Page 12 - FSUOGM Week 22 2022

FSUOGM NEWS IN BRIEF FSUOGM

metres of natural gas monthly. Above this import 1mn tonnes per year (tpy) of LNG, crude oil at a discount on the spot market
amount, the price will be $0.11. Outside the Jain said. The long-term deal would enable and search for new customers as Western-
heating season, the price change threshold GAIL to lock in prices against a volatile aligned countries have banned or taken
will be 200 cubic metres of natural gas global LNG market that has fluctuated steps to reduce the import of Russian fuels.
monthly usage. considerably in recent years. With the recent action taken on May 30
Corporate gas tariffs will increase across “The main consideration of buying LNG by the Brussels to ban tanker deliveries to
categories: prices for i) NMMC, AMMC will be competitive prices from anywhere, the EU and restrict pipeline shipments,
and budgetary organisations will rise to including Russia,” Jain said, adding that it remains to be seen what sort of deal
$0.12 per cubic metres; ii) automobile gas GAIL’s imports of natural gas could rise Moscow and Colombo could arrange. As
filling compressor stations will pay $0.11; by up to 6% during the current fiscal year, it now stands, Sri Lanka will be very hard
iii) $0.091 will be the rate for thermal power which ends in March 2023. “We aren’t pressed to arrange financing for Russian
plants; and iv) other legal entities will be looking for short-term contracts, as they are crude purchases as international sanctions
$0.1 per cubic metre. costlier,” he said. mount against Russia, and Sri Lanka has no
From April 1, 2023, energy prices are A current long-term contract with current options for loan repayment.
expected to increase again to achieve cost Gazprom Marketing & Trading Singapore The Sri Lankan government defaulted on
reductions in the state budget and stimulate covers delivery of 2.5mn tonnes of LNG its foreign debt of $51bn and is currently
energy saving. Prices will be indexed to the during 2022 and 2.85mn tonnes in 2023. attempting to restructure it with the advice
level of inflation between 2023 and 2025. Meanwhile, India is clearly taking of international consultants.
From 2026, prices for electricity, natural advantage of discounted Russian crude. The tanker delivering the Russian crude
and liquefied gas will float freely. The country has imported 34mn barrels of waited outside the port of Colombo for a
Russian oil since February 24, according to month until Sri Lanka could scrape together
a report in Reuters citing Refinitiv Eikon the $72.6mn needed to pay for the cargo.
India's GAIL considers data. India bought more than 24mn barrels The Russian crude will allow the Ceylon
during the month of May, according to
Petroleum Corp. (CPC) refinery to restart
buying Russian assets, oil the data, compared with 7.2mn barrels in operations after being closed since March,
when it ran out of feedstock. The refinery
April and 3mn barrels in March. Due to the
imports surge crude import bill, total Indian imports from itself owes suppliers $735mn and has been
unable to find companies willing to commit
Russia between February 24 and May 26
The chairman and managing director of rose to $6.4bn against $1.99bn for the same to further crude oil deliveries.
GAIL (India) said that the state-owned period in 2021, the report said. . The Sapugaskanda refinery outside
company would be open to purchasing Colombo produces some 1,000 barrels per
Russian oil and gas assets despite the fact day (bpd) of diesel that will go a long way
that numerous companies are avoiding Sri Lanka turns to Russia to to meeting the country’s desperate fuel
doing business with Moscow since its shortage once it is back on stream. In order
invasion of Ukraine in late February. ease energy crisis to keep operating, the refinery will need
“Why would anyone say no [to Russian another crude cargo during the month of
assets] if it makes commercial sense," Manoj Sri Lanka will turn to Russia in the hope June. The latest crude delivery was arranged
Jain said during a press conference in New that Moscow can keep the island nation through Dubai-based Coral Energy.
Delhi after the company announced an supplied with energy, Power and Energy Wijesekera said the next order will also be
increase in quarterly profits of 39%. Minister Kanchana Wijesekera said last placed with Coral.
GAIL is one of several Indian companies week as a 90,000-tonne cargo of Russian oil The government has been forced to
that have engaged in talks with Shell for landed at the port of Colombo. end fuel subsidies, causing a 230% and
a 27.5% stake in the Sakhalin-2 LNG Sri Lanka is wrangling with its most a 137% rise in the price of diesel and
project in Russia’s Far East. ONGC Videsh serious economic crisis since independence gasoline respectively in the last six months.
Ltd (OVL) is also taking part in the talks. in 1948, due to the mismanagement of Rising inflation is reported to be having a
Despite international sanctions put in place the country’s finances, which have been devastating impact on the poorest of Sri
against Russia, and the move by many under the control of the Rajapaksa family. Lanka’s 22mn people.
Western energy companies to end their President Gotabaya Rajapaksa has in
partnerships in Russia, India has refused to recent weeks dismissed two of his brothers
impose sanctions, even though it belongs to who served as prime minister and finance New gas prices force
the US, Japan, Australia Quad group, and minister, but the president himself has
has taken advantage of purchasing Russian refused to resign despite widespread Kharkiv thermal power
crude oil at highly discounted prices. demonstrations. The country’s foreign
GAIL is India’s largest gas transmission reserves are depleted, making it impossible plant to close
company, with a cross-country network and to import food, medicine and fuel.
five gas processing facilities. The company is “I have made an official request to the The Kharkiv CHP-5 thermal power plant
looking to increase gas purchases from local Russia ambassador for direct supplies (TPP) will suspend operations due to
producers and also to import more LNG of Russia oil,” Wijesekera told a press increased gas prices set by Nagtogaz
from foreign firms. A stake in Sakhalin-2 conference in Colombo last week. “Crude Trading, Ukraine Business News reported
LNG could ensure long-term supplies to oil alone will not fulfil our requirement; we on May 31.
India, where gas demand is growing. need other refined products as well.” The new prices for fixed gas volumes
The company is currently looking to line Since the start of Russia’s invasion of for fuel and energy companies have risen
up a 10-year contract that would enable it to Ukraine, Moscow has been forced to sell its by three and a half times: from UAH7,900

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