Meeting Europe’s LNG Demand

OGI sits down with Dunkerque LNG, a Fluxys company, to learn more about their LNG terminal based in Fance which is actually the second largest LNG terminal in Europe. As the growth of global gas trading increases, the rapid growth of shipping LNG is growing with it. Dunkerque LNG is here to help our readers understand more of the implications of Europe’s (France in particular) increasing dependence on gas imports outside of the European Union. Dunkerque LNG is positioned to help bring more LNG gas to the European Union’s rising demand.

OGI: Could you start by explaining Dunkerque LNG’s credentials and experience in terms of your products and services for the gas sector? Could you tell our readers the breadth of your experience, how long the company has been active, and its reach? Dunkerque: On the 21st of June 2011, EDF and its partners, Total and Fluxys, gave approval for the construction of the Dunkirk LNG terminal. The terminal has been in service since 8 July 2016, with the commercial commissioning conducted by the shareholders on the 1st of January 2017. On the 30th October 2018, following a competitive auction process launched in early 2018, EDF and Total sold their interests in Dunkerque LNG. Fluxys has now the control of the Dunkirk LNG terminal, the second-largest LNG terminal in continental Europe after Barcelona. The Dunkirk LNG terminal is currently owned and operated by Dunkerque LNG, a company 61% owned by a consortium made up of gas infrastructure group Fluxys, AXA Investment Managers-Real Assets, acting as an agent for their clients, and Crédit Agricole Assurances, and 39% owned by a consortium of Korean investors led by IPM Group in cooperation with Samsung Asset Management. The new shareholders fully support Dunkerque LNG in its intentions to increase its activity. It benefits from the growth of LNG in Europe and the development of a small-scale market (by setting up an innovative supply chain via LNG reloading service using road tankers and bunker barges). The Fluxys Group affiliate will benefit from the full range of the Fluxys group’s LNG expertise, one of its core businesses and its long-standing commercial relationships in the LNG world. The Dunkirk terminal will become a real bridge thanks to its excellent interconnection with not only French and Belgian, but also German gas networks, and would provide a solution to the expected growth in new gas import requirements for Germany. EDF and Total remain the main customers of the Dunkirk LNG terminal through 20-year “ship or pay” contracts. These contracts mean that customers pay regardless of their use of the terminal, enabling the terminal’s services to be used flexibly. Of an annual regasification capacity of 13 billion m3, 9.5 are reserved for EDF and Total in the long-term, and 3.5 are put on sale through a bond issue. OGI: What are some of the benefits of LNG, opposed to building more gas pipelines in Europe? Dunkerque: The gas, once it has been extracted, can be transported in two ways: in gas form through a gas pipeline or in liquid form. In the latter case, the gas is liquefied by cooling it to a very low temperature (-162°C), so that it occupies a much smaller volume. Liquefied natural gas (LNG) takes up 600 times less space than in its gaseous form. The LNG in the terminals and storage tanks is stored at close to atmospheric pressure. This liquefaction enables diversity of gas supply. LNG is clear, odourless, non-toxic and non-corrosive. The transportation of LNG by ship gives greater flexibility of supply and improved cost for distances greater than 3,000 km. The LNG chain also means gas can be transported in complete safety when transport by pipeline is not possible or when the distance between the production site and point of consumption is too great. Dunkirk’s LNG terminal was created against a backdrop of growing dependence in Europe, and in France in particular, on natural gas imports from outside the European Union, as conventional gas production in the North Sea draws to a close. The installation of this LNG terminal is therefore a strategic one, and should create a flexible raw energy supply source, close to an area of high consumption, against a backdrop of tensions on the energy market. OGI: Why does Dunkerque LNG’s terminal stand out as one of the most attractive in Europe? Dunkerque: Dunkirk LNG terminal offers major advantages to its customers: • One of the largest on-terminal storage capacities in Europe. • Diversification and security of supply for the French and European markets. • A new maritime landing-point for LNG in France. • A location at the heart of Europe, at the cross-roads of maritime routes through the English Channel and the North

Sea and close to natural gas consumer markets in France and North-West

Europe. • A direct connection to two European markets (France and Belgium). • A deep-water port making it accessible all year round. • Genuine upstream flexibility to handle all sizes of ship from 5,000 m3 to 265,000 m3. • Downstream flexibility feeding the network upon customer request. • Excellent technical operation. The innovative design of the terminal allows optimisation of both the upstream (through gas import contracts) and downstream (output to network) markets through the allocation of

firm rights: • A number of slots (loading or reloading times). • A storage capacity. • A minimum and maximum output. Dunkerque LNG has developed a flexible and competitive service with its customers at the heart of terminal operational management. Certain more specific services are also offered to meet the needs of all of its customers: • Filling gas tanker holds (gassing up). • Cooling gas tanker holds (cooling down) • Inerting gas tanker holds (inerting). • Unloading excess volumes. OGI: Could you tell us more about your regasification capacity? Dunkerque: The Dunkirk LNG terminal has an annual regasification capacity of 13 billion m3 of gas, or around 20% of annual French and Belgian natural gas consumption. It is the only one to be directly connected to two markets, French and Belgian, thanks to two separate pipelines coming from the Pitgam compressor station. OGI: Could you talk a bit about your safety and environmental commitments? Dunkerque: Dunkirk’s LNG terminal is located in the Western Port on a 56-hectare site, equivalent to 80 football pitches, of which 20 hectares have been reclaimed from the sea. It is located on the Clipon site, an artificial dune created around thirty years ago when the Western Dunkirk outer Port was created, on the Loon-Plage commune. Prior to construction, the contracting agent conducted all necessary consultation work at local level. The concerns expressed during the public debate held in 2007, and the decision to make this large industrial project an example of how environmental requirements can be integrated, led to a number of key technical decisions. These relate in particular to the location of the terminal. The site was therefore moved to the west to preserve sensitive areas. Compensation measures were also taken by Dunkerque LNG: • The construction of a habitat for migratory birds on the Gravelines commune, covering an area of 20 hectares, named the “Hems

Saint - Pol sensitive natural area”. • The creation of an area located within the confines of the Gravelines nuclear power station, for the preservation of biodiversity, covering an area of 4.5 hectares. Other installations, implemented by the Dunkirk Major Sea Port and managed by the Nord departmental council, are located adjacent to the site of the terminal: • The reconstruction of wild bird habitats and dune ecosystems; the constitution of a preservation area at Clipon Est, including the creation of salt marshes used by birds as a feeding zone. • The creation of a preservation area, which complements Dunkerque LNG’s second measure and provides access arrangements for anglers.

Also, a non-CO2-producing regasification solution was adopted, using 5% of the warm water produced by the Gravelines nuclear power plant. This measure gives a maximum saving of 436,000 tonnes of CO2 a year. All of the compensatory environmental measures are covered by an order of the prefect dated on the 31st of July 2009. Concerning security, it is ensured by a guard post, regulated access, a video surveillance system, an operations team present 24/7 and the port and military security brigade in the area. The terminal is protected against the tsunami risk (elevation of 10 meters around the platform, sea wall, reinforcement of the dike). It is also protected against the risk of fire thanks to the presence of a water spray boom on all buildings in the process area. The fire network is supplied by 5 pumps drawing from the sea (which allows cooling and protection from thermal effects). The network can also be supplied by tugboat (dedicated pontoon). The terminal design provided for the collection of LNG leaks by gutters connected to safety areas. The tanks are jacketed (concrete and cryogenic steel), with entry andexit points on the top. The process is equipped with an automatic emergency stop system and activation of fire protection means. OGI: Has the Covid-19 situation impacted the LNG business in any way, and if so, how so? Dunkerque: Despite the major impact of the coronavirus outbreak in the society, the essential services of Dunkirk LNG terminal remained operational. As one of the key players in the European gas infrastructure, we are responsible for the energy supply of our customers. Public services, households, hospitals and many industries are in need of our energy supplies, now more than ever. We are proud to have been able to ensure a continued stable gas supply for society and our customers and partners, thanks to the commitment of our teams. For all our activities, our terminalling activities in Dunkirk, we are carefully complying with the recommendations of national authorities in the field of health and safety. OGI: Finally, could you enlighten our readers about small-scale LNG activities in Dunkirk? Dunkerque: LNG is also transported on a smaller scale. This provides for the use of LNG as a fuel and the transportation of energy over shorter distances or to areas without access to electricity, which are not connected to a transportation or gas distribution network. Ship owners and haulage companies as well as remote industry increasingly choose Liquefied Natural Gas (LNG) as alternative low emission fuel. Their supply can now be sourced from the Dunkirk LNG terminal. Following its commercial entry into service on June 1st, the newly commissioned truck loading bay at the Dunkirk LNG terminal offers a loading capacity of 3,000 slots per year. Using the service is straightforward: • Customers can book loading slots online 24/7. • After online training, drivers can fully autonomously load LNG in just 90 minutes. The increasing demand for cleaner energy in maritime and road transport as well as in the industrial sector has brought LNG to the forefront as an attractive alternative due to its low emission profile. As it goes, switching from heavy fuel oil, diesel, petroleum or coal to LNG not only reduces carbon dioxide (CO2) emissions but also drastically cuts air pollution by virtually eliminating emissions of particulate matter and sulphur (SOx), and significantly reducing nitrogen oxide (NOx) emissions as well. The teams at Dunkirk’s LNG terminal adapted the existing jetty to take bunker vessels above 5,000 m3. This work has been carried out last June during the stop of the activity. We are also considering building a dedicated jetty, depending on how the market develops. OGI: Thank you for your time. •

Dunkerque LNG - Fluxys

https://www.fluxys.com/en/companydunkerque-lng Copyright: Dunkerque LNG – HappyDay

From Net Zero Ambition to Total Strategy

Increasing energy while decreasing carbon

Growing energy demand and getting to Net Zero are the two global trends underpinning the Total Energy Outlook and thus the evolutions of the energy markets that Total integrates into its strategy. Total’s strategy aims to transform itself into a broad energy company by profitably growing energy production from LNG and electricity, the two fastest growing energy markets, aiming to create long term value for its shareholders. In the next decade, Total’s energy production will grow by one third, roughly from 3 to 4 Mboe/d, half from LNG, half from electricity, mainly from renewables. The Group will progressively scale up profitable investments in renewables and electricity from 2 to 3 B$ per year representing more than 20% of capital investments. Total confirms its ambition to get to Net Zero by 2050 together with society for its global business (Scope 1+2+3). On its way to carbon neutrality in Europe by 2050, Total will reduce the Scope 3 emissions of its European customers by 30%, in absolute value, by 2030. This decrease in Europe allows Total to take the new commitment to reduce the absolute level of the worldwide Scope 3 emissions of its customers in 2030 compared to 2015. In the next decade, oil products sales from Total will diminish by almost 30% and Total’s sales mix will become 30% oil products, 5% biofuels, 50% gases, 15% electrons.

Increasing energy in gases

Total LNG sales will reach 50 Mt/y by 2025 and will double over 202030, creating value from scale, arbitrage and integration along the value chain. Cash-flow from integrated LNG business shall grow by 40% to more than 4 B$ in 2025 at 50$/b. Decarbonizing natural gas with biogas and hydrogen as well as continuing to reduce methane emissions will contribute to Total’s climate ambition.

In electrons

Developing an integrated business model from production to sales through storage and trading, Total is targeting 50 TWh of net production and 80 TWh of sales to 9 million customers by 2025. Building on the strong dynamic in 2020, Total will grow as a world leader in renewables, raising its objective to 35 GW gross capacity in 2025 (70% already in portfolio), and has the ambition to add around 10 GW per year beyond, as it managed to do in 2020. Renewables and electricity are expected to deliver a predictable cash flow of more than 1.5 B$ per year by 2025.

And privileging value over volume in oil

Total will focus on low cost oil projects, privileging value over volume and develop its portfolio of oil projects, all with profitability above 15% at 50$/b, while ensuring consistency for Capex allocation with climate ambition.

Adapting energy sales to market evolution and engaging in the mobility revolution

As recently demonstrated with the Lindsey refinery divestment and the transformation of Grandpuits refinery into a zero oil platform, Total will adapt refining capacity and sales to demand, particularly in Europe. In the same time, it will further increase its biofuels productions and sales as demand for such renewable products is supported by policies aiming to get to Net Zero. Renewable diesel production is expected to reach more than 2 Mt/y by 2025. The Group is also committing more than 1 B$ over the next ten years to the e-mobility revolution by investing in manufacturing and EV charging with a target of 150,000 charge points by 2025. Resilience & Growth underpinning compelling investment case In the current uncertain environment, Total remains focused on what it controls and specifically on the pillars that enable the Group to resist the crisis: HSE, delivery, costs and cash, with a view to continuously improve its organic breakeven below 25 $/boe. Discipline and flexibility will be maintained on capital investments with 13-16 B$ over 2022-25 assuming an oil price between 50 and 60 $/b. Considering the shortterm uncertainty and low price environment, capital investment for 2021 should be under 12 B$. Cost reduction efforts will be accelerated and increased to 2 B$ by 2023. Accelerating its shift toward low carbon businesses while growing its Upstream production by around 2% per year between 2019 and 2025, mainly over 2022-25, the Group confirms a cash flow growth of 5 B$ by 2025 and a ROE greater than 10% in a 50 $/b environment. Based on this outlook and given the resilience shown by the Group, the Board reaffirms its confidence in the Group’s fundamentals and confirms that the dividend is supported at 40 $/b. Beyond serving the dividend, priority will be given to bringing gearing below 20%. Furthermore, the Board is convinced that Total, with its strategy to become a multienergy company while offering a high yield dividend, is a compelling investment case supporting stock rerating.•

New Plastics Set Standards in Flame Retardancy and Electrical Insulation

On the occasion of this year’s International Trade Fair for Plastics Processing (Fakuma), BASF is showcasing on its virtual platform two new high-performance plastics, Ultradur® B 4440 and Ultramid® B3U42G6, adding innovations in the field of flame-retardant and highly insulating polymers to its existing portfolio. The two new high-performance plastics offer extremely high tracking resistance and excellent fire behavior combined with economical processing options. These two new products successfully combine material innovation and sustainability by avoiding the use of antimony and halogen compounds. “The new Ultramid® and Ultradur® grades mean that we are able to offer our partners from key industries solutions for the increasing regulatory requirements in the areas of electrical systems and fire protection,” says Dr. Michael Roth, Product Developer at BASF Performance Materials. “The trend toward automation in production at our customers’ plants also means that simple and stable manufacturing is essential. Ultradur® B 4440 and Ultramid® B3U42G6 make this possible,” explains Roth. Ultradur® B 4440 and Ultramid® B3U42G6 allow optimum insulation properties and flame retardancy for thin walls. Both high-performance plastics attain the highest CTI rating of 600 volts and the V0 classification according to UL94 as highly flame-retardant materials at wall thicknesses from 0.4 mm. Both materials exhibit good suitability for injection molding. The unreinforced Ultradur® B 4440, which can also be processed by extrusion, lays the foundations for increasingly complex components, and helps designers meet growing demands. These two products open up the possibility for entirely new miniaturized solutions, e.g., for connectors, terminal blocks, loose buffer tubes for fiber optical cables and filaments. Since Ultradur® absorbs minimal moisture, it also provides high dimensional stability. An additional benefit is the use of bright colors to differentiate. “Orange is the new gray,” the expert Dr. Michael Roth explains. But other colors are also possible. “The color coding of individual parts makes for smoother and therefore faster production and assembly.” Precise laser marking is also possible through laser-sensitive coloring. The laser-transparent coloring options of Ultramid® extends the range of applications into housing assemblies. “Besides the unreinforced Ultradur® B 4440 the currently developed glass fiber-reinforced Ultradur® products combine the high dimensional stability of polyester with distinctive high rigidity and toughness,” explains product developer Dr. Michael Roth. “This means that we can offer forward-looking materials for the electrical industry, construction and mobility sectors, combining technical progress with sustainability.” •

Aker Solutions Awarded Subsea Contract for Breidablikk

Aker Solutions has been awarded a contract from Equinor for the delivery of a subsea production system for the Breidablikk development in the North Sea. The contract value is estimated at about NOK 2.5 billion, including options. The contract covers the delivery of four subsea templates and up to 23 subsea trees and associated components. The deliveries include Aker Solutions’ standard, lightweight vertical subsea trees, and Vectus™, the company’s next-generation subsea control system, which offers greater data and power capabilities. “We are very pleased to see the Breidablikk project move forward, following the interim measures by the Norwegian authorities this summer,” said Kjetel Digre, chief executive officer of Aker Solutions. “The award demonstrates our competitive position in the subsea market and will lead to more activity at many of our facilities in Norway and internationally, creating work for hundreds of employees across Aker Solutions. We look forward to continuing our long-standing collaboration with Equinor in this project.” The work will be carried out at Aker Solutions’ locations in Fornebu, Tranby, Egersund, Sandnessjøen and Ågotnes, with additional deliveries from Brazil, Malaysia and the UK. Aker Solutions booked NOK 2 billion related to the first 15 subsea trees in the second quarter of 2020 and will book NOK 0.5 billion for the additional eight subsea trees as order intake in the third quarter of 2020. Breidablikk is a large oil discovery on the Norwegian Continental Shelf located north-east of the Grane field in the North Sea. Breidablikk will be developed as a subsea field with a tie-back to the Grane platform by Equinor and partners Petoro, Vår Energi and ConocoPhillips. The project development is subject to final approval by the Norwegian authorities. •

Aramco and Local Companies Back COVID-19 Aid Initiatives in the Basque Country

ARAMCO, a world leading energy and chemicals company, is backing an aid program to mitigate the effects of coronavirus on Basque society. The program, part of the company’s global response to COVID-19, will be managed by the Energy Advanced Foundation, founded by TUBACEX, TUBOS REUNIDOS, AMPO and VICINAY MARINE, for the role they play within their value chain. Over 300,000 euros have now been donated and allocated to a range of charitable initiatives covering healthcare, food supply and education. In terms of healthcare, facemasks and other Personal Protective Equipment were donated to retirement homes, community health centers and to the general public, ensuring access these important preventive resources. Additionally, funding was awarded to a project proposed by the Biocruces Bizkaia Health Research Institute to understand and prevent COVID-19 in retirement homes, analyzing the importance of the microbiota in diagnosis, prognosis and treatment. Finally, funding was given to an innovative project developed by Eversens, which detects inflammation in the respiratory tract associated with SARS-COV-2 by measuring exhaled nitric oxide (eNO). On another front, the program offers support to sections of society left financially vulnerable by coronavirus. This includes a donation of more than 30,000 euros to food Banks in Álava, Biscay and Gipuzkoa, who have seen a 30% increase in the demand for basic goods during confinement. This amount is expected to cover the dietary requirements of 50 individuals for the period of a year. Other activities in this vein include the provision of a daily meal for families without resources in the Ayala valley, and support for the RedCross’ Responde program, meeting the basic needs of groups at risk from poverty and exclusion. These groups include the homeless, and thanks to the global plan outlined here around twenty young people, who had been living in sports centers and hostels around Bilbao during the pandemic, could be relocated to Caritas’ Begoñetxe temporary residence, where they will receive ongoing coaching on education and employment. Lastly, confinement has exacerbated educational and digital inequality across younger generations. With the participation of Euskaltel and SD Eibar Fundazioa, the program was able to offer internet access to impoverished families in the Durango and Debabarrena areas so that their children could participate in online classes. The program demonstrates ARAMCO’s commitment to this key region, home to the largest number of companies related to the energy sector in Spain. For Talal Al-Marri, President and CEO of Aramco Europe, this initiative is “a priority for Aramco, as we are committed to supporting frontline care providers during this challenging time. We have looked to do this across our global locations, in communities where we operate, like the Basque region. Indeed, the company’s response to Covid-19 has been led from the very top, with our global leadership highlighting early on in the crisis, that we would be taking all the necessary precautions to support health and safety during this time.” In the words of Jesús Esmorís, President of the Energy Advanced Engineering Foundation’s business leaders, ARAMCO’s donation was “a call for solidarity”, garnering the support of other companies to unite behind a common goal. Further notable contributions came from other Energy Advanced Engineering foundation members, including Fluidex, Euskaltel and SD. Eibar. •

This week the Australian federal government announced a so-called Gas-fired Recovery. The plan appears to be largely concerned with the east coast, without anything obvious about Western Australia, Australia’s largest gas producer. Much of the media focus has been on proposals for new pipelines and on proposals for new gas-fired power in NSW following the closure of the Liddell coal-fired power station. New pipelines may well be necessary for increased east coast gas supply but there is no missing link that cannot be readily bridged. The critical element is finding and developing affordable gas to flow into any new infrastructure. Accordingly, two important measures announced by the government are: • Setting new gas supply targets with states and territories and enforce potential “use-it or lose it” requirements on gas licenses. • Unlocking five key gas basins starting with the Beetaloo Basin in the NT and the North Bowen and Galilee Basin in Queensland, at a cost of $28.3 million for the plans. Gas supply targets are a good idea. The cheapest gas will always be the gas that is closest to the customers. The main culprits are NSW and Victoria. For NSW a decision on Narrabri development is due within weeks. This decision is critical for NSW manufacturers. We know too that NSW has substantial onshore gas resources beyond Narrabri (over 10,000 PJ or 10 Tcf). Over the last couple of years Victoria has been through a government-sponsored gas study, aimed at re-booting onshore exploration. A government-sponsored independent study along Victorian lines might be one way NSW onshore gas resources can be unlocked. In this context the additional funding for GISERA could help smooth the way. In Victoria onshore exploration for anything other than conventional gas is illegal and AGL’s Crib Point LNG import terminal is mired in green tape. Making progress in Victoria is likely to be challenging but one potential resource, but which is off limits, is Victoria’s biogenic CSG. The presence of biogenic gas, associated with deep (450 -1,200m) brown coals, is extensive across the Gippsland Basin and Latrobe Valley. It is estimated that EL 4416, covering 2,000 km2 of the onshore Gippsland Basin, hosts prospective biogenic CSG resources totalling around 3.7 Tcf. ExxonMobil and Ignite Resources were evaluating the resource. Exxon walked away from the joint venture in 2014 after the blanket ban on onshore drilling was put in place by the Victorian Government. A ban on CSG development remains and this resource is not likely to be evaluated in the foreseeable future. This is unfortunate because the gas is likely to be low cost, not require fracking and sufficiently deep such that it would not pose any danger to agricultural water supplies. Successful exploration and appraisal of this resource would solve all the problems of Victorian manufacturers. However this is likely to take time and in the meantime anything the Commonwealth can do to facilitate approval sooner or later for an LNG import terminal would be prudent in view of the decline in fields offshore Victoria. There have been potentially significant gas resources identified in the Beetaloo Basin (6.6 Tcf), North Bowen Basin (9.7 Tcf) and the Galilee Basin (2.5 Tcf). Government support to unlock these basins would be worthwhile. However, it is early days yet for the Beetaloo and the NT government also has plans for energy-intensive manufacturing in Darwin. It is also early days for the Galilee Basin. The history of the North Bowen Basin to date has been disappointing, notwithstanding numerous wells drilled. The Basin used to have significant 2P reserves booked but most of this has now been re-classified as Contingent Resources. Overall, the best chance of finding affordable gas for NSW and Victorian manufacturers is onshore NSW and Victoria. It will be interesting to see further details on a proposed Australian Gas Supply Hub at Wallumbilla and how this will vary from the current operation. However major gas supply hubs in the US and Europe work because they are part of large gas markets, 89 Tcf pa in the case of the US compared with 0.6 Tcf pa for eastern Australian domestic gas. However, the absence of timely information about gas contract bid and offer prices is certainly an impediment to an efficient east coast gas market. Unfortunately, the gas contract price data in the latest ACCC gas report is six months out of date. This is like the ASX only publishing share prices with a six-month delay. The ACCC continually monitors contract prices and publishing these (say) monthly rather than six months in arrears would significantly boost market transparency. •

Vietnam Refinery First Step to Reach Leading Position in Downstream, Marketing and Petrochemicals

Kuwait Petroleum Corporation (KPC) prepares to ship two million barrels of crude to the Vietnam Refinery in August 1, 2017 in order to supply it with enough supplies for operations, Minister of Oil, Minister of Electricity and Water and Chairman of the Board of KPC Engineer Essam Abdulmohsin Al-Marzouq said, adding that KPC’s International Marketing Department will send other shipments according to the agreements in this regard. The Vietnam Refinery was established in Nghi Son, which is located around 200 kilometers south of Hanoi, Al-Marzouq said, adding that it is considered one of Kuwait Petroleum International’s (KPI) vital offshoot projects. The refinery was designed to process Kuwaiti crude by 100%, with a capacity of up to 200,000 barrels a day, he said, adding that it achieves integration between refinement and petrochemicals to attain the targeted returns. Furthermore, it secures limited risks by entering with global partners, and marketing fuel products in the Vietnamese market which enjoys high demand through global prices, Al-Marzouq noted, adding that the project started in July 2013 and was completed in 43 months. “A joint company was established as the owner of the refinery and petrochemical complex project in Vietnam, where KPI owns a 35.1% share, Japan’s Idemitsu Kosan owns a 35.1% share, PetroVietnam owns a 25.1% share and Japan’s Mitsui owns a 4.7% share,” Al-Marzouq said, adding that the project is expected to make generous returns according to KPC’s foreign investment requirements, and provide a safe long-term outlet for the Kuwaiti crude. The project, which is affiliated with KPI, is important because it comes as part of efforts to enhance Kuwait’s oil relations with Vietnam and other international partners, Al-Marzouq said, while also applauding KPI’s ability to grow and improve, as well as the capabilities of the Kuwaiti young people whose aspirations help realize the hopes and ambitions of the oil sector. “The Vietnam Refinery project embodies the vision of KPC and its subsidiaries to reach a leading global position in the downstream industry and marketing, achieve excellence in performance indicators, and provide added value to Kuwaiti crude,” Al-Marzouq concluded. •

ADNOC Announces Addition of New Chinese Partner following a Transfer of Stakes in its Offshore Concessions from CNPC to CNOOC

The Abu Dhabi National Oil Company (ADNOC) announced, today, its agreement to the transfer of rights in its Lower Zakum and Umm Shaif and Nasr offshore concessions from the China National Petroleum Corporation (CNPC) to China National Offshore Oil Corporation’s subsidiary CNOOC Limited (CNOOC). The transfer has been approved by Abu Dhabi’s Supreme Petroleum Council (SPC) and marks the first time that a dedicated Chinese offshore oil and gas company joins ADNOC’s concessions. The transfer of concession rights to another key Chinese company reinforces the strong and strategic bilateral ties between the United Arab Emirates (UAE) and the world’s second-largest economy, China. The transfer comprises of CNOOC acquiring (through its holding company, CNOOC Hong Kong Holding Limited (CNOOC HK)), a 40 percent interest in CNPC’s majority-owned subsidiary PetroChina Investment Overseas (Middle East) Ltd (PetroChina). His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said: “The transfer of part of CNPC’s share in two of ADNOC’s major offshore concessions to CNOOC reflects the long-standing strategic and economic bilateral relations between the UAE and China, and highlights the continued pull of the UAE as a leading global energy and investment destination, backed by a stable and reliable business environment. The transfer also illustrates ADNOC’s strengthened access to international markets and partners and our commitment to generating sustainable returns for the UAE. “CNOOC joins our other international partners in the Lower Zakum and Umm Shaif and Nasr concessions and bring world-class expertise and technology to help us continue to maximize value from the concessions as we create a more profitable upstream business and deliver our 2030 strategy.” PetroChina holds a 10 percent interest in the Lower Zakum concession and a 10 percent interest in the Umm Shaif and Nasr concession. As a result of the transfer, CNOOC will hold a 4 percent interest in the Lower Zakum concession and a 4 percent interest in the Umm Shaif and Nasr concession, while PetroChina will retain a 6 percent stake in the concessions. Mr. Dai Houliang, Chairman of CNPC, said: “CNPC has had successful cooperation with ADNOC, and we believe that the cooperation with CNOOC will bring more value to ADNOC and the partners of the concession. We will leverage the strengths of the two Chinese companies, which will help reinforce the development of these two concessions.” Mr. Wang Dongjin, Chairman of CNOOC, said: “We are very pleased to participate in the Lower Zakum and Umm Shaif and Nasr concessions. This further strengthens the strategic relationship with ADNOC and PetroChina. CNOOC will leverage our extensive expertise in the offshore sector and be dedicated to value creation in these concessions for our mutual benefit.” This agreement follows the signing of a comprehensive framework agreement between ADNOC and CNOOC in July 2019 to explore new opportunities for collaboration in both the upstream and downstream sectors as well as in liquified natural gas (LNG). CNOOC joins an ONGC Videsh-led consortium (10 percent), INPEX Corporation (10 percent), CNPC (6 percent), Eni (5 percent), and Total (5 percent) as participants in the Lower Zakum concession; and Eni (10 percent), Total (20 percent), and CNPC (6 percent) as participants in the Umm Shaif and Nasr concession. ADNOC retains a 60 percent majority ownership interest in both concessions. CNOOC is the largest producer of offshore crude oil and natural gas in China and one of the largest independent oil and gas exploration and production companies in the world. As at the end of 2019, the company owned net proved reserves of approximately 5.18 billion barrels of oil equivalent (BOE). Chinese energy companies have steadily increased their participation in ADNOC’s upstream and downstream operations. At the same time, ADNOC has identified China – the world’s second-largest oil consumer – as an important growth market for its crude oil and petrochemical products. •

The Hague Court Rules for Chevron in Ecuador Dispute

The District Court of The Hague today ruled in favor of Chevron Corporation in its dispute with the Republic of Ecuador, upholding a 2018 arbitral award rendered by an international tribunal administered by the Permanent Court of Arbitration. In its unanimous award, issued pursuant to the U.S.-Ecuador Bilateral Investment Treaty, the international arbitral tribunal found that a $9.5 billion Ecuadorian judgment against Chevron was procured through egregious fraud and corruption by the plaintiffs’ legal team, including bribery of the presiding judge and ghostwriting of the judgment. It held the judgment unenforceable under international law. The tribunal also rejected the underlying environmental allegations against Chevron. In its award, the tribunal found that a Chevron subsidiary completed an environmental remediation program supervised and approved by the Republic of Ecuador and that the Republic released the environmental claims on which the fraudulent Ecuadorian judgment was based. Any responsibility for current environmental conditions in Ecuador lies with the state-owned oil company, which continues to operate in the same area today. The District Court of The Hague upheld the award in full and rejected the Republic of Ecuador’s attempt to set it aside, noting that “the fraudulent character of the Lago Agrio judgement and the proceedings preceding it is common ground between the parties.” The court found that the international tribunal acted within its remit when issuing the award, and that the award was well reasoned and complied with the applicable law and public policy. The court concluded that the international tribunal’s orders properly sought to “remove the consequences of a fraudulent judgment that was rendered by a corrupt judge.” The court held that “because none of the setting aside grounds brought forward by Ecuador succeed, the claims will be denied.” The court’s ruling follows decisions from courts in Argentina, Brazil, Canada, Gibraltar and the U.S. rejecting the fraudulent Ecuadorian judgment against Chevron. In July, Argentina’s highest court unanimously rejected the plaintiffs’ bid to enforce the corrupt judgment, bringing to an end the last pending recognition proceeding against Chevron. Even Ecuador finally admitted in a public filing earlier this year that the $9.5 billion judgment issued by its courts against Chevron is “fraudulent.” Chevron’s arbitration against the Republic of Ecuador is now in its final stage, where the company is seeking to recover from the Republic of Ecuador costs it has incurred to expose and defend against the fraud. •

Schlumberger, IBM and Red Hat Announce Major Hybrid Cloud Collaboration for the Energy Industry

Schlumberger, IBM and Red Hat, announced today a major collaboration to accelerate digital transformation across the oil and gas industry. The joint initiative will provide global access to Schlumberger’s leading exploration and production (E&P) cloud-based environment and cognitive applications by leveraging IBM’s hybrid cloud technology, built on the Red Hat OpenShift container platform. Collaborative development will initially focus on two key areas: • Private, hybrid or multi-cloud deployment of the DELFI* cognitive

E&P environment enabled by Red Hat OpenShift to significantly expand access for customers. • Delivering the first hybrid cloud implementation of the OSDU™ data platform (the open data platform for the industry). Through the agreement with IBM and Red Hat, Schlumberger has committed to the exclusive use of Red Hat OpenShift. Using the container platform will enable the deployment of applications in the DELFI environment across any infrastructure, from traditional data centers to multiple clouds, including private and public. This new way of hosting will offer the possibility to use multiple cloud providers and will address critical issues for customers, facilitating in-country deployments in compliance with local regulations and data residency requirements. The DELFI environment incorporates cutting-edge data analytics and artificial intelligence, drawing upon multiple data sources, automating workflows, and facilitating seamless collaboration for domain teams. Many more oil and gas operators, suppliers and partners, from all regions of the world will be enabled to work from the industry’s leading digital environment—built on a standard, open platform—where they can ‘write once and run everywhere’ when creating new applications. “By expanding market access to the DELFI environment we take a major step forward on the journey to establishing the open and flexible digital environment our industry needs, “comments Olivier Le Peuch, chief executive officer, Schlumberger. “Our collaboration with IBM and Red Hat complements our established digital partnerships to produce an industry-first solution to overcome our customers’ challenges. Together, we are enabling seamless access to a hybrid cloud platform in all countries across the globe for deployment in any basin, for any operator.” “The logic, purpose, and differentiation of all businesses can now be rendered in code, which is why digital innovation has become the most powerful way to drive transformation and hybrid cloud is the lever that unleashes it,” said Arvind Krishna, chief executive officer, IBM. “Together with Schlumberger, we are empowering a much broader group of participants to play a role in driving that transformation and helping the energy industry solve some of the world’s toughest challenges to emerge stronger.” “The energy industry is transforming as organizations look for efficient new ways to power their operations, adopt digital technologies to create a competitive advantage, and innovate and integrate workflows to make faster and better decisions,” said Paul Cormier, president and chief executive officer, Red Hat. “A hybrid cloud foundation built on open source offers the flexibility, acceleration and innovation this digital transformation requires. Schlumberger has long been an industry leader and is bold in its vision for digital transformation in the energy industry. We look forward to working closely with Schlumberger to make the DELFI environment available everywhere with Red Hat OpenShift.” Schlumberger supports many of the world’s most vital oil and gas operations and is on the forefront of digitalization across the energy sector. It has established the DELFI environment as the industryleading cognitive E&P environment where today energy professionals access open APIs to work together, independent of role, workflow or physical location, and create solutions that significantly improve business operations. The organizations intend to further their collaboration with the creation of a differentiated data management and operations solution for the OSDU™ data platform, enabling oil and gas operators to build, deploy and transition digital solutions with hybrid-cloud data infrastructures. This will foster wider collaboration and greater efficiency across many professionals in the E&P value chain. Prior to this announcement, Schlumberger, IBM and Red Hat successfully piloted the new hybrid cloud deployment of the DELFI environment on Red Hat OpenShift, the leading Kubernetes platform, working with Red Hat and IBM Services, the world’s largest team of Red Hat certified consultants. The two organizations focused on demonstrating the flexibility and portability for compute, storage and data intensive exploration and field development applications. IBM’s collaboration with Schlumberger is part of the company’s new commitment to invest in accelerating adoption of hybrid cloud and open architectures. IBM is targeting essential industries, such as energy, running the crucial processes of the world. These efforts are increasing in importance as organizations navigate the impacts of the pandemic and economic downturn, which is creating an acute need for speed to market, flexibility and nimbleness to encourage innovation. •

Neptune Energy Digitalises Drilling & Wells

Neptune Energy today announced it will adopt Halliburton’s DecisionSpace 365 well construction suite of cloud applications to consolidate all global drilling and wells activities, improve efficiency and significantly reduce non-productive time, leading to potential annual savings of more than $20 million. The three-year agreement – part of Neptune’s digital subsurface programme – will create a platform for Neptune’s digital well program. It aims to reduce the duration for planning wells from weeks to days, automate engineering calculations and consolidate data currently held across multiple global locations into one. Moving to a cloud-based solution will enable Neptune to incorporate artificial intelligence, machine learning and data analytics to solve upstream challenges and support the company’s overall digital transformation. DecisionSpace 365 cloud applications will enable Neptune to build “digital twins” of its wells to not only plan and track their progress throughout their lifecycle, but to model opportunities to optimise performance and predict potential problems before they occur. It will also bring significant benefits to optimising inventories of Neptune’s plant, people and production resources. Neptune’s Global Head of Drilling & Wells, Brett McIntyre, said: “The industry faces unprecedented challenges at this time and new digital technologies are enabling E&P companies to be more efficient, maximise the value of their activities, reduce costs and support employees. “We see significant opportunities to enhance the safety and productivity of our global drilling and wells activities, reducing non-productive time and supporting our global teams’ ability to work together to share knowledge and best practice. “Our technology and digitisation strategy aims to enable Neptune to be safer and more responsible, ensuring production efficiency and profitable growth from our globally-diverse, gas-weighted portfolio. By applying technology smartly, we can also reduce waste across the whole value chain and support our ability to be a safer, faster and better business.” By consolidating data from Neptune’s four enterprise data management (EDM) environments into one system in the cloud, Neptune’s drilling and wells teams can access all well data from any location, at any time; collaborate and share resources; ensure consistent approaches across the business and reduce costs associated with using multiple software platforms. •

Andritz to Supply Train Wheel Production Line to Russia

International technology group ANDRITZ and Allegro – a subsidiary of EVRAZ and RailService established to implement the project to produce train wheels in the Titan Valley special economic zone – have signed a contract to supply a complete production line for train wheels. The contract was signed by Valerij Galchenkov, Managing Director of Allegro GmbH, Heinz Autischer, Head of Metals Processing at ANDRITZ, and Daniel Huber, Managing Director of Schuler. ANDRITZ GROUP subsidiaries ANDRITZ Maerz and Schuler will supply the production line. The main part of the contract is expected to be booked in mid-2021, with the first consignment being scheduled for delivery in the first quarter of 2022. The production process comprises several stages: The blanks produced by EVRAZ are heated to 1,250 °C in the rotary hearth furnace, then descaled and preformed in a hydraulic press with 10,000 tons of press force. After this, the blanks are rolled in a wheel-rolling machine developed by Schuler and forged into a finished product in a crimping and piercing press with 5,000 tons of press force. This is followed by a geometric test in a laser measuring system and permanent marking in a marking press. Finally, the wheels undergo heat treatment and the running surfaces are hardened. Allegro is investing a total of around 16 billion rubles (approximately 180 million euros) in the production of train wheels. With the new production line, Allegro will be able to produce 200,000 train wheels per year, and up to 300,000 with a further extension. Production is scheduled to start in the fourth quarter of 2022, and the project will create a total of 425 new jobs. “We are looking forward to reaching this milestone with ANDRITZ as the main supplier,” says EVRAZ Vice President Denis Novozhenov, who heads the Ural Division. “Production of train wheels requires highest competence and strict quality control, and this begins in production of the steel. The know-how from EVRAZ is vital to this project.” Heinz Autischer, Head of Metals Processing at ANDRITZ: “We are very proud that we have won a railway wheel line again to be supplied jointly by ANDRITZ Maerz and Schuler. With this order, we will deliver the most advanced production line ever built in this segment and also strengthen our technology leadership in this area.” •

Gazprom Continues Work Towards Identifying Ownerless Gas Networks in Russian Regions

The Gazprom Board of Directors reviewed the information on the measures undertaken to inventory ownerless gas facilities in Russian regions, as well as to optimize the procedure of their transfer to specialized organizations for further operation in line with the laws of the Russian Federation. It was noted that operation of ownerless gas distribution facilities (gas networks that have no lawful owners and are lacking proper technical maintenance and condition monitoring) remains a highly relevant issue for Russian regions. The gas distribution companies of the Gazprom Group are consistently working to inventory gas distribution networks within the areas of their responsibility. Information about detected ownerless property is submitted to local authorities for registration and subsequent transfer into municipal ownership. If local governments fail to act appropriately, the relevant information is then forwarded to prosecution offices. In addition, Gazprom actively cooperates with the federal authorities with the aim of improving the existing legislation concerning the ownership registration procedure for ownerless networks. For instance, the Company proposed to streamline the procedure for registration of ownerless networks in municipal ownership by, inter alia, reducing the registration timeframes from one year to three months, with a possibility of automatic accrual of ownership rights by municipal authorities with respect to these facilities after the expiration of this period. In addition, increased attention should be paid to the issue of proper operation of ownerless networks, as well as their routine and emergency maintenance, prior to the registration of ownership rights. The Management Committee was tasked with continued implementation of the measures for inventorying ownerless gas facilities and enhancing the procedure of their handover to specialized organizations for further operation in line with the laws of the Russian Federation. •