Page 14 - GLNG Week 38

GLNG EUROPE GLNG

European gas storage 94% full

PERFORMANCE EUROPE’S gas storage facilities were 93.7% to traders, including an easing of tariffs and the
full as of September 16, with 1,041 TWh of gas introduction of a customs-free storage regime
in reserve, data published by Gas Infrastructure for up to three years.
Europe (GIE) shows. The pace at which gas is being injected into
While this is an unusually high amount for storage in Europe has slowed, to around 12 TWh
the time of year, it was marginally less than what per week from 16 TWh a month ago. The same is
was stored at the same point in 2019. But this true for Ukraine, which has seen injection rates
data does not include Ukraine, which GIE noted fall to 6 TWh from 10 TWh per week.
separately had 38% more gas stored than a year The difference in day-ahead prices and prices
ago, at 282.8 TWh. Ukraine’s underground stor- for Q1 2021 delivery has narrowed, making
age reservoirs were 87.8% full. storage less attractive than it was in August. That
Storage volumes in Europe have been build- difference was only €3 ($3.6) per MWh on Sep-
ing up at an untypically high rate this year as tember 17 at the Dutch TTF hub, versus €5.4 per
demand has been weaker because of coronavi- MWh on August 24.
rus (COVID-19) lockdowns and the resulting Besides improving terms, Ukraine has also
economic fallout. However, storage levels were secured more storage business thanks to the
unusual last year as well, as there was a record temporary easing of restrictions on reverse
influx of LNG. A global glut in LNG supply also flow at its Velke Kapuszany gas interconnection
dragged down prices, incentivising companies to with Slovakia. These restrictions were loosened
stock more. to mitigate against the impact of maintenance
Much of the extra gas stored in Ukraine this work at the smaller Budince interconnection.
year was injected on behalf of European com- According to Slovakian transmission system
panies. Ukraine has taken steps in recent years operator (TSO) Eustream, that work will cease
to make its vast storage network more attractive in October.™

Arctic LNG-2 lines up $9.5bn

in international finance

INVESTMENT RUSSIA’S $21bn Arctic LNG-2 export project project, and the document seen by Reuters states
is reportedly set to get $9.5bn in financing from that an unnamed Russian bank will potentially
international banks, with additional funding allocate $1.5bn.
expected to come from domestic lenders. Novatek has previously said that $9-11bn of
Russian gas firm Novatek and its partners the needed financing for Arctic LNG-2 would
took a final investment decision (FID) on the come from external sources, leaving its equity
project a year ago, and construction is well partners to cover the rest. As of press time, none
underway. The terminal’s three trains are due to of the lenders or project participants had con-
go online in 2023, 2024 and 2026, bringing its firmed the Reuters report.
output to 19.8mn tonnes per year (tpy). Arctic LNG-2 will be Novatek’s second liq-
The lender expected to offer the largest credit uefaction project to launch production. Its first,
facility, $5bn, is China Development Bank Yamal LNG, went on stream in December 2017
(CDB), according to a document seen by Reu- and is now producing 17mn tpy of super-cooled
ters. The Japan Bank for International Cooper- gas. The company has several other export devel-
ation (JBIC) is set to provide a $2.5bn facility, opments in the pipeline, but none of them have
while France’s Bpifrance is anticipated to allocate reached an FID yet. Novatek had hoped to sanc-
$700mn in credit finance. tion this year the 5mn tpy Obsk LNG scheme,
Novatek’s equity partners at Arctic LNG-2 which it plans to develop without partners, but
are French oil major Total, China’s CNPC and has delayed the move because of weak market
CNOOC and Japan’s Mitsui and JOGMEC, pro- conditions.
viding a rationale for these lenders’ involvement. Novatek earlier this month secured all the
Also in the line-up are Italy’s SACE, set to financing it needs to build a fleet of carriers to
provide $1bn, and Germany’s Euler Hermes ship Arctic LNG-2’s gas. The vessels will be con-
with a $300mn offering. In addition, Russian structed at the Zvezda shipyard in the Russian
state lender Sberbank said earlier this month it Far East and funded with loans from state devel-
was willing to lend over €2.7bn ($3.2bn) to the opment bank VEB.RF.™

P14 www. NEWSBASE .com Week 38 25•September•2020