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Gunvor says it will take time for the supply glut supplier Gazprom made a bold claim last week,
created by the pandemic to be soaked up, and in saying it would one day send up to 130bn cubic
the meantime, its plant will continue to generate metres (bcm) per year of gas to China.
negative cash flow. The company has stressed Gazprom projects it will only send 5 bcm of
that the decision would not affect operations at gas to Russia’s eastern neighbour this year via the
its 88,000-bpd refinery in Rotterdam, the Neth- Power of Siberia pipeline, brought on stream in
erlands, or its 110,000-bpd plant in Ingolstadt, December. That network is not expected to reach
Germany. Other refiners may consider similar its full 38 bcm per year capacity until 2025.
options, and for the long-term health of Euro- Nevertheless, Gazprom CEO Alexei Miller
pean refining, reduced capacity may not be such says the 130 bcm per year target can be reached
a bad thing. by expanding Power of Siberia’s flow capacity by
Meanwhile, Mediterranean-focused Ener- a further 6 bcm, building a second pipeline with
gean has secured a significant price cut in its deal a capacity of 50 bcm per year through Mongo-
to acquire the upstream arm of Italy’s Edison. lia and delivering additional supplies via the Far
It will pay only $284mn, instead of an original East. Miller did not disclose a timeframe for real-
price of $750mn. This is largely because Edison’s ising these projects. The pipeline through Mon-
Algerian and Norwegian assets have been omit- golia, known as Power of Siberia 2, enjoys strong
ted from the transaction, although weaker mar- political support from Moscow. But it is still
ket conditions also helped drive down the price. at the study phase, and it could be many years
BP, meanwhile, has agreed to sell its $5bn before Russia and China agree a supply contract
petrochemicals business to UK chemicals group to underpin its construction, if ever.
Ineos to help meet its $15bn divestment target Uzbekistan is making progress on several
early and reshape its business for the energy fronts in its energy sector. It has struck a prelim-
transition. By divesting its petrochemicals, BP is inary deal with a group of Russian investors for
also separating itself from its peers such as Royal the construction of a 1.5-GW gas-fired power
Dutch Shell and ExxonMobil, both of which are plant that would supply both domestic and
expanding their petrochemicals businesses. Afghan electricity users. It has also launched a
$300mn modernisation programme at one of its
If you’d like to read more about the key events shaping two main refineries, aimed at bringing the qual-
Europe’s oil and gas sector then please click here for ity of the plant’s fuel to Europe standards.
NewsBase’s EurOil Monitor.
If you’d like to read more about the key events shaping
FSU: Gazprom’s bold claim the former Soviet Union’s oil and gas sector then
The long-serving head of Russia’s state gas please click here for NewsBase’s FSU Monitor .

P8 www. NEWSBASE .com Week 26 01•July•2020