Page 16 - NorthAmOil Week 31
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NorthAmOil PERFORMANCE NorthAmOil
Russia overtakes US in
LNG supplies to China
GLOBAL RUSSIA continues to make inroads into Asian In June 2019, Russia exported 67,000 tonnes
LNG markets. The latest Chinese customs data of LNG to China, while the US exported none
show that Russia supplied 396,000 tonnes of that month. The latest figures for Russian LNG
LNG to the Asian country in June, compared shipments to China show how dramatically LNG
with 340,000 tonnes arriving from the US. trade between the two countries has grown over
According to the customs data, Russia’s LNG the past year.
exports to China surged by 20.7% on May fig- Overall, Russia has more than quadrupled its
ures, while US exports only rose 2.4% month on LNG exports since 2009 and is aggressively pur-
month. suing further expansion. Earlier in July, Russian
This is perhaps not surprising given that Minister of Energy Alexander Novak wrote in an
US exports of LNG to China had only recently article that new megaprojects could allow Russia
resumed, having been disrupted by the trade war to take up to 15% of the global LNG market by
between the two countries. Earlier this year, Bei- 2025. This compares with around 7% in 2019 –
jing started granting tariff waivers to buyers of and likely a higher figure in 2020.
US LNG in a bid to encourage them to increase Total Chinese imports of LNG also rose
imports. 29% year on year in June 2020, to 5.79mn
Data from the US Energy Information tonnes. The figure refutes previous projections
Administration (EIA) show that the country has that China’s June imports were set to fall from
only been exporting LNG to China again since May levels of 5.6mn tonnes. This comes after
March. Prior to this, the last time US LNG was the early hit China took from the coronavirus
shipped to China was in February 2019. (COVID-19) pandemic.
PROJECTS & COMPANIES
Marathon Petroleum to close
two refineries, sell Speedway
US MARATHON Petroleum has announced plans quarter of 2021 and generate after-tax proceeds
to permanently close two small US refineries as of about $16.5bn, which Marathon will use to
a result of lower demand for fuels. Separately, the repay some of its debt of over $30bn and for
downstream company said it had struck a deal to shareholder returns.
sell its network of Speedway gasoline stations to The all-cash acquisition is Seven & i’s largest
7-Eleven, which is a wholly owned, indirect sub- ever, and will leave Marathon far more reliant
sidiary of Japan’s Seven & i Holdings, for $21bn. on refining and midstream operations at a time
Both moves were announced immediately in when refining margins are being squeezed.
the run-up to Marathon’s second-quarter earn- Indeed, the move to close two refineries illus-
ings call, when the company reported a smaller trates the challenges currently facing the refining
quarterly loss than analysts had expected. industry. The refineries are located in Martinez,
Thanks to a recovery in demand for gasoline and California and Gallup, New Mexico and were
other products since it collapsed in April, Mara- both acquired in 2018 when Marathon took over
thon posted an adjusted loss of $868mn, or $1.33 Andeavor.
per share, for the second quarter, compared with Major maintenance had been carried out
analysts’ expectations of a $1.75 per share loss. at the 161,000 barrel per day (bpd) Martinez
The sale of Speedway comes after Marathon refinery last year, but the demand collapse and
launched a restructuring process in 2019 under further upcoming maintenance contributed to
pressure from activist investor Elliott Manage- Marathon’s decision to shut the refinery. It is now
ment. The company had initially planned to evaluating the possibility of converting Martinez
spin off Speedway into a separate entity, but this to a renewable diesel facility.
process was delayed until 2021 in June, just a few The company had sought a buyer for the
weeks before Marathon announced the sale to much smaller Gallup refinery, to no avail. It
Seven & i. will continue using logistics assets at the Gal-
The deal is anticipated to close in the first lup site.
P16 www. NEWSBASE .com Week 31 06•August•2020
