Page 8 - FSUOGM Week 17 2022

FSUOGM PIPELINES & TRANSPORT FSUOGM

Russian gas supply to Europe could

fall by third in 2022, analysts warn

RUSSIA ANALYSTS warn that Gazprom could lose as year, down from about 150 bcm in 2021. Sindre
much as a third of its market share in Europe as a Knutsson, head of gas market research at Rystad
The analysts consider result of fallout from the war in Ukraine, Reuters Energy, predicts that supplies could fall even fur-
risks of either side reported on April 22. ther, “driven by a push from buyers to become
cutting off supply. Russia covers around 40% of the gas that less reliant on Russia, or by Russia holding back
Europe consumes, but the EU is now making a volumes, for example driven by a disagreement
concerted push to phase out Russian imports, on which currency the gas should be paid in.”
targeting a reduction of as much as two thirds Knutsson did not rule out a cut in gas transit
in a single year. Russia has meanwhile threat- via Ukraine if the conflict causes damage to the
ened to cut off supply if so-called “unfriendly” country’s transmission system.
countries that have supported sanctions do Gazprom’s main customers in Europe are
not make payments for their gas at special Germany, which took 45.8 bcm of gas in 2021,
accounts at Gazprombank, for conversion Italy, which took 20.8 bcm, and Austria, which
into rubles. bought 13.2 bcm. Both Germany and Italy have
Sergei Kapitonov, at the Energy Centre at announced plans to ramp up LNG imports,
Moscow’s Skolkovo School of Management, while Austria’s options are limited, unless it can
warns that Gazprom’s deliveries to Europe could tap supply that arrives in Europe in neighbour-
slump by as much as 40-45bn cubic metres this ing states. ™
INVESTMENT

Shell in talks with Chinese state

firms for Sakhalin stake

RUSSIA CHINA’S three largest state oil companies are Gazprom Neft at the Salym Petroleum oil devel-
reportedly in talks to acquire Shell’s position at opment in Western Siberia. But first it must find
Chinese and Indian the Sakhalin-2 oil and LNG project in the Rus- a buyer, and there is scepticism about how West-
buyers are considered sian Far East. ern majors can realistically leave the country
the most likely According to the UK Telegraph newspaper, without divesting their shares at a discounted
recipients of exiting Shell is discussing the sale of its 27.5% holding rate to Russian companies.
Western majors' stakes. in the project to China’s state-run CNOOC, Sakhalin-2 satisfies about 4% of the global
CNPC and Sinopec. The project is operated by LNG market, fed with feedstock from the Pil-
Gazprom, while other investors include Japan’s tun-Asokhskoye and Lunskoye fields off the east
Mitsui and Mitsubishi. coast of Sakhalin Island. Most of its exports go to
Shell is still open to talks with buyers outside China, Japan and South Korea.
China, however, and a source told Reuters that Mitsui and Mitsubishi have ruled out divest-
Chinese energy firms were following Beijing’s ing from Sakhalin-2, arguing that such a move
instruction to be cautious when making new would only result in Chinese investors taking
investments in Russia because of sanctions and their place. The reported talks between Shell and
the general political fallout from Moscow’s inva- Chinese firms have sparked concerns in Japan
sion of Ukraine. about whether the LNG supplies it gets from the
“The communication between Chinese com- plant might be jeopardised if China becomes a
panies and Russia at this point only focuses on key shareholder and diverts shipments to its own
trade and development of new projects,” the market.
source said, claiming that the takeover of pro- There is also speculation that the reliable
jects abandoned by Western firms was not on operation of Sakhalin-2 might be at risk if Shell
Beijing’s agenda. A source at CNPC also said that departs. It was the Anglo-Dutch major that led
Chinese companies were unlikely to target Shell’s the development of the project, with Gazprom
position at Sakhalin 2. only taking its place as operator when the plant
Shell declared on February 28 that it was was nearly complete. Gazprom does not operate
leaving Russia, including Sakhalin LNG and its any other liquefaction facilities, and has had dif-
other joint ventures in Russia, including with ficulty developing such projects on its own. ™

P8 www. NEWSBASE .com Week 17 26•April•2022