Page 8 - FSUOGM Week 18 2021

FSUOGM PIPELINES & TRANSPORT FSUOGM

“The transshipment complexes are part of facility will eventually have three trains, each
Novatek’s logistical chain to optimise the use of with a production capacity of 6.6mn tonnes per
[its] Arc7 ice-class tanker fleet, with the aim [of year (tpy) of LNG. It will also be able to turn out
ensuring] efficient and cost-effective LNG trans- as much as 1.6mn tpy, or barrels per day (bpd),
portation from Arctic LNG 2 and other Novatek of gas condensate. Feedstock will come from
projects,” it said. Utrenneye, a field that holds 1.434 trillion cubic
metres of gas and 90mn tonnes of condensate.
LNG sales agreements Leonid Mikhelson, the chairman of
In related news, Novatek said in a separate state- Novatek’s management board, hailed the signing
ment on April 28 that it had signed 20-year sales of the SPAs. “The long-term off-take agreements
and purchase agreements (SPAs) covering 100% between Arctic LNG 2 and its participants
of future production from Arctic LNG con- ensure the future revenue stream from LNG
sortium. The SPAs will allow the consortium’s sales and de-risk the project,” he commented.
members to load LNG in volumes correspond- “This represents one of the most important
ing to their equity stakes at the transshipment milestones in attracting the project’s external
complexes. financing, which will be completed in 2021.”
“The SPAs provide for LNG supplies from Equity in the Arctic LNG 2 consortium is
Arctic LNG 2 on FOB Murmansk and FOB divided between Novatek (operator), with 60%;
Kamchatka basis, with pricing formulas linked Total, with 10%; China National Petroleum
to international oil and gas benchmarks,” the Corp. (CNPC), with 10%; China National Off-
company stated. shore Oil Corp. (CNOOC), with 10%; and the
It also noted that sales would begin in 2023, Japan Arctic LNG consortium, which includes
when Arctic LNG 2 is due to bring the first Mitsui and Japan Oil Gas and Metals National
train of its gas liquefaction plant on stream. The Corp. (JOGMEC), with 10%. ™

INVESTMENT
Russia’s Gazprom focuses on

dividends, ESG and governance

RUSSIA’S natural gas giant Gazprom held an
2021 Investor Day following a publication of
its 2020 IFRS results, which brought a material
improvement in the company’s dividend, an
emerging focus on ESG issues and a noticea-
ble improvement in Gazprom’s corporate gov-
ernance, senior oil & gas analyst at BCS Global
Markets Ronald P. Smith wrote on April 29. terms at about RUB1.5 trillion (about $20bn).
Last week, Gazprom reported a $4.8bn net The company’s management is bullish
profit under IFRS for 4Q20 versus a $3.4bn loss on supply growth, seeing pipeline exports to
posted in the previous quarter, beating the con- Europe and China rise 33% on 2019 levels by
sensus estimates by 9%. 2030, or from 199bn cubic metres per year to
BCS GM noted “unprecedented” level of dis- about 265 bcm per year. “Part of this would nat-
closure on the part of Gazprom’s management urally come from the full ramp-up of Chinese
as it stated that 56.1% of European gas sales are deliveries to the contracted 38bcm per annum
being made on prompt day-ahead or month- from 2025, but the remaining 30 bcm or so
ahead hub pricing, while 30.9% are being made would almost certainly require the Western
based on traded forwards prices, and only 13% Route contract to China finally be concluded,”
on Gazprom’s traditional oil-linked pricing BCS GM analysts note.
mechanism. While Gazprom confirmed its previous div-
The company also provided detailed guid- idend guidance, BCS GM believes that “there
ance on expected 2021 capex, pricing and vol- is still doubt in many investors’ minds as to the
umes. Gas prices are seen to be on track to be sustainability of the new dividend policy.” How-
at least $200-$206 per 1,000 cubic metres, “well ever, the reiterating of the policy seen as positive.
above the $170/kcm in Gazprom’s official budget Previously Gazprom switched to a 50% div-
and slightly higher than more recent guidance.” idend payout one year earlier than the dividend
Despite the improved financial situation in strategy implies, with the surprise dividend
2021, capex will remain flat year on year in ruble news being received positively by the analysts. ™

P8 www. NEWSBASE .com Week 18 05•May•2021