Page 11 - AsianOil Week 39 2022

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Australia drops plan to

restrict LNG exports

POLICY AUSTRALIA has abandoned plans to impose international buyers, and ensure that domestic
restrictions on LNG exports after striking a deal buyers do not pay more than customers overseas
The government said in with its three East Coast producers of super- would.
August it was weighing cooled gas to avert a domestic supply crunch. King said the deal would not affect supplies
up the restriction. The government said in August it was weigh- to overseas customers or supplies under existing
ing up the restriction, sparking concerns among contracts.
LNG exporters and their predominantly Asian “I want to state, very firmly and clearly, that
buyers. This was after a competition watchdog Australia will always be a trusted and reliable
warned that Australia’s East Coast gas market trading partner and a safe place to invest,” she
was facing a 57 PJ shortfall in supply next year. said at a televised conference.
Under the agreement, announced on Sep- Santos’ Gladstone LNG was viewed as par-
tember 29 by Resources Minister Madeleine ticularly at risk as a result of the proposed restric-
King, the Shell-run Queensland Curtis LNG, tion, as the terminal, whose other shareholders
ConocoPhillips-operated Australia Pacific include TotalEnergies, Korea’s KOGAS and
LNG and Santos-led Gladstone LNG terminals Malaysia’s Petronas, takes more gas out of the
will offer an extra 157 PJ of gas to the domestic domestic market than it puts in. Gladstone LNG
market in 2023. has agreed to ramp up supply to the domestic
“Given the agreement means the projected market during the peak winter demand season
shortfall will be avoided, I am satisfied I do not in Australia, Santos said.
need to take steps to activate the Australian “The [agreement] is a good outcome for San-
domestic gas security mechanism at this time,” tos and very welcome, to remove sovereign risk
King said in a statement. and ensure long-term LNG supply contracts are
The LNG exporters are required to offer honoured,” the company’s managing director,
uncontracted gas to the domestic market before Kevin Gallagher, said in a statement. ™
NEWS IN BRIEF

OPEC+ expected to make US, whose President Joe Biden lobbied hard China CAMCE Engineering
earlier in the year to encourage OPEC+
sharp production cut members to raise output. pushing to finalise gas
However, despite widespread pressure,
The OPEC+ group of oil producers is the group’s top producers – Saudi Arabia project contract with
expected to cut combined output by at least and Russia – have stuck by each other,
1mn barrels per day (bpd) when they meet appearing to have learnt from the folly of Kazakhstan’s Sozak Oil and
in person this week for the first time since their short-lived price war that coincided
the coronavirus (COVID-19) pandemic with the start of the pandemic. Gas
began. With sanctions constraining the market
The anticipated reduction would be for Russian crude as its ‘military operation’ Chinese industry infrastructure contractor
OPEC+’s second in as many months, with in Ukraine continues and Moscow moves China CAMCE Engineering is pushing to
September’s decision wiping out the 100,000 to annexe four south-eastern regions of finalise a contract with Kazakhstan’s Sozak
bpd added to output in August. its neighbour, Riyadh has refrained from Oil and Gas for engineering, procurement
Over the previous 18 months the group criticism, perhaps with an eye on the and construction works on a natural
had been working to return around 10mn stability of oil relations and another on its gas development project in Kazakhstan,
bpd of supplies taken off the market to own long-running military campaign in Upstream has reported.
stem the massive losses experienced by Yemen. CAMCE moved to make a $11.96bn
oil exporting nations when crude prices Russia is reported to be keen to cut deal with Sozak in June 2019 - further
plummeted in Q2 2020. The slow build- output by 1mn bpd, while Saudi Arabia is developments were likely delayed by the
back ensured that prices rose steadily, thought to be considering an additional, global pandemic.
but renewed volatility amid conflict and unilateral cut in the region of 500,000 bpd. CAMCE will be responsible for EPC
concerns about demand has necessitated The two countries account for more services covering a gas plant with an annual
action in the opposite direction as many half of the OPEC+ group’s 43.86mn bpd processing capacity of 6bn cubic metres
market commentators opine that the production quota for October at 11mn bpd of natural gas as part of Sozak’s operations
group now views $90 per barrel as a non- each, but while Saudi Arabia has been able in Kazakhstan’s Turkistan and Kyzylorda
negotiable price floor. to produce around this level of late, Russian regions.
Such a policy is likely to result in outcry output has fallen as sanctions bite.
from major consuming nations, led by the

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