Page 16 - DMEA Week 50 2020

DMEA LNG DMEA

DESFA lands operator role at

Kuwaiti LNG terminal

KUWAIT GREEK gas transmission system operator Kuwait already imports LNG at its 5.8mn
DESFA has won a contract to run Kuwait’s tonne per year (tpy) Mina Al-Ahmadi terminal,
The terminal is due on second LNG import terminal, following a commissioned in 2009. But the Gulf state wants
stream in 2022. tender. to expand the use of gas in power generation, in
DESFA will operate and maintain the facility order to cut down on costlier and more polluting
in Al-Zour for five years. In a statement, the grid fuel oil. While the country is making efforts to
firm said it had secured the contract thanks its increase domestic supply, it also recognises that
“high specialisation” and “know-how”, as well as more LNG will be needed to keep up with the
that of its shareholders, Italy’s Snam and Spain’s pace of demand growth.
Enagas. The Al-Zour terminal is set to receive up to
“The experience gained by DESFA from 3mn tpy of LNG from Qatar Petroleum under
managing the Greek transmission system and a 15-year deal signed last year. The facility is
the LNG terminal in Revithoussa also had a equipped with eight storage tanks, each with a
catalytic contribution to the undertaking of the 225,000 cubic metre capacity.
project,” it said. DESFA has been operating the Revithoussa
The building of the Al-Zour terminal began LNG terminal in Greece since 2008 and the com-
in 2016 and is expected to finish next year, with pany reportedly wants a role in the development
commercial deliveries commencing in 2022. It of a second Greek regasification facility planned
will supply gas to local power plants and indus- in Alexandroupolis. Snam has a 39.6% stake
try, including a new 615,000 barrel per day (bpd) in DESFA, while Enagas has 13.2%. Belgium’s
oil refinery that Kuwait National Petroleum Co. Fluxys also has 13.2% and the Greek government
(KNPC) is building. has 33%. ™

TRANSPORT

Zhenhua wins SOMO’s prepayment tender

IRAQ CHINA Zhenhua Oil Co. has won a five-year companies and international oil firms. Mean-
term crude supply tender from Iraq’s state oil while, Argus Media quoted an informed bank-
The deal guarantees marketer SOMO under a novel arrangement ing source as saying that companies already
Zhenhua the supply of that includes a $2bn pre-payment for the first engaged in oilfield development in Iraq were
48mn barrels of crude year’s crude volume. The agreement guarantees best positioned to win the tender given that
per year in 2021-2025. Zhenhua the supply of 48mn barrels of crude per they would have already carried out relevant
year from January 2021 to December 2025. due diligence.
Following approval by the Iraq Cabinet and Zhenhua is a subsidiary of state-owned China
Finance Ministry, Zhenhua will have 30 days to North Industries Group (Norinco), which is
pay the $2bn pre-payment for loadings between involved in the development of the 10,000 barrel
July 1, 2021 and June 30, 2022. per day East Baghdad field and the 130,000 bpd
SOMO is understood to have been consid- Ahdab field. Norinco also operates the 120,000
ering implementing an oil sales pre-payment bpd Huajin refinery in China.
solution for some time. However, given the lack According to Zhenhua, the company trades
of warning and short deadline, the move bears around 1.3mn bpd of oil and refined products.
the hallmarks of a knee-jerk reaction to fill Bagh- In January 2018, Iraq’s Ministry of Oil
dad’s $3-4bn monthly operating deficit. (MoO) agreed a deal with Norinco and Pow-
The award followed a brief bidding period erChina for the construction of a new 300,000
which was extended from four days to 11 to bpd refinery on the al-Fao Peninsula in the
give potential participants more time to prepare south of the country. While little has been
paperwork and fulfil banking requirements. heard of the deal since, in November Iraqi Oil
However, because of the short window and Minister Ihsan Abdul Jabbar said that Baghdad
large upfront cost, those able to take part were would soon kick off bidding for work to con-
effectively limited to state-backed Chinese struct the refinery. ™

P16 www. NEWSBASE .com Week 50 17•December•2020