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In the meantime, net profits were also down 40% outstripped the country’s gas pipeline imports
y/y at RUB41.6bn ($573mn), while EBITDA fell in May and that LNG shipments that month had
38.5% to RUB71.3bn. surged by 205.5%.
In more upbeat news, Novatek has begun Chinese LNG demand is also expected to be
pilot production at gas condensate-bearing lay- strong throughout the remainder of the year,
ers of the North-Russkoye and East-Tazovskoye as the country leads efforts to recover from the
fields. The pair have a combined annual produc- impact of COVID-19.
tion capacity of 7.7 bcm of gas and 1mn tonnes However, there have also been warnings that
of condensate. The company intends to sell the Chinese buyers of the super-chilled fuel will
gas to local industrial customers but will export likely seek lower prices. This is not surprising,
most of the condensate. given the oversupplied market, but will not be
Meanwhile, Ukraine’s biggest gas producer, welcomed by exporters seeking to recover from
Ukrgasvydobuvannya (UGV), has secured a the drop in LNG demand.
€51.9mn ($60.9mn) loan from the European One area where LNG has the potential to
Bank for Reconstruction and Development expand is its use as a marine fuel. Last week, Gaz-
(EBRD). The funds will be used to procure more prom Neft became the first Russian company to
workover rigs to boost output at UGV’s older join the Society for Gas Marine Fuel (SGMF), a
fields and to increase waste-heat recovery at a group that seeks to promote the fuelling of ships
key deposit in Ukraine’s north-west. with LNG.
UGV will need all the help it can get to deliver The company has added motivation to do so,
on ambitious growth targets. It was already as the decision by Russia and its OPEC+ allies
apparent long before the COVID-19 crisis began to restrict oil supply will prevent Gazprom Neft
that the company would fall far short of its goal from advancing new oil projects. Gazprom Neft’s
of producing 20 bcm of gas this year. The col- parent company, Gazprom, also wants to move
lapse in European gas prices this year means its into LNG bunkering. Other companies around
production is now on track for a sharp decline. the world may follow, as they seek areas where
there is scope for demand to grow.
If you’d like to read more about the key events shaping
the former Soviet Union’s oil and gas sector then If you’d like to read more about the key events shaping
please click here for NewsBase’s FSU Monitor . the global LNG sector then please click here for
NewsBase’s GLNG Monitor .
Searching for LNG demand growth
US LNG exports are being forecast to rise in Mideast: Gulf OSPs to drop as output rises
August, which would mark a rebound after Crude oil production from OPEC member
several months of declines amid cargo cancella- countries has increased by some 1mn barrels
tions spurred by the impact of the COVID-19 per day (bpd), as producers in the Persian
pandemic on demand. Over 100 US LNG car- Gulf are stepping back from their extra
goes are estimated to have been cancelled so far voluntary output cuts.
this year, and further cancellations are expected, As production has increased, there is grow-
albeit coming at a slower pace. ing speculation that Saudi Aramco and ADNOC
And even during this period of low demand, will cut their official selling prices (OSPs) for
some LNG markets are growing rapidly. crude cargoes to Asia loading in September as
For example, new data released by Turkey’s they seek to continue efforts to increase market
energy regulator last week showed that LNG share.

Week 31 06•August•2020 www. NEWSBASE .com P9