In last Thursday’s Taipan Insider, I talked about the current dispute between Russia and Ukraine over natural gas supplies.

Since this latest row began, supplies to Eastern Europe have been nearly non-existant. And major Western European countries were starting to feel the pinch, too. Some countries were even forced to dip into reserves, this being the onset of the bitter winter season.

Now, Russia says it will resume supplying natural gas tomorrow morning. This is only after a monitoring deal has been agreed to by both parties and mediated by the European Union.

Still, it may be a while, reports the BBC, before supplies return to normal.

The overnight low temperature in Prague, Czech Republic, tonight is 15 degrees fahrenheit.

If you’ve been following my blog, you’ll know that I’ve been knee-deep in researching the energy ties in Central Asia. This area has become a hot bed for investment and news is swirling around just how much natural gas is in this region.

Let me spell it out for you: Russia ships nearly two-thirds of all its natural gas production to Europe, and one Central Asian country, Turkmenistan, helps fulfill its contracts.

But if Central Asia countries start making deals with Europe over Russia, Russia will be left out in the cold.

I don’t think that’ll happen though. You see, Russia’s got a contingency plan. It just met with Iran and Qatar to firm up an energy deal.

First let me explain the tug of war…

The Caspian Sea energy nations met last Friday in Azerbaijan. At the top of the list for discussion was the signing of a declaration to limit Russia’s monopoly over export routes to Western Europe. Now, results showed that there are some countries unwilling to sign the declaration, but the fact that a declaration was even up for discussion is promising for some.

This is big news particularly for the European Union.

For years now, the EU has imported 40% of its natural gas from Russia. These imports make up 25% of the EU’s total natural gas consumption. Those are extremely high numbers and the European Commission wants to do something about it.

“This is a problem we must address. We must shield European citizens from the risk that external suppliers cannot honor their commitments,” EU Commission President Jose Manuel Barosso told reporters from RussiaToday.

We all know that Russia is more than willing to turn of the tap. With Russia as the single largest supplier of imported gas, the EU is seeking diversity in its energy imports. RussiaToday notes that this will be accomplished a number of ways, from opening up a new North Sea offshore grid to new projects in the Mediterranean.

So where does that leave Russia?

Continue Reading »

Right now, copper spot prices are an anemic $1.65 per pound. That’s an amazing drop from above $4 back in June.

And yet, one Chilean copper mine is actually expanding.

The mine is called Dona Ines de Collahuasi. It’s Chile’s third largest copper mine and is located in an historical copper mining area. Back in 1880, a large, high-grade copper and silver vein was found. It’s one of the world’s largest copper resources.

Right now, the mine produces roughly 440,000 tons of copper a year.

But the mine has just approved a $64 million project that will increase annual output by 30,000 tons. And that’s just the first expansion.

At the end of the first quarter of 2009, a $750 million expansion plan will boost production to 650,000 tons a year. After that expansion is complete, the mine intends to increase production to a full one million tons of copper a year by 2014.

That’s an astounding move.

Continue Reading »

News from Asia Times Online has a tiny Caspian county rivalling Mother Russia for regional energy dominance.

In an announcement on October 13, British consultant group Gaffney, Cline & Associates valued Turkmenistan’s natural gas resources for its new Yoloten-Osman field at 4 trillion cubic meters… at least.

On the high side of the estimate, this field could contain as much as 14 trillion cubic meters.

The U.S. consumes 604 billion cubic meters a year, so this is a massive find! It’s also five times the size of Turkmenistan’s previous favorite field.

This new reserve estimate came as a big shock to Russia’s Gazprom (GAZP:Russia), who’d picked up a giant contract with Turkmenistan’s state-owned energy company, Turkmengaz. The contract, signed on July 25 earlier this year, meant Turkmenistan would export 50 billion cubic meters a year to Russia through 2009. Gazprom needs these exports to meet its contracts with Europe, as the company exports about two-thirds of its total production.

Continue Reading »