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The Central Asian country sold 19.5mn tonnes A better month for the LNG market
of petroleum in January-July, flat on the 19.5mn Things are looking up for the global LNG mar-
tonnes exported in the same period of 2019, ket after several challenging months on both the
AzerNews reported on August 17. The value of supply and demand fronts.
said exports, however, slid from $9.5bn in the US LNG exports are picking up, with Reuters
first seven months of 2019 to $6.3bn in the same reporting this week that they are on track to rise
period of 2020. for the first time in six months. This follows a
Natural gas exports fared somewhat bet- spate of cargo cancellations from US liquefaction
ter, with shipments climbing from 6.7bn cubic terminals over the summer, which are continu-
metres in January-July 2019 to 7.7 bcm in the ing, but at a slower pace.
same period of 2020. The value of the country’s Meanwhile, Asian spot LNG prices have
gas exports climbed from $1.2bn to $1.4bn. risen to more than a six-month high over the
The country’s output of gasoline expanded past week. This has been attributed to factors
0.3% year on year in the period to 715,900 including the risk of a potential shutdown at the
tonnes, while diesel production grew by 4.4% on Gorgon LNG terminal in Australia, as well as
the year to 1.3mn tonnes. Investment in Azer- something of an uptick in demand, though not a
baijan’s oil and gas sector grew by 22.9% y/y to particularly large one as yet.
AZN3.4bn ($2bn) in the first seven months. The two regions’ LNG industries are closely
Azerbaijan produced 554,100 barrels per day linked, with US producers seeking long-term
of crude in July and another 96,000 bpd of con- buyers in Asia in particular. One US company
densate, according to the Energy Ministry. The trying to secure a new Asian investment cur-
Azeri-Chirag-Guneshli field delivered 435,100 rently is Tellurian, which has been in the news
bpd of crude, while State Oil Company of Azer- for scaling back the scope of the first phase of its
baijan Republic (SOCAR) produced 119,000 proposed Driftwood LNG terminal on the US
bpd. The country has agreed to limit its pro- Gulf Coast by deferring construction of some of
duction to 554,000 bpd in May-July under the the pipelines that would serve the facility.
OPEC+ production framework. The company had also recently renewed
Looking further ahead, the county is set to talks with India’s Petronet LNG over a tentative
start up the Karabakh oil and gas field in the Cas- deal that would include an 18% equity stake in
pian Sea before the end of 2022, the head of the Driftwood, as well as the option for the Indian
Karabakh operating company, Tahir Dadashov, company to buy up to 5mn tonnes per year (tpy)
told Reuters. “In the early years, oil production from the facility. However, Indian media on
at the Karabakh field will amount to more than August 16 cited sources familiar with the matter
1.5mn tonnes per year [30,000 bpd],” Dadashov as saying Petronet was considering scaling back
said on August 12. He added that gas production its proposed $2.5bn investment in Driftwood as
would reach 4.5mn cubic metres per day. a result of Tellurian’s overhaul of the project.
The Karabakh operating company, which is A further reminder of link between the LNG
a joint venture between SOCAR and Norway’s industries in the US and Asia came last week
Equinor, has been developing the field since when the SK Resolute LNG carrier made the
May 2018. Dadashov estimates the field has 10,000th Neopanamax transit of the expanded
21mn tonnes (153,93mn barrels) of recoverable Panama Canal since its opening in June 2016.
oil reserves. The executive said support blocks The expanded canal offers a shorter, and there-
for a new platform would be installed in the first fore more competitive, route for LNG deliver-
quarter of next year, with engineering works on ies from the US East and Gulf coasts to Asian
platform to be wrapped up by the end of 2022. countries..

If you’d like to read more about the key events shaping If you’d like to read more about the key events shaping
the former Soviet Union’s oil and gas sector then the global LNG sector then please click here for
please click here for NewsBase’s FSU Monitor . NewsBase’s GLNG Monitor.

Week 33 19•August•2020 www. NEWSBASE .com P9