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Peru’s national lockdown leads to decline in gas production
PERFORMANCE
Output levels at Camisea Block 56 are important, as the site supplies feedstock to Peru LNG.
PERU’S natural gas industry has seen produc- tion decline since March 15, when the govern- ment imposed a nationwide lockdown in the hope of containing the coronavirus (COVID-19) pandemic.
According to data released earlier this week by PeruPetro, the national oil company (NOC), Peru’s gas fields were yielding 1.12bn cubic feet (31.72mn cubic metres) per day as of the day that the restrictions took effect. As of March 22, though, output levels were down by about 30.45% to 779mn cubic feet (22.06 mcm) per day.
The decline in production levels was steep- est at Camisea Block 88, the country’s main gas block, which holds reserves of 8.76tn cubic feet (248.1bn cubic metres). The block went from yielding 482 mmcf (13.65 mcm) per day as of March 15 to 143 mmcf (4.05 mcm) per day as of March 22, a fall of 70.33%.
Some of the country’s fields did buck the trend. PeruPetro’s data showed that Camisea Block 56, which holds 1.67 tcf (47.29 bcm) of gas, was yielding 407 mmcf (11.53 mcm) per day on
March 22. This was 4.63% up on the March 15 figure of 389 mmcf (11.02 mcm) per day.
Output levels at Camisea Block 56 are impor- tant, as the site supplies feedstock to Peru LNG, a gas liquefaction plant and export terminal in Pampa Melchorita, as well as fuel to the domestic market. PeruPetro did not comment on output levels at Peru LNG, but it did say that the facil- ity had not loaded any new cargoes since mid- March. Peru LNG loaded three cargoes in the first half of the month and dispatched the third to China on March 13, it said.
The drop in output has led the Peruvian Hydrocarbons Society (SPH), a private indus- try association, to lobby for the government to extend assistance to the energy sector. Earlier this week, the group noted that Peru had suc- ceeded in pushing crude oil production up to 60,000 barrels per day (bpd) in the first half of March, up by 20% on the figure reported for the same period of 2019. Without help, these gains could evaporate in the face of the coro- navirus pandemic and the collapse in world oil prices, it said.
ASIA
Indian LNG buyers issue force majeure notices
POLICY
INDIA’S decision to impose a 21-day lockdown this week has reportedly driven the country’s LNG importers to issue force majeure notices to their suppliers.
India Prime Minister Narendra Modi ordered a complete lockdown on March 25 in a bid to control the spread of the coronavirus (COVID- 19). The move led more than half a dozen Indian ports to declare force majeure which, in turn, has forced Petronet LNG, GAIL (India) and Guja- rat State Petroleum Corp. (GSPC) to follow suit, according to Reuters’ sources.
The newswire quoted unnamed sources as saying that Petronet LNG was looking to delay deliveries from Qatargas, while GSPC had also issued force majeure notices to suppliers.
“Gas demand has reduced drastically and it is likely to go down further,” a source at state-run gas utility GAIL said. They added: “Only fertil- iser, power and refineries are running at parcel loads. Other local buyers have already issued force majeure, so where should we sell LNG?”
The GAIL insider, speaking to Reuters, added
that the company had already served force majeure notice to some of its suppliers and was preparing to notify the remainder.
A source at GSPC said the company had received force majeure notices from most of its customers, adding: “Industries like chemical, textile and ceramics that do not qualify under categoryofessentialcommoditiesareclosing.”
Another source said that with demand down and LNG storage tanks almost full, car- goes meant for India could soon be diverted to China. The source said: “Transport segment is already down 10% and retail gas is down to 10% of normal volumes, industrial output has been impacted.”
LNG stockpiling could even force state run Oil and Natural Gas Corp (ONGC) to curb its production, company chairman Shashi Shanker told the newswire. “As of now there is no impact on the production of oil and gas, but in the coming days gas production might get affected because of less off-take in view of the decrease in domestic demand,” he said.
Week 12 26•March•2020 w w w . N E W S B A S E . c o m P9
