Page 7 - Euroil Week 40 2019
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EurOil COMMENTARY EurOil
which has seen output plummet over the past 18 months because of natural decline and techni- cal glitches. It will also be transformational for Lundin, the field’s original discoverer, which produced a mere 68,700 bpd of oil and 8,800 barrels of oil equivalent per day of gas in the rst half of 2019.
Its developers were able to capitalise on low oil prices to help bring down its development costs. According to Equinor, the eld will have a break-even price of less than $20 per barrel, with operating costs at below $2 per barrel. It has fore- cast cash ow from operations of around $50 per barrel in 2020, assuming a moderate oil price of $70perbarrel,thankspartlytothephasingoftax
payments while output is expanded. Compared with most other North Sea
elds, Johan Sverdrup’s oil is unusually heavy, with an API gravity of 28. It also has greater sulphur content of 0.80% than Forties, the largest of the five grades that make up the Brent benchmark.
Equinor has also touted the eld’s green cre- dentials. It will be powered from land, cutting greenhouse gas emissions by as much as 90%. Emissions of 0.67 kilos of carbon dioxide per barrel are expected from production – among the lowest in the world. is contrasts with a 9-kg average for Norway and 18-kg average globally.
PIPELINES & TRANSPORT
Hungary to tap Romanian gas next year
HUNGARY
The new compressor station will allow the annual ow of 1.75 bcm of Romanian gas to Hungary.
FGSZ, the gas transmission arm of Hungary’s MOL has inaugurated a HUF6bn (€18mn) com- pressor enabling the reverse ow of up to 1.75bn cubic metres gas from Romania.
e facility is positioned at a cross-border pipeline in southeast Hungary near the border town of Csanadpalota. It is currently owing gas from Hungary to Romania at its full capacity of 0.6 bcm per year. It will be able to pump 1.75 bcm of gas in both directions by mid-2020, Hungar- ian Minister of Foreign A airs and Trade Peter Szijjarto said at the ceremony.
The compressor project will serve a role in establishing the BRUA (Bulgaria-Roma- nia-Hungary-Austria) energy corridor, which will deliver Romanian and other sources of gas to Central European markets. Romania, currently a net importer of gas, will have a surplus available for export in the coming years a er the start-up of several Black Sea elds.
One of these projects, Neptun Deep, is oper- ated by OMV and ExxonMobil. The pair are
yet to take a nal investment decision (FID), with OMV complaining that Romanian leg- islation approved last year has undermined Neptun Deep’s economics. Bucharest has been back-tracking on some of these reforms, however.
Hungary has already established two-way interconnectors with Slovakia and Croatia. And construction of a third with Serbia could start as early as next year, with completion targeted for the end of 2021.
Hungary’s government is in talks on the acquisition of a 25% stake in an LNG terminal under development o the Croatian island of Krk – tipped as a potential source of supply for the Hungarian market.
Hungary’s interconnectors have helped make its gas supply more secure and more exible, MOL CEO Zsolt Hernadi commented at the cer- emony. MOL is also expanding and maintaining gas reserves for this purpose, at an annual cost of €200mn, the company head said.
Week 40 10•October•2019 w w w . N E W S B A S E . c o m P7
