Page 6 - MEOG Week 28

MEOG PIPelInes & transPort MEOG
Bulgaria secures loan offers for TurkStream extension
turkey
BULGARIA’S state gas pipeline operator Bul- gartransgaz has received offers for €542mn ($616mn) in six-year loans to nance the exten- sion of Russia’s TurkStream gas pipeline, it said on July 9. Bulgartransgaz launched a tender for €400mn in nancing in early June. It needs to make advanced payments to Saudi-led group Arkad, which it hired last year to build the 474- km Bulgarian stretch of the TurkStream exten- sion, known as the Balkan Stream. It also needs to transfer funds to local group DZZD Ferrostaal Balkangaz, enlisted to construct the pipeline’s compressor units.
“ e combined amount of the o ers totals €542mn,” Bulgartransgaz said in a statement. “ e interest rates for each of the six years of the o eredloansvarybetween1.35%to3.5%.”
Offers came from ING Bank, Citibank europe, International Bank for economic Co-operation, VTB Bank europe as well as the Bulgarian units of Rai eisen, Unicredit, KBC Group, eurobank and OTP Bank. State-run Bul- garian Development Bank, Municipality Bank
and Budapest-based International Investment Bank, also made a joint bid.
Bulgartransgaz will now engage the lenders with the aim of nalising loan contracts.
Bulgaria was due to nish work on its section of the Balkan Stream last year, but there were delays nalising the award of a €1.1bn ($1.2bn) contract to Arkad. It has also taken much longer than anticipated to arrange nancing.
ese setbacks frustrated Russia, with Rus- sian President Vladimir Putin threatening in December to reroute Balkan Stream around Bulgaria unless progress was made.
Balkan Stream will connect with TurkStream near Bulgaria’s border with Turkey. A er run- ning through Bulgaria it will traverse Serbia and terminate in Hungary. Serbia completed its 403- km section in late March, although it is still work- ing on support infrastructure. Bulgarian Prime Minister Boyko Borissov insisted in June that Bulgaria would wrap up work on the pipeline by the end of this year, despite setbacks caused by the coronavirus (COVID-19) pandemic.™
PerFormanCe
OPEC production cuts curtail Saudi industrial output
saudI arabIa
INDUSTRIAL production in Saudi Arabia plunged in terms of volume in May 2020, with the Industrial Production Index (IPI) diving by 21.8% month on month driven by sharply lower oil output, reported the General Authority for Statistics.
e m/m dive in IPI was primarily driven by a 29.2% m/m collapse in the heavyweight mining and quarries sub-index as a result of Saudi Arabia’s sharp cut in oil production from 12mn barrels in April to 8.5mn barrels in May a er reaching a quota-sharing agreement with OPeC+ member countries following the brief, but e ective, price war that lasted parts of March and April.
e fall in industrial output remained local- ised to the hydrocarbon sector in May, with production of manufactured goods increasing across the board by 7.1% m/m in May.
Production of paper and related products jumped up by 17% m/m, furniture surged by
15.7% m/m and plastics and rubbers rose by 15% m/m. Likewise, electricity and natural gas out- put soared by 30% m/m. On an annual basis, IPI contracted by 15.5% year on year in May 2020 compared to the same month the previous year, driven by a 12% y/y drop in mining and quar- ries output compounded by a 26% y/y dive in manufacturing production and an 8% y/y fall in electricity and natural gas output.
Performance was impacted across OPeC’s 13 members, which reported an 18.4% reduction in oil export revenue in 2019 because of slumping prices. e cartel’s Annual Statistical Bulletin, which was published on July 13, showed that the countries’ economies had been badly hit prior to this year’s COVID-19 crisis and market meltdown.
OPeC oil export revenues fell from $692.3bn in 2018 to $564.9bn in 2019, as weak demand growth and continued competition from non- OPeC producers impacted the cartel.™
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w w w . N E W S B A S E . c o m Week 28 15•July•2020