Page 9 - EurOil Week 22

EurOil NRG EurOil

The Lebanese Army has its work cut out struggle to fulfil its 2014 supply deal with Chi-
trying to clamp down on the smuggling of sub- na’s CNPC after overestimating the capacity of
sidised fuel across the border into Syria. The its production sites in Eastern Siberia.
problem, which has exacerbated Lebanon’s eco- In Kazakhstan, Chevron has announced that
nomic crisis, shows no sign of abating despite the 20,000 workers or two thirds of the workforce
government’s claims of progress. at the giant Tengiz oilfield will be demobilised
Nigeria needs to do more to encourage the following a COVID-19 outbreak. The move will
construction of modular oil refineries, a devel- likely affect work on an expansion project, which
oper of one such plant has said. These small- is already running a year behind schedule.
sized refineries will help Nigeria overcome its
reliance on fuel imports, which has grown since If you’d like to read more about the key events shaping
the shutdown of its outdated, loss-making state the former Soviet Union’s oil and gas sector then please
plants. click here for NewsBase’s FSU Monitor . Russia’s
Gazprom, by far
If you’d like to read more about the key events shaping LNG giant pushing ahead as others hold
the downstream sector of Africa and the Middle East, back Europe’s biggest
then please click here for NewsBase’s DMEA Monitor. Even as US LNG exports decline, the back-
ers of the Golden Pass LNG project, which is gas supplier,
Further Russian losses under construction in Texas, have requested
Gazprom Neft has become the latest Russian oil authorisation to expand the capacity of the has also cut
and gas producer to post a net loss for the first terminal. This is perhaps not surprising con-
quarter on low prices and ruble devaluation. sidering the project is majority-owned by shipments via
Rosneft and Novatek also slipped into the red Qatar Petroleum (QP), which is also aggres- other routes
for similar reasons. sively pursuing the expansion of its domestic
While blessed with low production costs, LNG export capacity. QP owns a 70% stake in including
Russian companies are having to cut their cap- Golden Pass LNG, while ExxonMobil holds
ital expenditure to protect their earnings, much the remaining 30%. Ukraine.
like their international peers. After all, the profits The partners are seeking permission to boost
of state firms serve as a key source of revenue for the capacity of Golden Pass LNG to 18.1mn
the Russian government. VTB Capital expects tonnes per year (tpy), from 15.6mn tpy previ-
Gazprom Neft to reduce its full-year overall cap- ously. They say the increase “does not involve
ital expenditure by around 25% from its initial any equipment changes or environmental per-
guidance, to RUB335bn ($4.8bn). mit adjustments”, and would be achieved via
Despite the market collapse, parent company “production efficiencies”.
Gazprom is counting on strong gas demand Separately, QP announced this week that it
growth in the long run. It recently launched the had signed $19bn worth of order for LNG ships
planning phase for a second pipeline to China, from South Korean shipbuilders Daewoo Ship-
and also revealed last week it had resumed devel- building & Marine Engineering, Hyundai Heavy
opment studies for the offshore Shtokman gas Industries Holdings and Samsung Heavy Indus-
field in the Russian Arctic – a project it tried to tries. This marks the largest ever single LNG
advance for more than a decade before shelving vessel order, covering more than 100 ships to be
in 2013. delivered by 2027.
Gazprom’s reappraisal of the high-cost and Qatar’s push on both domestic and overseas
challenging project is oddly timed, given that LNG development comes as other planned
global gas prices are at their lowest level in liquefaction projects in North America and
decades. elsewhere appear to be increasingly in doubt.
An investigation by Russian news outlet A handful of North American developers have
Lenta.ru has meanwhile cast doubt on Gaz- already postponed final investment decisions
prom’s ability to deliver on its existing supply (FIDs) from this year until 2021, but analysts are
commitments to China. The report claimed now warning that it could be even longer before
the company risked losing $20bn and would any more liquefaction capacity is sanctioned.

Week 22 04•June•2020 www. NEWSBASE .com P9