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Russia overtakes US in LNG supplies to China

PERFORMANCE RUSSIA continues to make inroads into Asian In June 2019, Russia exported 67,000 tonnes
LNG markets. The latest Chinese customs data of LNG to China, while the US exported none
show that Russia supplied 396,000 tonnes of that month. The latest figures for Russian LNG
LNG to the Asian country in June, compared shipments to China show how dramatically
with 340,000 tonnes arriving from the US. LNG trade between the two countries has grown
According to the customs data, Russia’s LNG over the past year.
exports to China surged by 20.7% on May fig- Overall, Russia has more than quadrupled its
ures, while US exports only rose 2.4% month on LNG exports since 2009 and is aggressively pur-
month. suing further expansion. Earlier in July, Russian
This is perhaps not surprising given that Minister of Energy Alexander Novak wrote in an
US exports of LNG to China had only recently article that new megaprojects could allow Russia
resumed, having been disrupted by the trade war to take up to 15% of the global LNG market by
between the two countries. Earlier this year, Bei- 2025. This compares with around 7% in 2019 –
jing started granting tariff waivers to buyers of and likely a higher figure in 2020.
US LNG in a bid to encourage them to increase Total Chinese imports of LNG also rose 29%
imports. year on year in June 2020, to 5.79mn tonnes. The
Data from the US Energy Information figure refutes previous projections that China’s
Administration (EIA) show that the country has June imports were set to fall from May levels
only been exporting LNG to China again since of 5.6mn tonnes. This comes after the early hit
March. Prior to this, the last time US LNG was China took from the coronavirus (COVID-19)
shipped to China was in February 2019. pandemic.™

OCEANIA

Woodside may pre-empt Cairn’s

sale of Sangomar stake to Lukoil

FINANCE & AUSTRALIA’S Woodside Energy indicated partner. “We think Woodside is interested
INVESTMENT last week that it might seek to block Russia’s in increasing its stake in Sangomar and
Lukoil from acquiring a stake in RSSD, the may prefer a different JV makeup, so [it]
consortium set up to develop the Sangomar may seek to pursue rights to pre-empt or
block offshore Senegal. challenge the sale,” he commented.
Woodside, the operator of RSSD, informed Cairn is not the only member of the RSSD
Reuters that it had not ruled out exercising its venture that is seeking to unload its stake in
right to pre-empt the sale of the stake now owned Sangomar. Australia’s FAR has announced
by Cairn Energy (UK). “Woodside will consider plans to sell its 15% holding but has not named
all its options,” a company spokeswoman said. any potential buyers. When contacted by Reu-
Cairn’s plan is “subject to joint venture (JV) ters, it declined to say whether it had held any
and government approvals,” she added. She discussions with Lukoil.
was speaking after Lukoil revealed that it had The RSSD joint venture also includes Pet-
offered to pay $400mn offer for a 40% stake in roSen, the national oil company (NOC) of Sene-
Sangomar. gal, which has a 10% stake. PetroSen is not likely
If Woodside pre-empts the sale of Cairn’s to give up its holdings in the project.
holdings in the block, it will increase its The Sangomar block includes three sepa-
stake from 35% to 75%. In excluding Lukoil, rate fields – Rufisque, Sangomar Offshore and
it may also manage to avoid US sanctions on Sangomar Deep Offshore – that give the RSSD
Russia. The current sanctions regime pro- joint venture its name. Woodside and its part-
vides for Washington to impose penalties on ners discovered oil there in 2014 and have said
companies that join Lukoil and other major that the block holds around 645mn barrels of
Russian operators for deepwater oil devel- oil equivalent in recoverable reserves, includ-
opment projects. ing 485mn barrels of crude oil and 160mn boe
Saul Kavonic, an analyst for Credit of natural gas.
Suisse, told Reuters last week that he did RSSD has said that it hopes to begin extract-
expect the Australian company to exercise ing oil from Sangomar in 2023. The cost of devel-
its option to buy out its non-operating oping the block is likely to exceed $4.2bn.™

P10 www. NEWSBASE .com Week 31 06•August•2020