Page 13 - MEOG Week 24

MEOG nr G MEOG

Nigerian industrial
conglomerate Dangote
is commissioning a
$2bn urea plant.

COVID-19 drags on Asian gas demand gas exporters shipped 93 cargoes in May –
A surge of new COVID-19 cases has taken some amounting to 6.4mn tonnes – which was down
of the steam out of the oil price recovery, with seven cargoes from April, according to energy
Brent crude trading around $38.20 per barrel on consultancy EnergyQuest’s latest monthly gas
June 15. Analysts have warned that oil demand sector report.
recovery is likely to be a lengthy affair, with all
eyes trained on Chinese import figures to give If you’d like to read more about the key events shaping
some sense of pricing trajectory. Asia’s oil and gas sector then please click here for
For the natural gas export sector, however, NewsBase’s AsianOil Monitor.
the short-term supply and demand balance is
more complicated than simply looking to China. Nigerian downstream progress
While the Asian giant is the world’s second-larg- Nigeria is making advances in its downstream
est buyer of the fuel, a fundamental weakening in sector, with industrial conglomerate Dangote
global demand has driven prices to record lows undertaking commissioning on a new $2bn
this year. granulated urea fertiliser plant in Lagos. The
Before COVID-19 hammered LNG demand, plant, one of several under development, will run
prices were already in a tailspin because of on gas feedstock supplied by Nigerian Gas Co.
unseasonably warm winter temperatures and the and Chevron. But traders warn that it could take
steady commissioning of new export projects. until the second quarter of 2021 for commercial
While China’s LNG imports are anticipated production to start up.
to remain robust for the rest of the year, demand Nigerian authorities have also awarded a
from Japan – the world’s largest importer of licence to Nigeria Delta Exploration & Produc-
the super-chilled fuel – is not expected to fully tion (NDEP) to operate a small-sized oil-refining
recover this year. train in Ogbele, a town in the coastal Rivers State.
The Japan Gas Association (JGA) said last The plant will run on crude produced at a mar-
week that city gas demand had fallen by 10% year ginal field in the area.
on year in April and by more than 20% in May, With a capacity of only 5,000 barrels per day
owing to the national lockdown imposed. (bpd), the train’s launch will have little impact
“An impact from the coronavirus pandemic on Nigerian fuel supply, much of which comes
on our business is quite significant,” Reuters from abroad. But oil industry figures have called
quoted JGA chairman Michiaki hirose as saying on the government to deploy these small-sized
on June 11. Japan’s LNG imports fell by 8.8% y/y modular refineries en masse in order to wean the
in April to 5.13mn tonnes, Ministry of Finance country off costly imports.
data showed in May. Meanwhile, Iran continues to supply gaso-
Between unusually high inventory levels line to Venezuela, drawing heavy criticism from
and weak demand, unnamed industry sources the US. While Tehran has hailed this trade as a
warned S&P Global Platts on June 12 that not political triumph, Washington has threatened
even a hotter-than-average summer could to retaliate. The supplies should help Venezuela
improve the outlook. ease shortages, as will its decision to partially lift
The effect is already being felt by the world’s long-standing subsidies.
largest exporter of the fuel – Australia. Australian Lastly, Kuwait has said it is no longer seeking

Week 24 17•June•2020 www. NEWSBASE .com P13