Page 8 - GLNG Week 44

GLNG AUSTRALASIA GLNG
PNG commission delays UBS oil loan inquiry
POLICY
A Papua New Guinea (PNG) government commission set up to investigate a A$1.2bn ($827.3mn) loan from UBS that the former administration used to buy into Oil Search has once again delayed its inquiry.
Chairman Salamo Injia said on November 4 that the commission had not received the fund- ing the government had promised in September. Injia added that the inquiry still had not com- pleted a tender to hire an international law firm. This is the commission’s second delay, with Injia having originally postponed the start of proceed- ings in October.
“Until these and other outstanding adminis- trative arrangements are completed by the gov- ernment agencies and officers concerned, this Commission is unable to sit today and is unlikely to sit any time soon,” the chairman said.
PNG Prime Minister James Marape had previously agreed to Injia’s requests to extend the inquiry’s duration from three to six months, increase its budget and appoint an international law firm, but the funding has yet to be released and a tender for appointing a law firm has yet to be completed.
If the commission is unable to provide an update by the end of November, then it is expected to announce in December that the inquiry will be held in early 2020.
Marape, who was finance minister when the government bought 10% of Oil Search in 2014, has promised to resign if the inquiry finds him guilty of improper conduct. The government eventually sold the stake at an estimated loss of $420mn owing to the commodity price slump.
Marape became prime minister in May, after taking over from Peter O’Neill, and promptly launched the inquiry.
PNG’s purchase of the Oil Search stake helped the company pay for a holding in the giant Elk-Antelope development, which will underpin the two-train Papua LNG project.
The current administration remains frus- trated over the natural gas agreement signed between O’Neill’s government and Total on the Papua LNG project. Petroleum Minister Kerenga Kua has set his sights on ExxonMobil’s as-yet to-be-agreed-upon P’nyang project, saying that he is looking for “far better” terms than were agreed for Papua LNG.™
EUROPE
Lithuania to acquire its own LNG FSRU
INVESTMENT
LITHUANIA is looking to buy its own floating, storage and regasification unit (FSRU), at a time when its imports of LNG are at an all-time high.
The board of state-owned Klaipedos Nafta (KN) said it supported a plan to buy either the Independence FSRU it is currently leasing from Norway’s Hoegh LNG or a different vessel. A final decision on the matter is anticipated by the end of 2022.
KN aims to reach a deal with banks to obtain financing for the purchase by the end of April 2020, and have the state-guaranteed loans cleared under EU state aid rules by the end of May 2021.
By having its own FSRU rather than renting one, Lithuania would presumably save costs in terms of rental fees. It aims to cut costs further by borrowing €135.5mn ($150mn) from the Nor- dic Investment Bank to cover rent payment for the FSRU from 2020, saving €27mn per year for consumers.
“Estimates show that the LNG terminal will provide economic benefits for Lithuania and gas consumers of the region after 2024,” KN Klai- pedaLNGdirectorArunasMolissaid.“Asareli- able alternative for gas import, the LNG terminal will ensure competition in the gas market and
contribute to the energy security of the state. In turn, this provides Lithuania with opportunities for regional leadership in the energy sector and for KN to further actively develop the cross-bor- der LNG chain of value.”
Lithuania launched the 4bn cubic metre per year Klaipeda LNG terminal in 2014, but in its early years the project found it difficult to com- pete with cheap and readily available Russian pipeline gas. Thanks to a slump in global LNG prices, however, it managed a 40% growth in imports during the first nine months of 2019, receiving LNG carriers during the period, versus eight a year earlier.
The terminal’s biggest customer is Lithuanian fertiliser producer Achema. It has two more Lith- uanian clients – energy group Lietuvos Energijos Tiekimas (LET) and commodities trader Imlitex – as well as Estonian power group Eesti Energia and Estonian gas distributor Elenger.
Lithuania developed its LNG import capa- bility to help wean itself off its heavy reliance on Russian gas. However, while it has success- fully reduced its dependence on Russian piped exports, Achema and the terminal’s other buyers are in fact buying significant quantities of Rus- sian LNG, according to recent shipping data.™
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w w w . N E W S B A S E . c o m Week 44 07•November•2019