Page 7 - GLNG Week 07 2022

GLNG AFRICA GLNG

Saipem says it will appeal Algerian court’s

conviction on Arzew LNG fraud charges

PROJECTS & ITALY’S Saipem said on February 15 that it suspension of the verdict and the fine. (Instead,
COMPANIES intended to appeal its conviction in an Algerian the funds will be set aside in case they are needed
court on criminal charges of fraud related to the later, Reuters noted.)
award of a contract in 2008 for the construction The company went on to say that it had not
of the Arzew LNG plant. yet been notified of the reasoning underlying the
In a statement, Saipem acknowledged that court’s decision. It also stressed that it had been
the Tribunal of Algiers had reached a first-degree fully acquitted in the Italian court system of cor-
decision on the fraud case, which has been in ruption charges related to the GNL3 Arzew con-
process since 2019, on February 14. It noted that tract under a ruling issued in December 2020.
the tribunal had convicted Saipem and two affil- The Algerian court ruling is coming just a
iated companies, Saipem Contracting Algérie few short weeks after Saipem’s announcement
and Snamprogetti SpA Algeria Branch, of using in late January that it had sustained losses
fraudulent means – that is, bribery – to obtain equivalent to nearly one third of its total equity
approval for its overpriced bid on GNL3 Arzew, in 2021. That news pulled the energy services
as the LNG plant contract was known. contractor’s share and bond prices down signif-
Additionally, the Italian energy services icantly, and the independent Italian investment
contractor reported that it had incurred a fine bank Equita said in a research note on Febru-
of around €192mn as a result of the guilty ver- ary 15 that the GNL3 Arzew verdict made fur-
dict. It said it intended to book those costs on its ther losses likely.
accounts at the end of Fiscal Year 2021 but would “We believe the conviction can expand the
not pay the fine immediately, since it intended [2021] net operating loss... to €2.3-2.4bn,” the
to file an appeal with the aim of securing the note said.™

ASIA

Thailand plans another LNG import terminal

PROJECTS & THAILAND is looking to establish itself as 2011 under the monopoly of PTT. However, the
COMPANIES a regional LNG hub with plans to expand its government is now taking steps to liberalise the
import capacity. This week, PTT and the Elec- market and has recently granted import licences
tricity Generating Authority of Thailand (Egat) to a number of companies with the intention of
agreed to form a joint venture to co-invest in a developing an LNG hub that could provide gas
second LNG regasification terminal in Rayong throughout Thailand and the region.
Province. The country’s Energy Regulatory Commis-
State-run Egat is expected to invest THB20bn sion (ERC) has granted LNG import licences
($617.2mn) in the new facility, according to the to six companies: Electricity Generation,
Bangkok Post. Egat had been considering invest- Gulf Energy Development, B.Grimm Power,
ment in a floating storage and regasification Hin Kong Power, PTT Global LNG and Siam
unit (FSRU) in the northern part of the Gulf of Cement Group.
Thailand. However, the National Energy Policy The government is hoping that with deregu-
Council (NEPC) urged Egat to forego the FSRU lation numerous competitors will stabilise prices
project and instead invest in PTT’s LNG import in the domestic market, benefiting power gener-
terminal project at Nong Fab, which it deter- ation companies, industrial consumers and the
mined was more commercially viable. operators of gas-powered vehicles.
PTT, the state-owned oil and gas company, Thailand currently meets most of its gas
in 2019 started construction of the Nong Fab demand from fields in the Gulf of Thailand,
LNG receiving terminal at a cost of THB41.4bn the Malaysia-Thailand joint development area
($1.28bn). It is due to begin receiving LNG and and onshore gas. Gas imports, amount to some
processing it for storage in mid-2022. The Egat- 30% of consumption, come from neighbouring
PTT joint venture facility will be located nearby Myanmar and LNG. Demand for LNG is fore-
and have an import capacity of 7.5mn tonnes per cast to grow due to declining domestic reserves.
year (tpy). Combined with the plant that is about According to the BP Statistical Review 2021,
to open, capacity will increase to 19mn tpy. Thailand consumed 46.9bn cubic metres of gas
Thailand has been importing LNG since in 2020.™

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