Page 7 - GLNG Week 29 2020

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even greater difficulty in the second and third French company. The financing includes direct
quarters. and covered loans from eight export credit agen-
Gazprom has sought to reassure investors cies (ECAs), 19 commercial bank facilities and
that its dividend policy remains unchanged, but a loan from the African Development Bank
these investors remain sceptical, with this sen- (AfDB).
timent reflected in the company’s share price. The agreement secures the majority of the
The supplier is taking steps to cut its operat- required funds for the $20bn Mozambique LNG
ing costs and capital investments in 2020, with project. Construction on the terminal is under-
the latter due to be reduced to RUB1.3 trillion way, and LNG production is due to begin around
($18.21bn), from an earlier forecast of RUB1.6 2024. Total and its partners will hope that the
trillion ($22.42bn). global glut of LNG will have eased significantly
Azerbaijan’s state energy group SOCAR has by then.
warned that some of the infrastructure that car- In the immediate term, however, the glut
ries Caspian oil and gas to world markets could continues to be exacerbated by new liquefac-
be at risk, following border clashes with Arme- tion coming online in the US. Last week, Kinder
nia. 15 servicemen from Azerbaijan and six from Morgan said the seventh liquefaction train at
Armenia died last week. The countries have a its Elba Island LNG terminal was ready to enter
long-standing dispute over the Nagorno-Karab- service. (See: Kinder Morgan ready to start up
akh region that has periodically flared up. seventh Elba Island train, page 14) The facility is
The infrastructure SOCAR was referring a comparatively small-scale one, with each of the
to includes various oil and gas pipelines, some terminal’s 10 trains having a capacity of 300,000
of which are situated not far from the territory tpy of LNG. Nonetheless, all of the remaining
where clashes took place. units are anticipated to be online by the end of
In Kazakhstan, a long-standing dispute the summer, contributing to the rise in US liq-
between the government and Moldovan busi- uefaction capacity. It is worth noting, however,
nessman Anatolie Stati wages on. Stati claims that no cargoes have been exported from Elba
that in 2010, oilfields controlled by his com- Island since January amid the downturn in
panies were expropriated by the Kazakh state. global demand.
The Amsterdam Court of Appeal last week Total US LNG export capacity is anticipated
confirmed it had rejected Kazakhstan’s appeal to rise from 9.7 bcf (274.7 mcm) per day cur-
against a $543mn award in favour of Stati by a rently to 9.8 bcf (277.5 mcm) per day by the end
Stockholm arbitration tribunal in 2013. Stati of 2020 and 10.5 bcf (297.4 mcm) per day by the
continues to seek the arrest of Kazakh property end of 2021.
overseas, to put pressure on the government to
settle the award. Latin America: Budget and production cuts
The COVID-19 pandemic continues to affect
If you’d like to read more about the key events shaping the plans and performance of operators in Latin
the former Soviet Union’s oil and gas sector then please America.
click here for NewsBase’s FSU Monitor. For example, Colombia’s national oil com-
pany (NOC) Ecopetrol has trimmed more than
GLNG: Export projects proceed $1bn from its capital investment budget for 2020.
Despite the challenging conditions in the LNG The firm had said last November that it was pre-
market, export projects for the fuel in the US pared to spend more, to the tune of $4.5-5.5bn,
and Mozambique have announced steps forward after turning in a solid financial performance in
during the past week. At the same time, however, 2019. In the wake of the pandemic and the Sau-
setbacks have come for others. di-Russian oil price war, though, it is now look-
In one of the most significant developments ing at a budget of $3.0-3.4bn this year.
for a new LNG export project in the past week, Meanwhile, the pandemic is also affecting
France’s Total announced that it had signed a operational performance in Argentina. New
$14.9bn senior debt financing agreement for the government data show that the country saw
Mozambique LNG venture. (See: Total reveals natural gas output drop by 12.2% year on year
details of Mozambique LNG financing deal , page in May, marking the lowest monthly total in the
11) The deal is the largest ever project financing last two decades. Yields are reported to be down
for a development in Africa, according to the at both conventional and unconventional fields.

Week 29 24•July•2020 www. NEWSBASE .com P7