Page 9 - FSUOGMWeek 10 2020

FSUOGM COMMENTARY FSUOGM
to support petrochemical producers, including a subsidy on domestic ethane use.
The measure will also apply to Novatek’s future Arctic LNG projects. The operational Yamal LNG terminal and the planned Arctic LNG-2 terminal due on stream in 2023 have already secured generous bespoke tax breaks, including zero MET and export duty during their first 12 years of production. Moscow awarded this relief because it is eager to see Rus- sia emerge as a top-tier LNG producer.
Onshore
The draft law also envisages the introduction of an excess profit-tax (EPT) scheme for fields located north of 70 degrees of latitude in the regions of Krasnoyarsk, Yakutia and Chukotka. Eventually Russia wants to extend profit-based tax to the entire industry, in lieu of MET and export duties. Officials believe that doing so will make the tax environment more uniform, and encourage producers to operate more efficiently.
Furthermore, the law provides for extra tax relief at the Vankor cluster of fields owned by Rosneft. These include the main Vankorskoye field and its satellites Suzunskoye, Tagulskoye and Lodochnoye.
The company is due to receive MET tax relief when oil prices are above a base level in order to compensate for infrastructure costs. The exact amount of fiscal support has not been specified, although in order to pay the reduced MET rate, projects will have to com- plete all infrastructure before January 1, 2030. The lower rate will apply for 10 years from the law coming into force.
Vankorskoye came on stream in 2009 and the challenge for Rosneft now is slowing the pace of production decline. Suzunskoye, Tagulskoye and Lodochnoye are yet to launch commercial operations.
In October last year, the Russian government agreed to provide RUB600bn ($9bn) in MET relief for Rosneft’s Vostok Oil project, which comprises the Vankor fields and other resources further north. Rosneft says the project could one day yield up to 2mn barrels per day (bpd) of oil, helping Russia counter output decline in West- ern Siberia, under the right tax conditions.
Suzunskoye, Tagulskoye and Lodochnoye already receive relief under current legislation. Tagulskoye and Lodochnoye’s development falls under an EPT regime, while Suzunskoye enjoys regional tax relief. ™
PIPELINES & TRANSPORT
NS2 pipelaying vessel bound for Egypt
RUSSIA
The Akademik Cherskiy previously set courses for Singapore and Sri Lanka.
THE Akademik Cherskiy pipelaying vessel that Russia has indicated will complete the Nord Stream 2 pipeline has set a course for the Egyp- tian port of Suez, data published by Vessel Finder shows, suggesting its final destination is Europe.
Akademik Cherskiy’s estimated time of arrival in Egypt is March 25. According to Platts Analytics, from there it would take the vessel two months to reach Danish waters.
Swiss-based Allseas halted work on the 55bn cubic metre per year Nord Stream 2 in late December after the US implemented new sanc- tions threatening measures against contractors involved in its construction. This left 160 km of the total 2,460-km length of the pipeline’s two strings still to be completed.
Platts Analytics estimates it will take the Akademik Cherskiy two months to finish laying the pipeline, and a further few months for Gaz- prom to commission it.
“Therefore we forecast first flows on Nord Stream 2 in Q4-20, with a ramp-up to full capac- ity by Q2-21,” Platts gas analyst Ornela Figuri- nate commented on March 5.
In early January Russian President Vladimir Putin said the pipeline would be completed without international assistance and would become operational by the first quarter of 2021.
Russia’s oil and gas industry relies heav- ily in many areas on foreign equipment and
technology. One such area is offshore pipelay- ing. In 2016, Gazprom bought the Chinese-built Akademik Cherskiy to be used as a last resort if European contractors stopped working on Nord Stream 2 because of sanctions.
After working at fields off the coast of Sakha- lin Island, Akademik Cherskiy left the Far East- ern port of Nakhodka, bound for Singapore. It then changed its course to the Sri Lankan capital of Colombo, and had been due to arrive there on February 22.
Gazprom on February 10 awarded a contract for the installation of welding and technical equipment on the vessel, which suggested that the purpose of its trip to the Asia-Pacific area was to receive upgrades. Both Singapore and Colombo have shipyards, but NewsBase cannot confirm these upgrades took place.
Russia does have other pipelaying vessels, including Fortuna, owned by Russian contrac- tor MRTS and already stationed in the Baltic Sea. Despite having previously worked on Nord Stream 2’s Russian section, Fortuna is seen as unsuitable to complete the pipeline because it can only lay a maximum of 1 km of pipeline per day. It also lacks dynamic positioning capabil- ity. Denmark granted a construction permit for Nord Stream 2 on the assumption that a vessel with dynamic positioning capability would be used. ™
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