Page 16 - FSUOGM Week 03 2021

FSUOGM NEWS IN BRIEF FSUOGM

Chubais argues that Russian exporters
Russia to adopt GHG which would achieve total RES investment
RUSSIA will benefit from lower export carbon taxes,
Russian maritime major reduction strategy break-even within 11 years. He also refers to
Russia's green energy potential in terms of
Sovcomflot gets new LNG Russia intends to adopt a strategy of solar and power energy.
Domestically, his plan aims to cut
greenhouse gas (GHG) emissions reduction
tanker in 2021, according to the Deputy Prime CO2 emissions by 23mn tonnes by 2031,
Minister and ex-Minister of Energy
increase investment into RES by RUB800bn
Russian maritime shipping major Alexander Novak. ($10.9bn) annually, and create 30,000-
Sovcomflot (SCF Group) has announced As analysed by bne IntelliNews, the 40,000 new jobs..
the delivery of a new 0.174mn cubic metre latest 2020 mini-government reshuffle and
liquefied natural gas (LNG) carrier SCF the promotion of Novak to Deputy Prime
Timmerman, operated under a long-term Minister was seen as a response to "green" Russia's Gazprom posts
time charter agreement with Royal Dutch challenges that Russia's energy sector will
Shell. have to face in the international arena over 40% jump in European
As reported by bne IntelliNews, SCF is a vis-a-vis the European Union and the US
major player in the Russian development of President-Elect Joe Biden. exports in January
the Arctic maritime routes and hydrocarbon While Novak has proved himself Russia's
exploration, operating tankers and top energy negotiator with the OPEC+ deal, Russia's natural gas giant Gazprom boosted
icebreakers. The shipping major has also another veteran reformer, Anatoly Chubais, its gas exports to Europe by 41.5% year on
started testing the navigation of unmanned was entrusted with a role of "Climate Czar" year in the first 15 days of January 2021 to
tankers. and actually improving the ESG situation at 9.1bn cubic metres, the second-best reading
In December 2020 SCF received home. ever, Interfax repots.
additional subsidies for contracting Arctic According to Novak, the Russian As reported by bne IntelliNews, in
vessels at the Zvezda shipyard controlled by methodology for calculating emissions is to December 2020 BCS Global Markets
oil giant Rosneft. be improved to account for the absorption "enthusiastically confirmed" a Buy call
Sberbank CIB on January 18 estimates capacity of forests, and each sector of the on Gazprom. The analysts noted that
that the SCF Timmerman vessel would add economy will have to implement energy- Gazprom's exports are recovering faster
around $23mn in revenues per year, which efficiency programmes. than expected after a tough year, with
is already incorporated into the valuation The government also has to set up European exports seen returning to normal
model. conditions for implementing measures to by 2023.
"Because it operates under long-term reduce and prevent emissions, as well as to Although the jump in European exports
contracts with fixed rates, the recent increase the absorption of such emissions. at the beginning of January is exaggerated
rally in LNG spot rates does not provide "In the last 12 months, a large pack by a low base effect, it is still very strong
support to SCF's LNG business," analysts of climate regulation has been adopted, in absolute terms, BCS Global Markets
comment. creating a framework that makes it possible commented on January 18, seeing the news
"On the other hand, though SCF is on to control CO2 emissions and, if the desire as Positive.
the path toward realising its aim of moving exists, reduce Russia’s carbon footprint," "Meanwhile, European gas prices are
away from spot contracts – which are very VTB Capital (VTBC) commented on at recent highs, with TTF spot prices
volatile by nature – to fixed-rate long-term January 17. averaging c$7.4 per mcf (c$260 per mcm) in
contracts with oil and gas majors around VTBC sees substantial room for the first half of the month, up 90% y/y from
the world, a substantial part of its vessel improvement in terms of ESG and carbon the $3.9/mcf ($137/mcm) seen in the first
portfolio still serves as spot tankers for the footprint in Russia, while the key driver of half of January 2020," BCS GM also notes.
transport of oil and oil products," Sberbank these changes is the imminent introduction VTB Capital (VTBC) in December
CIB adds. of the EU carbon border tax. 2020 also upgraded the investment case on
When the spot tanker rates start The looming introduction of EU Carbon Gazprom, noting that the entire gas futures
to recover, investor interest in SCF is Border Tax in 2022 is a major issue for price curve is moving up and company's
expected to pick up, Sberbank CIB argues, Russia to resolve. Most recently, the Central shares are yet to reflect that.
adding that this is dependent primarily on Bank of Russia (CBR) warned that the tax On the domestic market, Russian
demand for oil products expanding, thus could threaten financial stability, as Russia deliveries are also likely doing "quite well",
entailing increased transport of oil and oil is the second-largest exporter of CO2- as Gazprom’s production in the first half
products. intensive exports to the EU after China, of January rose 4.3% to 22.6 bcm, due to
The company, long primed for with exporters facing extra costs of $3bn- domestic demand being boosted by one of
privatisation, held an IPO of 17.2% of its $4.8bn annually. the deepest cold snaps seen in years across
shares on Moscow Exchange in October Previously Chubais proposed the European part of the country, BCS
2020, with the state now controlling 82.8%.. introducing a green energy certificate GM stressed, while affirming a Buy call on
trading system, which would facilitate Gazprom's shares.
the construction of large-scale renewable
energy sources (RES) capacity generation.

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