LNG

Novatek, the Russian natural gas company and operator of the Yamal LNG export plant and developer of the delayed Arctic LNG II venture, has reported positive operating data for the second quarter of 2024 amid continued Western sanctions.

LNG importer India said plans were advancing for more exploration and production of domestic energy resources as the nation was preparing to launch a 10th bidding round for oil and gas blocks in August or September.

July 10 (LNGJ) - Indian Prime Minister Narendra Modi has ended a visit to Russia and a statement said that both countries were exploring the possibility of expanding cooperation in the natural gas sector and India would continue to import around 3 million tonnes per annum of Russian LNG and the volumes could be increased.

   It was also stated that the Indian state-owned company, Oil and Natural Gas Corp. (ONGC), is maintaining its participation in the Sakhalin 1 oil project in the Russian Far East while the choice of a new operator of the joint venture was now underway after the withdrawal of US major ExxonMobil Corp.

TotalEnergies reported declines in annual and quarterly net profits as commodity prices plummeted compared with the previous year while the French major sold over 44 million tonnes of liquefied natural gas and opened the Le Havre floating LNG regasification terminal in France while being further boosted by progress in other oil and gas projects.

The Russian Finance Ministry said that that the federation’s oil and gas revenues decreased by 26 percent in the first 10 months of the year amid warnings that natural gas and LNG producer Gazprom was heading for record losses and another gas company Novatek faced financial disruption to its Arctic LNG II project.

Reliance Industries, the Indian conglomerate and a leading energy company with domestic gas volumes backing the nation’s LNG imports, reported a decline in fiscal first-quarter earnings while strategic oil and gas operations advanced amid likely continued volatility in gas markets.

The price cap on Russian crude oil backed by the 27-nation European Union and the G7 group of leading western economies entered into force on December 5 and may have an impact on other energy markets and prices.

In addition to the price cap on Russian crude the EU-G7 coalition will cap prices of petroleum products such as gasoline from February 5 in 2023.

“The cap has been set at a maximum price of $60 per barrel for crude oil and will be adjustable in the future in order to respond to market developments,” said a statement on December 3 from the European Commission in Brussels.

“This cap will be implemented by all members of the Price Cap Coalition (EU and G7) through their respective domestic legal processes,” the Commission added.

The price cap, which comes on top of the EU import ban on Russian seaborne crude oil and oil products and the corresponding bans of the G7, is aimed at reducing the revenues Russia earns from oil as a sanction against the invasion of Ukraine in February 2022.

The G7 nations include the EU countries of France, Germany and Italy in addition to the US, Canada, Japan and the UK.

These measures apply to Russian crude oil falling under CN code 2709 00 and Russian petroleum products falling under CN code 2710.

Exceptions

“There is a 45-day wind-down period for seaborne Russian crude oil purchased above the price cap, provided it is loaded onto a vessel at the port of loading prior to 5 December 2022 and unloaded at the final port of destination prior to 19 January 2023,” the Commission explained.

“Maritime-related services and maritime transport can be provided during this period. There is no equivalent provision for petroleum products,” it added.

The Commission stated that “the EU's sanctions against Russia are proving effective and are damaging Russia's ability to manufacture new weapons and repair existing ones” as well as hindering its transport of material.

“The geopolitical, economic, and financial implications of Russia's continued aggression are clear, as the war has disrupted global commodities markets, especially for agrifood products and energy,” added the Commission.

The statement explained that the crude oil cap did not affect the full EU import ban on Russian crude and petroleum products and the specific exceptions and derogations which were already agreed in previous sanctions packages.

“These exceptions and derogations allow certain EU Member States to continue importing crude oil and petroleum products from Russia due to their specific situation or to import seaborne crude oil from Russia if the supply of crude oil by pipeline from Russia is interrupted for reasons beyond their control,” said the Commission.

“Specific projects which are essential for the energy security of certain third countries may be exempted from the price cap,” it added.

Analysts explained that while the EU's ban on importing Russian seaborne crude oil and petroleum products remains fully in place, the price cap will allow European operators to transport Russian oil to third countries, provided its price remains strictly below the ($60) cap.

“The price cap has been specifically designed to reduce further Russia's revenues, while keeping global energy markets stable through continued supplies,” said the Commission.

“It will, therefore, also help address inflation and keep energy costs stable at a time when high costs - particularly elevated fuel prices - are a great concern in the EU and across the globe,” it declared.

Russia’s invasion of Ukraine has upended the fuel investment landscape and intensified a commodity price shock with record earnings likely to be invested in new projects worldwide, including LNG export and imports projects over the next 10 years.

TotalEnergies, the French major under fire for its energy links to Russia, is now the target of European Union-led critics who wish to tax energy companies more, using almost any pretext.

TotalEnergies, the French energy major, said that Europe did not have enough liquefied natural gas import infrastructure for the number of cargoes required to make up for the Russian volumes cut by Western sanctions over the Ukraine invasion.