Page 8 - Euroil Week 44 2019

EurOil PIPELINES & TRANSPORT EurOil
Design work begins at Bosnia- Croatia gas link
BOSNIA
A consortium led by UK-based consultancy Mott MacDonald has started designing a 160- km gas interconnector between Croatia and Bosnia which should offer the latter an alterna- tive to Russian gas.
Mott and its partners have already designed 40-km of the South Gas Interconnector Bos- nia-Croatia since beginning the work at the start of August, Bosnian gas utility BH-Gas reported on November 4. The gas link starts in Zagvozd in southern Croatia and runs to Posusje and Travnik in Bosnia, with a branch leading off to Mostar.
The Mott-led group were awarded a EUR1mn ($1.1mn) design contract in July, funded with a grant from the European Commission.
Bosnia sources practically all of its gas from Russia, but the new gas link would allow it to also tap supplies from an LNG import terminal under construction in Krk, Croatia.
The Krk project, which will import up to 2.6bn cubic metres per year of gas, took some time to get off the ground because over concerns over how much regional demand there would be for LNG. But a final investment decision was reached in February, with operations slated to start in 2021.
BH-Gas aims to have the new gas link up and running by 2023 or 2024. Croatia plans to construct a further 60 km of pipeline to Zagvozd from its coastal down of Split, facilitating future supplies from Krk.™
INVESTMENT
Hungary’s MOL buys into ACG project
AZERBAIJAN
The purchase will add 360-380mn barrels to MOL’s proven and probable reserves.
HUNGARIAN oil firm MOL is poised to land a stake in Azerbaijan’s biggest oil project through a $1.57bn deal with US major Chevron.
MOL said on November 4 it had struck a deal to buy Chevron’s 9.57% stake in the Aze- ri-Chirag-Gunashli (ACG) oil project – a clus- ter of oilfields operated by BP in the Caspian Sea. It will also secure Chevron’s 9.6% share in the Baku-Tbilisi-Ceyhan (BTC) pipeline, used to pump ACG’s oil to the Mediterranean coast where it can be loaded onto tankers for export.
MOL will pay Chevron $1.57bn for the assets, with the sale due to close in the second quarter of 2020 once it is cleared by regulators. It will then be backdated to January 1 this year.
In a statement, MOL CEO Zsolt Hernadi described the deal as a “significant milestone” in the company’s drive to build up its international exploration and production business. MOL will add around 360-380mn barrels per day of oil equivalent to its proven and probable reserves through the purchase, while also netting a 9.57% share of ACG’s output, which reached 584,000 barrels per day last year.
“With these new barrels we are also
strengthening our resilient, integrated business model, which will continue to generate robust cash flow to finance the MOL 2030 transforma- tional projects as well as rising dividends to our shareholders,” Hernadi said.
Reports first emerged that MOL was seek- ing Chevron’s share at ACG last month. Fellow US oil firm ExxonMobil is also looking for a buyer for its 6.8% stake, having hired Bank of America Merrill Lynch to handle the process. The pair first entered Azerbaijan shortly after it declared its independence from the Soviet Union in 1991, but are now looking to shed non-core international assets to focus more on domestic shale oil.
ACG has been in production since 1997 and is now past its prime, with output stead- ily declining. However, the project still enjoys low production costs, and BP and its partners believe a further 3bn barrels of oil can be recov- ered from the fields before their depletion. They recently approved a plan to add a seventh platform at the site at a cost of $6bn, and have discussed the development of ACG’s deeper gas reservoirs.™
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w w w . N E W S B A S E . c o m Week 44 07•November•2019