Page 13 - FSUOGM Week 23

FSUOGM INVESTMENT FSUOGM

KMG to spin off gas

pipeline business

KAZAKHSTAN KAZAKHSTAN’S state-run oil and gas firm metres of gas annually to China and agreed to
KazMunayGaz (KMG) is planning to spin off double that volume the following year.
KMG will transfer its its natural gas shipping and trading subsidiary Kazakhstan launched a plan in 2016 to pri-
gas pipeline division to KazTransGas and aims to seek consent from vatise a number of large state-owned enter-
Kazakhstan’s sovereign creditors to go ahead with the move, it said on prises. An initial public offering (IPO) at KMG
wealth fund. June 5. was expected to be the crown jewel of this pro-
KMG owns both upstream and down- gramme. At the time the government was strug-
stream assets along with subsidiaries operating gling to get a handle on its finances in the wake
the ex-Soviet country’s oil and gas pipelines, of the 2014 oil price crash.
KazTransOil and KazTransGas. The spin-off will The sale was repeatedly delayed, however. The
allow KMG to focus on exploration, production government had hoped to encourage investors
and refining while keeping the infrastructure in ahead of the offering by selling a stake in KMG
the hands of the state as the company goes ahead to Royal Dutch Shell, but the major declined
with its listing plans. because of corporate governance concerns. The
Under the plan, KMG is set to hand over overall privatisation drive also lost traction, as
KazTransGas to sovereign wealth fund Sam- rising oil prices meant the government was in
ruk-Kazyna, the company said. less need of financing.
Aside from shipping Kazakh gas to other Following the sharp fall in oil prices in March,
Central Asian nations as well as China and Rus- Kazakhstan’s budget is once again under pres-
sia, KazTransGas acts as a trader. The company sure. The long-awaited IPO at KMG could there-
signed a contract in 2017 to supply 5bn cubic fore be back under consideration.™

BP cedes operatorshop of SGC

section to SOCAR

AZERBAIJAN BP on June 4 turned over operatorship of the via tankers through the Bosphorus to European
South Caucasus Pipeline (SCP) to a subsidiary markets.
BP has reaffirmed of Azerbaijan’s state oil firm SOCAR. SCP is BP heads the international consortium devel-
its commitment to the first of three interconnected pipelines due oping Azerbaijan’s giant Shah Deniz field. It is
remaining part of the to start carrying Caspian Sea gas from Azerbai- expected to make its first deliveries to Europe
Southern Gas Corridor. jan to the EU later this year via Georgia, Turkey, this year via the Southern Gas Corridor (SCG),
Greece and Albania and a seabed link to Italy. of which the SCP is a part. The Trans-Anato-
SOCAR Midstream Operations will take over lian Natural Gas Pipeline (TANAP) that runs
as the technical operator of all SCP facilities in through Turkey and the still unfinished and
Azerbaijan and Georgia, BP, SOCAR and SCP delayed Trans-Adriatic Pipeline (TAP) laid from
said in a joint statement. Greece through Albania to Italy are also part of
“We remain committed to working with the SCG.
Socar to ensure continued safe and reliable oper- In late May, Azeri media reported that TAP
ation of the pipeline,” Gary Jones, BP’s regional had started introducing its first gas into the
president for Azerbaijan, Georgia and Turkey, Albanian section of its pipeline. The latest pro-
said in the statement, noting the transfer of rights ject update from TAP reportedly stated that gas
was in line with an agreement initially signed in from Azerbaijan should reach Italy via its pipe-
2013. line before the end of this year. Environmental
BP will continue to operate the Sangachal protests in Italy have caused some delays in the
gas processing and oil production terminal in realisation of TAP.
Azerbaijan, the Baku-Tbilisi-Ceyhan (BTC) Shah Deniz I has a production capacity of 8bn
oil pipeline running from Azerbaijan-to-Geor- cubic metres (bcm). Shah Deniz II is expected to
gia-to-Turkey and the Western Route Export reach 16 bcm per year. Some 10 bcm has been
Pipeline (WREP) that carries oil from Caspian earmarked for Europe and 6 bcm for Turkey.
Sea fields in Azerbaijan to the Black Sea coast of The first commercial gas deliveries to Turkey
Georgia, from where crude is further shipped from Shah Deniz II took place in June 2018. ™

Week 23 10•June•2020 www. NEWSBASE .com P13