Page 147 - RusRPTOct22

Germany’s Federal Network Agency by order of the German government,
stated German Chancellor Olaf Scholz on Friday (Vedomosti). Although the move is supposedly only temporary, and set to last 6 months, Rosneft protested the move, calling it an “irrecoverable loss of assets”, “illegal”, and an “expropriation”.
A move to ensure future supplies – Scholz. The assets in question are Rosneft Deutschland GmbH (RDG) and RN Refining & Marketing GmbH (RNRM), which among other things own 54.17% of the of the 230kbd PCK Schwedt refinery. Supposedly the move was necessary as many local businesses were refusing to work with a Russian-owned business, making the operation of the assets difficult, and Chancellor Scholz pitched the move as a “guarantee that Germany will continue to be supplied with oil in the medium and long term”.
A potential refining shortfall for Germany. The move, in fact, may directly result in shortages. Urals crude supplied via the Druzhba pipeline has traditionally made up a substantial portion of the plant’s feedstock. Alternative supplies via the port of Rostock and a linking pipeline can theoretically provide about half of the plant’s needs, and the German government is hoping to receive Kazakh crude via Druzhba to replace the rest. However, Druzhba is a Russian pipeline, and it seems unlikely to us that such an arrangement will be allowed. It also seems less than certain that, in a world that will be short of oil should Europe push to enforce its embargo on Russian oil beginning on 5 December, that even the Rostock option will be easily realised.
● Novatek
Novatek plans to put on stream the first train of the Arctic LNG 2 project in December 2023, CEO Leonid Mikhelson told reporters on the sidelines of the Eastern Economic Forum (EEF). The Arctic LNG 2 is the second LNG project of Novatek. The project provides for construction of three LNG trains with the capacity of 6.6mn tonnes per year each.
Novatek the only company to meet criteria for Shell’s share of Sakhalin-2. Novatek will consider acquiring Shell's 27.5% stake in the 11.5mtpa Sakhalin-2 LNG project, but the decision will be taken only after a thorough audit, stated CEO Leonid Mikhelson on September 7.
Shell chose not to retain its share in the project after a Kremlin-ordered conversion of its holding structure to onshore Russia rather than offshore. Mikhelson’s comments came after reports that the government’s criteria for any potential purchaser – including having experience in large-tonnage LNG production of over 4mmtpa, accumulated production and trading volumes of at least 40mm tonnes, and valid time charter agreements for LNG carriers, among other things – are met only by Novatek.
147 RUSSIA Country Report October 2022 www.intellinews.com