Page 16 - GLNG Week 42

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Zhai Cuiping as saying on October 20.
Zhai said domestic and imported gas prices
had soared, with the state-owned daily report-
ing that domestic gas prices are in line with those
on the international market. The paper said
the week’s average ex-factory LNG prices had
climbed by 10.37% from the previous week to
CNY3,114 yuan ($468) per tonne.
“Temperatures in northern China have
dropped significantly, and some cities even
experienced rain and snow. A very cold winter
is likely on the horizon, which will drive LNG week, expanding 9.18 percentage points com-
demand for city gas firms,” Zhai added. pared with the same period last year.”
SCI99 analyst Feng Haicheng said: “Since The analysts were confident that imports
some regions in northern China have already would continue to rise this year, supporting
entered the winter heating season, it is now a domestic prices in the process.
tight balance between supply and demand in the SCI99 analyst Zhang Rongrong said: “Look-
natural gas market.” ing ahead, with the gradual decrease in temper-
The analyst added: “Utilisation rates of 141 ature and more cities entering the winter heating
domestic LNG factories reached 63.18% this season, LNG prices will likely remain bullish.”™

South Korean yard wins $1.7bn

order for Arctic LNG-2 carriers

PIPELINES & SOUTH Korea’s Daewoo Shipbuilding & Marine
TRANSPORT Engineering (DSME) has received orders worth
$1.7bn for six Arc7 LNG carriers (LNGCs)
that will serve Novatek’s Arctic LNG-2 project
in northern Russia, Kommersant reported on
October 15 citing sources.
The orders were placed by Russian ship-
owner Sovcomflot and Japanese counterpart
MOL, which will charter the vessels out to Arctic
LNG-2, according to the newspaper. DSME con-
firmed the orders in a filing on the Korea Stock
Exchange, without disclosing the customers.
They will be delivered between July and Decem- The Arc7 LNGCs will
ber 2023. be built at Zvezda as part of its import substitu- serve Novatek’s Arctic
The vessels’ cost, which is $283mn each, tion drive. Changes to the country’s merchant LNG-2 project in
is 15% lower than similar ships ordered for shipping code have even banned the use of for- northern Russia.
Novatek’s Yamal LNG plant, which went online eign-flagged and foreign-built vessels to trans-
in late 2017. This reflects the weaker conditions port oil and gas along the Northern Sea Route
in the market for ship construction, as a result (NSR) in the Arctic.
of the economic fallout from the coronavirus However, Novatek and its partners have man-
(COVID-19) pandemic. aged to secure exemptions, after raising concerns
Arctic LNG-2 is due on stream in 2023 and that this restriction will slow the pace of develop-
will produce 19.8mn tonnes per year (tpy) of ment plans. The 15-strong fleet of LNGCs used at
LNG at full capacity. Novatek is partnered at the Yamal LNG were all built at foreign yards, and 10
project with France’s Total, China’s CNPC and ships needed for another of Novatek’s upcoming
CNOOC and Japan’s Mitsui and JOGMEC. projects, Obsk LNG, will also be built overseas.
A further 15 LNGCs for Arctic LNG-2 have A final investment decision (FID) on Obsk
been ordered by a joint venture between Novatek LNG had been expected this year but has been
and Sovcomflot, at Russia’s Far Eastern Zvezda delayed in light of the collapse in global gas
shipyard. The pair secured financing to build the prices as a result of the pandemic.
fleet from state development bank VEB.RF last Constructing vessels at Zvezda is also costlier
month. than in South Korea, with VEB.RF estimating
Russia’s government has been pushing for last year that each of the Arctic LNG-2 LNGCs
more vessels used in the oil and gas industry to ordered there would cost $330mn.™

P16 www. NEWSBASE .com Week 42 23•October•2020