Page 7 - FSUOGM Week 31 2019
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FSUOGM PIPELINES & TRANSPORT FSUOGM
Novatek steps on Gazprom’s feet in European market
RUSSIA
Gazprom has warned that its market share and with it, government export revenues, is under threat.
RUSSIA’S second-largest natural gas producer and global LNG runner-up Novatek is increas- ing the competition with gas giant and pipeline exports monopolist Gazprom in the European market, Kommersant daily reported on August 5 citing IHS data.
Supplies of LNG to Europe almost doubled in 1H19 to 61bn cubic metres, making LNG the fastest-growing competitor to Gazprom’s pipeline sales into the company’s largest market. Among the LNG suppliers, Novatek increased its sales by 9.5 bcm, US LNG saw a 7.1 bcm increase, and Qatar LNG 5 bcm.
As reported by bne IntelliNews, Gazprom, who has the monopoly over gas exports by pipe- line, previously cried foul over potential harm from LNG supplies to Europe by Novatek. Kom- mersant estimated, that apart from Turkey, Gaz- prom’s pipeline supplies to Europe in 1H19 stood at 88.5 bcm.
LNG outgrew supplies from Norway (up by 0.5% to 65.8 bcm) and Algeria (down by 21% to 20.6 bcm), while gas output in EU states also
declined (by 4% to 21.6 bcm in the UK and by 16.5% to 15.3 bcm in the Netherlands).
LNG is Gazprom’s weak spot, as the com- pany operates only one LNG plant in Sakha- lin and is facing delays in the planned Baltic LNG project a er the recent pull-out by Royal Dutch Shell. In the meantime Novatek has almost caught up with state oil and gas majors in terms of capitalisation a er adopting and successfully carrying out an ambitious LNG strategy.
Gazprom is rushing to complete the Nord Stream 2 pipeline before the start of 2020 prior to the expiry of its gas transit agreement with Ukraine. Delays in the construction of Nord Stream 2 would force Gazprom to re-negotiate the transit conditions in the face of contractual obligations with European buyers.
Novatek’s head and Russia’s richest man, Leonid Mikhelson, already suggested that should Gazprom face di culties with contractual Euro- pean supplies, his company could “help” replace those with LNG.
INVESTMENT
Rosneft snaps up St Petersburg fuel retailer
RUSSIA
More of Russia’s fuel sector is falling into the hands of large vertically integrated oil companies.
RUSSIAN state oil giant Rosne has acquired the largest independent fuel retailer in St Petersburg, bringing more of Russia’s fuel market under the control of larger vertically integrated players.
e St Petersburg Fuel Co. (PTK) controls 142 filling stations across St Petersburg, the greater Leningrad region and across other areas of northwest Russia. It also operates a eet of fuel tanker trucks and two oil depots.
Rosne ’s interest in the company was rst reported in June, when Russia’s Kommersant cited sources as saying the oil rm was looking to close a purchase within several months. Rosne reported nalising the deal on July 31, without disclosing the price it paid.
“This will allow Rosneft to take a leading position in the oil products market of St Peters- burg and the Leningrad region – one of the larg- est in the Russian Federation,” the company said in a statement, noting that PTK’s assets would synergise with its existing operations.
e deal will raise the total number of Ros- neft-controlled filling stations nationwide by 5% to 3,100. Rosne ’s share of St Petersburg fuel outlets will expand from 10% to 27%, displacing the current market leader Lukoil, which operates 24% of stations.
PTK has changed hands many times since its founding in 1994, although company registry data show that its owners prior to Rosne were businessman Andrei Golubev and his wife Olga.
Independent fuel retailers in Russia are con- tending with slimmed margins as a result of tax- ation changes that have driven up the domestic cost of oil. is looks set to spur a urry of deals as larger vertically integrated companies better able to withstand tough market conditions snap up their smaller rivals.
In early July, Finland’s Nestle struck a deal to transfer its fuel operations in Russia to Tatne , already the country’s fourth biggest fuel retailer a er Rosne , Lukoil and Gazprom Ne with 600 stations. Tatne supplies these stations with fuel from its re nery in Tatarstan, which in turn pro- cesses crude from local Tatne oil elds.
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