making a bid to help construct railways, roads, and ports in Europe. Li even took the 16 visiting state leaders on a high-speed train ride to demonstrate China’s capabilities.

The main deals that came out of the summit, and the various bilaterals held on the sidelines, were also related to infrastructure. China signed deals with both Hungary and Serbia to build a high-speed rail line between their respective capitals, Budapest and Belgrade, a project first discussed in 2013. Li said that construction will begin before the end of the year, and is slated to be completed by 2017. Xinhua described the new railway as “a fast lane for [the] import and export of products between China and Europe.”

The Hungary-Serbia high-speed railway will be just one part of a larger project, the “land-sea express passage” linking China and Europe that Li mentioned in his remarks. According to a statement from the Chinese government, “This express passage extends from the Piraeus Port of Greece in the south to Budapest of Hungary in the north via Skopje of Macedonia and Belgrade of Serbia.” Though Greece is not part of the China-CEE summit, leaders from the other three European state on the route – Hungary, Macedonia, and Serbia – met with Li and agreed to work together on the project.

Li also announced that China will invest in constructing and upgrading port facilities in the Baltic, Adriatic, and Black Seas. While he did not name any specific ports, Li said that “Croatia, Slovenia, Poland, Latvia and Bulgaria have proposed to strengthen cooperation on port development.” The projects will focus on “production capacity cooperation among the ports and industrial parks of the coastal areas of the Adriatic Sea, the Baltic Sea and the Black Sea,” Li said, adding that China expects “our companies to be the main players in these projects.”

That seems to be a condition for projects to receive Chinese financing. “China will provide preferential financing support for those [projects] that use Chinese products and equipment in production capacity cooperation,” Li said. He also proposed creating a new “16+1 finance company” specifically to financially support such projects “through business means” – thus avoiding violating EU restrictions on sovereign debt.

Many of the CEE states are hoping to use Chinese investment to boost their own economies. Vazil Hudak, Slovakia’s minister of economy, told Xinhua that the scope for cooperation is broad: “The whole region could be interested in larger infrastructure projects like communication, transport or some energy infrastructure between these countries, meaning gas pipelines.”

November 25, 2015

by AEA

Cooperation between China and Central and Eastern European Countries

On 24 November 2015, the 4th Summit of China and Central and Eastern European Countries (hereinafter referred to as “CEECs”) was held in Suzhou, China. Premier Li Keqiang of the People’s Republic of China, President Andrzej Duda of the Republic of Poland, Prime Minister Edi Rama of the Republic of Albania, Chairman of the Council of Ministers Denis Zvizdic of Bosnia and Herzegovina, Prime Minister Boyko Borisov of the Republic of Bulgaria, Speaker of Parliament Josip Leko of the Republic of Croatia, Prime Minister Bohuslav Sobotka of the Czech Republic, Prime Minister Taavi Roivas of the Republic of Estonia, Prime Minister Orban Viktor of Hungary, Prime Minister Laimdota Straujuma of the Republic of Latvia, Prime Minister Algirdas Butkevicius of the Republic of Lithuania, Prime Minister Nikola Gruevski of the Republic of Macedonia, Prime Minister Milo Djukanovic of Montenegro, Prime Minister Aleksandar Vucic of the Republic of Serbia, Prime Minister Miro Cerar of the Republic of Slovenia, Vice Prime Minister and Minister of Economy, Commerce and Relations with the Business Environment Costin Borc of Romania and Deputy Prime Minister Lubomir Vazny of the Slovak Republic attended the meeting. They expressed appreciation and gratitude to China for the efforts it had made as the host country to ensure the success of the meeting. Representatives of other parties, including the EU, Austria and the European Bank for Reconstruction and Development, were present as observers.

Participants at the meeting (hereinafter referred to as “the Participants”) commended the substantial progress that had been made in the past year in the cooperation between China and Central and Eastern European Countries (hereinafter referred to as “16+1 cooperation”), in particular in the implementation of the Belgrade Guidelines for Cooperation between China and Central and Eastern European Countries (see Annex), welcomed and supported the important agreement between the Chinese and EU leaders on establishing the China-EU Connectivity Platform, as well as on developing synergies between the Belt and Road initiative of China and the Investment Plan for Europe, and between 16+1 cooperation and China-EU relations. The Participants expressed their readiness to seize these opportunities and work together to further advance 16+1 cooperation.

The Participants jointly formulated and issued, on the theme of “New Beginning, New Domains, New Vision” , the Suzhou Guidelines for Cooperation between China and Central and Eastern European Countries.

1. The Participants support Latvia in hosting the 5th China-CEEC Summit in 2016.

2. The Participants welcome the Medium-Term Agenda for Cooperation between China and Central and Eastern European Countries issued during the 4th China-CEEC Summit, and are ready to implement it in light of their respective realities, needs and priorities.

3. 16+1 National Coordinators’ Meetings will be held in China and Latvia respectively in 2016.

4. The Participants support the establishment of a mechanism of quarterly meetings between the Secretariat for Cooperation between China and Central and Eastern European Countries (hereinafter referred to as “the Secretariat”), its member organizations and CEEC embassies in China. The Participants support more efficient use of the Secretariat’s website.

5. Cooperation on Connectivity

(1) The Participants note that the cooperation document on the Belt and Road initiative was signed between the governments of China and Hungary and that there is an interest to have similar documents between China and other CEECs, with a view to enhancing cooperation on regional connectivity.

(2) The Participants welcome the commencement of the regular express cargo railway transit from China to Poland. The Participants encourage and support similar links between China and other CEECs and appreciate the efforts assuring possibility that the goods could be transported in both directions. The Participants support the further development of the Eurasian Land Bridge and welcome the establishment of logistic centers in CEECs.

(3) The Participants appreciate the major progress that has been made in the modernization of the railway line connecting Budapest and Belgrade and welcome the joint efforts of the relevant parties for early completion of the project.

(4) The Participants welcome China, Hungary, Serbia and Macedonia in organizing the 2nd working group meeting and a workshop under the Framework Agreement on Cooperation in Facilitating Customs Clearance Among the Chinese, Hungarian, Serbian and Macedonian Customs in Budapest in 2016, streamlining customs clearance procedures for goods in transit and means of transport and increasing cooperation on customs clearance facilitation for the China-Europe Land-Sea Express Line.

(5) More CEEC customs are encouraged to take part in the third phase of the China-EU Smart and Secure Trade Lanes Pilot Project.

(6) The Participants welcome and support Serbia in leading the efforts to establish a China-CEEC association on transport and infrastructure cooperation and welcome the participation of relevant Chinese and CEEC institutions, businesses and organizations on a voluntary basis.

(7) The Participants welcome and support Latvia in leading the efforts to establish a China-CEEC secretariat on logistics cooperation and welcome the participation of relevant Chinese and CEEC institutions, businesses and organizations on a voluntary basis.

(8) The Participants welcome the relaunch of direct flights between Beijing and Budapest and the launch of direct flights between Beijing and Prague in addition to existing Beijing-Warsaw connection. The Participants support deepening civil aviation cooperation between China and more CEECs.

(9) The 1st China-CEEC Transport Ministers’ Meeting will be held in Riga, Latvia, in 2016.

6. Economic and Financial Cooperation

(1) The 2nd China-CEEC Ministerial Meeting on Promoting Trade and Economic Cooperation will be held in Ningbo, China, in June 2016.

(2) The China-CEEC Investment and Trade Expo will be held in Ningbo, China, in June 2016 during the China International Consumer Goods Fair.

(3) The 3rd Meeting of the China-CEEC Investment Promotion Agencies Contact Mechanism will be held in China in 2016.

(4) The Participants welcome and support Romania’s initiative of setting up a Center for Dialogue in energy-related projects. The 1st meeting of the Center will be organized in Romania in 2016.

(5) The Participants welcome and support the participation of Chinese and CEEC SMEs in the China International Small and Medium Enterprises Fair 2016.

(6) China will attend the Brno International Engineering Fair in the Czech Republic in 2016 as a partner country.

(7) The China Investment Forum will be held in the Czech Republic in 2016.

(8) The Participants welcome and support the organization of an economic forum focused on infrastructure, tourism and industrial capacity cooperation between China and CEECs, to be held in Sarajevo, Bosnia and Herzegovina, in the first half of 2016.

(9) Qualified CEEC financial institutions are welcomed to apply to be indirect participants in the RMB Cross-border Inter-bank Payment System (Phase One).

(10) The Participants welcome the ongoing work leading to the signing of a statement of cooperation on crisis management between the China Banking Regulatory Commission and the Czech National Bank and the signing of an MoU on regulatory cooperation between the China Banking Regulatory Commission and the Polish Financial Supervision Authority.

7. Agricultural and Forestry Cooperation

(1) The 11th China-CEEC Agrotrade and Economic Cooperation Forum will be held in China in 2016, in conjunction with the 2nd meeting of the China-CEEC Association on Promoting Agricultural Cooperation.

(2) An exhibition area will be set aside for top-quality CEEC agro-products at the 14th China International Agricultural Trade Fair to be held in Yunnan Province, China, in the second half of 2016.

(3) The Chinese side will create a free-of-charge exhibition space for top-quality CEEC wines and spirits at the National Agriculture Exhibition Center.

(4) The Participants welcome the signing or the work leading to the signing of the relevant protocols on quarantine of animal and animal-originated products to be exported to China between China and Serbia, Macedonia, Slovenia, Lithuania, Poland and Estonia respectively. The Participants support China and more CEECs in expanding trade of agro-products and food.

(5) The Participants support Slovenia in leading the efforts to establish a China-CEEC coordination mechanism for forestry cooperation. The 1st China-CEEC High-Level Meeting on Cooperation in Forestry will be held in Slovenia in May 2016.

(6) The Participants welcome China and CEECs in signing agreements on strengthening cooperation in water resources and agricultural irrigation.

8. Cooperation on Science, Technology and Health

(1) The 3rd China-CEEC Seminar on Innovation, Technology Cooperation and International Technology Transfer will be held in China in 2016.

(2) The Participants encourage and support the establishment of a virtual China-CEEC technology transfer center, and the role of the secretariat will be assumed by the relevant Chinese and Slovak institutions.

(3) The Participants support the environment protection authorities of China and CEECs in enhancing exchanges under the framework of 16+1 cooperation and discussing the possibility of cooperation with a third party.

(4) The 2nd China-CEEC Health Ministers’ Forum will be held in China in 2016.

(5) CEEC health professionals will be invited to visit China in 2016 and to participate in seminars on global health diplomacy, healthcare system reforms and health promotion, with a view to strengthening academic and professional exchanges.

(6) CEEC medical and health businesses will be invited to China for exhibitions on health services and medical devices, with a view to promoting cooperation in the medical industry.

9. People-to-People Contacts and Cultural Exchanges

(1) The Secretariat will continue to invite senior CEEC officials for a trip to China in 2016.

(2) The 4th China-CEEC Education Policy Dialogue and the 3rd meeting of China-CEEC Higher Education Institutes Consortium will be held in China in 2016.

(3) A China-CEEC forum on cooperation in the field of art and the 2nd China-CEEC Summer Dance Camp will be held in China in 2016.

(4) Famous CEEC artists and composers as well as artistic directors of international opera festivals in CEECs will be invited to visit China in 2016.

(5) The Participants support China and CEECs in carrying out joint projects on translation and publication of each other’s literary works. China welcomes CEECs to be the Country of Honor as a group at the Beijing International Book Fair in 2016.

(6) The 1st China-CEEC Cultural and Creative Industries Forum will be held in Belgrade, Serbia, in 2016.

(7) The 1st China-CEEC Experts’ Forum on Intangible Cultural Heritage will be held in Krakow, Poland, in 2016.

(8) The Participants welcome the Chinese Academy of Social Sciences in leading the efforts to establish a China-CEEC think tanks network.

(9) The 4th China-CEEC High-Level Symposium of Thinks Tanks will be held in 2016.

(10) The Participants encourage and support mutual visits by Chinese and CEEC journalists in 2016.

(11) A China-CEEC seminar of sinologists will be held in 2016.

(12) The Participants welcome the organization of the Travel 2016 expo and the related professional conference in March 2016 in Budapest. China will participate in the expo as the Country of Honor. The Participants support the opening of the regional center of the China National Tourism Administration in Budapest.

(13) The 3rd China-CEEC High-Level Conference on Tourism Cooperation will be held in Croatia in 2016.

10. Cooperation at the Local Level

(1) The 3rd China-CEEC Local Leaders’ Meeting and the China (Hebei) International Economic and Trade Fair 2016 will be held in Hebei Province, China, in 2016.

(2) The 2nd working meeting of the China-CEEC Association of Provincial Governors will be held in Hebei Province, China, in 2016.

(3) The Participants encourage and support exchanges and cooperation between mayors of Chinese and CEEC capital cities.

Annex:

Implementation of the Measures of the Belgrade Guidelines for Cooperation between China and Central and Eastern European Countries

1. In January 2015, the customs clearance facilitation cooperation mechanism for the China-Europe Land-Sea Express Line among the Chinese, Hungarian, Serbian, Macedonian and Greek Customs was officially established.

2. From February to October 2015, the Chinese Art Festival was held in Lithuania, Estonia and Latvia.

3. In March 2015, the launch ceremony of the Year of Promotion of China-CEEC Tourism Cooperation was held in Budapest, Hungary.

4. In March 2015, the 1st working group meeting under the Framework Agreement on Cooperation in Facilitating Customs Clearance Among the Chinese, Hungarian, Serbian and Macedonian Customs was held in Shanghai, China.

5. In April 2015, the Chinese Ministry of Foreign Affairs appointed the Special Representative for China-CEEC Cooperation.

6. In April 2015, the 1st meeting of the China-CEEC Business Council was held in Katowice, Poland.

7. In April 2015, the Riga High Level Conference on Transport and Logistics and the 3rd ASEM Transport Ministers’ Meeting was held in Riga, Latvia.

8. In May 2015, the 1st Customs Control Techniques Workshop for the China-Europe Land-Sea Express Line among the Chinese, Hungarian, Serbian and Macedonian Customs was held in Shanghai, China.

9. In May 2015, the 33rd Meeting of the Central Bank Governors’ Club of the Central Asia, Black Sea Region and Balkan Countries was held in Shanghai, China.

10. In May 2015, the 1st Meeting of China-CEEC Association of Provincial Governors was held in Hebei Province, China.

11. In May 2015, the Beijing-Budapest regular flight was launched.

12. In May 2015, heads of customs of China, Hungary, Serbia and Macedonia met in Xi’an, China, and signed the Cooperation Action Plan for 2015-2016.

13. In May 2015, China and Hungary signed an MoU on nuclear energy cooperation.

14. From May to June 2015, the Chinese Ministry of Culture organized Chinese performing arts organizations to purchase programs from Hungary, Serbia and Romania.

15. In June 2015, a delegation of CEEC journalists visited Zhejiang Province, Henan Province and Beijing, China.

16. In June 2015, the 1st China-CEEC Investment and Trade Expo was held in Ningbo, China.

17. In June 2015, the launch ceremony of the China-CEEC Association on Promoting Agricultural Cooperation and the 1st Meeting of Ministers of Agriculture was held in Sofia, Bulgaria.

18. In June 2015, the 1st China-CEEC Health Ministers’ Forum was held in Prague, the Czech Republic.

19. In June 2015, the 1st TCM center in the Czech Republic was established.

20. In June 2015, the cartoon series Panda and the Little Mole co-produced by China and the Czech Republic was premiered in the Czech Republic.

21. In July 2015, the 5th China-CEEC National Coordinators’ Meeting was held in Beijing, China.

22. In July 2015, a delegation of senior CEEC officials visited Sichuan Province, Yunnan Province and Beijing, China.

23. From July to August 2015, the 1st China-CEEC Summer Dance Camp was organized in Shaanxi Province, China.

24. In August 2015, Bank of China Prague Branch was opened.

25. From August to September 2015, the 2nd China-CEEC High-Level Conference on Tourism Cooperation was held in Bled, Slovenia.

26. In September 2015, the 10th China-CEEC Agrotrade and Economic Cooperation Forum was held in Budapest, Hungary.

27. In September 2015,the 3rd China-CEEC Education Policy Dialogue and the 2nd working consultation of the China-CEEC Higher Education Institutes Consortium were held in Warsaw, Poland.

28. In September 2015, the Beijing-Prague direct flight was launched.

29. In September 2015, the 2nd China-CEEC Seminar on Innovation, Technology Cooperation and International Technology Transfer was held in Bratislava, Slovakia.

30. In October 2015, an exhibition area dedicated to CEECs was created at the 11th China International Small and Medium Enterprises Fair in Guangzhou, China.

31. In October 2015, the Workshop on Customs Clearance Procedures of Transit Goods and Risk Management among the Chinese, Hungarian, Serbian and Macedonian Customs was held in Skopje, Macedonia.

32. In October 2015, a delegation of artistic directors of CEEC jazz festivals visited China.

33. In October 2015, the Seminar on Radio and Television Program Production for Central and Eastern European Countries was held in Shanghai and Hunan Province, China.

34. In October 2015, the 6th China-CEEC National Coordinators’ Meeting was held in Warsaw, Poland.

35. In October 2015, the 2nd China-CEEC Young Political Leaders’ Forum was held in China.

36. In November 2015, the 2nd China-CEEC Cultural Cooperation Forum was held in Sofia, Bulgaria.

37. In November 2015, the China Investment Forum was held in Prague, the Czech Republic.

38. In November 2015, China and Slovenia signed an MoU on the establishment of the China-CEEC coordination mechanism for forestry cooperation.

39. The 3rd China-CEEC High-Level Symposium of Think Tanks will be held in Beijing, China, in December 2015.

40. China and Romania will sign a new agreement on avoidance of double taxation as appropriate; China signed cooperation agreements on education with the Czech Republic, Estonia, Lithuania and Romania respectively; China signed cooperation agreements on quality inspection with Lithuania, Macedonia, Poland, Romania, Serbia and Slovenia respectively; China signed documents on cultural exchanges and cooperation with Bulgaria, Croatia, Latvia and Poland respectively; China signed with Romania an MoU regarding the relevant nuclear power project.

November 20, 2015

by AEA

Corinth Pipeworks to provide pipes for Greek section of TAP

Trans Adriatic Pipeline AG (TAP) awarded a contract to Corinth Pipeworks S.A. who will provide approximately 495km of 48” diameter line pipes for the pipeline across Greece, TAP reported on November 20.

This contract award makes up approximately 270,000 tonnes of line pipe.

Corinth Pipeworks S.A. is a global supplier of high quality steel pipes for the energy and construction markets. Based in Greece, Corinth Pipeworks Group of Companies has subsidiaries in Greece, USA, Russia, Cyprus and Poland and a representative network of agencies, worldwide. Its Thisvi plant is located in Viotia, Greece and its annual production capacity amounts 1,000,000 tonnes, approximately.

TAP will transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe. The 878 km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.

TAP’s shareholding is comprised of BP (20%), SOCAR (20%), Statoil (20%), Fluxys (19%), Enagás (16%) and Axpo (5%).

TAP’s initial capacity will be 10 billion cubic meters per year, expandable to 20 billion cubic meters per year.

November 18, 2015

by AEA

Assessing the performance of natural bitumen from Albania

The market for high modulus asphalt mixes has become very competitive in recent years, most notably in the segment for bitumen additives. Written by Edith Tartari, MSc Eng, electronics engineer with Selenice Bitumi in Albania.

The exploitation of natural asphalts as additives to modify the asphalt binders represents a growing challenge, especially in this moment when there is increasing demand for a more rational use of fossil fuels compatible with protection of the environment, ecosystems and the quality of human life.

Natural asphalts may represent a useful and economic alternative to the polymeric materials and other traditionally used modifiers of distillation bitumen, increasing the binder consistence, viscosity and stability. Their use allows superior performing asphalt pavements with higher values of stiffness and greater resistance to rutting and fatigue.

THE CHARACTER OF NATURAL BITUMEN

Research work was conducted by the University of Rome ‘’La Sapienza” on the characterisation of natural asphalts and their evaluation as modifiers, using rheological and thermal techniques. For the study, three of the most commonly used types of natural asphalt were selected: Gilsonite from Utah deposit (United States), Selenizza (Albania) and Trinidad Lake Asphalt (Central America).

To investigate the nature of the modification, 10% (in weight) of each natural asphalts was added to a standard penetration grade bitumen 80–100 and mixed at a minimum temperature of 150–180°C in order to guarantee the complete solubility.

Rheological analysis was carried out with a rotating rheometer under isochronal conditions, with temperature scanning. This was to assess viscoelastic behaviour in relatively high temperatures, as well as under isothermal conditions, with frequency scanning, for determining the characteristics in a low-temperature range. Trails were performed in the respective linear viscoelastic areas for each sample in order to apply the temperature-frequency equivalency principle and generate the master curves.

PENETRATION AND SOFTENING POINT

As expected, for the three cases, the resulting modified bitumen was characterised by higher softening point (R&B temperatures) and lower penetration values, compared to the original standard bitumen, due to the presence of high percentages of asphaltenes content in the natural asphalts.

Principal characteristics of the original bitumen and the modified products
Type of bitumen	Penetration at 25° (1/10 mm)	R&B Temp.	Asphaltenes content
Original bitumen	96	44	9.8
+ 10% Gilsonite	38	58	15.8
+ 10% Selenizza	67	52	13.0
+ 10% Trinidad	78	51	12.3

The table shows the principal characteristics of the original standard bitumen and the bitumen samples, modified with 10% of each type of natural asphalt. Furthermore, a proportional relationship was observed between the percentages of asphaltenes present in the modified samples of bitumen and the respective values of the softening point.

VISCOELASTIC PROPERTIES, HIGH TEMPERATURES
This correlation implies that the rheological behaviour for medium and high temperatures (50–160°C), whose softening point represents the lower limit, is not a function of the modifier quality and depends exclusively on the asphaltenes content.

Viscosity values of the modified bitumen for this temperature range increase. But even if the viscosity curves shift upwards, their shape and the slope remain unchanged and they remain parallel to one another, for all sample types. This means that the modifiers don’t affect the internal interactions between the asphaltene components in the modified bitumen, which is a typical phenomenon for the compatible additives. Thus, despite the significant increase of asphaltenes content (from 25% to 60%), the thermal susceptibility remains unaltered.

VISCOELASTIC PROPERTIES, LOW TEMPERATURES
For the low temperatures (10–60°C), the rheological modifications seem complex and are differentiated. The viscoelastic behaviour and the ductility of the modified samples, deduced from the master curves at 20°C and 60°C, are impacted by the quality of the natural bitumen (the bituminous component and the inorganic one, which, in this case, may perform the function of filler, decisive for the product performance). At T=20°, an inversion of the zero shear viscosity curves was observed.

During the modulated differential scanning calorimetry (MDSC) tests, the samples (7–10 mg), were subjected to a modulated heat flow, resulting from a sinusoidal temperature ripple overlaid on a linear temperature ramp, in the temperature range from -50°C to +160°C.

The system’s thermal response is composed of the reversing curve, inversely proportional to the heat capacity and the non-reversing curve, an undefined function of time and temperature. For the bitumen analysis, the reversible curve is more indicative as it highlights the various thermodynamic effects (glass transition, melting), while the non-reversing curve rather identifies the kinetic process.

The MDSC analysis, carried out with a calorimeter TA Instruments 2920, has shown that the rheological behaviour of the straight run bitumen has been modified by the addition of natural bitumen.

When comparing the softening temperatures obtained from different reversible curves of the original bitumen and the modified samples, it was observed that the addition of the natural asphalts Trinidad and Selenizza, affects the lower limit of the softening range of the straight-run bitumen.

Indeed, it was noticed that the total softening range of the original bitumen was composed of two different phases. The first one was due to the presence of the maltenic phase (lighter fraction) that melted at 55.8°C. The second one was due to the presence of the asphaltenic phase, melting at 67.8°C.

The maltenic phase of of both samples modified with Trinidad and Selenizza started to soften at lower temperature, for example about 45.9°C, due to the presence in the natural asphalts of different maltenic phases characterised by lower molar mass compared to the original bitumen. Meanwhile, the asphaltenic phases behaved independently. A dilution effect of the original bitumen was thus obtained.

In contrast, it was observed that the natural bitumen Gilsonite, does not act as a diluent. Its addition to the straight-run, bitumen had a negligible influence on the melting temperatures of different maltenic and aphaltenic phases of the original bitumen. But, on the other hand, it expands the softening range of the original bitumen to higher temperatures.

In conclusion, the study indicated that the modifications introduced by the addition of natural asphalts, operate in such a way as to increase the consistency, the viscosity and the stability of the original bitumen thus proving that the natural bitumen can represent an advantageous alternative to other additives for modifying the road pavement bitumen.

USE IN ROAD PROJECTS
Many examples of the implementation of road construction projects confirm the above-mentioned theoretical results.

During the construction of a 17.5km section of the A150 highway in France, the proposed project envisaged the implementation of a two-layer pavement structure consisting of a 6cm HMAC wearing course and a 12cm HMA binder course, over a PF3 sub-grade. With reference to the binder course, in order to meet the technical specifications according to the CE standard NF EN 13108-1, the project intended to use a recycled HMA base course EB 14 ASSISE 20/30 (EME 0/14 class 2). For the manufacture of the recycled hot-mix asphalt, two types of binders were analysed.

The basic HMA mix design contains 30% AE (asphalt aggregates) + 20/30 penetration grade bitumen. On the other hand, the alternative solution is composed of 30% AE (asphalt aggregates) + 50/70 grade bitumen + 1.5 % Selenizza. For comparison purposes, the two types of HMA had the same composition of materials in terms of particle size distribution curves and percentage of binder used.

The comparative study of the two different mix design types showed that both of them met the requested technical specifications and were in accordance with the standards. It should nevertheless be noted that on equal parameters of the obtained modified binder (penetration grade, softening point), the second approach, using natural bitumen, yields noticeably better results in terms of rheological and mechanical properties. There were higher results of stiffness (15 855MPa), better resistance to fatigue (137.1μm/m) and better resistance to rutting (3.3%).

These results validate the idea that the specific constituents of natural asphalts, shall be taken into consideration in the technicaleconomic choices.

Highway A150 in France. An implementation of a two-layer pavement structure consisting of a 6cm HMAC wearing course and a 12cm HMA binder course, over a PF3 sub-grade

A further example comes from the construction of the Fier–Tepelene highway in Albania, where the natural bitumen Selenizza was used as an additive for the production of bituminous mixtures of the flexible pavement.

It was used because of problems in finding the right bitumen locally that could meet the requirements of the technical specifications. But it was used also because natural bitumen could simultaneously contribute to reduce by 4cm the total thickness of asphalt layers, compared to the thickness provided for in the original project design.

The new road pavement structure consisted of three layers of continuously graded bituminous mixtures, the base course (9cm), the binder course (6cm) and the wearing course (4cm). For all bituminous mixtures, the natural bitumen Selenizza was used to a percentage of 8% by weight of the base bitumen. A study conducted by the Polytechnic University of Turin in Italy, on materials sampled from the production plant, as well as on a test session, evaluated the binder and pavement performance.

The analysis of compact issues, by referring to binder viscosity and the binder-related contribution to the occurrence of rutting, fatigue and thermal cracking as well as the assessment of mixture stiffness, led to the conclusion that the considered bituminous mixtures containing the natural asphalt Selenizza, were in compliance with the pavement construction standards and specifications.

One last example on the successful use of the natural bitumen Selenizza, is the Highway A8 Olimpia Odos construction project in Greece. It involved 375km of highway and was designed according to the prescription of French standards. The road structure consisted of a Dense Bitumen Macadam (DBM) base course, an anti-rutting binder course AC (5cm) and an anti-skid TAC (thin asphalt concrete) wearing course (2.5cm).

Several trial mix designs for the base and binder courses were tested using different kinds of binders such as bitumen 50/70, bitumen 50/70 + 8% Selenizza, bitumen 30/50 and PR PLAST modified bitumen. Laboratory tests on elastic modulus and fatigue showed that the binder with bitumen 50/70 + 8% Selenizza, had higher results of stiffness and fatigue compared to all the other tested binders, allowing it to produce an asphalt concrete that belongs to the higher project category DBM 4. This made it possible to reduce the road package thickness by at least 4cm.

NEUTRAL ASPHALT, ENVIRONMENTAL IMPACT
The recent worldwide economic crisis and the growing environmental awareness have created the need for bituminous binders that meet Life Cycle Assessment constraints. As a part of a common commitment to sustainable development, the University of Rome, in cooperation with the company Selenice Bitumi, carried out e research project, whose aim was to analyse and compare for the first time the production process of the Albanian natural asphalt (Selenizza). The project was also a chance to look at the steps necessary to produce conventional bitumen from crude oil, evaluating the energy consumption and CO2 emission for each kind of product. The study was based on the guidelines of the environmental assessments according to the European standard, such as Life Cycle Assessment (LCA) and Life Cycle Inventory (LCI), on the bitumen produced in crude oil refineries.

Highway A8 Olimpia Odos construction project in Greece uses the natural bitumen Selenizza

For conventional bitumen the energy consumption of each step has been calculated as well as the carbon dioxide emission, starting from oil extraction, up to vacuum distillation. It included the entire chain of bitumen production, beginning with the acquisition of raw materials, transport, manufacture, use and maintenance, recycling and final disposal.

The product cycle of natural asphalt Selenizza composed from four main phases – extraction, concentration, processing and storage. This is much simpler than the refinery cycle, with an immediate feedback in energy consumption and environmental impact. Moreover, transport stages are reduced to the minimum due to the close proximity of the quarry site to the processing unit.

For study purposes, all technical documentation about electrical equipment and vehicles operating at the mine of Selenice in Albania, together with geological and chemical analysis, were exploited to evaluate the energy consumption characterising each stage of the process.

Also, the value of the Italian-Albanian energy mix, determining the amount of CO2 emissions per kWh of electricity produced, was acquired from the International Energy Agency (IEA). The data on the calorific value of the fuels used during the production, that is, the amount of CO2 emissions per kg of burned fuel, were available from international literature and from ENI (Italian national hydrocarbons agency).

In the light of such an innovative analysis, it was concluded that the natural asphalt Selenizza allows substantial energy saving: 2,376MJ/t versus 4,71MJ/t, that is, about 50% of the value of the bitumen produced from crude oil. There was a significant reduction in CO2 emissions up to 44%: 127,3kg versus 226,2kg per tonne of conventional bitumen production.

A more efficient and smart use of natural resources at the dawn of the 21st century represents a challenge that we must all embrace. Indeed, the natural bitumen Selenizza, is an environmentally friendly product, available within the reach of every road construction company. It can also contribute to improving the quality of high modulus hot-mix asphalts. It offers a better resistance for the high-traffic stress roads, providing material savings by reducing layer thickness and ensuring increased pavement longevity.

Selenice Bitumi is a wholly owned subsidiary of French Company KLP Mines. The company owns the mine of Selenice, an open-pit natural bitumen reserve that constitutes the only deposit of natural bitumen in Europe.

The natural bitumen originating from these deposits is used as an additive and is mixed with refined bitumen, in different percentages, composing on average about 1% of the total mass of the binder.

Selenice Bitumi products are sold in France, Switzerland, Italy, Greece and Ukraine as well as in China, Canada and countries in North Africa, such as Tunisia and Morocco.

November 18, 2015

by AEA

Transatlantic Petroleum to sell Albanian assets

On November 16, 2015, the Company’s Board of Directors authorized the immediate launch of a marketing process for the sale of all of the Company’s oil and gas assets and operations in Albania.

While TransAtlantic pursues the marketing process, it will continue the execution of its current operational plan focusing on low cost, high return operations. TransAtlantic does not expect to comment further or update the market with further information on the marketing process unless and until the Board of Directors has approved a specific transaction or otherwise deems disclosure appropriate or necessary. There is no assurance that this marketing process will result in the Company pursuing a particular transaction or completing any such transaction.

Production Update

TransAtlantic’s current net production as of November 13, 2015 is approximately 6,500 BOEPD, and is comprised of approximately 5,800 BOEPD from Turkey and 700 BOPD from Albania.

About TransAtlantic Petroleum Ltd.

TransAtlantic Petroleum Ltd. is an international oil and natural gas company engaged in the acquisition, exploration, development and production of oil and natural gas. The Company holds interests in developed and undeveloped properties in Turkey, Albania and Bulgaria.