Page 9 - AfrOil Week 32

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This comes as Train 2 at Gorgon remains offline (CGC) has joined YPF, the national oil company
for repairs after an inspection of that train’s pro- (NOC), in the ranks of companies offering a
pane heat exchangers during planned mainte- bond swap.
nance found weld quality issues and cracks in Last week, the independent oil and gas
the equipment. firm revealed that it was looking to tender an
The US-based super-major previously said exchange of $300mn worth of senior unsecured
Train 2 would be returned to service in Septem- bonds due to mature in 2021 for securities that
ber. But the Australian Manufacturing Workers will be repaid in 2025. The move led Fitch Rat-
Union has voiced fears that the cracks may not be ings to downgrade CGC; the agency explained
reparable and may require the heat exchangers to its decision by saying that the company appeared
be replaced altogether. to be taking this step in the hope of avoiding a
Western Australia’s Department of Mines, default on its 2021 notes.
Industry Regulation and Safety said the inspec- In other news, Russia and Argentina are mov-
tion orders for Trains 1 and 3 had to be carried ing forward with plans for joint production of
out before August 21. It is not yet clear whether steel pipes for oil and gas projects.
Chevron may have to shut down the trains in Ricardo Lagorio, Argentina’s ambassador
order to carry out the inspection – and effect any to Moscow, told Sputnik earlier this week that
necessary repairs – but the order raises the pros- Tenaris, an international company founded in
pect that the whole plant could be shut down. Argentina, and Russia’s Severstal were working
This comes as the LNG market continues to together to build a new welded pipe plant in
struggle to absorb a global oversupply, which has Western Siberia. The facility is due to begin pro-
been exacerbated by the hit to demand from the duction next year and will reach full capacity in
coronavirus (COVID-19) pandemic. Indeed, 2024, Lagorio said.
other LNG producers may welcome an outage at Elsewhere in Latin America, Mexico’s
Gorgon. And elsewhere in the world, the current national electricity provider CFE is under fire
market oversupply is not stopping LNG opera- for burning residual fuel oil at a plant near the
tors from moving forward with liquefaction capital that contravened regulations pertaining
capacity expansions that were already underway to maximum sulphur content. Shortly after a
before the pandemic hit. Reuters report brought the utility’s violations to
Among those companies reporting progress light, a Mexican Nobel Prize winner called for
recently are Cheniere Energy, which is now a ban on the use of heavy fuel oil in power gen-
anticipating bringing Train 6 at its Sabine Pass eration. Residual fuel oil is plentiful in Mexico,
LNG terminal on the US Gulf Coast into service as the country produces large amounts of heavy
earlier than previously announced, in the second crude oil.
half of 2022. Meanwhile, Kinder Morgan said it
would be ready to bring the ninth of 10 small- If you’d like to read more about the key events shaping
scale liquefaction trains at its Elba Island LNG the Latin American oil and gas sector then please click
terminal in Georgia online this week. And Train here for NewsBase’s LatAmOil Monitor.
3 at Cameron LNG, also in the US, started com-
mercial service this week. Middle East: Aramco’s quiet week
It has been a quiet week, with companies
If you’d like to read more about the key events shaping throughout the region returning to work fol-
the global LNG sector then please click here for lowing the Eid al-Adha break. The big news
NewsBase’s GLNG Monitor. was Saudi Aramco’s Q2 earnings update, which
showed that the company’s net income had
Latin America: Argentina bond swap offer dropped by a full 50% during the first half of the
Argentina’s Compañía General de Combustibles year, with Q2 $10bn lower than Q1.

Week 32 12•August•2020 www. NEWSBASE .com P9