Page 6 - GLNG Week 32

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mismanagement and corruption, and made worse by fallout from the coronavirus (COVID- 19) pandemic. The explosion has stoked public anger against authorities, with nationwide pro- tests leading the government to resign on August 10.
Iraq has delivered some 720,000 litres of gas- oil to the country as a form of humanitarian aid. Alongside fuel oil, gasoil serves as a vital fuel in Lebanon’s power sectors. But supply shortages have been chronic, resulting in frequent power outages for decades.
Iraq is eager to supply Lebanon with gasoil and fuel oil on a regular, commercial basis. For its part, Lebanon has long wanted to diversify its imports of these products once contracts with Algeria’s Sonatrach and Kuwait’s KPC expire at the end of this year.
In other news, Saudi Aramco has awarded a $80mn contract to Spain’s Tecnicas Reunidas to build a new sour water stripper at its 550,000 bpd Ras Tanura oil refinery. The Saudi oil giant has scaled back spending significantly in response to the oil price collapse, and so it is proceeding with only the most necessary and minor projects to improve its downstream efficiency.
Aramco has notably axed a far costlier plan to build a synthetic rubber production in the east- ern Saudi port of Al Jubail, at least according to its Russian partner Sibur.
If you’d like to read more about the key events shaping the downstream sector of Africa and the Middle East, then please click here for NewsBase’s DMEA Monitor.
Europe: UK offshore decarbonisation
The UK Continental Shelf (UKCS) can deliver 60% of the necessary emissions cuts for the country to meet its net-zero target, according to a new report by the Oil and Gas Authority (OGA).
Integrating oil and gas production with renewable energy, carbon, capture and storage (CCS) and hydrogen could achieve 30% of the emissions cuts required by 2050, while the use of offshore wind, wave and tidal projects could contribute a further 30%, according to the OGA.
Among its key findings, the report estimates that UKCS reservoirs could store up to 78 giga- tonnes of CO2, which sufficient for hundreds
of years of the UK’s CCS needs. Meanwhile blue hydrogen, produced from natural gas but with CO2 from the process being captured and stored, has the potential to decarbonise 30% of UK gas consumption within three decades.
The OGA has called for greater regulatory co-ordination and support, in order to ensure that pioneering projects in these fields are a success.
Meanwhile, the US is ramping up pressure on Germany to shift its position on the Nord Stream 2 pipeline, but Berlin shows no sign of dropping its support for the Russian project. Several US Senators wrote a letter to the operator of Germa- ny’s Mukran port this week, threatening “crush- ing legal and economic sanctions” if it helps Russian vessels complete the pipeline. Mukran has served as a logistic and service centre for ves- sels working on Nord Stream 2 over the years, as well as a storage site for its pipes.
Both the German government and the Euro- pean Commission are considering steps to pro- tect EU businesses from potential US punitive action. This means any sanctions may prove inef- fectual, serving only to sour US-European ties.
If you’d like to read more about the key events shaping Europe’s oil and gas sector then please click here for NewsBase’s EurOil Monitor.
FSU: Russian tax tweaks
Russia trialled a new profit-based tax system at certain oilfields last year, in a bid to encourage investment in extra recovery. The pilot scheme is part of efforts to reform the Russian oil industry’s complex and problematic tax regime, and advo- cates want it to be applied nationwide within a decade.
The only problem is that Russia’s finance ministry (MinFin) says this experiment has cost the budget some $2.9bn. The ministry has filed a bill seeking to make significant changes to the system, in order to claw back some of these lost revenues.
Unsurprisingly, the proposed changes are strongly opposed by oil producers that have benefitted from the profit-based system. If the ministry gets its way, these companies would take a significant hit to core earnings over the next few years.
Meanwhile, the US is ramping up pressure on Germany to shift its position on the Nord Stream 2 pipeline.
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w w w . N E W S B A S E . c o m Week 32
14•August•2020