Page 8 - FSUOGM Week 30 2019

FSUOGM PIPELINES & TRANSPORT FSUOGM
Novatek to seek NWF funding for gas tankers
RUSSIA
Novatek is seeking $5bn from the fund.
RUSSIA’S second-largest natural gas producer and global liquefied natural gas (LNG) run- ner-up Novatek asked the government to cut the interest rates for construction of its LNG tank- ers at the Zvezda shipyard using the sovereign National Welfare Fund (NWF), Kommersant daily reported on July 29 citing unpublished letter of Novatek’s head and Russia’s richest man Leonid Mikhelson to Prime Minister Dmitri Medvedev.
As reported by bne IntelliNews, tanker transportation strategy is crucial for Novatek’s LNG exports development. At the same time the government recently came under re from the central bank and the Audit Chamber for its plans to unseal the NWF beyond the 7% of GDP threshold.
Reportedly, Novatek suggested depositing $5bn from NWF on the accounts of state devel- opment bank Vnesheconombank (VEB.RF),
which would then discount lease construction of 15 LNG tankers for Novatek’s next LNG pro- ject Arctic LNG-2.
Notably, Zvezda is controlled by the Ros- ne egaz holding company, which holds state stakes in Gazprom and Rosne , and headed by influential head of Rosneft Igor Sechin, who is also the CEO of the Rosne oil com- pany subsidiary.
Previous reports and Kommersant sources note that initially Novatek intended to build the tankers in South Korea, but in order to support domestic shipbuilding the contracts were le with Russian shipyard Zvezda, despite about 20% price di erence.
Industry sources surveyed by the daily believe that Novatek will nd it hard to nance projects with Zvezda internationally, as it both carries sanction risks and has little competence in building gas tankers. ™
Belarus claims $800mn drop in exports on dirty oil crisis
BELARUS
The country plans to seek compensation for direct and indirect losses.
THE exports of Belarusian state-owned oil and petroleum conglomerate Belne ekhim shrank by $800mn in 2019 compared with the previous year due to the recent crisis over poor-quality oil supplies from Russia, the nation’s Economy Min- ister Dmitry Krutoi said in a televised interview this week.
In April, Belarus, Ukraine, some Central European countries and Germany suspended oil imports via the Druzhba pipeline a er nding contaminants that can damage re nery equip- ment. Russia’s law enforcement agencies and oil pipeline operator Transne launched a criminal investigation into possible deliberate contamina- tion of oil.
“We had to process part of our own oil at our re neries. e supplies were limited. If we look at the export statistics of Belne ekhim, we will see that we have minus $800mn compared with a year before,” the minister said. “Of course, it was very hard to make up for this loss using other sectors.”
In May, Belarusian Deputy Prime Minister Igor Lyashenkon said Minsk is going to seek compensation for the direct and indirect losses caused by poor-quality oil from Russia.
“We’ve talked to [our Russian] colleagues. Two kinds of compensations are involved: direct losses of enterprises and indirect losses. The direct losses are simple to understand — bro- ken equipment,” he said. “Competent groups are working on it. e Russian side has assured us that Belarus will get compensations for doc- umented expenses. Naturally, we’ve raised the issue of indirect losses, too.”
During the first week of the crisis, Minsk reduced the workload of the Mozyr oil re nery by around 40%, and Na an’s re nery by around 50%. Belarus estimates its revenue losses at around $100mn as a result of Russia’s supplies of low-quality oil, according to Belne ekhim. Bela- rus was also forced to suspend exports of light oil products to Ukraine, Poland, and the Baltic states. ™
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Week 30 31•July•2019