Page 9 - FSUOGM Week 11

FSUOGM PIPELINES & TRANSPORT FSUOGM
Sinochem refuses to buy crude from Rosneft
CHINA
Wasington sanctioned Rosneft Trading
in February, over allegations that the firm had provided
a financial lifeline to the Venezuelan government.
CHINA’S state-run Sinochem Group has reportedly refused to buy crude oil from Rus- sia’s state-run Rosneft. Sinochem International Oil issued a tender on March 16 that excluded Rosneft and its subsidies from participating, Reuters and Bloomberg reported. The subsid- iary said in the tender that offers would not be considered if they came “from or related to Rosneft Oil Company and its subsidiaries and affiliates”.
The tender is for the sale and delivery of oil to Sinchem Group’s Quanzhou refinery in eastern China’s Fujian Province.
Sinochem is anticipated to start up a new crude distillation unit (CDU) and a petro- chemical complex at the plant in the middle of the year. The expansion will raise the facility’s capacity from 240,000 barrels per day to 300,000 bpd. The new CDU is understood to be geared towards processing light crude into naphtha for the cracker, while existing units mainly process heavier grades.
While Sinochem has not said why it excluded Rosneft’s cargoes from the tender, Reuters
quoted unnamed sources as saying the Chinese company was concerned by the prospect of fur- ther sanctions on the Russian company.
Washington sanctioned Rosneft Trading in February over allegations that the firm had pro- vided a financial lifeline to the Venezuelan gov- ernment. The US, which has a total embargo on Venezuela, issued new sanctions against seven of the South American country’s politicians in January, among which was congressional leader Luis Parra.
The US government has set a May 20 deadline for companies to end their dealings with Rosneft Trading.
Reuters’ sources said Sinochem was concern that Washington would not limit its sanctions to Rosneft Trading and could impose sanctions on other Rosneft units before any purchased oil arrived in China.
Bloomberg, meanwhile, said Sinochem had also refused to accept any cargoes from Iran, Syria and Venezuela. Sinochem also refused to buy oil from Kurdistan, which is home to some Rosneft operations. ™
Gazprom shuts down Power of Siberia for maintenance
RUSSIA
The pipeline is scheduled to undergo maintenance twice a year.
RUSSIA’S Gazprom has shut down the Power of Siberia gas pipeline to China for two weeks of routine maintenance, the company reported on March 16.
The pipeline, which pumps gas from the Chayandinskoye field in Yakutia to China, will resume operations on April 1, Gazprom was quoted as saying by Russia’s TASS news agency.
Gazprom has worked out a schedule for the maintenance with China’s CNPC, which buys gas from Power of Siberia under a 30-year deal signed in 2014. The pair previously agreed on maintenance being carried out on the pipeline twice a year in spring and autumn.
Power of Siberia was launched in December 2019 and is capable of delivering 38bn cubic metres per year of gas to the Chinese market. It will not reach this capacity until 2025, however, and to date has only flowed around 900mn cubic
metres of gas.
Maintenance is typically timed to coincide
with a lull in gas demand. China has reduced its gas imports over the past two months in response to the coronavirus (COVID-19) pan- demic’s impact on consumption.
Beijing’s state gas importers have declared forces majeure on their supply contracts in an attempt to push back shipments without incur- ring penalties. Kazakhstan and Uzbekistan have reported receiving such notices, but Gazprom said on March 5 it had not. Turkmenistan, Chi- na’s biggest gas supplier, has not commented on the matter.
China’s National Development and Reform Commission (NDRC) announced last week that, starting in May, a tariff of CNY0.1825 ($0.0261) would be applied on Power of Siberia’s gas when it enters China. ™
Week 11 19•March•2020 w w w . N E W S B A S E . c o m P9