Page 12 - Euroil Week 10 2020

EurOil PROJECTS & COMPANIES EurOil
EIB backs Dutch nitrogen project
NETHERLANDS
The goal is to ensure that the Netherlands can cover its gas needs with imports once Groningen is closed.
THE European Investment Bank (EIB), which in November announced it would cut funding to fossil fuel projects, has agreed to provide a €240mn ($273mn) loan to help the Netherlands close down its largest gas field.
In a statement on March 10, the EU lender said it would issue the funds to Dutch gas grid operator Gasunie for the construction of the Zuibroek nitrogen plant. This plant will extract nitrogen from the air and mix it with high-cal- orific gas from abroad, making it suitable for domestic use.
The goal is to ensure that the Netherlands can cover its gas needs with imports once the giant Groningen field closes in mid-2022. As recently as 2013, the field produced almost 54bn cubic metres of low-calorific gas, covering domestic demand and providing a surplus for export. This was before tremors blamed on drilling damaged buildings and prompted authorities to impose a series of reducing caps on its output.
The government declared in September it would bring forward Groningen’s planned total shutdown by eight years to 2022.
With funding now in place, the Zuidbriok
project has been approved by the Dutch govern- ment, Gasunie said separately. The plant, due on stream in mid-2022, will enable the Netherlands to lower output at Groningen by a further 7 bcm per year. It will join another nitrogen facility which Gasunie launched in Weiringermeer last year, which is able to replace 5 bcm per year of gas from the field.
Groningen’s output in the year starting Octo- ber 1, 2019 has been capped at 12 bcm per year, down from a limit of 19.4 bcm in the previous 12 months.
“We are making every possible effort to help bring gas extraction in Groningen to an end more quickly,” Gasunie CEO Han Fennema commented. “This plant is a necessary meas- ure that will eliminate the need for gas from the Groningen field in order to guarantee security of supply from 2022 onwards.”
US contractor Air Products has been selected to construct the plant, which will be capable of extracting 180,000 cubic metres of nitrogen per hour. The nitrogen mixing station is to be built by a local duo Visser & Smit Hanab and A. Hak Leidingbouw. ™
Ukraine’s JKX sheds oil assets in Hungary
HUNGARY
JKX wants to focus on its core operations in eastern Ukraine.
LONDON-LISTED JKX Oil & Gas has agreed to sell its Hungarian subsidiary in order to focus more on its core operations in eastern Ukraine.
In a statement on March 9, the junior pro- ducer said it had reached a terms agreement for the sale of 100% of Folyopart Energia KFT (Riverside Energy KFT) to a Cyprus-registered firm called Starhol Holding for $2.9mn. The deal should be closed after consent from Ukrainian antitrust regulators, which it expects to get in four to eight weeks.
“I am pleased that we are demonstrably exe- cuting our previously announced strategy and taking steps to focus our portfolio on our most prospective opportunities,” JKX CEO Victor Gladun said in a statement.
Riverside has rights to six undeveloped oil and gas concessions. The subsidiary had gross assets valued at HUF950mn ($3.3mn) at the end of December. Its disposal will help simplify JKX’s structure and reduce costs, with proceeds to be spent on ongoing operations in Ukraine.
JKX revealed plans to quit Hungary in 2018, stating it wanted to concentrate on its core fields in Ukraine’s Poltava region. It enjoyed a bumper
year in 2019, reporting a 52% growth in produc- tion in Ukraine to 5,584 barrels of oil equivalent per day (boepd) and a surge in net cash reserves. The company typically publishes its full annual results in April, but for much of the year it achieved higher earnings thanks to production growth, which more than offset a steep fall in gas prices.
In February, the company stated it had become debt free, after making a final $5.8mn bond repayment. CFO Ben Fraser also said he would be leaving the company at the end of March. ™
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Week 10 12•March•2020