Page 16 - GLNG Week 25

GLNG EUROPE GLNG

Total extends LNG agreement with Sonatrach

PIPELINES & FRANCE’S Total and Algeria’s Sonatrach have after Algeria blocked the sale of Occidental
TRANSPORT agreed to extend their existing LNG supply part- Petroleum assets previously owned by Anadarko
nership by three years. As a result, Sonatrach will Petroleum to the French company.
continue to provide 2mn tonnes per year (tpy) of Total’s CEO, Patrick Pouyanné, said during
Algerian LNG to the French market, primarily the company’s first-quarter earnings call in May
through the import terminal at Fos Cavaou, on that it had been officially informed by Occidental
the southern coast of France. that it would not be able to acquire the Algerian
The agreement also includes the sub-charter assets on objections from Algiers. Occidental
of a Total LNG tanker by Sonatrach, the French is now expected to hold onto the assets, unless
The contracted LNG company said in a June 25 statement. some new way to overcome Algiers’ opposition
will primarily be “This agreement is part of the long history to the deal can be found.
delivered through the of co-operation between Total and Sonatrach,” According to the International Group of LNG
import terminal at Fos Total’s president of gas, Laurent Vivier, stated. Importers (GIIGNL), Sonatrach and Total have
Cavaou on the south “Thanks to the quality of our relationship we two agreements dating from 1972 that were due
coast of France. were able to conclude it in an extremely volatile to expire this year. Under these agreements, Total
market environment. This new contract further has been receiving 1.5mn tpy and 2.5mn tpy on a
enhances the flexibility of Total’s LNG portfolio delivered ex-ship (DES) basis.
and strengthens our position as a major partner The extension thus covers a smaller volume
of Sonatrach.” of LNG, but nonetheless is likely to be a welcome
In its own statement, Sonatrach echoed the development for Sonatrach as Europe increas-
message about the partners’ pre-existing rela- ingly diversifies its sources of gas supply. Indeed,
tionship, and how it had helped them to agree to the Algerian company has a number of contracts
the extension. However, Reuters reported, citing that will soon come up for expiry, including a
sources familiar with the situation, that relations 720,000 tpy deal with Greece’s DEPA, which is
between Sonatrach and Total had deteriorated due to end in 2021.™

Poland awards contracts for

LNG terminal expansion

INVESTMENT POLAND’S gas grid operator Gaz-System has receiving gas from different parts of the world,”
issued contracts worth PLN1.9bn ($480mn) for he told a news conference.
expansion of the country’s sole LNG import ter- Poland has several other new gas import pro-
minal in Swinoujscie, it said on June 24. jects underway at the moment, including pipe-
The terminal is due to be expanded to take lines from Norway and Lithuania and potentially
8.3bn cubic metres of gas per year by 2024, up the construction of a second LNG terminal in
from 5 bcm at present, helping Poland wean itself Gdansk. The government has declared that it will
off Russian gas. not renew its long-term contract for Russian gas,
Gaz-System’s Polskie LNG subsidiary and the which expires at the end of 2022.
authority for the ports of Szczecin and Swinou- Polish gas demand is also set to grow over the
jscie awarded the contracts to Austria’s Porr and coming years, as some coal-fired power capacity
China’s TGE Gas Engineering. The agreements is phased out and replaced with gas-based gener-
cover the design, construction and commission- ation. Record low gas prices in Europe, coupled
ing of both the project’s onshore and offshore with the rising cost of EU carbon emissions per-
structures. mits which have eroded margins at coal plants,
Commenting on the awards, Piotr Naimski, could prompt the government to fast-track the
a minister responsible for Polish energy infra- switchover.
structure, said the expansion was “essential” for Polish gas firm PGNiG has recently reserved
Poland to improve its energy security and forgo the capacity of the expanded Swinoujscie termi-
imports from Russia, which still account for nal. Longer term, its plan is not only to supply
more than half its supply. domestic customers but also transit gas to neigh-
“The terminal gives us the flexibility of bouring countries such as Ukraine.™

P16 www. NEWSBASE .com Week 25 26•June•2020