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OPEC, Allies to Discuss Cuts

OPEC, Allies to Discuss Cuts OPEC, Allies to Discuss Cuts

Russian Energy Minister Alexander Novak said Monday that he plans to discuss a potential output cut in 2019 with oil companies before OPEC/non-OPEC meetings in early December.
"Undoubtedly, we have discussed it, and we will discuss it. We are in constant contact and we will discuss it further to develop a position by December," Novak said, S&P Global Platts reported.
Russia is the key non-OPEC participant in the production cut deal with OPEC that has been in force since the beginning of 2017. 
Participants in the deal will meet in early December to discuss amendments to the deal, which may include a cut in output targets and a move away from using October 2016 production to more recent data as a baseline to measure compliance.
Novak is part of a Russian delegation visiting Turkey Monday for a ceremony marking completion of the subsea section of the Turk Stream gas pipeline.
"Development of this project will allow Turkey to fully cover its gas needs directly from Russia," Novak said in an interview with the Anadolu news agency.
Russia currently supplies gas to Turkey via the Blue Stream pipeline and transit countries. Half of Turk Stream's 31.5 billion cubic meters per year capacity has been earmarked for the domestic Turkish market. 
The remainder is to be shipped on to Europe with routes to Bulgaria, Serbia and Hungary as well as Greece and Italy under consideration.
Novak said that the European gas market is sufficient for various suppliers.
"The European market is big enough, it is diversified and has many suppliers both pipeline and LNG. The issue is supply conditions," Novak said, adding that pipeline transport is the most reliable and efficient way to supply European customers."
In recent years it was Russian gas which was the only source of additional volumes during unexpectedly cold weather. And we have free capacity, the ability to increase gas supplies at any moment as needed," Novak said.
He added that Russian gas prices are currently 25%-30% lower than prices for US gas, and in some cases they are as much as 40% lower. 

 

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