Page 15 - FSUOGM Week 29

FSUOGM PERFORMANCE FSUOGM

Russian LNG output slumps 10% in June

RUSSIA RUSSIAN LNG production in June was 10.1% 48.2bn cubic metres in June, representing a
below the level in the corresponding month last 13.3% decline year on year and 8.5% drop month
Russian LNG year, state statistics agency Rosstat reported on on month. Between January and June, output
production was affected July 16. was 294 bcm, down 11.1% y/y.
by maintenance at the This marks the first year-on-year decline in Production of associated petroleum gas
Sakhalin-2 plant. Russian LNG output in 2020. Rosstat did not (APG), released as a by-product at oilfields, was
disclose any reasons for the fall, although one of 7.4 bcm last month, down 1.1% y/y and 7.2%
the two trains at the 11mn tonne per year (tpy) m/m. It totalled 48.2 bcm in the first half of the
Gazprom-operated Sakhalin-2 LNG plant in the year, up 3.7%.
Far East went offline in mid-June for a month of Gazprom and Novatek followed other gas
scheduled maintenance. suppliers in making cuts to production after
Gazprom and privately run rival Novatek demand plummeted in March as coronavirus
have also been cutting gas exports this year (COVID-19) lockdowns were imposed around
in response to the collapse in global demand the world.
triggered by the coronavirus (COVID-19) Gazprom’s European sales were weak even
pandemic. before coronavirus restrictions were put in
A total of 2mn tonnes of LNG was produced place, owing to warm weather, high levels of gas
by Russia last month, which also represented a in storage and competition from LNG suppliers.
20.8% decline on the amount in May. Production Its sales to European customers slumped 17%
over the first six months of the year was up 7.2%, y/y in the first quarter, to 51.6 bcm.
however, at 15.4mn tonnes. Novatek suffered a 30.4% drop in interna-
Russian LNG production surged by 47.7% tional sales in the second quarter, to 4.92 bcm.
last year to 29.5mn tonnes, on the back of the The company sells most of its gas in China
launch of Yamal LNG’s three 5.5mn tpy trains and other Asian markets, some of which were
between late 2017 and late 2018. badly affected by measures to prevent the virus’
Russia’s overall dry gas production totalled spread.™

Uzbek gas output slides

17.1% in H1 2020

UZBEKISTAN UZBEKISTAN’S gas production declined by targets for several years now, and each time
17.1% year on year to 25.145bn cubic metres in results have disappointed. In May, the energy
Buyers in China and January-June, its state statistics committee said ministry forecast that production this year
Russia cut shipments on July 20. would reach only 51.7 bcm.
because of the Most of the Central Asian country’s gas is Uzbekistan has undertaken reforms to attract
coronavirus crisis. used domestically, but it also stands as one of more upstream investment. It is currently in talks
Uzbekistan's major exports. Buyers in China on establishing a production-sharing agree-
and Russia cut supplies earlier this year as the ment (PSA) with BP and Azerbaijan’s SOCAR
coronavirus (COVID-19) pandemic led to to explore the western Ustyurt region, and
global demand collapsing. Chinese buyers even negotiations are also underway with the UAE’s
declared force majeure on supplies. Uzbekistan Mubadala, France’s Total and Russia’s Novatek.
is contracted to deliver 10 bcm per year of gas to However, few new investments have been final-
China via the Central Asia-China gas pipeline. ised, and the coronavirus crisis has made it even
Some international producers working harder to attract partners.
in Uzbekistan have also been affected by the Uzbekistan’s production of gas condensate
decline in exports. Russia’s Lukoil, the coun- also slumped in the first half by 43% to 730,100
try’s second-biggest producer after state-owned tonnes, while its oil extraction rose 3% to 347,000
Uzbekneftegaz (UNG), blamed coronavirus tonnes. ™
restrictions for a 18% fall in its international gas
sales in the first quarter. The company supplies
China with gas from the Southwest Gissar and
Kandym gas projects in Uzbekistan.
The Uzbek government had been projecting
an 8.8% rise in national gas output this year, to
63.8 bcm. It has been setting ambitious growth

Week 29 22•July•2020 www. NEWSBASE .com P15