Page 7 - FSUOGM Week 15
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FSUOGM COMMENTARY FSUOGM
The risk here is that some fields and wells once closed may be economically unfeasible to re-open once restrictions are eased.
Economic hit
Kazakhstan, meanwhile, is bracing itself for the economic shock of low oil prices. The gov- ernment has warned of a 0.9% contraction in GDP this year, after previously forecasting 4% growth, and is looking to rein in spending dras- tically. It is also considering tax breaks to help
producers stay afloat, but providing too much support will reduce its budget revenues even further.
The consensus is that the latest OPEC+ deal on production cuts goes nowhere near far enough to make up for the demand destruction caused by the coronavirus (COVID-19) pan- demic. The risk is that Kazakhstan’s steep cuts to production could weaken its position further, if the supply pact fails to have the desired impact on prices.
PIPELINES & TRANSPORT
Russian LPG exports via railway hit five-year low
RUSSIA
RUSSIAN liquefied petroleum gas (LPG) exports via rail slumped to their lowest level in five years in 2019, data published by the energy ministry shows.
Shipments came to 6.03mn tonnes during the year, down 10% versus the amount in 2018. The reduction was owing to lower production of sales gas in Russia and the start-up of some units at Sibur’s Zapsibneftekhim petrochemical com- plex, which uses some LPG as feedstocks.
LPG deliveries to the port of Ust-Luga on the Baltic Sea as well as ports on the Black Sea saw the biggest decline, as did overland shipments to Finland. On the other hand, exports to China began and deliveries to Ukraine were restored during the year. There was also an uptick in
volumes to Belarus.
Russian LPG shipments to Northwestern
Europe fell 13% to 2.21mn tonnes, while supplies to Eastern Europe were more or less unchanged at 2.94mn tonnes. A further 299,200 tonnes of LPG were received at Black Sea ports, down 30%.
Direct rail supplies to Belarus rose 7% 1.04mn tonnes, because of higher transit deliveries to Ukraine and other countries in Eastern Europe.
Exports to Ukraine grew by 24.4% to 679,700 tonnes, as shipments were resumed by Rosneft and Lukoil.
Rail deliveries were also started to China last August and totalled 21,000 tonnes. The suppliers were Gazprom, Irkutsk Oil Co (INK) and Omsk Rubber.
Week 15 15•April•2020 w w w . N E W S B A S E . c o m P7
