Page 8 - FSUOGM Week 38

FSUOGM NRG FSUOGM

burden, it has also called for greater tax breaks to low-cost LNG capacity. This week, a warning
be provided to Rosneft’s Priobskoye and Vankor came that this push to bring down the cost of
oilfields. The latter will play a key role in the LNG could make it more difficult for producers
company’s Vostok Oil megaproject in the Rus- in Australia and elsewhere to sanction new liq-
sian Arctic. uefaction projects.

If you’d like to read more about the key events shaping If you’d like to read more about the key events shaping
the former Soviet Union’s oil and gas sector then please the global LNG sector then please click here for
click here for NewsBase’s FSU Monitor . NewsBase’s GLNG Monitor .

More talk of carbon-neutral LNG as over- Pressure on Venezuela
supply continues THIS week’s LatAmOil takes a close look at
The idea of carbon-neutral LNG is being talked developments involving Venezuela.
about with increasingly frequency, although The South American state continues to suf-
it accounts for only a miniscule fraction of the fer widespread fuel shortages but is awaiting the
LNG market to date. arrival of two tankers filled with Iranian gasoline.
Six cargoes of LNG that can be described as The shipments are not likely to provide relief for
carbon-neutral have been traded to date. Four of long, as the vessels only hold enough to cover
these were cargoes sold by Royal Dutch Shell that consumption for a few weeks, US special envoy
involved full-lifecycle carbon offsets, one was a Elliott Abrams pointed out last week. Abrams
partial offset by Japan’s JERA and there has also also indicated that Washington did not intend to
been a tender by Pavilion Energy for offsets up to seize these cargoes, as it did in August.
the point of delivery. In the meantime, the national oil company
Earlier this month, carbon-neutral LNG (NOC) PdVSA is reportedly scrapping some of
was discussed at the Gastech Virtual Summit, its own infrastructure in order to secure metal
where speakers noted that the growing appe- and parts. According to Bloomberg, it hopes to
tite for offsetting emissions from the fuel would use these materials as payment in kind for repair
raise its costs. However, such an increase in the work on pumping stations and compression
price of LNG would come at a time when low facilities that serve oil production facilities in
natural gas prices are key to displacing com- Monagas State. The NOC is eager to bring these
peting fuels, including coal, and to penetrating fields back on stream, as they contain light crude
emerging, price-sensitive markets in Asia. As that can be made into gasoline more easily than
a result, the industry would need to be careful the heavy crude contained in the Orinoco belt.
to balance decarbonisation with remaining Further north, Canada’s Crystallex has asked
cost-competitive. a judge in the US federal court system to set a
Wood Mackenzie’s principal analyst for date for the sale of shares in PdV Holding, the
Asia-Pacific gas and LNG, Lucy Cullen, told PdVSA subsidiary that is the parent company
Gastech that two sets of buyers could emerge on of US-based downstream operator Citgo Petro-
the LNG market if carbon-neutral LNG becomes leum. Crystallex, which is trying to enforce a
more commonplace. The first set would be those $1.4bn arbitration decision that went against
that are more carbon-conscious and the second Venezuela, has proposed that the sales begin on
would be those that are more sensitive to price. January 11, 2021.
The discussion about carbon-neutral LNG
comes as Qatar – one of the leading producers If you’d like to read more about the key events shaping
of the super-chilled fuel – is seeking to under- the Latin American oil and gas sector then please click
cut competitors by developing significant new here for NewsBase’s LatAmOil Monitor .

P8 www. NEWSBASE .com Week 38 23•September•2020