Page 10 - FSUOGM Week 32 2019

FSUOGM PIPELINES & TRANSPORT FSUOGM
Russian LNG exports soar 54.5% in 1H19
RUSSIA
In the same period Gazprom suffered a 5.3% decline in piped exports.
RUSSIAN LNG exports surged 54.5% year on year in the rst half of 2019, data published on August 8 by the Federal Customs Service shows, while piped deliveries overseas slumped 4.9%.
Shipments of super-chilled natural gas totalled 29.4bn cubic metres in the six-month period, with growth driven by private gas rm Novatek’s Yamal LNG terminal reaching its full 16.5mn tonne per year capacity last December. Russia’s other LNG export facility on Sakhalin Island is operated by state-run Gazprom and has a capacity of more than 10mn tpy.
In monetary terms, LNG sales were up 70.1% y/y at $4.5bn, on the back of higher international gas prices.
Meanwhile Gazprom, which has a monopoly over Russia’s piped gas exports, su ered a 5.3% decline in overseas deliveries in the first half to 108.3 bcm, while earnings from these sales dipped 4.3%, achieving $22.7bn.
Gazprom faces sti competition in its core European market from Novatek and other
LNG suppliers. While its sales on the continent shrank, LNG imports almost doubled to 61 bcm in the rst half, as reported by bne IntelliNews.
By robbing it of potential sales, Gazprom argues that Novatek is jeopardising government export revenues. While Gazprom pays standard tax rates at all but a select few projects, Novatek’s Yamal LNG project is subject to no export tax, mineral extraction tax (MET) or property tax during its rst 12 years of operation, as well as a 13.5% reduction in pro t tax.
Russian LNG exports in June alone were up 90% month on month at 4.1 bcm, earning $469.5mn in revenues. During the same month Gazprom’s sales fell 4.9% to 14.9 bcm, totalling $2.6bn.
Novatek is set to receive similar state support at the new 19.8mn tpy Arctic LNG-2 terminal it is developing. It has also reportedly asked the government to cut interest rates for the construc- tion of its LNG tankers in the Far East, with the help of Russia’s National Welfare Fund (NWF).™
PERFORMANCE
Gazprom Neft ups net profit by 29% in 1H19
RUSSIA
RUSSIA state-owned Gazprom Ne ’s revenue in the rst six months of 2019 totalled RUB1.215 trillion ($18.6bn), an increase of 6.8% year- on-year, the company said in a press release on August 8.
e company had higher production growth at major projects (the Novoportovskoye and Vostochno-Messoyakhskoye fields), a more favourable pricing environment, and e ective management initiatives delivering adjusted EBITDA growth of 10.8% year-on-year, at RUB408.1bn.
Net profit attributable to Gazprom Neft PJSC shareholders totalled RUB215bn, a 29.2% increase year-on-year.
Higher operating cash ow resulted in a posi- tive free cash ow of RUB125.2bn in 1H19.
Hydrocarbon production, including Gaz- prom Neft’s share in joint ventures, rose to 47.4mn tonnes of oil equivalent (mtoe) in 1H19, a 5.6% increase year-on-year, as a result of higher production levels at the Novoportovskoye and Vostochno-Messoyakhskoye fields, as well as in the Orenburg region, together with a greater ownership interest in Arсtiсgas.
Refining volumes at Gazprom Neft’s own and joint-venture re ning assets amounted to approximately 20mn tonnes in 1H19: these vol- umes being impacted by planned repairs at the Company’s Pančevo and Yaroslavl re neries.
As part of its development of its petrochemi- cals business, as envisaged under the Company’s long-term development strategy, Gazprom Ne , together with SIBUR, consolidated 100% of the charter capital in the Poliom LLC polypropylene plant in Omsk: the integration of re ning and petrochemicals assets allowing the Company to improve e ciency by using re nery feedstocks to produce high-value-added products.
e company also increased sales of oil prod- ucts through premium channels in H1 2019, with sales of bitumen materials, in particular, increasing by more than 15%, sales of lubricants by 6.7%, and sales of bunkering fuels by more than 22%. ™
The East- Messoyakhskoye eld is one of Gazprom Neft’s major growth projects.
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Week 32
14•August•2019