Page 13 - MEOG Week 46

MEOG
neWs In BrIeF
MEOG
What Aramco’s IPO means for the Saudi economy
Saudi Aramco cancelled the London leg of its initial public offering roadshow, scheduled for Wednesday, according to people familiar with the situation, who asked not be named because it wasn’t a public event.
It’s the latest sign that the giant Saudi oil company has scaled back the international ambitions for the IPO because of lackluster demand from money managers. The company had already decided not to market the share sale in the US, Canada or Japan.
The deal will now mainly rely on rich Saudi families and other local investors. BLoomBerG
oIL
Yemen’s Houthi rebels seize vessel in Red Sea
The Saudi-led coalition fighting in Yemen said Iran-aligned houthi rebels hijacked a vessel south of the red Sea.
Saudi Arabia’s state-run Saudi Press Agency quoted coalition spokesman Colonel Turki al-Malki as saying on Monday that houthis seized the ship while it was towing a South Korean oil drilling rig on Sunday.
Al-Malki said the “attack” threatens vital shipping routes in the Bab al-Mandeb Strait, used for oil shipments from the Gulf to Europe, as well as goods from Asia to Europe.
“On Sunday, during the sailing of the tugboat rabigh-3 in the southern red Sea, it
was hijacked and subjected to armed robbery by terrorist elements affiliated to the houthi militia,” said al-Maliki said.
he did not say which country the tugboat belonged to or how many crew members were on board the seized ship.
According the tracking website Marine Traffic, rabigh-3’s home port is in the western Saudi city of Jeddah and it sails under the kingdom’s flag.
Mohammed Ali al-houthi, a senior rebel official, said: “Yemeni coast guards ... are checking to see whether [the vessel] belongs to the countries of aggression or to South Korea, in which case it will be released after completing legal procedures. The crews are being well treated. We assure everyone not to worry about the crew.”
Al Jazeera’s Mohammed al-Attab, reporting from the capital Sanaa, quoted a houthi source as saying South Korea has demanded the release of its rig and crew.
“houthis said they would release it after carrying out paperwork to confirm that this oil rig belongs to South Korea. The source told me the seizure is a usual measure that they are carrying out when they find any foreign vessel in the Yemeni regional waters,” he said. aLJaZeera
Gas
Phase 1 of TANAP to
be commissioned on
November 30
The final part of Phase 1 of the Trans
Anatolian Natural Gas Pipeline (TANAP)
is to be commissioned on 30 November, Vedomosti reports. The gas transportation capacity of Phase 1 of TANAP is 16bcm/a, with 6bcm/a of gas intended for Turkey, while the plan is to deliver the remaining volumes to Europe. Gas transportation to Turkey via TANAP has reached 3.08bcm since the start of commercial gas supplies on 30 June 2018.
VTB MM believes that the economic turmoil in Turkey made consumers there particularly sensitive to the price of gas being supplied, with gas consumption pressured
by alternative cheap sources such as coal.
As a result, total gas consumption in Turkey decreased 5.5% YoY in January – August this year to 30.6bcm, while Gazprom’s gas supplies dropped 35% YoY in 9mo19 to 11.7bcm (facing stiff competition from both LNG and TANAP).
In our Gazprom model, we do not expect any significant rebound in gas supplies to Turkey in future, as we think the 15.75bcm first line of the TurkStream gas pipeline (to be launched in December this year) is just going to replace the current transit supplies to the country through Ukraine. At the same time, we note that Gazprom’s gas is probably the most expensive on the Turkish market, so to keep its market share the company
is inevitably going to have to sacrifice the margin, we think, which is negative for the fundamentals in the longer term. At the same time, we deem the news as not market- moving for the stock right now.
VtBmm
Week 46 20•November•2019
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