Page 10 - AsianOil Week 27 2022

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Russia mulls rubles-for-LNG scheme

PIPELINES & RUSSIA’S Gazprom is considering expanding special accounts in Gazprombank. The buyers
TRANSPORT its rubles-for-gas scheme for pipeline sales to must transfer US dollar and euro-denominated
Europe to LNG as well, Interfax reported on July payments to one account, where Gazprombank
The system has already 4, although the Kremlin has said no decision on moves them into a ruble-denominated account,
been applied to pipeline the matter has been taken yet. and sends them to Gazprom.
gas sales. Kirill Polous, a deputy department head at The majority of Gazprom’s customers in
Gazprom, was quoted as saying by Interfax that Europe complied with the decree, and those that
Gazprom had made the proposal, citing foreign refused, including buyers in Bulgaria, Denmark,
exchange competition between pipeline gas sold Finland, Germany, the Netherlands and Poland,
in rubles and LNG that is sold in US dollars. had their supply cut off.
“Currently no decisions have been taken Asked by Reuters this week, buyers of Russian
in this regard and there are not any prepared LNG in Japan and Korea confirmed that they
orders,” Kremlin spokesperson Dmitry Peskov had not yet received a request from Gazprom
told reporters. for payment in rubles. The two countries have
Asked whether an LNG-for-rubles scheme supported Western sanctions against Russia and
might cover all LNG from Russia, which comes condemned its invasion of Ukraine.
mainly from Gazprom’s Sakhalin-2 project and By requiring buyers to make payments into
the Novatek-led Yamal LNG plant, Peskov redi- one Russian bank and not into accounts at Euro-
rected questions to Gazprom. pean banks, Russia is effectively preventing
At the end of March Russian President Western countries from appropriating funds in
Vladimir Putin issued a decree requiring all buy- order to deprive the Kremlin from financing for
ers of pipeline gas in “unfriendly countries” that its war, and for potential use in reconstructing
have supported sanctions against Russia to set up Ukraine. ™

SOUTH ASIA

Pakistan fails to get single offer

in latest LNG tender

PIPELINES & PAKISTAN has once again failed to receive a sin- The bid it received in late June from Qatar
TRANSPORT gle offer in a tender for LNG spot cargoes, as the Energy Trading, for example, was priced at $39.8
country scrambles to find gas supply to ease the per mmBtu. Pakistan has struggled to procure
The country is acute energy crisis it is experiencing. cargoes, as there is a limit to how much the coun-
contending with an The company invited bids from suppliers for try can afford to pay, given it is trying to preserve
acute energy crisis. two cargoes in July, followed by five in August its foreign currency reserves.
and three in September. The tender closed on Pakistan’s energy crisis has been exacer-
July 7. bated by low levels of hydropower genera-
It marks the fourth time in a month that Paki- tion and a heatwave this year that has driven
stan has failed to procure LNG in tender, reflect- up demand for energy. Many of its cities are
ing the global market’s tightness. State-owned now suffering from rolling blackouts, forc-
Pakistan LNG (PLL)’s previous competition in ing the government to resort to emergency
late June received only a single bid from Qatar measures such as rationing electricity and
Energy Trading for a single cargo for July 30-31. limiting the working hours of some fac-
PLL had also wanted to secure cargoes on July tories and other businesses. Pakistan has
3-4, July 8-9 and July 25-26. also ramped up power generation at coal
For years, Pakistan has relied to a large degree and fuel oil-burning plants, driving up its
on spot LNG purchases, delivered to its two termi- emissions.
nals in Karachi. For many years this strategy has On July 6, Pakistan’s power minister Khur-
served it well, given that spot prices have generally ram Dastgir noted that the 969-MW Neelum-
been low for much of the past decade. However, Jhelum hydropower plant had been closed due
this also means the country has been hit hard by to a malfunction, putting the country’s power
the LNG supply crunch over the past year. system under additional stress. ™

P10 www. NEWSBASE .com Week 27 11•July•2022