Page 96 - RusRPTJul20

States to Europe were close to 3mn tonnes in both May and June, just 1mn tonnes lower than a record high in March, Refinitiv Eikon data shows. Supplies from the United States to Europe remain ample despite oil production decrease in the US by 2.1mn bpd from March, as oil prices have plummeted due to overproduction and the fallout from the coronavirus crisis. Through May to July, Russia produced 2mn bpd less due to the global oil output cut deal, which Washington is not part of. With less Urals available, its prices have spiked, hurting the demand further.
The price of Russia’s flagship Urals grade oil in Northwestern Europe soared to a record premium to North Sea Brent on June 25. ​Urals was selling at $43.25 per barrel for Rotterdam delivery that day, which was $2.35 more than Brent. The premium was up $0.40 from June 24 and represented the largest recorded since September 1994, the Argus pricing agency estimated. Urals traditionally trades at a discount to Brent because of its high sulphur content, which adds costs at refineries. This discount widened in March and early April as refiners in Europe, the main market in which Urals is sold, cut back production as the coronavirus (COVID-19) pandemic took hold, causing fuel demand to plummet. However, since Russia and its OPEC+ partners reached a landmark deal in early April to take 9.7mn barrels per day (bpd) of supply off the market, Urals has become scarcer and the discount has swung to a premium. Some refiners favour higher-sulphur crude if their plants are designed specifically to process it. This unusual situation has led to some unusual buying habits. France’s Total, Europe’s biggest oil refiner, has reportedly ​started buying​ North Sea oil, as fewer volumes are available from its two main suppliers, Russia and Nigeria.
Dutch-British oil major Royal Dutch Shell sees Russia as one of the key regions for liquefied natural gas (LNG) development, ​TASS reported citing the chairman of the company in Russia, Cedric Kremers. As reported by ​bne IntelliNews,​ Shell ​previously pulled out​ of the ​joint Sakhalin LNG project with state-owned gas giant Gazprom​. Shell already controls 27.5% in the only LNG project of Gazprom Sakhalin-2. Kremers said that Shell was ready to co-operate with "existing and new partners" on LNG in Russia, when asked whether projects with Novatek independent gas company are being considered. Novatek has completed Russia's largest LNG project Yamal LNG and is developing the Arctic LNG-2 project. Previously analysts suggested that in the environment of low prices, the ​rivalry between LNG and pipeline gas exports​ between Russian gas producers will increase.
Freeport LNG has delayed the FID on the fourth train of its plant (capacity of 5mnt/a of LNG) until at least 2021, ​Kommersant reports. The current capacity of the six existing LNG projects in the US is 55mnt/a. Before the year-end, two launches (with a combined capacity of 5.25mnt/a) are expected. In 2021, the only scheduled launch is that of a 4.5mnt/a train at Corpus Christi, while in 2022 Venture Global plans to launch the Calcasieu Pass project with annual capacity of 10mnt/a, although its construction might be delayed, according to Kommersant, citing Platts. The total capacity of the existing and potential liquefaction facilities in the US that have obtained permits to be constructed stood at 158mnt/a as of March. However, many of the new projects could be postponed or cancelled.
Russia's prosecutor general on June 5 ordered a review of hazardous structures built on Arctic permafrost after the second-worst fuel spill in Russian history​, which is being attributed to ground shifting as result of
96​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com