Page 7 - AfrOil Week 22a 2020

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Malaysia’s exports of LNG are expected to drop to 1.5-1.64mn tonnes in May, the newswire quoted unnamed industry sources as saying last week. This would represent a nearly two-year low in terms monthly export volumes, down from the 1.92mn tonnes the country exported in April.
The news comes after Petronas announced last month that it would cut its 2020 capital expenditure budget by 21% and its operating expenditure 12%.
With the international gas market tanking, the region’s largest gas exporter – Australia – has begun turning its attention to ways it can prop up domes- tic producers.
Australian Energy Minister Angus Taylor said last week that it was essential for the country to lean on gas-fired power generation as it transitions to a greener economy.
Taylor’s comments came following an update to the Australian Energy Statistics, which showed that renewable energy sources accounted for 21% of the country’s power generation in 2019. Gas-fired power generation represented 20.5% of the national total.
Taylor said: “Gas is flexible and provides the dispatchable capacity we increasingly need to balance intermittent renewables and deliver a secure, reliable and affordable electricity system to power our homes, businesses and industries.”
He added: “This has never been more impor- tant – particularly as we begin our recovery from the impact of the COVID-19 pandemic. This is why the Australian government believes a gas- fired recovery will drive jobs and economic growth.”
If you’d like to read more about the key events shaping Asia’s oil and gas sector, then please click here for NewsBase’s AsianOil Monitor.
South African fuel rationing
Many markets are reeling in excess fuel supply as a result of COVID-19 travel restrictions. But South Africa has had to ration diesel following a fast recovery in demand as the country’s lock- down is eased.
Only two of South Africa’s six refineries are
operating normally, with most refining capacity having been shut down in response to a collapse in demand. Opposition politicians blame the government for failing to ensure a sufficient stockpile of fuel.
Meanwhile, Egypt has unveiled a new strat- egy that aims to realise $19bn in new petro- chemical projects by 2035. The country is set for a rapid growth in demand for petrochemical products as its population boom continues. The government is eager to see domestic resources used to meet this demand, rather than imports.
The Lebanese Army has its work cut out trying to clamp down on the smuggling of sub- sidised fuel across the border into Syria. The problem, which has exacerbated Lebanon’s eco- nomic crisis, shows no sign of abating despite the government’s claims of progress.
Nigeria needs to do more to encourage the construction of modular oil refineries, a devel- oper of one such plant has said. These small- sized refineries will help Nigeria overcome its reliance on fuel imports, which has grown since the shutdown of its outdated, loss-making state plants.
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.
European gas demand still weak European gas demand remains subdued, despite the slow easing of COVID-19 lockdowns. Rus-sian gas flowsviatheYamal-Europepipelinethatruns through Belarus and Poland to Germany slumped to zero last week, with the continent’s gas storage levels at an unprecedented high for this time of year.
Russia’s Gazprom, by far Europe’s biggest gas supplier, has also cut shipments via other routes, including Ukraine. But its ship-or-pay transit deal with Kyiv means it will pay to pump 65 bcm of gas through Ukraine’s pipelines regardless of whether it actually sends that much. Norwegian gas supplies to Europe were below the five-year average last month but are now at normal sea- sonal levels.
Week 22 03•June•2020 w w w . N E W S B A S E . c o m P7