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“China is set to dominate future growth and public travel) will weigh on both gasoline
as well, as it will overtake the US as the and diesel demand growth,” it said.
world’s largest economy,” the OIES said.
“But the pace of the country’s oil consump- What next
tion is slowing while the product makeup is China and India are widely forecast to be the
shifting, in line with the restructuring of the twin engines of oil demand growth for at least
Chinese economy and policy efforts to curb the next decade. The recent collapse in oil prices
local air pollution.” has forced sellers to look to China to provide
While noting that China’s oil imports upward momentum. As noted above, how-
had set a string of records this year, with ever, the country’s time in this role is running
the country’s economic output estimated to out. Shifts in political and economic priorities
have returned to 80-90% of pre-coronavirus are already eroding oil demand growth in the
(COVID-19) levels, the group said oil demand world’s largest importer.
had failed to keep pace. Governments from around the world are
“The domestic demand outlook is by no increasingly invested in technological invest-
means bearish, with demand for gasoline, die- ments, following the COVID-19 pandemic.
sel, jet fuel and fuel oil already inching up from Work-from-home strategies are the norm and,
2019 levels in May,” it said. “But it is also far from with a vaccine unlikely to be widely available
the stellar recovery that crude buying or refinery before mid-2021, this will only become further
runs would imply.” entrenched, undermining long-term oil demand
The OIES also noted China’s increasing even more. While China remains the world’s
support for NEVs, saying that electric vehicle factory, thus ensuring a considerable amount of
charging infrastructure was part of a wider wave demand, the economy is shifting more toward
of technology investments that the government services and consumption driven growth.
was urgently pursuing. Even in a case of moderately slowed Chinese
“The government’s focus on infrastructure to oil demand growth, the international oil market
support its growing electric fleet (for both private would be hit hard, with prices plummeting.™

OCEANIA

Senex signs gas supply deal, expands acreage

PROJECTS & AUSTRALIAN independent Senex Energy has The developer described PLR2020-1-9 as
COMPANIES signed a natural gas supply contract with a refin- being high-potential exploration acreage, noting
ery near Queensland’s Gladstone Port. that it lies on trend with the Scotia and Merid-
Senex Energy said on September 22 that it ian gas fields and is situated close to existing
would supply up 300 TJ (7.81mn cubic metres) infrastructure.
per year of gas to Southern Oil Refining’s North- The additional PLR2020-1-13 acreage,
ern Oil Refinery for two and a half years. The meanwhile, will allow the company to expand
contract can be extended by a further five years, Atlas’ gas production by 50% to around 18
with volumes increasing to 350 TJ (9.12 mcm) PJ (468.87 mcm) per year. Senex added that
per year. the acreage was development-ready, subject
Senex said the gas would come from its Pro- to project approvals, and would allow the
ject Atlas block – located in petroleum land company to immediately book 41 PJ (1.07bn
release (PLR) 2020-1-13 in the Surat Basin – via cubic metres) of 2P reserves once the title was
the Wallumbilla Gas Hub and would be supplied granted. This will raise existing 2P reserves by
at a fixed price in line with current market levels 18% to 275 PJ (7.16 bcm).
and indexed annually. Senex has already reached an agreement with
The sales agreement with Northern Oil gas infrastructure operator Jemena to expand
Refinery follows Senex’s announcement that it Atlas’ processing facility by 50% to 48 TJ (1.25
expects to increase Atlas’ gas production by 50%, mcm) per day of sales gas. Senex said it intended
following the Queensland government’s award to fund development drilling through free cash
of additional acreage next to Atlas. flow (FCF) and existing debt facilities.
Senex said on September 21 that the state had Senex said it would will undertake an initial
awarded the developer preferred tenderer status four-year work programme, comprising geolog-
for additional acreage at PLR2020-1-13 in the ical studies, 2D seismic acquisition and an explo-
Surat Basin and the 486-square km PLR2020- ration well, but that it expects first gas from the
1-9 in the Bowen Basin. new acreage in the first half of 2022.™

Week 38 24•September•2020 www. NEWSBASE .com P11