Page 7 - GLNG Week 37

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Rosneft had been trying to advance the exports had fallen each month between March
project for a decade before quietly shelving it and July, as the coronavirus (COVID-19) pan-
last year. The company failed to find invest- demic hit demand, prompting a number of
ment partners and had difficulty working out a buyers to cancel contracted cargoes. Exports of
means of supplying the complex with raw mate- US LNG fell to a 21-month low of 3.1bn cubic
rials. Under its first stage, priced at RUB700bn feet (87.8mn cubic metres) per day in July, and
($9.3bn), FEPCO is slated to process up 12mn proceeded to rebound to 3.7 bcf (104.8 mcm)
tonnes per year (240,000 bpd) of crude oil and in August. According to federal data, they are
produce 8mn tpy of gasoline, diesel and other expected to rise further to 3.8 bcf (107.6 mcm)
refined fuels, along with 3.4mn tpy of petro- per day in September.
chemicals. Its output would double under a This comes despite some recent setbacks,
second stage, which would bring overall costs to including both Cheniere Energy’s Sabine Pass
RUB1.5 trillion. terminal and Sempra Energy’s Cameron LNG
Meanwhile, Rosneft is also pushing ahead facility being taken offline ahead of Hurricane
with a hard-to-recover oil project in the Vol- Laura making landfall in the region. Sabine Pass
ga-Urals Basin – its first without any partner. The – the largest LNG export terminal in the US –
company said on September 10 it had started was reported last week to have loaded its first
drilling a first well to test the Domanik formation cargo since going offline. However, Cameron
in the Orenburg region. LNG remains offline, and a utility warned last
Rosneft’s close partner and shareholder BP week that transmission lines damaged by Hur-
had wanted to take part in the project, but pulled ricane Laura, which resulted in power supply to
out after the 2014 oil price crash. Western sanc- the terminal being cut, would take an extended
tions were also imposed on Russia’s oil sector period to repair. The facility is reported to have
that year, but they have only prevented firms deferred cargo loadings scheduled for Septem-
from assisting at shale reservoirs rather than ber to October.
limestone formations such as Domanik. Exports from other terminals that were not
Rosneft has been assessing the potential for affected by the storm are also reported to be on
commercial production at Domanik sites in the the rise. This includes the Corpus Christi LNG
Samara region as well, through a joint venture and Freeport LNG plants in Texas, as well as the
with Norway’s Equinor. The company typi- Elba Island terminal in Georgia.
cally partners with international oil companies
(IOCs) at technically challenging or significantly Latin America: Multiple challenges
costly projects. Mexico’s Finance Ministry has lowered its expec-
tations for Pemex, the national oil company
If you’d like to read more about the key events shaping (NOC). The ministry said in April that Pemex
the former Soviet Union’s oil and gas sector then please was on track to produce 2.207mn bpd of crude in
click here for NewsBase’s FSU Monitor . 2021, but draft budget proposals have reportedly
trimmed the forecast to 1.857mn bpd.
US LNG exports rebound despite setbacks But Marco Oviedo, the chief economist for
US LNG exports are reported to be on track to Latin America at Barclays, told Bloomberg that
rise for a second consecutive month in Septem- even this 8.4% reduction seemed overly “opti-
ber, as the spate of cargo cancellations that hit US mistic.” He predicted that Pemex, which saw oil
liquefaction terminals over the summer slows production sink to a record low in July, would
down. (See: US LNG exports rebound despite set- miss the new target.
backs, page 14) Pemex is not the only Latin American com-
Gas prices in both Asia and Europe rose by pany facing challenges. Fitch Ratings reported
over 60% in August, and while they still remain last week that its outlook for Peru LNG, the oper-
comparatively depressed, they have helped the ator of a natural gas liquefaction plant and export
LNG trade to pick up. This comes after US LNG terminal in Pampa Melchorita, was negative. The

Week 37 18•September•2020 www. NEWSBASE .com P7