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A better month for the LNG market Latin America: US seizes Venezuelan fuel
Things are looking up for the global LNG mar- The US government has stepped up its campaign
ket after several challenging months on both the to prevent Iran from selling petroleum products
supply and demand fronts. to Venezuela.
US LNG exports are picking up, with Reuters On August 14, officials in Washington con-
reporting this week that they are on track to rise firmed that US forces had seized four cargoes of
for the first time in six months. This follows a Iranian gasoline en route to Venezuela. Tehran
spate of cargo cancellations from US liquefaction responded by acknowledging that it had sup-
terminals over the summer, which are continu- plied the fuel but described it as Venezuelan
ing, but at a slower pace. property, saying that Caracas had already paid
Meanwhile, Asian spot LNG prices have its bill. Venezuela’s government did not respond
risen to more than a six-month high over the immediately to reports of the seizure.
past week. This has been attributed to factors The US action is sure to exacerbate the prob-
including the risk of a potential shutdown at the lems of Venezuela’s oil industry. According to
Gorgon LNG terminal in Australia, as well as IHS Markit, the South American state shows no
something of an uptick in demand, though not a soon of reversing the decline in its crude output
particularly large one as yet. and may see production drop from the current
The two regions’ LNG industries are closely level of 100,000-200,000 barrels per day to near
linked, with US producers seeking long-term zero. As recently as 2019, Venezuelan yields
buyers in Asia in particular. One US company still stood at 650,000 bpd. However, US sanc-
trying to secure a new Asian investment cur- tions, deteriorating infrastructure and the fall in
rently is Tellurian, which has been in the news global energy demand have wreaked havoc on
for scaling back the scope of the first phase of its the sector.
proposed Driftwood LNG terminal on the US Meanwhile, Venezuela’s National Assembly,
Gulf Coast by deferring construction of some of which is dominated by parties that oppose the
the pipelines that would serve the facility. socialist government led by President Nico-
The company had also recently renewed las Maduro, has launched an investigation of a
talks with India’s Petronet LNG over a tentative recent oil spill off the coast of Falcón State.
deal that would include an 18% equity stake in MPs have requested information from the
Driftwood, as well as the option for the Indian national oil company (NOC) PdVSA and other
company to buy up to 5mn tonnes per year (tpy) state-run institutions for details on the incident,
from the facility. However, Indian media on which appears to be related to maintenance work
August 16 cited sources familiar with the matter at the El Palito refinery. Opposition legislators
as saying Petronet was considering scaling back say the spill happened because heavy rainfall
its proposed $2.5bn investment in Driftwood as caused the 146,000 bpd plant’s oxidation ponds
a result of Tellurian’s overhaul of the project. to overflow.
A further reminder of link between the LNG In other news, Argentina’s YPF has reported
industries in the US and Asia came last week that its financial and operational performance
when the SK Resolute LNG carrier made the suffered in the second quarter of 2020 as a result
10,000th Neopanamax transit of the expanded of the coronavirus (COVID-19) pandemic. The
Panama Canal since its opening in June 2016. state-owned firm said it had incurred a loss of
The expanded canal offers a shorter, and there- ARS85bn ($1.17bn) in the April-June period,
fore more competitive, route for LNG deliver- exceeding by 154.8% the loss of ARS33.36bn
ies from the US East and Gulf coasts to Asian ($458.7mn) reported in the same period of
countries.. 2019..

If you’d like to read more about the key events shaping If you’d like to read more about the key events shaping
the global LNG sector then please click here for the Latin American oil and gas sector then please click
NewsBase’s GLNG Monitor. here for NewsBase’s LatAmOil Monitor.

P10 www. NEWSBASE .com Week 33 19•August•2020