Page 6 - AsianOil Week 23 2022

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Rise in Russian oil tankers departing for India,

China and Turkey since start of Ukraine war

PERFORMANCE INDIA, China and Turkey recorded the largest Research & Consulting, was cited as saying.
increases in the number of Russian oil tankers Giovanni Stanouvo, commodity analyst at
that departed for their ports between the start of UBS, was reported as predicting India, China
the war in Ukraine on February 24 and June 2, and Turkey will continue to buy Russian crude
according to a Nikkei Asia analysis of data from because of the steep price discounts. Tatsufumi
Refinitiv. Okoshi, senior economist at Nomura Securi-
The increases were given as nearly eightfold ties, on the other hand, was said to be is scepti-
in the case of India, and 70% and 54% for China cal China and India could significantly increase
and Turkey, respectively. their purchases of oil from Russia from the cur-
All in all, 290 oil tankers departed Russia for rent level.
Asia in the period of just over three months, up “Both India and China have long-term oil
from 190 in the same period last year. purchase contracts with their oil suppliers in the
“The ability of Asia to absorb more produc- Middle East,” Okoshi told Nikkei Asia. “Their
tion will be tested as the European Union winds basic stance is to buy cheap Russian oil in the
down imports from Russia in response to the spot market when it is convenient. I don’t think
invasion of Ukraine,” noted the newspaper. they will switch from the Middle East and buy a
Russian crude from the Urals now trades at large amount of oil from Russia.”
lower prices than output from elsewhere, such Analysts say the diversion of Russian
as Brent crude from the North Sea. oil and gas output to Asian markets would
“While the price of Russian crude has been require expensive new infrastructure such
somewhat discounted, Russia’s shipping of crude as extremely long pipelines and specialised
oil has not been significantly damaged,” Tomom- ports, as well as shipping capacity, that would
ichi Akuta, senior economist at Mitsubishi UFJ take years to build.™

Energy Transfer finalises

another offtake agreement

PROJECTS & US-BASED Energy Transfer has signed an LNG Transfer LNG’s president, Tom Mason.
COMPANIES sales and purchase agreement (SPA) with China The latest announcement comes amid rising
Gas Hongda Energy Trading, a subsidiary of demand for LNG and increased global com-
China Gas Holdings. petition for supplies in the wake of the war in
The deal is the fifth to be signed by Energy Ukraine, which has led to European countries
Transfer since March for supply of LNG from its seeking out alternatives to Russian gas. Against
proposed Lake Charles LNG terminal in Louisi- this backdrop, Asian buyers – who were likely
ana. It brings a final investment decision (FID) already in negotiations when the war broke out
on the terminal a step closer. – have wasted no time in signing new long-term
Under the newly announced deal, China offtake agreements.
Gas will buy 700,000 tonnes per year (tpy) of Indeed, with the exception of commod-
LNG from Energy Transfer subsidiary Energy ity trader Gunvor, all of the buyers Energy
Transfer LNG Export on a free-on-board (FOB) Transfer has lined up so far have been Asian
basis for a period of 25 years. The purchase price companies.
will be indexed to the US’ Henry Hub bench- Lake Charles LNG is a brownfield project
mark plus a fixed liquefaction fee. Deliveries are that involves conversion of an existing import
expected to begin in 2026. facility to exports. The export plant would have
“This SPA brings our total amount of a liquefaction capacity of 16.5mn tpy, so there is
LNG contracted from our Lake Charles LNG still some way to go in terms of signing up offtak-
export facility to nearly 6.0mn tpy and is an ers. Nonetheless, the past few months come as a
important step towards our goal of reach- major boost for the project, which was previously
ing FID later this year,” commented Energy seen as less likely to reach FID anytime soon.™

P6 www. NEWSBASE .com Week 23 10•June•2022