Page 10 - EurOil Week 35 2022

EurOil PIPELINES & TRANSPORT EurOil

China resells LNG to Europe

EUROPE CHINA is selling its surplus LNG cargoes to likely equal to 7% of Europe’s gas imports in the
Europe, providing the latter with some relief first sixth months of this year.
Resold volumes from as European gas prices soar as a result of the COVID-19 restrictions as well as the fall-out
China are helping to summer heatwaves and cutbacks in Russian gas from weaker economic growth meant that Chi-
ease conditions on the supply. na’s real gross domestic product (GDP) growth
European market. European LNG imports soared 60% year in the first half of the year amounted to a mere
on year in the first six months of this year, 2.5%. Meanwhile, the central government has
according to Kpler, amounting to 53mn also taken steps to bolster energy production
tonnes. At the same time, Chinese imports amid the energy crisis, and involves bringing
dropped 20.3% y/y in January to July, as more coal-fired power plants back online at the
demand has been crippled by coronavirus expense of LNG demand. According to Nikkei
(COVID-19) pandemic restrictions. While Asia, Shanxi Province, for example, has boosted
those restrictions are starting to be eased, in its coal output by 100mn tonnes to 1.3bn tonnes
the meantime China has the opportunity to this year and plans to add a further 50mn tonnes
resell LNG it does not need to Europe. of supply in 2023.
According to Nikkei Asia, Chinese LNG China has also stepped up its own gas supply,
trader JOVO Group recently disclosed it had with domestic production on track to rise by 7%
resold an LNG cargo to a European buyer, and y/y in 2022, according to gas consulting firm SIA
a futures trader told the news site that the profit Energy. The drop in China’s LNG needs has had
from such a deal could amount to tens of mil- implications for international prices. LNG prices
lions of dollars and possibly even $100mn. Chi- in Asia are currently at around $45 per mmBtu,
nese energy giant Sinopec also acknowledged while European prices are exceeding $60 per
in April that it had been diverting excess LNG mmBtu. In a typical year, LNG supplies to Asia
cargoes to the international market. Local media sell at a premium to European deliveries, but
reports estimate that Sinopec alone has resold 45 that long-running trend reversed late last year as
cargoes of LNG, or around 3.15mn tonnes, and a result of Russian cuts to Europe’s gas supply and
the total amount of resold Chinese LNG was other factors. ™

INVESTMENT

Equinor reportedly mulls

part-sale at Statfjord

EUROPE EQUINOR is considering the sale of part of Facilities at Statfjord include three fully inte-
its stake in Norway’s Statfjord field and several grated concrete platforms at Statfjord A, Stat-
Resold volumes from other minor holdings in satellite fields, Reuters fjord B and Statfjord C. Oil is loaded into tankers
China are helping to has reported citing a company presentation. and shipped to a number of ports in north-west
ease conditions on the The Norwegian state company has a 64% Europe, while gas is exported via the Tampen
European market. share in Statfjord, which it has controlled as Link and the FLAGS system to the St Fergus ter-
operator since the late 1980s. Production at the minal in Scotland.
North Sea field peaked in the early 1990s and has Equinor only expanded its stake in the field
been undergoing a managed decline ever since, last year, striking a $50mn deal with the Norwe-
and in total it has yielded over 51bn barrels of oil gian arm of Spirit Energy. The decommission-
equivalent (boe) to date. ing of Statfjord A has been postponed until 2027,
The divestment covers a 28% shares in while B and C are expected to continue opera-
Stafjord and the nearby Statfjord North, Statfjord tions beyond 2035. ™
East and Sygna fields. Equinor has 45% of Stat-
fjord North, 43.3% of Statfjord East and 43.4% of
Sygna. Other partners in the main Statfjord area
include Var Energi with 21.4% and Equinor’s UK
business with 14.5%.
According to Reuters, Equinor has hired US
investment bank Houlihan Lokey to advise on
the sale.

P10 www. NEWSBASE .com Week 35 02•September•2022