Page 9 - AsianOil Week 25 2021

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Gazprom reveals Chinese gas supply details

PIPELINES & RUSSIA’S Gazprom has for the first time pub-
TRANSPORT licly disclosed how much it is earning from
natural gas supplies to China via the Power of
Siberia pipeline.
In an investor presentation on June 17, Gaz-
prom’s deputy chairman Famil Sadigov said the
company had delivered 4.1bn cubic metres of gas
to China in 2020 and earned RUB44.3bn ($608mn) China was meant to take 5 bcm per year of
from those sales. This means that Gazprom sold its gas from Russia last year, but likely took less
gas to China’s CNPC at an average price of around than that because of the coronavirus (COVID-
$150.2 per 1,000 cubic metres last year. 19) pandemic’s impact on demand. According
This is more than the price that Gazprom to Sadygov, Gazprom expects to ship 8.5 bcm
set for its gas supplies to Europe in 2020. Its gas per year of gas to China in 2021 and double
sold in non-CIS markets for only $143 per 1,000 its revenues. This means China is taking the
cubic metres during the year. minimum amount of gas from Russia under
Gazprom signed a 30-year deal to supply current obligations.
gas to China in 2014. These deliveries began in The latest information means that Russian
December 2019, when the 3,000-km Power of gas is competitive versus other supplies that
Siberia pipeline was brought online. Supplies are head to China. According to Chinese cus-
set to ramp up to 38 bcm per year by 2024. toms data, China paid $180 per 1,000 cubic
The contract indexes gas prices to the price metres for Uzbek gas in 2020, $210 for Turk-
of oil products with a nine-month lag, although men gas, $340 for Myanmar gas and $230 for
Gazprom and CNPC have never disclosed the LNG imports. The cheapest LNG during the
pricing formula. It also includes a take-or-pay year came from Nigeria and Malaysia and was
provision that means that China must pay for priced at around $200 per 1,000 cubic metres,
85% of agreed volumes each year, whether it while the most expensive came from Qatar at
takes that much or not. $275 per 1,000 cubic metres.™

South Korea seeks to strengthen

UAE relations with loan

POLICY THE Export-Import Bank of Korea (Eximbank) Korean companies have won a total of $6.8bn
this week announced that it had agreed to worth of contracts from ADNOC since 2017.
lend $5bn to the Abu Dhabi National Oil Co. ADNOC has collaborated for decades with
(ADNOC) in a move to strengthen ties further Asian IOCs to develop its oil and gas reserves,
between South Korea and the UAE. with recent E&P deals signed with Japan’s
Under a framework deal agreed between the Cosmo and Thailand’s PTT E&P and a broad
parties, Eximbank will provide ADNOC with agreement signed in March with Malaysia’s Pet-
project finance for developments for which ronas to explore opportunities throughout the
Korean firms are contracted. oil and gas value chain.
The deal was signed during a meeting Korean IOCs are involved in various upstream
between HE Dr. Sultan Al Jaber, ADNOC man- projects alongside ADNOC, with Korea National Oil
aging director and group CEO, and Eximbank Co. (KNOC) holding a 30% stake in the Al Dhafra
CEO Bang Moon-kyu in Abu Dhabi. Petroleum joint venture and with GS Energy own-
Bang said that the deal “is expected to ing a 10% stake in the JV as well as a 3% stake in the
strengthen a co-operative relationship between sprawling ADNOC Onshore concession.
the two institutions. Eximbank’s various finan- Meanwhile, South Korea’s NH Investment &
cial programmes will continue to help expand Securities Co. is a member of a consortium led by
Korean companies’ overseas contracts”. Global Infrastructure Partners (GIP) and Brook-
Representatives of Eximbank told local media field Asset Management that last year acquired
that the loan was expected to provide a platform a collective 49% stake in ADNOC’s natural gas
for Korean companies to develop stronger ties pipelines division for $10.1bn. The gas subsidi-
with counterparts in the UAE as well as others ary holds lease rights to 38 gas pipelines covering
in the region. According to the Korea Herald, a total of 982 km.™

Week 25 24•June•2021 www. NEWSBASE .com P9