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Meanwhile, US lawmakers are seeking to in 2013.
impose additional sanctions on Gazprom’s Gazprom’s reappraisal of the high-cost and
Nord Stream 2 gas pipeline to Germany, in a challenging project is oddly timed, given that
last-ditch attempt to prevent the project’s com- global gas prices are at their lowest level in
pletion. US Senators Ted Cruz, a Republican, decades.
and Jeanne Shaheen, a Democrat, are reportedly An investigation by Russian news outlet
to be planning to introduce a bill this week on Lenta.ru has meanwhile cast doubt on Gaz-
new measures. prom’s ability to deliver on its existing supply
Further US pressure is unlikely to make a commitments to China. The report claimed the
difference at this stage. Sanctions imposed by company risked losing $20bn and would strug-
Washington last December led to Swiss-based gle to fulfil its 2014 supply deal with China’s
contractor Allseas abandoning the pipeline, with CNPC after overestimating the capacity of its
just 6% of its offshore section left to complete. production sites in Eastern Siberia. Russia’s
Russia is preparing to finish the job with its own In Kazakhstan, Chevron has announced that
pipelaying vessel, which is currently moored at 20,000 workers or two thirds of the workforce Gazprom, by far
a German port. It is hard to see how additional at the giant Tengiz oilfield will be demobilised Europe’s biggest
sanctions could therefore thwart construction. following a COVID-19 outbreak. The move will
Washington could threaten measures against likely affect work on an expansion project, which gas supplier,
companies hoping to buy gas supplied by Nord is already running a year behind schedule.
Stream 2. But Germany would strongly oppose has also cut
such a move, viewing it as US interference in If you’d like to read more about the key events shaping
what Berlin has insisted is “a purely commercial the former Soviet Union’s oil and gas sector then please shipments via
project.” click here for NewsBase’s FSU Monitor . other routes

If you’d like to read more about the key events shaping LNG giant pushing ahead as others hold including
Europe’s oil and gas sector then please click here for back
NewsBase’s EurOil Monitor . Even as US LNG exports decline, the back- Ukraine.
ers of the Golden Pass LNG project, which is
Further Russian losses under construction in Texas, have requested
Gazprom Neft has become the latest Russian oil authorisation to expand the capacity of the
and gas producer to post a net loss for the first terminal. This is perhaps not surprising con-
quarter on low prices and ruble devaluation. sidering the project is majority-owned by
Rosneft and Novatek also slipped into the red Qatar Petroleum (QP), which is also aggres-
for similar reasons. sively pursuing the expansion of its domestic
While blessed with low production costs, LNG export capacity. QP owns a 70% stake in
Russian companies are having to cut their cap- Golden Pass LNG, while ExxonMobil holds
ital expenditure to protect their earnings, much the remaining 30%.
like their international peers. After all, the profits The partners are seeking permission to boost
of state firms serve as a key source of revenue for the capacity of Golden Pass LNG to 18.1mn
the Russian government. VTB Capital expects tonnes per year (tpy), from 15.6mn tpy previ-
Gazprom Neft to reduce its full-year overall cap- ously. They say the increase “does not involve
ital expenditure by around 25% from its initial any equipment changes or environmental per-
guidance, to RUB335bn ($4.8bn). mit adjustments”, and would be achieved via
Despite the market collapse, parent company “production efficiencies”.
Gazprom is counting on strong gas demand Separately, QP announced this week that it
growth in the long run. It recently launched the had signed $19bn worth of order for LNG ships
planning phase for a second pipeline to China, from South Korean shipbuilders Daewoo Ship-
and also revealed last week it had resumed devel- building & Marine Engineering, Hyundai Heavy
opment studies for the offshore Shtokman gas Industries Holdings and Samsung Heavy Indus-
field in the Russian Arctic – a project it tried to tries. This marks the largest ever single LNG
advance for more than a decade before shelving vessel order, covering more than 100 ships to be

Week 22 04•June•2020 www. NEWSBASE .com P9