Page 11 - FSUOGM Week 22 2022

FSUOGM NEWS IN BRIEF FSUOGM

“We expect that by activating new (bpd) of crude into the country using sea tariffs. The proposed rate changes are part
deposits, in which reserves of natural gas routes. Some indicators point to the number of a larger energy sector reform initiated by
in the Caspian region have been confirmed, being closer to 1.1mn bpd. President Shavkat Mirziyoyev.
Serbia will secure additional quantities A further 800,000 bpd is also moved The new rates for electricity and natural
of natural gas for its needs, and that it across Russia to Chinese refineries via gas are effective from July 1, 2022. Research
will become a transit route by building pipeline. This crude is thought to be made conducted by Energy Ministry revealed
the gas interconnection, by which we will up of Russia’s heavy sour Ural crude, that 80% of the nation’s households use 200
additionally increase stability and security accounting for 15% of the total Ural kWh or less of electricity and 500 cubic
of our country and the region,” she stated. demand worldwide. metres or less of natural gas per month. The
Mihajlovic said the agreement opens As a result, total estimates currently ministry said that the new rates would have
space for cooperation in electricity, talking place China’s Russia-sourced imported only a modest impact on the vast majority
on improving energy efficiency and crude at approaching 2mn bpd. of residents. It added that the current yearly
exchanging experiences, technologies and And with Western nations continuing electricity supply gap of between 2,000 GW
investments in renewable energy sources. to sanction Moscow, the profits look like and 3,000 GW, mainly due to outdated grid
Azerbaijan’s Minister of Energy Parviz extending into the summer for Asian assets, the challenging financial situation of
Shahbazov said the meeting was an nations still intent on importing Russian state energy companies and fast-growing
“excellent opportunity” to discuss future crude. market demand, required urgent action to
joint activities concerning the Southern Gas Urals in particular has been hard hit by modernise Uzbekistan’s energy sector.
Corridor and other topics related to energy UK and US-led sanctions banning Russian Further to new tariffs effective from
and the economy. crude imports. The European Union is also the coming month, the government also
expected to follow suit in the coming weeks, decided on incremental price developments
albeit with Russia’s former Soviet bloc ally to facilitate long-term planning for
China hiring more tankers Hungary still insistent on allowing Russian businesses, with rates scheduled to float
crude to flow into Europe.
freely starting in 2026.
to transport Russian crude Russia stands to gain, with Russian Urals important step to make Uzbekistan’s
“Reforming the tariff system is an
It is in India and China, however, that
China International United Petroleum & currently selling for just $87 per barrel. energy market more efficient, while also
Chemical Co. (Unipec), the largest trading This is significantly lower than current employing a fair and socially conscious
company in China, has hired around prices for the other benchmark crudes approach. According to a newly introduced
10 crude oil tankers in the firm’s bid to traded globally; Brent and WTI (West Texas ‘social norm’, household price levels will be
maintain the flow of discounted Russian Intermediate) are selling for $114 and $107 divided according to usage thresholds. The
crude into the country. respectively. new tariff regime will also enable domestic
Unipec is itself a subsidiary of China’s Just last week between 74 and 79mn and international businesses to invest in
oil and gas giant Sinopec, and the increase barrels of Russian crude were shipped Uzbekistan’s energy market, and make
in tanker hire has seen Unipec expand its to Asia. The bulk of this made its way to informed long-term decisions ultimately
tanker fleet five-fold, according to shipping Indian and Chinese ports. This number beneficial to all members of society,” said
analytics firm Vortexa. is almost triple the 27mn barrels shipped Sherzod Khodjaev, Deputy Minister of
The tankers being hired are made up in the week prior to Russia’s February 24 Energy.
primarily of smaller aframax vessels. Each invasion of Ukraine. The new system was designed to share
is capable of carrying between 80,000 and This rush to snap up discounted Russian the burden equitably, given these disparities.
120,000 tonnes, and are a common sight at crude may not be without consequence, Rates will also vary dependent on consumer
Chinese ports in the East China Sea. though, at least for India. type and seasonality.
Two larger supertankers are also “Some of the interested buyers in Asia New electricity tariffs for consumer
known to have been contracted by Unipec, are more motivated by economics rather households will have two usage levels. Up
however. than taking a political stand,” said senior to 250 kWh monthly consumption, a single
Parent company Sinopec remains tight- oil analyst Jane Xie at Kpler Singapore. kWh will cost the equivalent of $0.029
lipped on the exact details, loads and routes “That said, there has been an increase in US (based on the current UZS/USD exchange
being taken by each of the hires. interest in India’s buying of Russian oil, so rate) – an 11.5% rise from current levels.
One of the supertankers though is there may be some downside risks to this Any kWh above this level will be priced at
known to be the Yuan Qiu Hu, which trade flow, even if it is currently unlikely to $0.06.
was involved in a rare ship-to-ship crude be dented significantly,” she added. Corporate rates will not vary based
transfer off the coast of South Korea in late on consumption. However, tariffs will
May. differentiate between Navoi Mining and
Russian Urals is typically shipped to Uzbekistan to hike energy Metallurgical Combinat (NMMC), Almalyk
Chinese ports in five days. Mining and Metallurgy Complex (AMMC)
As end destinations of the 10 new loads and fuel tariffs as part of and other budgetary organisations,
remains unknown at present, though, including kindergartens, schools, hospitals,
there is increasing speculation in Asia as to “liberalisation” plans ($0.073 per kWh) and other legal entities
whether these cargoes are set for Southeast ($0.054 per kWh). NMMC and AMMC are
Asian ports to help Beijing garner influence Uzbekistan’s Ministry of Finance in co- the largest energy consumers in the nation.
in related trade issues. operation with the Ministry of Economic Consumption thresholds will also affect
According to recent reports from Development and Poverty Reduction and household gas consumption. One cubic
Beijing, it is now understood that China Ministry of Energy have signed a resolution, metre of natural gas will be priced at $0.037
is importing just over 1mn barrels per day which, once passed, will set new energy for households using less than 700 cubic

Week 22 02•June•2022 www. NEWSBASE .com P11