Page 10 - FSUOGM Week 38 2019

FSUOGM INVESTMENT FSUOGM
Chinese bank backs Russian fertiliser complex
RUSSIA
The plant would run on gas produced off the coast of Sakhalin Island.
CHINA’S state development bank CDB has committed CNY12bn ($1.7bn) in funding towards the construction of a fertiliser complex in the Russian Far East.
CDB reached an agreement with the Russian development bank VEB.RF on the loan on Sep- tember 17, Russia’s deputy prime minister and VEB.RF’s chairman, Igor Shuvalov, told report- ers on September 17.
The complex in the port city of Nakhodka will initially produce up to 1.8mn tonnes per year of methanol, using natural gas as feedstock. Under its second phase, it will also manufacture up to 1.8mn tpy of ammonia. Production should reach full capacity by mid-2023, according to VEB.RF. The complex could also produce urea as a later stage.
The project’s developer is Nakhodka Fertil- iser Plant, a company owned by Russian busi- nessman Artem Obolensky. Obolensky acquired the firm from long-time business partner and
Kremlin ally Arkady Rotenburg back in 2016. Construction is expected to cost more than RUB200.7bn ($3.1bn), Russia’s ministry for the Far East’s development estimated in early Sep- tember. VEB.RF and another state-owned Rus- sian bank, VTB, have already pledged to cover $2.5bn of this sum. CDB’s funds will come under
this amount.
The plant is well-positioned to meet
demand for fertiliser products in growing mar- kets across the Asia-Pacific region and Latin America. It will export these supplies from a specially built marine terminal. The complex will be fed with 3.15bn cubic metres of gas per year from fields off the eastern coast of Sakha- lin Island, under a 20-year deal signed with Gazprom in 2015.
A number of companies are investing in the manufacture of fertiliser products in Russia, hoping to exploit the country’s low-cost gas to enter a fast-growing global market. ™
PERFORMANCE
Azeri gas output surges 31% in 8M 2019
AZERBAIJAN
The increase is thanks to Shah Deniz’s expansion.
AZERBAIJAN’S natural gas production soared by 30.9% in the first eight months of the year, on the back of growth at the BP-operated Shah Deniz gas field in the Caspian Sea.
National output reached almost 15.9bn cubic metres in the period, up from 12.1 bcm a year earlier, Azerbaijan’s state statistics committee reported on September 19. This was chiefly the result of the start-up of Shah Deniz’s second stage in mid-2018. Azeri exports climbed 60.1% year on year, arriving at 7.41 bcm.
At full capacity, Shah Deniz Stage 2 (SD-2) will produce 16 bcm of gas per year for sale in Turkey and southern Europe. Its first stage, com- missioned in 2006, reached an annual plateau of 10 bcm. This gas is sold to Georgia and Turkey.
BP operates Shah Deniz with a 28.8% stake. Its partners are Azerbaijan’s SOCAR with 16.7%, Malaysia’s Petronas with 15.5%, Russia’s Lukoil with 10%, Iran’s NICO with 10% and Turkish Petroleum (TPAO) with 19%. The consortium is currently discussing development of Shah Den- iz’s deeper gas reservoirs as part of a third-stage expansion. BP recently disclosed plans to drill a test well at the site next year.
Azerbaijan suffered a 2.4% decline in oil and condensate output in January to August to
25.17mn tonnes (759,200 barrels per day), even while exports rose by 7.6% to 21.45mn tonnes (647,000 bpd). The Caucasus country produces the bulk of its crude at the offshore Azeri-Chi- rag-Gunashli (ACG) project, also run by BP. ACG’s output has been declining more or less steadily since peaking at 823,000 bpd in 2010. It averaged 542,400 bpd in the first half of this year.
BP approved the addition of a new platform at ACG in April and recently disclosed details of contracts it had awarded under the $6bn project.™
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Week 38 25•September•2019