Page 7 - FSUOGM Week 19 2022

FSUOGM PIPELINES & TRANSPORT FSUOGM

Russia puts Nord Stream 2 to

work for domestic market

RUSSIA RUSSIA has announced it will use the onshore Nord Stream 2, only one line of the pipeline with
section of the Nord Stream 2 gas pipeline to serve 100% load can be put into operation,” it said. “The
Nord Stream 2's second domestic demand, after Germany put the export commissioning of the second offshore string of
string will only become project on hold in response to Moscow’s actions Nord Stream 2 may not begin until 2028.”
available for European in Ukraine. Germany’s government announced it was
flow in 2028, according Gazprom said on May 5 it would use the 55 suspending the certification process needed
to Gazprom. bcm per year pipeline’s onshore facilities to work for Nord Stream 2’s commercial launch
in expanding gas supplies to customers in north- on February 22, after Moscow recognised
west Russia. Ukraine's eastern breakaway territories of
“Due to the fact that the Nord Stream 2 off- Donetsk and Lugansk as independent. The
shore gas pipeline is currently not in use, and project’s fate appeared sealed after Russia
taking into account the implementation of began its all-out invasion of Ukraine two days
gas supply for consumers in northwest Russia, later, leading Germany to announce support
Gazprom has decided to use the excess onshore for several LNG terminals to replace all Rus-
gas transmission capacity of Nord Stream 2 for sian gas imports by as soon as 2024.
the development of gas supply to the regions of After delays caused by US sanctions and
northwest Russia,” Gazprom said. permitting issues in Denmark, Nord Stream 2
The company said that only half of Nord was finally completed in September 2021. Even
Stream 2’s capacity would be available in the before Germany’s decision to halt the project, its
event that the pipeline was allowed to export gas. certification was expected to take until late 2022
“If the German side decides to commission at the very earliest. ™

INVESTMENT

Mitsui writes down value of

Russian LNG investments

RUSSIA JAPAN’S Mitsui & Co. said this week that it had Indeed, Mitsui said that while it wants to
written down the value of its investments in two remain involved in Sakhalin-2, the company’s
TotalEnergies, Russian LNG projects by a combined JPY80.6bn position on Arctic LNG 2 could yet change.
another shareholder ($617mn). The company reduced the value of its “There is a good chance that the situation
in the project, has 12.5% stake in the Sakhalin-2 oil and LNG pro- in Arctic 2 will change, but that is not the case
acknowledged that it ject by JPY44.1bn ($338mn) and cut the value of at this stage,” said Mitsui’s CEO, Kenichi Hori.
is difficult to see how its investments in the under-construction Arctic “If that occurs, we’ll make an announcement
it can be completed in LNG 2 project by JPY36.4bn ($279mn). after evaluating the situation and confirm-
light of sanctions and Mitsui also reported a JPY20.9bn ($160mn) ing what needs to be confirmed among the
an absence of further loss in its LNG business in connection with its partners.”
funding. investments in Russia. The figure includes provi- Hori’s comments were reported by Japanese
sions against potential losses on loan guarantees media within days of France’s TotalEnergies,
the company has made. another investor in Arctic LNG 2, saying it was
The war in Ukraine and the exit of various difficult to see how the project could now be
international oil companies (IOCs) from their completed in light of sanctions and the fact that
investments in Russia have brought the partic- it would not direct any more funds to it.
ipation of other companies, including Japanese Separately, another Japanese company,
ones, into sharp focus. The Japanese government Marubeni, reported a write-down related to its
has insisted that Japanese companies will con- stake in Sakhalin-1 this week. The company said
tinue to participate in Russian projects – notably it had cut its exposure to Russia by JPY12.6bn
Sakhalin-1 and Sakhalin-2 – as they seek to retain ($96.5mn) and that even though it wanted to
access to energy imports. But they are increas- withdraw from the project owing to the war in
ingly coming under pressure, including financial Ukraine, it would stay in line with Japanese gov-
pressure. ernment policy. ™

Week 19 11•May•2022 www. NEWSBASE .com P7