Daily Digest: April 3rd, 2020
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Trump Raises Hopes of Russia-Saudi Truce
Oil prices spiked on April 2 after US president Donald Trump said he expected Russia and Saudi Arabia to cut their oil output rather than increase it.
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The Big Picture:
- "I expect & hope that they will be cutting back approximately 10mn barrels, and maybe substantially more which, if it happens, will be GREAT for the oil and gas industry," he tweeted.
- Reducing their combined daily output by 10-15mn bpd would be unthinkable for Russia and Saudi Arabia, for many reasons.
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Russia Hikes Gas Targets for 2035
The Russian government approved a new energy strategy until 2035 that raises its targets for natural gas and LNG production, its energy ministry said in a statement on April 2.
The Big Picture:
- Russia now plans to produce between 860bn and 1 trillion m3 of gas by 2035, up from a previous goal of 850-924bn m3, the ministry said. Russia has also raised its goal for LNG production in 2035 to 80-140mn mt, from 70-82mn mt.
- Besides LNG, growth is expected to be supported by increased gas exports to China via the 38bn m3/yr Power of Siberia gas pipeline.
BP Hooks up Phase 2 Facility at Omani Field
BP has connected a new Phase 2 facility at the Khazzan field in Oman, it said. It follows a three-week planned shutdown while it carried out maintenance and upgrades at its Phase 1 infrastructure.
The Big Picture:
- BP and its partner Oman Oil have been producing gas at Khazzan since September 2017.
- BP has been operating for more than a decade in the country. The UK major said separately it had been given the all clear from Omani authorities to proceed with exploration work at Block 77.
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Dutch NAM Tests New Small Field
Dutch producer NAM is drilling an exploratory gas well on the Papendijk in Spijkenisse-Oost, it said. Work on this small field is expected to continue until the middle of the month.
The Big Picture:
- NAM is a joint venture owned equally by Anglo-Dutch Shell and US ExxonMobil.
- NAM produces gas from over 150 small fields which together provide about 30% of the Dutch energy supply. Its major operation is Groningen, which is being closed prematurely owing to the damage caused to buildings by six decades of gas extraction.
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Cnooc Signs EPC Contract for Longkou Terminal
Cnooc Gas and Power signed the engineering, procurement and construction (EPC) contract for the first phase development of the Longkou LNG receiving terminal in Shandong province, it said.
The Big Picture:
- The terminal is expected to be completed and put into operation in 2022.
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Cnooc Gas and Power operates nine LNG import terminals at Tianjin, Shanghai, Ningbo, Putian, Yuedong, Dapeng, Zhuhai, Hainan and Shenzhen - most of which are part-owned by others.
UK Upstream Goup Probes Supply Chain Risks
Offshore industry group Oil & Gas UK has launched a survey in a bid to help find solutions to the problems faced by the hundreds of companies in the supply chain, it said.
The Big Picture:
- Its survey is intended to provide data to inform a possible government financial aid package for companies that are not already covered.
Mediterranean-focused Energean has agreed revised terms for the takeover of the upstream business of Italy's Edison, it said, excluding the latter's Algerian assets from the deal.
The Big Picture:
- Energean entered an agreement to buy Edison E&P for $750mn in July, a move aimed at expanding its mostly gas-based portfolio in the Mediterranean area. Edison E&P has assets in Algeria, Croatia, Egypt, Norway and the UK.
- Energean went on to cut a deal to sell Edison's North Sea business to UK-based Neptune Energy for $280mn.
GE To Add Gas Units at Polish Coal Plant
Polish power utility PGE has ordered two gas turbines from General Electric for its Dolna Odra coal-fired power plant in Poland's Western Pomerania region, the US supplier said on March 30.
The Big Picture:
- The units will help lower the 1,832-MW coal plant's emissions, including CO2 by around 2-3mn mt/yr, while also stabilising the regional power grid, which relies heavily on wind farms.
- Polish energy policy has shifted towards gas in recent years and away from coal, which is used to provide around 80% of its electricity.
