Page 11 - GLNG Week 43

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Baltic Pipe clears last major hurdle as Denmark grants offshore permits
PROJECTS & COMPANIES
To cover the remainder of the demand, Poland is expanding its LNG terminal in Swinoujscie.
THE Danish government granted the Pol- ish-Danish gas pipeline project, the Baltic Pipe, construction permits for Denmark’s offshore territory on October 25.
The permits were the last important paper- work that the project’s operators – Poland’s Gaz-System and Denmark’s Energinet – needed to obtain before kicking off construction of the pipeline in 2020. The Baltic Pipe is a major ele- ment in Poland’s plan to wean itself off Russian gas, which currently covers around two-thirds of the country’s demand.
Poland has said a number of times it would not renew its long-term gas supply contract with Russia’s Gazprom, expiring in 2022, the year of the completion of the Baltic Pipe.
“The approval of the Danish government for the construction of the offshore part of Baltic Pipe is a key element for the project’s implemen- tation,” Tomasz Stepien, CEO of Gaz-System said in a statement.
“As to the project’s implementation, we are currently working on selecting the pipe supplier and the construction and installation works con- tractor,” Stepien also said.
The pipeline will transport gas from the Nor- wegian offshore fields operated by the Polish state oil and gas company PGNiG. Its capacity is expected at 10bn cubic metres (bcm) a year. That is around 55% of Poland’s current demand and 45%-47% of the forecast demand in 2023-2024.
To cover the remainder of the demand, Poland is expanding its LNG terminal in the northwestern port of Swinoujscie from 5 bcm to 7.5 bcm as well as planning a floating LNG terminal in the Bay of Gdansk by 2024.
With the new infrastructure coming online soon and the domestic production combined, Poland is hoping to become a regional gas exporter.
The cost of the Baltic Pipeline is estimated at €2.1bn ($2.3bn).™
Novatek reports record high profit following LNG-2 stake sale
PERFORMANCE
RUSSIA’S privately owned LNG producer Novatek reported record high profits of $5.95bn in the third quarter of this year thanks to an extra $5.7bn revaluation gain following the sale of a 30% stake in its Arctic LNG2 project to Chinese and Japanese companies earlier this month, the company said in a press release on October 30.
Novatek has been making steady progress in developing Russia’s LNG business and its stock has been a big winner, almost doubling in value last year.
The one-off gain won’t be repeated unless more stakes in the project are sold, and the underlying results were more mundane. Despite flat q/q gas production of 18.3bn cubic metres (bcm) the company’s sales were seasonally down with 0.4bcm build up in inventories, flat conden- sate and oil output to 3.0mn tonnes.
As a result natural gas sales including LNG amounted to 16.7bcm, which represents a 11% drop q/q, while liquids sales were 3% higher q/q at 3.06mn tonnes, reports BCS Global Markets.
Exports were down too, to 3.04bcm of LNG, a 16% drop q/q. That pushed third quarter reve- nues down by 12% q/q to $2.9bn – broadly in line
with consensus. However, the volatility on inter- national markets in the prices for gas (which are at historically low levels) and LNG were offset to some extent by stable domestic sales of gas.
The operating environment on international energy markets has been affecting the company’s business and its Ebitda was down by 18% q/q to $881mn, which is 3% above consensus.
Novatek’s free cash flow (FCF) in the third quarter stayed positive at $220mn with cash flow yield (CFY) around 1.4% amid zero change in capex q/q, reported BCS GM.
Net debt amounted to $2bn at the end of the third quarter and apart from FCF was affected by 1H 19 dividends payment.™
Week 43 31•October•2019 w w w . N E W S B A S E . c o m P11