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staged a co-ordinated attack on Yukos in the sale from one of its major projects. It takes San-
early 2000s in order to bring its assets back under tos closer to a final investment decision (FID) on
state control, ordering Russia to pay $50bn in Barossa, which it deferred earlier this year owing
compensation to shareholders. Moscow has to the market downturn but now hopes to reach
been fighting the ruling ever since. by the first half of 2021.
In a fresh setback to Russia, the Dutch The two companies are also reported to have
Supreme Court “dismissed the Russian Feder- signed an agreement to jointly consider oppor-
ation’s application to suspend enforcement” of tunities for carbon-neutral LNG from Barossa.
the 2014 award until the court reaches its ver- The deal comes during a period where long-
dict. “The Supreme Court’s decision means that term supply agreements have become increas-
the former shareholders can continue to enforce ingly rare amid low LNG prices and a growing
the arbitral awards pending its final judgment.” number of options available to buyers. It illus-
Lawyers on both sides of the dispute will pres- trates that some appetite for striking long-term
ent their arguments to the court in early 2021, offtake agreements remains, and comes as a
the court said. This represents Russia’s last legal boost to other LNG producers that are still trying
avenue for reversing the award. to take their projects to FID.

If you’d like to read more about the key events shaping If you’d like to read more about the key events shaping
the former Soviet Union’s oil and gas sector then please the global LNG sector then please click here for
click here for NewsBase’s FSU Monitor . NewsBase’s GLNG Monitor .

GLNG: Asian bunkering success LatAmOil: Braskem Idesa blasts Cenagas
Two significant LNG-related developments have In Mexico, Cenagas, the state-owned operator
emerged from Asia in recent days. In a world first, of the country’s natural gas pipeline system, has
Korea Gas (KOGAS) successfully carried out a announced plans to halt shipments of feedstock
ship-to-ship LNG bunkering test in late Novem- to Etileno XXI, a unit of the Nanchital petro-
ber. KOGAS’ LNG carrier, SM Jeju LNG2, was chemical complex in Veracruz State. Braskem
connected a new LNG carrier built by Daewoo Idesa, the Brazilian-Mexican partnership that
Shipbuilding & Marine Engineering (DSME) with owns the plant, has protested against this move,
a capacity of 174,000 cubic metres for the test. calling it a “unilateral termination” that “may
“We believe this is a significant first step in have a material effect on the company’s operat-
creating and making a very successful market ing or financial results, depending on the timing
for LNG bunkering in the future,” KOGAS was of the stoppage.”
quoted by South Korean media as saying. It also reported that it had immediately sus-
Elsewhere, Australia’s Santos announced on pended operations at Etileno XXI after receiving
December 7 that it had signed a 10-year agree- notice from Cenagas, despite the pipeline oper-
ment to supply LNG from its proposed Barossa ator’s unwillingness to wait for 48 hours in order
project to Diamond Gas International, a unit of to allow for the safest possible shutdown. “[In]
Japan’s Mitsubishi. Under the agreement, Santos compliance with safety protocols, Braskem Idesa
will supply Diamond Gas with 1.5mn tonnes per initiated procedures for the immediate interrup-
year (tpy) of LNG. tion of its operating activities,” it said.
Santos’ CEO, Kevin Gallagher, said the deal The supply cut comes amidst a protracted
represented the company’s first long-term LNG dispute between Braskem Idesa and Pemex, the

Week 49 10•December•2020 www. NEWSBASE .com P7