LNG

Taiwan is set to wind down its liquefied natural gas imports from Russia as its supply contract with the Sakhalin II export facility in the Russian Far East is set to terminate at the end of March 2022, while other nations are ending their Russian LNG ties through sanctions over the Ukraine war.

Gazprom, the state-backed Russian natural gas pipeline giant, has completed a section of the planned link from the location of the LNG export plant at Sakhalin Island via the mainland to Khabarovsk and on to Vladivostok as the first inter-regional gas transmission system in Eastern Russia.

Gazprom, the Russian natural gas company supplying pipeline gas to Europe and China in competition to LNG, posted much higher first-half profits as volume sales of gas increased by 18 percent with the start of the partial global economic recovery.

Russian fleet owner Sovcomflot and Sakhalin Energy, operator of the LNG plant in the Russian Far East, signed long-term time-charter contracts for two existing LNG-powered tankers, which will be re-fuelled at the liquefaction and export plant.

Sakhalin Energy, the operator of the Sakhalin II LNG plant in the Russian Far East supplying four North Asian nations, has started scheduled maintenance at infrastructure facilities and is hopeful of having minimum disruption to exports despite changing loading arms.

“Around 2,500 technical staff from various regions of Russia will be engaged in operations at the facilities,” explained Roman Dashkov, Chief Executive of Sakhalin Energy.

“As part of the shutdown, for the first time in Russia, there will be a replacement of loading arms performed at the LNG jetty of the liquefaction plant,” said the CEO.

The Sakhalin plant has been on stream since 2009 and last year prodcued 10.8 million tonnes of lNG.

However, the joint venture run by Russian natural gas company Gazprom has yet to progress on construction of a long-promised third liquefaction Train at Prigorodnoye on Sakhalin Island.

The main shareholders in the plant are Gazprom with 50 percent, Royal Dutch Shell with 27.5 percent and Japanese company Mitsui & Co. and Mitsubishi with 12.5 percent and 10 percent respectively.

In the past year the Japanese have taken delivery of 51.6 percent of Sakhalin volumes, a further 17.4 percent was shipped to Taiwan, 16.3 percent to South Korea and 14.1 percent to China.

Since the start-up of the plant, Sakhalin Energy has produced and shipped about 130 million tonnes of LNG as of early May 2021 and more than 2,000 cargoes.

The company said that the Russian plant had already begun the maintenance campaign on the PA-B plant, the largest oil and gas production platform of the Sakhalin project.

The PA-B platform is located about 12 kilometres offshore the northeast of the island in waters depths of 32 metres.

“At the platform, it is intended to perform an annual purging of the hydrocarbon multiphase flow separation vessels, a repair of the produced water filters, maintenance of two gas compressors, including a gearbox inspection at one of them, and a number of other maintenance tasks,” explained the company.

The workers would then proceed with the scheduled shutdown of the facilities in the integrated gas chain, including the LUN-A platform.

The Sakhalin maintenance programme is expected to be completed by the start of July.

Gazprom, the largest supplier of pipeline natural gas to Western Europe and a main competitor to LNG, posted a nine-month net loss because of the weak Russian currency and as revenues and prices also tumbled in Western European.

Gazprom’s total sales decreased by 139 trillion Russian roubles ($18.27 billion), or 25 percent, to 4.30 trillion roubles ($56.27Bln) for the nine months to the end of September.

“The change was mainly due to a decrease in average prices and volumes of gas sold in the ‘Europe and other countries’ segment,” said Gazprom in its earnings statement.

Gazprom posted a nine-month loss of 218.37 billion roubles ($2.86Bln) compared with a net profit of 1.05 trillion roubles ($13.72 billion) in the first nine months of 2019.

“The balance of foreign exchange differences reflected within the item ‘net finance (expenses) income’ produced a loss to the amount of 749.45 billion roubles for the nine months ended September 2020 compared to the gain in the amount of 230.81Bln roubles for the same period of the prior year. This fact had a major impact on the financial result of the Gazprom Group,” state the Russian company.

By the end of the nine-month reporting period at the end of September 2020, the rouble had dropped to a five-year low against the euro.

Net sales to Europe dropped to 1.13 trillion roubles ($14.83Bln) in the nine months from 1.88 trillion roubles ($24.67Bln) in the prior-year period.

Volumes sent to European pipelines also tumbled to 154.4 billion cubic metres, but still totalled just less than the entire LNG output of Australia and Qatar combined.

Gazprom said the average price charged in Europe dropped by around 34 percent in the period to 9.165 roubles ($120) per million cubic metres versus 13,966 roubles ($183M).

The company’s net sales to former nations of the former Soviet Union amount to 199.54 billion roubles ($2.61Bln).

The volumes amounted to 21.3 Bcm compared with 171.4 Bcm in the same nine months of 2019.

Pipeline natural gas sales in the Russian Federation during the period brought in revenues of 622.88 billion roubles ($8.15Bln) compared with 666.12Bln roubles ($8.72Bln) in the prior year period.

The volumes were just short of the total sent to Europe and came in at 151.1 Bcm versus 162.9 Bcm in 2019.

The average sales price for pipeline gas in the Russian Federation was less than half that for Europe at 4,122 roubles ($54) per mcm and little changed from 2019 when it was 4,089 roubles per mcm.

Gazprom is an LNG exporter, though on a limited scale of around 10 million tonnes per annum from the Sakhalin joint venture in the Russian Far East. The cargoes are mostly supplied under contract to Japanese utilities.

Gazprom also sells refined products, oil and natural gas condensate. Gazprom's new sales flow to China since the start of 2020 is still at a very low level in volume terms of 5 Bcm and is not mentioned in the earnings. 

Sovcomflot, the Russian shipping line with 14 LNG carriers and two others on order, has reported a rise in first-quarter time-charter revenues and turned a profit as it also introduced LNG-powered vessels to its tanker fleet.

Toyo Engineering Corp. of Japan has been awarded two engineering and construction contracts in Thailand and Russia as it redirects its core business to petrochemicals after being involved in the global build-out of LNG liquefaction plants and import terminals, including the Sakhalin export facility in the Russian Far East and the largest Indian import terminal at Dahej near Mumbai.

Oct 10 (LNGJ) - The 177,000 cubic metres capacity carrier “Spirit of Hela” was unloading a cargo on October 10 at the Chinese Qingdao terminal owned by Sinopec from the Oceania nation of Papua New Guinea whose export plant is operated by ExxonMobil. The 75,500 cubic metres capacity Med-Class carrier “Cheikh Bouamama” will deliver a shipment on October 12 to the Cartagena terminal in southeast Spain from the Skikda plant in Algeria operated by Sonatrach. The 210,100 cubic metres capacity vessel “Al Ruwais” will deliver a shipment on October 14 to the Port Qasim facilities in Pakistan from the Ras Laffan plant in Qatar.

The 141,000 cubic metres capacity vessel “LNG Akwa Ibom” will unload a cargo on October 15 at the Indian Dahej terminal near Mumbai from the Bonny island plant in Nigeria. The 176,300 cubic metres capacity carrier “Rioja Knutsun” will deliver a US shipment on October 16 to the Huelva terminal in southwest Spain from the Sabine Pass plant in Louisiana, owned by Cheniere Energy. The 177,000 cubic metres capacity vessel “LNG Lagos II” will deliver a Nigerian cargo on October 17 to the Marmara Ereglisi terminal in Turkey.

The 210,000 cubic metres capacity Q-Flex carrier “Al Nuaman” is scheduled to deliver a Qatargas cargo on October 20 to the Belgian Zeebrugge terminal. The 150,000 cubic metres capacity carrier “Ob River” will unload a shipment on October 20 at the Japanese Mitzushima terminal owned by Nippon Oil from the Russian Sakhalin Island plant.

Royal Dutch Shell has signed a further agreement with Russian natural gas company Gazprom to make progress on plans to build a liquefied natural gas export plant on the northwest Russian coast to supply global markets.