Page 11 - AsianOil Week 06 2022

AsianOil EAST ASIA AsianOil

Rosneft clinches deal for oil

supplies to China via Kazakhstan

POLICY RUSSIA’S Rosneft has struck a deal with China’s geared to sending their oil westwards.
CNPC on the delivery of 200,000 barrels per day Kazakhstan’s government expressed a desire
(bpd) of oil to China via Kazakhstan, represent- to reverse this trend in 2019, in order to reduce
ing an extension of an existing agreement due to the country’s reliance on export routes via Rus-
expire at the end of 2023. sia, and on European customers such as Italy, the
Deliveries will be made via Kazakhstan’s Netherlands, Switzerland and France, where oil
Atasu-Alashankou pipeline to refineries in demand has stagnated. In contrast, China is the
north-west China. At present the pipeline only world’s fastest-growing oil market.
sends 20,000 bpd of Kazakh oil to China, even The government suggested that the flow direc-
though it has a capacity of 400,000 bpd. And so it tion of the Kenkiyak-Atyrau pipeline could be
has been repurposed for handling Russian tran- reversed to allow for more oil from the country’s
sit volumes. west to be sent to China. But there has so far been
Rosneft now has a 7% share of the Chinese only limited progress in implementing this plan.
oil market, but the bulk of its deliveries to the Rosneft extended the deal with CNPC dur-
country are made via the Eastern Siberia-Pacific ing Russian President Vladimir Putin’s visit to
Ocean (ESPO) pipeline. There have been issues Beijing for the Winter Olympics, where he met
with capacity constraints at ESPO in recent years, with Chinese counterpart Xi Jinping. China
however, meaning that Rosneft has resorted to and Russia signed several other energy deals,
sending more oil via Kazakhstan. and stressed the need for closer political ties
Kazakhstan used to send much more of its oil amid heightened tensions between both coun-
to China – in 2012 shipments amounted to nearly tries and the West. The highlight was a new gas
240,000 bpd. But many of the fields that exported supply deal reached between CNPC and Russia’s
their production eastwards are now mature, Gazprom, which will underpin the development
whereas the country’s main growth projects such of a new export route for Russian gas to China
as Tengiz, Karachaganak and Kashagan are also in the Far East.™

OCEANIA

Shell outlines QGC drilling plans

INVESTMENT ROYAL Dutch Shell has unveiled plans for methane (CBM), known locally as coal-seam gas
the next phase of onshore gas development in (CSG), in the Surat Basin. According to Shell’s
Queensland, Australia, alongside its partners in website, QGC’s operations include more than
the QGC joint venture. 3,000 production wells and six central process-
In a February 8 statement, Shell said QGC ing plants, as well as the two-train LNG export
would drill and connect around 145 new wells terminal.
in the Western Downs region of Queensland QGC needs to keep drilling new CBM wells
between now and 2024. The wells will be con- in order to maintain feed gas flows to QCLNG
nected to existing gas-processing plants, adding and to its domestic customers. The company
QGC needs to keep around 210 petajoules (5.5bn cubic metres) of previously launched major new phases of drill-
drilling new CBM wells gas output over the next 15 years. The gas will ing in 2015 and 2018. QCLNG will also buy gas
in order to maintain be used to supply both the Australian domestic from Shell’s Arrow Energy joint venture with
feed gas flows to market and the international market, via the PetroChina. Arrow is also developing CBM
QCLNG and to its Queensland Curtis LNG (QCLNG) plant on resources in the Surat Basin, in a project worth
domestic customers. Curtis Island. AUD10bn ($7.2bn), but faces strong opposition
“Gas will be crucial to the energy transi- from some Queensland landowners, who have
tion, allowing the integration of greater levels alleged that unauthorised drilling has taken place.
of renewable energy here and overseas, and a This is playing out as Australian LNG exports
vital part of Shell’s strategy to provide more and have risen to record highs. Consultancy Ener-
cleaner energy solutions to supply the world’s gyQuest said in January that Australian LNG
energy needs,” stated Shell Australia’s chairman, exports had reached a record 80.9mn tonnes in
Tony Nunan. 2021, up 3.7% on 2020. The consultancy also said
China National Offshore Oil Corp. that QCLNG and nearby Australia Pacific LNG
(CNOOC) and Japan’s Tokyo Gas are also part- (APLNG) were operating at 100% of their name-
ners in QGC. The joint venture taps coal-bed plate capacity last year.™

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