Page 17 - MEOG Week 46

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The project’s second phase was expected to raise at the conference. “We start with a [1mn barrel]
liquefaction capacity from 2.5mn tonnes per refinery behind us, and the relationship with
year (tpy) to 10mn tpy. Reporting its third-quar- [Vitol Tank Terminals International] allows us
ter results, though, Kosmos said the expansion access to locations all over the world.”
would add only 2.5mn tpy, bringing the total to
5mn tpy. If you’d like to read more about the key events shaping
The revised capacity represents “the sweet the downstream sector of Africa and the Middle East,
spot for leveraging all the major infrastructure then please click here for NewsBase’s DMEA Monitor.
from phase one,” Kosmos CEO Andy Inglis told
investors in an earnings call. Europe: UK drilling slump
The second phase will utilise spare capacity UK crude oil and natural gas production is slated
at the subsea infrastructure already being devel- to fall this year as drilling slumps to its lowest
oped for the first phase, Inglis explained. Rather level since the 1970s, Oil and Gas UK (OGUK)
than requiring a new floating production storage warned in a report on November 11.
and offloading (FPSO) unit, the first-phase ves- Overall activity has dropped sharply as a
sel will instead be expanded. A second gas export result of low oil and gas prices and restrictions
line from the FPSO to the hub terminal will also related to the coronavirus (COVD-19) pan-
no longer be required. demic. Only 54 wells were drilled in the first UK oil and gas
“As a result, we believe phase two will be 10 months of the year, compared to 112 for the
the most competitive brownfield LNG expan- whole of 2019. Only six exploration wells were drilling is slated
sion project globally,” Inglis said, “with limited completed during the period, and it is possible to fall this year
upstream capital requirements expected to be there will be no more this year, OGUK said.
less than $1bn gross to first gas.” The recovery will not happen overnight, the to its lowest level
Breakeven costs for this LNG are projected association has warned. It estimates that pro-
to come to just above $4 per mmBtu for Asian jects shelved during the downturn could take since the 1970s
deliveries and even less for European ones, three years to be restarted, with around the
thanks to the lower capital costs. same amount of time needed for investment to
Over in the UAE, national oil company rebound to pre-crisis levels. The drilling and rig
(NOC) ADNOC said on November 9 it intended companies needed to implement these projects
to start trading refined products in December are also in dire shape, OGUK said, noting that
through its joint venture with Italy’s Eni and many were undergoing bankruptcy proceedings.
Austria’s OMV. ADNOC Global Trading (AGT) All this undermines the UK North Sea’s
is 65%-owned by ADNOC, 20% by Eni and 15% competitiveness versus other basins, the asso-
by OMV. The recently-formed venture began ciation continued, and highlights the need for a
derivatives trading in September with a focus so-called North Sea transition deal to help oper-
on crude oil. It had hoped to launch trading ators get through the downturn and develop
operations in the second quarter of this year, but cleaner energies. The government has said it will
the coronavirus (COVID-19) pandemic led to publish the deal within the current parliament,
delays. but OGUK is hopeful that it will arrive shortly,
“Next month, we will begin trading the full possibly by the end of the year.
portfolio of our refined products,” ADNOC CEO In Norway, ConocoPhillips and its Polish
Sultan al-Jaber said at the ADIPEC conference. partner PGNiG have made a “substantial” gas
ADNOC has global ambitions for AGT. discovery in the Norwegian Sea, with an esti-
“The plan is to grow into Singapore, Europe and mated size of between 8mn and 30mn cubic
potentially gain a presence in the US,” ADNOC’s metres (50-189mn barrels) of recoverable oil
director for marketing, supply and trading said equivalent.

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