NOVATEK Reports Preliminary Operating Data for the First Half 2017

Moscow, 10 July 2017.

PAO NOVATEK reported today preliminary operating data for the first half 2017. NOVATEK’s marketable hydrocarbons production totaled 252.3 million barrels of oil equivalent (boe), including 31.04 billion cubic meters (bcm) of natural gas and 5,885 thousand tons of liquids (gas condensate and crude oil), resulting in a decrease in total hydrocarbons production by 21.3 million boe, or by 7.8%, as compared to the first half 2016. Preliminary natural gas sales volumes aggregated 33.13 bcm, which was 4.1% higher compared to the first half 2016.

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http://www.novatek.ru/en/press/releases/index.php?id_4=1744

Australia trims 2017-18 LNG export forecast by 3.8 mil mt on Ichthys delay

(Sydney, Platts, 7 Jul 2017)

The Australian government Friday lowered its forecast for the country’s fiscal 2017-18 (July-June) LNG exports by 3.8 million mt, due mainly to the later-than-expected startup of Inpex’s Ichthys LNG project. The Department of Industry, Innovation and Science revised down its forecast for fiscal 2017-18 LNG exports to 63.8 million mt in its latest quarterly report from 67.6 million mt issued in March. While pointing to the delay from late 2017 to March 2018 of the Northern Territory-based Ichthys LNG project startup, as well as minor revisions to forecasts for other LNG projects, the report also flagged intensifying global competition and federal government LNG export restrictions as casting uncertainty over the outlook.

Two other LNG projects are scheduled to start production in Australia in the current fiscal year: the 8.9 million/year Wheatstone LNG project and 3.6 million mt/year Prelude floating LNG facility.

Australian LNG benefits cannot be taken for granted

(APPEA Media Release (extract), 6 July 2017).

Australia has received a timely reminder of the value to our economy of a growing gas export industry – and a warning that ongoing success cannot be taken for granted. The June 2017 Resources and Energy Quarterly released by the Department of Innovation, Industry and Science confirms liquefied natural gas (LNG) is on track to overtake metallurgical coal as Australia’s second largest export commodity in 2018-19. The report forecasts the value of Australia’s LNG exports will jump from $23 billion to $37 billion in the next two years as new projects in Western Australia and the Northern Territory enter production. APPEA Director Matthew Doman said LNG exports delivered jobs and revenue for Australia as well as energy and reduced emissions for our Asian trading partners.

“While global supply capacity is set to increase from 285 million tonnes to 382 million tonnes by 2019, almost half of this increase will come from the five new export projects under construction in the US. Qatar, the world’s largest LNG producer, has also signalled its intention to massively increase its own export capacity. So, Australia may soon find itself caught between an established LNG giant determined to regain its market share and an emerging challenger, hungry for success. A supportive policy and regulatory framework in Australia is vital to the industry meeting these competitive challenges.” Mr Doman said the risk to Australia’s export industry was exacerbated by threats to export contracts under the Commonwealth’s new Australian Domestic Gas Supply Mechanism and possible tax increases on new gas projects.

“As a nation, we cannot take the industry’s ongoing success for granted. We are facing intense competition from low-cost producers in an already oversupplied global LNG market. Australia can succeed as a high-cost, low-risk country but we cannot succeed as a high-cost, high-risk country”, he said.