Daily Digest: March 30th, 2020
Oil Prices Fall Again, as Supply War Looks More Likely
The Brent oil benchmark had sunk to $22.87/b as of 09:10 GMT on March 30, its lowest point since the early 2000s and down 8.3% from the close of trading on March 27.
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The Big Picture:
- Oil prices continue to be weighed down by coronavirus (Covid-19) lockdowns. Riyadh is still not in talks with Moscow on cutting output to rebalance the market, Reuters reported, citing a Saudi official.
- The Trump administration is also reported to be considering sanctions on Russia to force the country to slash its production, in order to prop up prices and support the struggling US shale industry.
Producers Update Sustainability Standards
Three global oil and gas industry associations published the fourth edition of the Sustainability reporting guidance for the oil and gas industry.
The Big Picture:
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The Guidance provides oil and gas companies with a clear framework to demonstrate their important role in the energy transition by reporting on how they manage climate and sustainability impacts and opportunities.
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Sinopec's Qingdao Terminal Receives 300th Cargo
Sinopec-operated Qingdao LNG import terminal, located in the port city of Qingdao in Shandong province, received its 300th cargo on March 27, Sinopec said the same day.
The Big Picture:
- With this, the terminal, which came online over five years ago, has unloaded a total of over 21mn mt of LNG.
- In August 2018, Sinopec said the second phase of the terminal has been officially approved by Shandong provincial government.
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Beijing Gas Blue Sky's 2019 Profit Down 72%
Chinese gas distributor Beijing Gas Blue Sky Holdings said its profit for the 12 months to December 31, 2019, was HK$73.9mn, down 71.8% yr/yr, owing to the absence of one-time gain seen in the previous year.
The Big Picture:
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The company recorded total revenue of HK$2.67bn (US$340mn), representing a growth of 24.6% yr/yr, thanks to the completion of the acquisition of LNG distributors Zhejiang Bo Xin and Xin Te.
- It has six city gas projects in the provinces of Shanxi, Jilin, Liaoning and Hubei.
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Shell Withdraws From US LNG Project
Anglo-Dutch major Shell said it was withdrawing from the Lake Charles LNG project in Louisiana, a project it was developing in partnership with US midstream developer Energy Transfer.
The Big Picture:
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Energy Transfer said it would continue to develop the project, and is evaluating various alternatives to advance it, including the possibility of bringing in one or more equity partners and reducing the size of the project from three trains and 16.45mn mt/yr to two trains and 11mn mt/yr capacity.
Mitsubishi develops Singaporean Hydrogen
Japan's Mitsubishi and its affiliate Chiyoda have signed a memorandum with Singaporean firms PSA Corp, Jurong Port, City Gas, Sembcorp Industries and Singapore LNG to develop hydrogen as a fuel in Singapore.
The Big Picture:
- Under the memorandum, the group will discuss the the technical and commercial feasibility of hydrogen as energy, and develop businesses for its import and use in Singapore.
- They will discuss the use of Chiyoda's Spera hydrogen storage and transportation technology, enabling hydrogen to be transported in chemical tankers.
Lithuanian FSRU Goes Offline for Dredging
Lithuania's LNG floating storage and regasification unit (FSRU) at Klaipeda temporarily shut down import operations and has moved from the site so that the port can be dredged, its operator Klaipedos Nafta said.
The Big Picture:
- The Klaipeda LNG terminal's regasification capacity is 3.75bn m3/yr. It provides gas to consumers in Lithuania and neighbouring states as an alternative to Russian pipeline gas.
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Gazprom Makes no Change 2020 Investment Plan
Russia's state gas producer Gazprom does not foresee any difficulty in financing its 2020 investment plan, company head Alexei Miller told Russian president Vladimir Putin in a meeting on March 27.
The Big Picture:
- The company is bucking the trend by not cutting its capex, as many other producers have done in recent weeks in response to the market downturn.
- Gazprom announced in February a capital expenditure programme worth rubles 1.08 trillion ($14bn) for this year, down from a rubles 1.32 trillion spend in 2018.
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PetroChina Surges up the Rankings
As major listed companies have all published their FY2019 results it is now possible to compare their gas production level. Gazprom stays the undisputed leader with a 12% worldwide market share followed by PetroChina.
The Big Picture:
- PetroChina with its gas production focus, has overtaken respectively ExxonMobil in 2018 and Shell in 2019, to win its second position.
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Sinopec Tianjin Terminal's Imports Jump
Sinopec’s Tianjin LNG terminal, near Beijing, has received 1.75mn metric tons of LNG in the year to March 27, up 34% yr/yr, the company said.
The Big Picture:
- The terminal began commercial operations in February 2018 and supplies to downstream customers in Beijing, Tianjin, Hebei and Shandong.
