Page 10 - AsianOil Week 06

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Indonesia to halt LNG exports to Singapore in 2023
POLICY
INDONESIA has confirmed plans to end lique- fied natural gas (LNG) exports to Singapore once its current supply agreement ends in three years.
The Energy and Mineral Resources Min- istry said on February 7 that LNG shipments to Singapore would stop in 2023 and that the gas would be diverted to meet domestic demand instead.
The Jakarta Post quoted the head of down- stream regulator BPH Migas, Fanshurullah Asa, as saying that the decision could help reduce the country’s trade balance by displacing some domes- tic oil demand. The Indonesian government has already limited state-owned Pertamina’s crude import quota for this year, forcing the company to open talks with local oilfield contractors to increase its purchases of domestic crude.
Indonesia’s gas shipments to Singapore are sourced from the Suban field in the ConocoPhil- lips-operated onshore Corridor Block, which deliv- ered 833mn cubic feet (32.59mn cubic metres) per day in the first nine months of 2019, according to data from upstream regulator SKK Migas.
The ministry said that once the supply con- tract with Singapore expires, the gas will be dis- tributed to industrial estates in the Sei Mangkei Special Economic Zone (SEZ) in North Sumatra via the Dumai-Duri pipeline.
The decision to divert gas supplies away from the export market was first revealed in Novem- ber, when Energy Minister Arifin Tasrif said in
an official statement that there were no plans to renew the contract with Singapore.
Indonesia’s change in priorities comes as domestic demand outpaces available supply. Despite major new projects such as Repsol’s Sakakemang, BP’s Tangguh Train 3 and Chev- ron’s Indonesia Deepwater Development (IDD), all slated to come on stream within the next three to four years, these projects are only expected to delay Indonesia’s eventual emergence as a net LNG importer.
SKK Migas head Amien Sunaryadi told Bloomberg in November that LNG exports were anticipated to drop from 267 cargoes in 2014 to just 200 cargoes in 2019. Sunaryadi said that domestic commitments could rise from 31 cargoes in 2014 to 58 cargoes in 2019.
The regulator estimates that gas supply ear- marked for domestic buyers will climb from 22.7tn cubic feet (642.86bn cubic metres) in 2014 to 23.4 tcf (662.69 bcm) in 2019.
Sunaryadi said LNG export contracts that expired last year would not be extended.v
EAST ASIA
PetroChina reportedly plans refinery run cuts
PROJECTS & COMPANIES
STATE-RUN PetroChina reportedly intends to cut its refinery runs by 320,000 barrels per day (bpd) in February because of the spread of the coronavirus.
Reuters quoted an unnamed senior company executive on February 10 as saying that the cut was equivalent to almost 10% of PetroChina’s average processing rate of 3.32mn bpd. The official added that the cuts were likely to rise to 377,000 bpd in March.
“The production cuts are mostly on refineries in northeast and north China, where demand is hit harder than in the western parts of the coun- try,” the official said. “We’re monitoring the market on a daily basis. But from what we’ve observed now, there seems little chance for a fuel demand recovery in March.” PetroChina is reportedly talking with key long-term suppliers
about either deferring cargo loadings or trim- ming loading volumes.
The news of PetroChina’s decision to cut refinery runs comes exactly a week after Reuters reported that Sinopec had made a similar decision. The newswire said on February 3 that Asia’s largest refiner had decided to curb February throughput by around 600,000 bpd, equivalent to 12% of its average daily throughput of 5mn bpd in 2019. An unnamed Sinopec refinery executive said the cuts would likely be extended into March.
A Sinopec spokesperson told the newswire that the company was “closely monitoring the changing market situations, and will optimise operation rates and product mix based on mar- ket demand.”
Global energy consultancy Rystad Energy has slashed its global oil demand growth forecast
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w w w. N E W S B A S E . c o m Week 06 12•February•2020