Page 9 - LatAmOil Week 02 2021

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Washington’s current sanctions only target those The discovery has raised expectations that
companies providing pipelaying vessels for Nord Train 3 will also have similar issues that will need
Stream 2. But a proposed second round will to be dealt with once Train 1 is returned to ser-
extend penalties to those providing technical vice. Chevron has not said how long it expects to
certification and insurance for the work, as well take to carry out repairs on Train 1.
as additional pipelaying activities such as survey- The faulty welds affect propane heat exchang-
ing, trenching and rock placement. ers – also known as kettles – that are used in the
The legislation was part of a broader defence liquefaction process. The Australian Financial
bill that cleared the US Congress but was vetoed Review reported that all of the kettles across
by US President Donald Trump. The House of Gorgon’s three trains were manufactured by the
Representatives then voted to override that veto same company in South Korea.
and the Senate followed suit on January 1, mean- The prolonged outage at Train 1 comes as
ing the sanctions could come into law in the next LNG spot prices in Northeast Asia have risen on
few weeks. seasonal winter demand and some supply short-
In other news, Trafigura has revealed it ages. But the impact of the outages at Gorgon is
tapped a Russian bank for a $7bn loan to fund its somewhat limited by Chevron only taking one
investment in Rosneft’s Vostok Oil megaproject train at a time offline for maintenance.
in the Russian Arctic. Royal Dutch Shell, meanwhile, had more LNG spot prices
Rosneft announced on December 29 it had positive news to report as it returned its giant
completed a 10% stake sale to Trafigura, first Prelude floating LNG (FLNG) project to service. in Northeast
agreed in November. But neither company dis- The facility – the largest floating structure ever
closed the deal’s value, although Trafigura said it built – had been offline for around a year owing Asia have risen
was funded through long-term debt financing. to a technical disruption to its diesel genera- on seasonal
In corporate filings in Singapore, however, tors, which illustrates the complexity of FLNG
Trafigura reported obtaining a €5.775bn ($7bn) technology. winter demand
loan facility with the Credit Bank of Moscow Analysts have said that the remote location
on December 23, shedding light on the scale of of the Prelude facility, 475 km off Australia’s west and some supply
Vostok Oil’s deal. coast, as well as restrictions related to the corona-
The implication is that Trafigura paid the virus (COVID-19) pandemic have complicated shortages
same amount for Vostok Oil as its book value. Shell’s efforts to restart operations. Nonetheless,
It also puts Vostok Oil’s overall value at $70bn, the super-major said that as Prelude is a mul-
exceeding Rosneft’s entire market capitalisation ti-decade project, its focus in on sustained per-
of $62bn. formance over the long term.
However, Shell has backed out of other FLNG
If you’d like to read more about the key events shaping projects, as have other producers, likely deterred
the former Soviet Union’s oil and gas sector then please by having witnessed the challenges at Prelude.
click here for NewsBase’s FSU Monitor.
If you’d like to read more about the key events shaping
GLNG: Ups and downs in Australia the global LNG sector then please click here for
LNG-related news from Australia has been NewsBase’s GLNG Monitor.
mixed in recent days. Chevron said last week
that an inspection of Train 1 at its Gorgon LNG MEOG: Saudi Arabia takes charge
project in Western Australia had resulted in weld Saudi Arabia has signalled to the oil market that
quality issues being identified. These are similar it does not need consensus from its OPEC part-
to the weld quality issues that kept Train 2 at ners to make major moves, while its regional
Gorgon offline for months in 2020, and are likely nemesis Iran continues to award contracts in
to take at least several weeks to repair. pursuit of higher oil production.

Week 02 14•January•2021 www. NEWSBASE .com P9