Page 11 - FSUOGM Week 37

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

Week 37 16•September•2020 www. NEWSBASE .com P11