Page 12 - MEOG Week 50 2020
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MEOG TENDERS MEOG
Zhenhua wins SOMO’s
prepayment tender
IRAQ CHINA Zhenhua Oil Co. has won a five-year effectively limited to state-backed Chinese com-
term crude supply tender from Iraq’s state oil panies and international oil firms. Meanwhile,
marketer SOMO under a novel arrangement that Argus Media quoted an informed banking
includes a $2bn pre-payment for the first year’s source as saying that companies already engaged
crude volume. The agreement guarantees Zhen- in oilfield development in Iraq were best posi-
hua the supply of 48mn barrels of crude per year tioned to win the tender given that they would
from January 2021 to December 2025. have already carried out relevant due diligence.
Following approval by the Iraq Cabinet and Zhenhua is a subsidiary of state-owned China
Finance Ministry, Zhenhua will have 30 days to North Industries Group (Norinco), which is
pay the $2bn pre-payment for loadings between involved in the development of the 10,000 barrel
July 1, 2021 and June 30, 2022. per day East Baghdad field and the 130,000 bpd
SOMO is understood to have been consid- Ahdab field. Norinco also operates the 120,000
ering implementing an oil sales pre-payment bpd Huajin refinery in China.
solution for some time. However, given the lack According to Zhenhua, the company trades
of warning and short deadline, the move bears around 1.3mn bpd of oil and refined products.
the hallmarks of a knee-jerk reaction to fill Bagh- In January 2018, Iraq’s Ministry of Oil (MoO)
dad’s $3-4bn monthly operating deficit. agreed a deal with Norinco and PowerChina for
The award followed a brief bidding period the construction of a new 300,000 bpd refinery
which was extended from four days to 11 to on the al-Fao Peninsula in the south of the coun-
give potential participants more time to prepare try. While little has been heard of the deal since,
paperwork and fulfil banking requirements. in November Iraqi Oil Minister Ihsan Abdul Jab-
However, because of the short window and bar said that Baghdad would soon kick off bid-
large upfront cost, those able to take part were ding for work to construct the refinery.
DESFA lands operator role
at Kuwaiti LNG terminal
KUWAIT GREEK gas transmission system operator tonne per year (tpy) Mina Al-Ahmadi terminal,
DESFA has won a contract to run Kuwait’s sec- commissioned in 2009. But the Gulf state wants
ond LNG import terminal, following a tender. to expand the use of gas in power generation, in
DESFA will operate and maintain the facility order to cut down on costlier and more polluting
in Al-Zour for five years. In a statement, the grid fuel oil.
firm said it had secured the contract thanks its While the country is making efforts to
“high specialisation” and “know-how”, as well as increase domestic supply, it also recognises that
that of its shareholders, Italy’s Snam and Spain’s more LNG will be needed to keep up with the
Enagas. pace of demand growth.
“The experience gained by DESFA from The Al-Zour terminal is set to receive up to
managing the Greek transmission system and 3mn tpy of LNG from Qatar Petroleum under
the LNG terminal in Revithoussa also had a a 15-year deal signed last year. The facility is
catalytic contribution to the undertaking of the equipped with eight storage tanks, each with a
project,” it said. 225,000 cubic metre capacity.
The building of the Al-Zour terminal began DESFA has been operating the Revithoussa
in 2016 and is expected to finish next year, with LNG terminal in Greece since 2008 and the com-
commercial deliveries commencing in 2022. It pany reportedly wants a role in the development
will supply gas to local power plants and indus- of a second Greek regasification facility planned
try, including a new 615,000 barrel per day (bpd) in Alexandroupolis.
oil refinery that Kuwait National Petroleum Co. Snam has a 39.6% stake in DESFA, while Ena-
(KNPC) is building. gas has 13.2%. Belgium’s Fluxys also has 13.2%
Kuwait already imports LNG at its 5.8mn and the Greek government has 33%.
P12 www. NEWSBASE .com Week 50 16•December•2020
