Russian hydrocarbon (Oil and Gas and Coal) Industry: News #4

36 Rosneft fields will fall under the bill on liberalization of LNG exports

Moscow, April 19 - IA Neftegaz.RU. The bill, which allows state-owned companies to export reduced natural gas ( LNG ) to users of onshore subsoil plots wholly or partially located north of 67 degrees north latitude, will apply to 36 Rosneft fields in the Krasnoyarsk Territory, the Nenets and Yamalo-Nenets districts.
This was announced by Deputy Minister of Energy of Russia A. Bondarenko.

A. Bondarenko on April 19, 2023 presented the corresponding government bill in the State Duma Committee on Energy.

Theses of A. Bondarenko:

You can export gas in the form of LNG from all fields of Gazprom and its 100% subsidiaries:
these are about 190 deposits;
after the introduction in 2012-2013. of a number of amendments to the law "On Gas Export" gained the right to export LNG:
Rosneft,
Gazprom export ,
NOVATEK companies :
Yamal LNG ,
Arctic LNG-2 ,
Arctic LNG-1,
Arctic LNG-3,

Gazprom gaznefteprodukt holding;
licenses issued by the Ministry of Energy;
the new draft law expands the list of 3 categories of entities that have the right to export LNG, and provides for the granting of the right to export to Rosneft;
the list of fields now owned by Rosneft is expanding:
these are about 36 fields located in the Krasnoyarsk Territory, Nenets, Yamalo-Nenets Autonomous Districts;
the draft law will make it possible to monetize gas reserves that are far removed from Gazprom's unified gas supply system;
LNG can be produced from both natural gas and associated petroleum gas ( APG );
the bill aims to meet the target for LNG, which is set in the energy strategy of Russia until 2035:
about 140 million tons/year and achieving a 20% share in world exports.
Amendments to the law on gas exports, which provide for the granting of the exclusive right to export LNG to users of subsoil plots on land, wholly or partially located north of 67 degrees north latitude, were developed by the Russian Ministry of Energy back in May 2022.

It was assumed that such a measure would not only allow monetizing large gas reserves located in territories remote from the UGSS, but also to create conditions for increasing the production and export of LNG from promising LNG projects.

For example, Rosneft's potential LNG projects have long experienced difficulties with LNG exports.
We are talking about projects that can be implemented as part of the Vostok Oil project on the Taimyr Peninsula and have significant reserves of natural gas, as well as the planned LNG project based on the fields of Rosneft's subsidiary Kynsko-Chaselskoye neftegaz.

The Vostok Oil project is being created by Rosneft on the Taimyr peninsula in the north of the Krasnoyarsk Territory.
The project includes:
52 subsoil plots, within the boundaries of which 13 discovered fields are located:
the key ones are the Payakhskaya group of deposits, the largest deposits of the Vankor cluster (Vankorskoye, Suzunskoye, Tagulskoye and Lodochnoye),
promising subsoil plots in the north of the Krasnoyarsk Territory, incl. Zapadno-Irkinsky subsoil plot.
The resource base of the project is estimated at 6.5 billion tons of liquid hydrocarbons and about 2 trillion m 3 of gas.

Position of the Energy Committee
The Energy Committee reported that the bill would allow monetization of large gas reserves, which are located in territories remote from the unified gas supply system, with the help of LNG projects.

Theses of the Chairman of the Committee P. Zavalny:
in the current geopolitical situation, Russia needs accelerated gas monetization and an increase in export potential through diversification of supplies in order to maintain its leadership position in the global energy market;
at the same time, we need to increase the export of LNG as the most mobile type of natural gas and demanded by external markets, the share of which in the world gas trade will only grow;
Today, Russia's share in the LNG market is about 9%, despite the fact that our country ranks first in the world in terms of proven reserves of natural gas, owning approximately 20% of the world's reserves.
Gas fields located north of 67 degrees north latitude, in the Krasnoyarsk Territory, the Nenets, Yamalo-Nenets Autonomous Districts, are significantly remote from the Unified Gas Supply System, which is why gas monetization from these fields is economically feasible only through LNG production.
LNG bunkering
The bill also provides for the removal of LNG bunkering operations from the gas export law, which will stimulate the use of LNG as a bunkering fuel, which is a more environmentally friendly and alternative fuel for sea and river navigation.

Theses of P. Zavalny:
this will help:
replacement of liquid fuels with gas in the domestic market,
supporting the export potential of the oil industry in the face of declining oil production ,
reducing budget expenditures for stabilizing prices for petroleum products in the domestic market.
The 1st reading of the draft federal law on amendments to articles 2 and 3 of the federal law on gas exports will be held on May 16, 2023.

As noted by the First Deputy Minister of Energy of the Russian Federation P. Sorokin , by the end of 2022, Russia increased LNG exports by 10% :
taking into account potential projects, by 2030 our country can reach a level of LNG production of more than 100 million tons per year.

EU is still largest importer of Russian oil due to loophole in sanctions, report claims

EU reliant on rebadged Russian oil from India - Bloomberg, 04.30.2023.

India has become the bloc's top fuel supplier by re-exporting Russian supplies, according to the outlet.

The EU is still powering its economy with Russian oil despite sanctions, Bloomberg reported this week. Member states are now said to be buying the sanctioned fuel through India.

In December, the EU, G7, and allied countries imposed an embargo and a $60-per-barrel price cap on Russian crude and later introduced similar restrictions for exports of petroleum products.

But India has not joined the ban and instead has ramped up purchases of Russian oil that Moscow has been offering at discounts.

In 2022-2023, Indian refiners bought between 970,000 and 981,000 barrels of Russian oil per day, accounting for more than a fifth of the country's overall imports, which were between 4.5 million and 4.6 million barrels per day (bpd), Kpler and Vortexa data showed.

Not only has India become Russia's top oil buyer since the ban went into effect, New Delhi is now on track to become the bloc's largest supplier of refined fuels.

Indian processing plants have been snapping up cheap Russian oil, turning it into fuels and reselling it to the EU at a competitive price.

"Russian oil is finding its way back into Europe despite all the sanctioning and India ramping up fuel exports to the west is a good example of it," a lead crude analyst at Kpler, Viktor Katona, told Bloomberg. "With India taking in so much Russian barrels, it's inevitable," he added.

Imports of fuel from India to the EU are set to jump above 360,000 bpd, overtaking shipments from Saudi Arabia, according to Kpler.

Diesel powers large sectors of the European economy with more than a third of it coming from Russia prior to the conflict in Ukraine. Now that the EU has stopped accepting refined products from Moscow, the bloc needs to source the fuel from alternative suppliers, which means higher shipping costs and tighter competition between refineries, the outlet said.

Meanwhile, Russian crude oil arrivals to India are expected to surpass 2 million bpd in April, representing almost 44% of the nation's overall crude imports, data from Kpler showed.

https://www.rt.com/business/575481-india-eu-russian-fuel-exports-soar/

Novatek to improve proprietary natural gas liquefaction technology

MOSCOW, April 13. /TASS/. Novatek has obtained a Russian patent for its proprietary natural gas liquefaction technology called Arctic Cascade Modified (ACM), which builds upon the company’s patented Arctic Cascade process already implemented at the Yamal LNG project’s Train 4, the company said in a statement on Thursday.

"Stemming from operational lessons learned, improvements to the technology enable LNG production with a leaner equipment list and better energy efficiency. The underlying process design is compatible with domestically manufactured equipment," Novatek said.

The ACM liquefaction process is intended for the company’s large-scale LNG projects in the Arctic with a production capacity of 3 mln tons of LNG a year per LNG train.

Russian Deputy Prime Minister Alexander Novak said earlier in an interview with TASS that the capacity of the Russian medium-capacity technology Arctic Cascade might be increased from 1 mln to 2-3 mln tons, adding that concurrently Russia also developed a large-capacity gas liquefaction technology with a capacity of 5-6 mln tons with structures of Rosatom, Novatek and Gazprom.

Russia has been involved in substituting import of LNG technologies and subsidizing equipment creation since 2014, Novak said, noting that an increase in Russia’s LNG production was increasingly relevant as it permitted reducing the dependence on transit countries. The country plans to increase production to 64 mln tons per year in coming years, and to reach 100 mln tons by 2035, he said.

Pakistan will pay for Russian oil in yuan Details of the deal with the arrival of 750,000 barrels of crude oil in Pakistan in June

The cost of delivery is estimated at about $15 per barrel.

Pakistan finally agreed with Russia on a price of $50-52 per barrel.

Thus, preliminary, until the end of the year, Pakistan will pay for Russian oil with delivery of about $65-67 per barrel (in exchange rate terms) in yuan.