Page 7 - FSUOGM Week 03 2020

FSUOGM PIPELINES & TRANSPORT FSUOGM
Transneft reveals oil transport numbers for 2020
RUSSIA
Transneft expects
a 5.3% growth in supplies to Russian refineries, and a 3.8% cut in exports.
RUSSIA’S state oil pipeline operator Transneft has received requests for the transport via pipe- line of 259mn tonnes (5.2mn barrels per day (bpd)) to domestic refineries this year, accord- ing to company data, which is 5.3% more than it delivered last year.
Exports, on the other hand, are projected to fall by 3.8% to 229.5mn tonnes (4.6mn bpd), according to the company. Transneft is therefore scheduled to handle 488.6mn tonnes (9.81mn bpd) of oil in total this year, up 0.8%. Russia’s energy ministry has forecast a production range this year of between 555mn and 565mn tonnes (11.15-11.35mn bpd).
Transneft’s supplies to refineries slipped 1.3% last year, owing to processing cutbacks at some Rosneft, Lukoil and Gazprom Neft plants, as well as the shutdown of Antipinsky – the country’s largest independent refinery, with a 180,000 bpd capacity. Antipinsky, formerly owned by the private New Stream Group, had repeatedly to halt operations last year because it could not afford to pay for oil feedstock. It was then bought by a joint venture between state-owned Sberbank and Azerbaijan’s
SOCAR, which resumed processing in July. While most refiners use Transneft’s system to receive their supplies, some get deliveries via rail or via pipelines not controlled by the state company. The energy ministry estimated that a total of 290.3mn tonnes (5.83mn bpd) of oil was received at Russian refineries last year, slightly
down from 5.83mn bpd in 2018.
Exports meanwhile climbed 3.4% last year,
despite disruptions at the Druzhba pipeline over the summer caused by the large-scale contam- ination of oil with organic chlorides. Druzhba shipments were down 13.5% at 42.3mn tonnes (849,000 bpd), but this was offset by a 11% growth in sea-bound exports to 138mn tonnes (2.77mn bpd).
Growth in refining throughput this year is anticipated to come on the back of increased runs at Antipinsky and the launch of a new 120,000 bpd primary processing unit in August last year at the Tatneft-operated Taneco refinery in Tatarstan. Russian refiners are eager to keep refining runs high to recoup large investments in modernisation during recent years.™
Greek gas importer wins legal dispute with Turkish supplier
GREECE
The award draws a line under a ten-year dispute over gas supplies.
GREEK gas utility DEPA has claimed victory in an arbitration case against Turkish counterpart Botas over gas supplies, drawing a line under a decade-long dispute.
The International Court of Arbitration (ICC) in Paris ruled last week that Botas should retro- actively cut the contractual price it has charged DEPA for gas, the Greek firm said in a statement.
“This decision is the final step in a 10-year trade dispute,” DEPA said, without revealing details of the verdict. The company said it was currently assessing the impact of the legal win.
Botas supplies DEPA with around 0.7-0.9bn cubic metres per year of gas it buys from Azerbai- jan, under a long-term contract reached in 2003. It opened a case against the Greek firm at the ICC in 2009, demanding that it pay €300mn ($332mn) for reportedly failing to meet its take-or-pay com- mitment. A take-or-pay clause in a supply contract requires a buyer to pay for gas supplies regardless of whether it takes them or not, or face a fine.
The ICC subsequently issued a €180mn award to Botas. But DEPA later lodged its own claims over what it described as unfair pricing
since 2011. The verdict last week will see Botas retroactively apply a price cut from this year, a source told Reuters.
While details have not been disclosed, even a modest price revision would mean Botas fork- ing out tens of millions of euros in compensation to DEPA. The award comes at a fortunate time for Greece, which has recently broken up DEPA and is preparing to sell off a majority stake in its wholesale and retail activities this month. The government has also launched a tender for 100% of its distribution network.
DEPA also has long-term contracts for gas supply with Russia’s Gazprom and Algeria’s Sonatrach. It is currently in talks with Gazprom to remove the take-or-pay clause in their con- tract, while also seeking a price reduction from Sonatrach for LNG.
DEPA’s contract with Botas is due to expire in 2021, after which point it intends to buy gas directly from Azerbaijan via the nearlycompleted Southern Gas Corridor (SGC) network. The country is also building a second LNG import terminal to diversify its supply even further.™
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