Page 7 - GLNG Week 31

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The pair have a combined annual production Chinese LNG demand is also expected to
capacity of 7.7 bcm of gas and 1mn tonnes of be strong over the remainder of the year, as
condensate. The company intends to sell the the country leads efforts to recover from the
gas to local industrial customers but will export impact of COVID-19. However, there have
most of the condensate. also been warnings that Chinese buyers of the
Meanwhile, Ukraine’s biggest gas producer super-chilled fuel will likely seek lower prices.
Ukrgasvydobuvannya (UGV) has secured a This is not surprising, given the oversupplied
€51.9mn ($60.9mn) loan from the European market, but will not be welcomed by export-
Bank for Reconstruction and Development ers seeking to recover from the drop in LNG
(EBRD). The funds will be used to procure more demand.
workover rigs to boost output at UGV’s older One area where LNG has the potential to
fields and to increase waste-heat recovery at a expand is its use as a marine fuel. Last week, Gaz-
key deposit in Ukraine’s northwest. prom Neft became the first Russian company to
UGV will need all the help it can get to deliver join the Society for Gas Marine Fuel (SGMF), a
on ambitious growth targets. It was already group that seeks to promote the fuelling of ships
apparent long before the COVID-19 crisis began with LNG. (See: Gazprom Neft joins international
that the company would fall far short of its goal LNG bunkering group, page 18)
of producing 20 bcm of gas this year. The col- The company has added motivation to do so,
lapse in European gas prices this year means its as the decision by Russia and its OPEC+ allies
production is now on track for a sharp decline. to restrict oil supply will prevent Gazprom Neft
from advancing new oil projects. Gazprom Neft’s
If you’d like to read more about the key events shaping parent company, Gazprom, also wants to move
the former Soviet Union’s oil and gas sector then please into LNG bunkering. Other companies around
click here for NewsBase’s FSU Monitor . the world may follow, as they seek areas where
there is scope for demand to grow.
Searching for LNG demand growth
US LNG exports are being forecast to rise in Latin America: Another look at Suriname
August, which would mark a rebound after This week’s issue of LatAmOil takes another look
several months of declines amid cargo cancel- at Suriname, which recently reported a new oil
lations spurred by the impact of the coronavi- find at Block 58 in the offshore zone.
rus (COVID-19) pandemic on demand. (See: Staatsolie, the national oil company (NOC),
Cheniere’s earnings top estimates as LNG exports has shown strong interest in joining Apache
pick up, page 9) Over 100 US LNG cargoes are (US) and Total (France) in the development
estimated to have been cancelled so far this year, of Block 58. The NOC does have the right to
and further cancellations are expected, albeit acquire a stake of up to 20% in the project, but it
coming at a slower pace. would have to pay as much as $1.0-1.5bn to do
And even during this period of low demand, so. According to acting general manager Agnes
some LNG markets are growing rapidly. For Moensi-Sokowikromo, Staatsolie may have
example, new data released by Turkey’s energy difficulty raising such a large sum at this time,
regulator last week showed that LNG out- especially since Suriname’s credit ratings were
stripped the country’s gas pipeline imports in recently downgraded.
May and that LNG shipments that month had Meanwhile, Malaysia’s Petronas has arranged
surged by 205.5%. (See: Turkey’s Russian gas to use the Maersk Developer, a rig owned by
imports down, Qatari and Azerbaijani imports Maersk Drilling (Denmark), for a drilling pro-
up, page 19) ject at Block 52 offshore Suriname.

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