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Government revenue from the oil and gas Moving to the UAE, Fujairah-based storage
industry amounted to $11.89bn, which was operator Brooge Energy said on July 15 it was
less than half of a full-year forecast of $32.09bn near to completing early technical studies for a
and prompted SKK Migas to lower the target to phase-three expansion of its facilities. The pro-
$19.91bn. ject involves adding an extra 22mn barrels of oil
The country was already struggling to attract storage space and the construction of a 180,000
investment to its upstream, owing to political barrel per day (bpd) refinery.
uncertainty and a history of bureaucracy, before Fujairah is a popular hub for storage given
the pandemic, which will only make that task its strategic location outside the Strait of Hor-
harder. With yet another hurdle in Jakarta’s muz. With storage in high demand following
path, the government’s goal of boosting national the COVID-19 pandemic, Brooge has a strong
oil production to 1mn bpd by 2030 is once more case for pushing ahead with its plans. But first it
in doubt. wants to fully contract out the extra storage on a
store-or-pay basis
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then please click here for NewsBase’s DMEA Monitor.
Downstream MEA: Aramco restructuring
Saudi Aramco has unveiled plans to restructure Europe: Nord Stream 2 faces more pain
its downstream business by the end of this year, The US has moved closer to imposing tougher
weeks after closing its $69bn takeover of petro- sanctions on Russia’s embattled Nord Stream
chemicals giant SABIC. 2 project. US Secretary of State Mike Pompeo
The move is aimed at improving efficiency, announced last week that his department would
as the Saudi oil giant prepares to expand its fuel remove an exemption protecting the pipeline Aramco is
and petrochemicals operations internationally. from a US sanctions package introduced in 2017.
It intends to split the business into four units At the same time, another sanctions bill is mak- eager to build
responsible for fuels, chemicals, power and pipe- ing its way through US Congress. out its
lines. Three corporate functions – manufactur- There is bipartisan support for additional
ing, strategy and marketing, and affiliates affairs sanctions in both legislative houses. Although he downstream
– will support these units. has been reluctant to impose broader sanctions
Aramco is eager to build out its downstream against Russia in the past, US President Donald division
division to add value to its resources and reduce Trump has been unambiguous in his opposition
its reliance on crude oil sales. The restructur- to Nord Stream 2.
ing move is also a response to Riyadh’s new tax However, the consensus is that any new
regime. If it does not restructure the business, it sanctions will arrive too late to thwart the pro-
will have to pay a much higher rate of corporate ject, which is now all but 6% complete. Russia is
tax. SABIC and several other Aramco subsidiar- expected to resume construction in the coming
ies retain separate listings, however, which could weeks, with two of its own pipelaying vessels cur-
complicate the process. rently on standby off the German coast.
In other news from the kingdom, petrochem- In the Czech Republic, gas grid operator
icals producer Advanced Petrochemical has Net4Gas has scaled back plans for new gas links
secured a SAR1.5bn ($400mn) credit facility, in with Austria and Poland after failing to secure
order to finance its expansion projects in Jubail. the EU financial support it was hoping for. The
The company is preparing to expand its polypro- company’s Stork II pipeline was due to become
pylene (PP) output by 750,000 tpy starting in late operational in 2023, pumping up 13.7 mcm per
2024, at a cost of $1.8bn. day of gas in the direction of the Czech Republic
Despite difficult market conditions, and 19.6 mcm per day in the direction of Poland.
Advanced has a firm outlook, Al Rajhi Capital Net4Gas was also looking to build an 18 mcm
said in a research note last week, pointing to an per day bidirectional pipeline connecting the
expected recovery in PP prices, rising dividends Czech Republic with Austria, known as BACI,
and its organic growth path. by 2024.

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