Page 10 - AsianOil Week 19 2022

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Chinese yards to stop work

on modules for Arctic LNG 2

PROJECTS & CHINESE yards are reportedly set to halt work work on modules for Train 3 of Arctic LNG 2
COMPANIES on modules for the Novatek-led Arctic LNG 2 was halted on April 29, and work on Train 2 is
project in Russia by the end of May. This comes due to follow by May 27. Train 2 is reported to be
amid increasingly strict Western sanctions tar- around 40% complete, and Train 3 is at less than
geting the Russian economy – including the 10% completion. Train 1 is thought to be at least
country’s energy sector – in the wake of the war 85-95% complete.
in Ukraine. The last delivery of modules for the project
Modules for the LNG facility are being pre- from China took place in February, days before
fabricated across several Chinese yards. Some Moscow launched its invasion of Ukraine. A
yards, including Penglai Jutal Offshore Engi- 12-tonne module was delivered via the North-
neering (PJOE) and Cosco Shipping Heavy ern Sea Route (NSR) in what was the first such
Industry, have completed construction on their voyage using the route that late in the winter. The
components for Arctic LNG 2 and are await- vessel carrying the module reportedly departed
ing instructions from France-based contractor Tianjin, China, on December 29, entered the
Technip Energies on shipping them. However, NSR at Cape Dezhnev on January 25, and arrived
construction remains ongoing at other yards, at the site of Arctic LNG 2 on February 17.
including Bomesc. Given the work stoppages in China, and the
Under the EU’s fifth sanctions package, Euro- fact that TotalEnergies, which has a 10% stake
pean companies face a firm deadline of May 27 in Arctic LNG 2, is withholding further funding
to conclude any outstanding deliveries. With the from the project, the chances of it coming online
deadline fast approaching, it seems increasingly as previously planned look increasingly slim.
unlikely that already completed modules can still Technip’s compliance with sanctions means it
be transported from China to the assembly site will likely have to hand over its $7.6bn contract
in Russia. for Arctic LNG 2, in what would likely be a com-
Industry outlet Upstream has reported that plicated process.™

China’s oil imports up slightly in April

PERFORMANCE CHINA’S imports of crude increased during to battle the latest outbreak of the coronavi-
April to a total of 43.03mn tonnes, or an average rus (COVID-19) is thought to be a key reason
of 10.5mn barrels per day (bpd), marking a slight behind a decision by Saudi Aramco – a major
increase over total first-quarter average daily crude oil supplier to China – to cut its prices for
imports of 10.4mn bpd. Total imports during May cargoes. But despite the tight crude market,
the first quarter amounted to 127.85mn tonnes. OPEC+, which includes Russia, recently decided
The April import figure marks an increase of to continue with its restrictive crude production
7% over imports during April 2021, which aver- policy that will see only an increase of 432,000
aged 9.82mn bpd. bpd in June. While there may now be larger vol-
Chinese customs officials have reported that umes of Russian crude available, boycotts of the
crude imports during the January-April 2022 country’s oil have only led to higher prices.
period declined by 4.8% year on year. Figures for China is reported to be among those coun-
the first four months of this year show imports tries that have taken advantage of Russian crude
amounted to 170.89mn tonnes, or an average of selling at a discount. Iranian oil, which is also
10.4mn bpd. under international sanctions, continues to
Meanwhile, international crude prices con- make its way to China marked as coming from
tinue to fluctuate in an unstable market. Russian Oman, the UAE or Malaysia. Around 650,000
oil has been knocked out of many Western mar- bpd of Iranian crude is imported by China.
kets since the invasion of Ukraine, and Moscow China’s refineries are reported to have cut
has had to send more of its oil towards Asia in back throughput by 6% during April owing
search of buyers. Oil producers are playing the to renewed fears about COVID-19. China
game as nimbly as they can, enjoying higher exported refined oil products totalling 3.82mn
prices amid calls from the US in particular to tonnes during April, down 44% compared to
raise output to take the sting out of prices. April 2021. During March, refined product
China’s lockdown as the country continues exports amounted to 4.07mn tonnes.™

P10 www. NEWSBASE .com Week 19 13•May•2022