Page 7 - EurOil Week 47

EurOil PIPELINES & TRANSPORT EurOil
Gunvor to market Commonwealth LNG output
GLOBAL
EUROPEAN-HEADQUARTERED Gunvor Group agreed this week to double the maximum amount of LNG that it would buy from the pro- posed Commonwealth LNG project in Lousiana, on the US Gulf Coast.
The commodity trader said in a Novem- ber 25 statement that it had agreed to help Commonwealth LNG to secure binding LNG offtake and gas supply agreements for the full capacity of the planned facility. It will also buy up to 3mn tonnes per year of LNG from the project, which would have a total capacity of 8.4mn tpy itself.
A final investment decision (FID) could be made on the $4bn Commonwealth LNG in the first quarter of 2021, with exports then starting in the second quarter of 2024.
The deal with Gunvor allows Common- wealth to shift the burden of finding buyers on to a third-party marketer, differentiating the pro- ject from other LNG export facilities. It comes as developers are increasingly willing to explore new models for securing enough offtakers to justify building new projects. Competition in the market is intensifying as new supply comes
online, while buyers are pushing for more flexi- bility in how they secure volumes.
Meanwhile, commodity traders are becom- ing more prominent in the LNG trade, with the fuel being increasingly commoditised. Com- monwealth’s president and CEO, Paul Varello, described Gunvor as the most active LNG trader in the world. Indeed, Gunvor is on course to lead LNG ship charters this year. The combination with Gunvor “ultimately differentiates Com- monwealth from every other US LNG project currently chasing FID”, Varello added.
“In this highly competitive market, it is crit- ical for companies – particularly ones pursuing an LNG greenfield project – to recognise their core competencies and strengths,” Gunvor’s co-head of LNG trading, Kalpesh Patel, said in a statement. “Commonwealth LNG’s engineering and procurement team is best in class. And now, with the comprehensive support of Gunvor’s LNG and US Gas marketing team, Common- wealth LNG will excel not only at controlling costs and project execution, but also at commer- cialising their project and creating the lowest cost offering on the US Gulf Coast.”™
PERFORMANCE
Turkey’s natural gas imports and consumption down in September
TURKEY
TURKEY imported little more than 3bn cubic metres (bcm) of natural gas in September, a 7.4% decline on an annual basis, data from energy reg- ulator EPDK showed on November 26.
The country’s gas consumption plunged by 20.4% to 2.63 bcm from around 3.30 bcm in September 2018.
The decline in natural gas imports and con- sumption is almost certainly related to unusually warm weather, which is bad news for gas distri- bution companies facing lower revenues from lower consumption.
Some 2.47 bcm of natural gas imported in September was supplied via pipelines, while 0.57 bcm was delivered in the form of LNG.
Russia was the largest supplier of natural gas with 1bcm, followed by Azerbaijan with 819mn cubic metres. Iran delivered 648mn cubic metres of natural gas to Turkey in the month.
The amount of natural gas in storage decreased nearly 1.2% y/y to 3.24 bcm in Sep- tember while the country’s natural gas produc- tion increased to 37.2mn cubic metres from 36.5 mcm in September 2018.
In late October, Turkey’s Botas was reported to be seeking 70 LNG cargoes for delivery in 2020-23. A tender for the cargoes was report- edly issued shortly after the US lifted sanctions against Turkish ministries, including the energy ministry, and senior government officials, clos- ing on November 8. The sanctions had been imposed earlier in October in response to Tur- key’s military offensive in northern Syria.
Botas buys LNG on a long-term basis from Nigeria and Algeria. However, its contract with Nigeria is due to expire in 2021, while a deal with Algeria’s Sonatrach runs until late 2024.
The country is attempting to reduce its dependence on pipeline gas imports from Rus- sia, including by seeking new sources of LNG.™
Week 47 28•November•2019 w w w . N E W S B A S E . c o m P7