Page 9 - FSUOGM Week 22

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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sized refineries will help Nigeria overcome its reliance on fuel imports, which has grown since the shutdown of its outdated, loss-making state plants.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 flows via the Yamal-Europe pipeline that runs 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 with Kyiv means it will pay to pump 65bn cubic metres (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 seasonal levels.
Meanwhile, US lawmakers are seeking to impose additional sanctions on Gazprom’s Nord Stream 2 gas pipeline to Germany, in a last-ditch attempt to prevent the project’s com- pletion. US Senators Ted Cruz, a Republican, and Jeanne Shaheen, a Democrat, are reportedly to be planning to introduce a bill this week on new measures.
Further US pressure is unlikely to make a difference at this stage. Sanctions imposed by Washington last December led to Swiss-based contractor Allseas abandoning the pipeline, with just 6% of its offshore section left to complete. Russia is preparing to finish the job with its own pipelaying vessel, which is currently moored at a German port. It is hard to see how additional
sanctions could therefore thwart construction. Washington could threaten measures against companies hoping to buy gas supplied by Nord Stream 2. But Germany would strongly oppose such a move, viewing it as US interference in what Berlin has insisted is “a purely commercial
project.”
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.
LNG giant pushing ahead as others hold back
Even as US LNG exports decline, the backers of the Golden Pass LNG project, which is under construction in Texas, have requested author- isation to expand the capacity of the terminal. This is perhaps not surprising considering the project is majority-owned by Qatar Petroleum (QP), which is also aggressively pursuing the expansion of its domestic LNG export capacity. QP owns a 70% stake in Golden Pass LNG, while ExxonMobil holds the remaining 30%.
The partners are seeking permission to boost the capacity of Golden Pass LNG to 18.1mn tonnes per year (tpy), from 15.6mn tpy previ- ously. They say the increase “does not involve any equipment changes or environmental per- mit adjustments”, and would be achieved via “production efficiencies”.
Separately, QP announced this week that it had signed $19bn worth of order for LNG ships from South Korean shipbuilders Daewoo Ship- building & Marine Engineering, Hyundai Heavy Industries Holdings and Samsung Heavy Indus- tries. This marks the largest ever single LNG vessel order, covering more than 100 ships to be delivered by 2027.
Qatar’s push on both domestic and overseas LNG development comes as other planned liquefaction projects in North America and elsewhere appear to be increasingly in doubt. A handful of North American developers have already postponed final investment decisions (FIDs) from this year until 2021, but analysts are now warning that it could be even longer before any more liquefaction capacity is sanctioned.
A number of pre-FID projects in both the US and Canada would be greenfield developments, adding to their construction cost at a time when
Russia’s Gazprom, by far Europe’s biggest gas supplier, has also cut shipments via other routes including Ukraine.
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