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early 2000s in order to bring its assets back under sale from one of its major projects. It takes San-
state control, ordering Russia to pay $50bn in tos closer to a final investment decision (FID) on
compensation to shareholders. Moscow has Barossa, which it deferred earlier this year owing
been fighting the ruling ever since. to the market downturn but now hopes to reach
In a fresh setback to Russia, the Dutch by the first half of 2021.
Supreme Court “dismissed the Russian Feder- The two companies are also reported to have
ation’s application to suspend enforcement” of signed an agreement to jointly consider oppor-
the 2014 award until the court reaches its ver- tunities for carbon neutral LNG from Barossa.
dict. “The Supreme Court’s decision means that The deal comes during a period where long-
the former shareholders can continue to enforce term supply agreements have become increas-
the arbitral awards pending its final judgment.” ingly rare amid low LNG prices and a growing
Lawyers on both sides of the dispute will pres- number of options available to buyers. It illus-
ent their arguments to the court in early 2021, trates that some appetite for striking long-term
the court said. This represents Russia’s last legal offtake agreements remains, and comes as a
avenue for reversing the award. boost to other LNG producers that are still trying
to take their projects to FID.
If you’d like to read more about the key events shaping
the former Soviet Union’s oil and gas sector then please If you’d like to read more about the key events shaping
click here for NewsBase’s FSU Monitor . the global LNG sector then please click here for
NewsBase’s GLNG Monitor .
GLNG: Asian bunkering success
Two significant LNG-related developments LatAmOil: Braskem Idesa blasts Cenagas
have emerged from Asia in recent days. In a In Mexico, Cenagas, the state-owned operator
world first, Korea Gas (Kogas) successfully of the country’s natural gas pipeline system has
carried out a ship-to-ship LNG bunkering test announced plans to halt shipments of feedstock
in late November. Kogas’ LNG carrier, SM Jeju to Etileno XXI, a unit of the Nanchital petro-
LNG2, was connected a new LNG carrier built chemical complex in Veracruz state. Braskem
by Daewoo Shipbuilding & Marine Engineering Idesa, the Brazilian-Mexican partnership that
(DSME) with a capacity of 174,000 cubic metres owns the plant, has protested this move, call-
for the test. ing it a “unilateral termination” that “may have
“We believe this is a significant first step in a material effect on the company’s operating or
creating and making a very successful market for financial results, depending on the timing of the
LNG bunkering in the future,” Kogas was quoted stoppage.”
by South Korean media as saying. It also reported that it had immediately sus-
Elsewhere, Australia’s Santos announced on pended operations at Etileno XXI after receiving
December 7 that it had signed a 10-year agree- notice from Cenagas, despite the pipeline oper-
ment to supply LNG from its proposed Barossa ator’s unwillingness to wait for 48 hours in order
project to Diamond Gas International, a unit of to allow for the safest possible shutdown. “[In]
Japan’s Mitsubishi. Under the agreement, Santos compliance with safety protocols, Braskem Idesa
will supply Diamond Gas with 1.5mn tonnes per initiated procedures for the immediate interrup-
year (tpy) of LNG. tion of its operating activities,” it said.
Santos’ CEO, Kevin Gallagher, said the deal The supply cut comes amidst a protracted
represented the company’s first long-term LNG dispute between Braskem Idesa and Pemex, the

P10 www. NEWSBASE .com Week 49 10•December•2020