Page 11 - FSUOGM Week 20

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Group (PipeChina) said in a May 16 statement that construction had started on a new LNG ter- minal in Yantai, Shandong Province. The facil- ity, which is set to enter service in 2023, will have an initial capacity of 5mn tonnes per year. This will be ramped up to 20mn tpy, though a time- line for this has not been provided. State-owned PipeChina is developing the facility jointly with Nanshan Group.
If you’d like to read more about the key events shaping the global LNG sector then please click here for NewsBase’s GLNG Monitor.
Latin American fuel shifts
Both Brazil and Mexico have been dealing with shifts in their domestic gasoline markets over the last week.
In Mexico, the retail fuel association Onexpo reported that gasoline consumption had dropped significantly as a result of the measures intro- duced to contain the coronavirus pandemic. The latest official data from the Ministry of Energy show that gasoline sales dropped to 538,000 bpd in the week ending on April 10, down by 32% on the figure of 797,000 bpd recorded for the week ending on March 20. Unofficial data indicate that consumption levels sank even further, falling to 319,000 bpd by late April.
The decline is likely to put pressure on fuel retailers, according to Grupo Arco, a company that operates a chain of 105 filling stations in Mexico. Nevertheless, US-based Valero has unveiled plans for expanding its downstream operations in that country. Last week, the firm said it wanted to add another 60 retail outlets to its chain in Mexico by the end of the year. Valero opened its first station in Mexico in January and has already brought the number of its outlets up to 40.
Meanwhile, Brazil is gearing up for the intro- duction of new specifications for E27 gasoline on August 3. The revised standards will affect
the fuel’s Research Octane Number (RON) and specific mass. According to Argus Media, the changes in these two categories are likely to make imports of unblended gasoline more expensive, since suppliers will have to use denser gasoline components that have higher octane ratings in order to comply with specifications.
These expectations have helped to widen the price gap between domestically produced gaso- line and imported gasoline. As a result, Brazilian importers are showing considerably less interest in bringing fuel into the country in June or July.
If you’d like to read more about the key events shaping the Latin American oil and gas sector then please click here for NewsBase’s LatAmOil Monitor.
Middle Eastern cutbacks
This week focuses on what might be a surpris- ing development in the oil market: the dramatic response of OPEC+ to the oil price crash by its embarking on an unparalleled programme of production cutbacks. The depth of these cuts was such that the secretary-general of OPEC expressed confidence that the worst of the oil crisis could be over. A month on from the nadir of the oil price, this is a striking view.
A second theme is the evaluation of two recent developments in the gas market. With the ripples of the oil market crash now spread- ing to its gas counterparts, Qatar may have to choose between curbing LNG output and risk- ing a market share battle that hurts gas prices. Although it has an edge over rival LNG pro- ducers, it may have no choice but to cut output. At the same time, rival moves for energy rights involving Turkey, Greece and Cyprus are afoot in the Eastern Mediterranean and Black Sea; these moves include the EastMed pipeline deal sailing through a Greek parliamentary committee.
The notable first action of the new govern- ment in Iraq will no doubt test its mettle and
A growing number of US LNG cargoes are thought to be reaching China
as the Asian country cautiously restarts its economy.
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