Russia won’t demand immediate switch to rouble gas payments, Kremlin says

Update Russia won’t demand immediate switch to rouble gas payments, Kremlin says
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Updated 30 March 2022

Russia won’t demand immediate switch to rouble gas payments, Kremlin says

Russia won’t demand immediate switch to rouble gas payments, Kremlin says
  • The G7 group of nations rejected Moscow’s demands this week

LONDON:  Russia will not immediately demand that buyers pay for its gas exports in roubles, the Kremlin said on Wednesday, promising a gradual shift and saying Russia should work on an idea to widen the list of its exports requiring rouble payment.

The Kremlin said on Wednesday that demanding rouble payment for exports of oil, grain, fertilizers, coal, metals and other key commodities in addition to natural gas was a good idea and should be worked on.

Asked whether the payments should be in roubles starting from Thursday, Kremlin spokesman Dmitry Peskov said: “Absolutely no.”


“As we discussed before, payments and delivery is a time consuming process ... This does not mean that a tomorrow’s delivery should be paid (in roubles). From a technological point of view, this is a more prolonged process,” he said.


In response to the West’s crippling sanctions on Russia over the invasion of Ukraine, Russian President Vladimir Putin insisted that natural gas exported to Europe or the United States should be paid for in his country’s currency, a measure his government said could be in place this week.


Rouble payments could be extended to oil, grain, metals, fertilizer, coal and timber exports to the European Union, Russia’s top lawmaker Vyacheslav Volodin said on Wednesday.


Asked about Volodin’s comments, Kremlin spokesman Dmitry Peskov said: “This is an idea that should definitely be worked on.”


Europe has so far refused to pay for gas in roubles, setting the stage for a standoff that led Germany to declare on Wednesday an “early warning” that it could be heading for a supply emergency.


Russia says it will work out practical arrangements by Thursday for foreign companies to pay for gas in its currency.


“If you want gas, find roubles,” Volodin, the speaker of the lower house of parliament, said in a post on Telegram.


Peskov said that the US dollar’s role as a global reserve currency had already taken a hit in recent years, and a move to pricing Russia’s biggest exports in roubles would be “in our interests and the interests of our partners.”


Germany said its early warning measure was designed to prepare for a possible disruption or stoppage of natural gas flows from Russia.


Europe, which imports about 40 percent of its gas from Russia and pays mostly in euros, says Russia’s state-controlled gas giant Gazprom is not entitled to redraw contracts.

The G7 group of nations rejected Moscow’s demands this week.

BOOMERANG
Russian officials have repeatedly said the West’s attempt to isolate one of the world’s biggest producers of natural resources is an irrational act of self harm that will lead to soaring prices for consumers and tip the economies of Europe and the United States into recession.


Russia says the West’s sanctions — and in particular the freezing of about $300 billion in Russian central bank reserves — amount to a declaration of economic war.


Putin says the freezing of central bank reserves was a default on the West’s obligations to Russia that would torpedo confidence in the US dollar and the euro.


Former President Dmitry Medvedev said that West’s sanction had “boomeranged” back to undermine the economies of Europe and North America, driving up prices for fuel and heating and undermining confidence in the dollar and euro.


“The world is waking up: confidence in reserve currencies is melting like a morning fog,” Medvedev said.

“Abandoning the dollar and the euro as the world’s main reserves no longer looks like a fantasy.”


Medvedev said “crazy politicians” in the West had sacrificed the money of their taxpayers on the altar of an unknown victory in Ukraine.

“The era of regional currencies is coming.”


Russia has long sought to reduce dependence on the US dollar, though its main exports — oil, gas and metals — are priced in dollars on global markets.


Globally, the dollar is by far the most traded currency, followed by the euro, yen and British pound.


Saudi Arabia raises the bar in green hydrogen production: KAPSARC

Saudi Arabia raises the bar in green hydrogen production: KAPSARC
Updated 19 sec ago

Saudi Arabia raises the bar in green hydrogen production: KAPSARC

Saudi Arabia raises the bar in green hydrogen production: KAPSARC

RIYADH: Given its resources, infrastructure and land, Saudi Arabia is placed at a very competitive position in the green hydrogen industry, especially in terms of cost and volume capacity of the product, according to Rami Shabaneh, a King Abdullah Petroleum Studies and Research Center researcher.

Global prices of hydrogen range between $2 and $7 per kg. The Kingdom falls at the lower end of the cost curve due to low natural gas and renewable electricity prices locally.

“In Saudi Arabia, it is much lower because of the low-cost resources and high capacity factors the electrolyzers can achieve. A recent study by KAPSARC shows that reaching $1 per kg is plausible in the long term,” Shabaneh told Arab News.

“Other countries can achieve a similar levelized cost of hydrogen production, but only a few can produce the volumes required to meet the decarbonization targets,” he added.

The cost of green hydrogen is highly sensitive to renewable electricity costs and electrolyzer load factors.

“The renewable energy prices in the Kingdom are some of the lowest in the world. An auction price accepted at $10.4 per MWh is a world record low right now,” he said.

KAPSARC analyzes the resource, export and cost reduction potential of Saudi Arabia’s hydrogen production.

According to Shabaneh, despite significant decreases in hydrogen costs, the world still needs supporting mechanisms for hydrogen to substitute for traditional fuels in some sectors.

He further pointed out that having fossil fuels in the Kingdom’s energy system does not necessarily mean more emissions.

“You can still use fossil fuels to make blue hydrogen with high capture rates of GHG emissions,” he said.

Saudi Arabia is building a $5 billion green hydrogen project in NEOM, powered by renewable energy, to supply 650 tons of carbon-free hydrogen daily. The plant will see its first production in 2026.

The project will export hydrogen in the form of liquid ammonia to the world market for use as a biofuel that feeds transportation systems.

The plant will need around 4.3 gigawatts of clean energy to power it, as ACWA Power, one of three project owners, plans to use solar during the day and wind at night to eliminate the need for batteries and expensive storage solutions.

 


Abu Dhabi power transmission project secures $3.2bn financing

Abu Dhabi power transmission project secures $3.2bn financing
Updated 29 September 2022

Abu Dhabi power transmission project secures $3.2bn financing

Abu Dhabi power transmission project secures $3.2bn financing

DUBAI: Abu Dhabi Offshore Power Transmission Company has secured more than $3.2 billion in financing with export credit agencies and banks for an offshore electricity transmission project, the Japan Bank for International Cooperation said in a statement.

The financing is to build and operate a high-voltage direct current offshore power transmission system linking two offshore production facilities owned by state-controlled oil giant Abu Dhabi National Oil Company to Abu Dhabi’s onshore grid.

Japan Bank for International Cooperation provided $1.201 billion for the direct current transmission project. The remaining $2 billion was financed by Export-Import Bank of Korea, Mizuho, Sumitomo Mitsui Banking Corporation, BNP Paribas Fortis and Standard Chartered, JBIC said in the statement on Wednesday.

“The project will receive payment of power transmission charges from ADNOC for 35 years after the construction has been completed,” JBIC said.

ADNOC and JBIC signed a memorandum of understanding in November to cooperate on decarbonization, energy transmission and energy efficiency.

JBIC said the project was in line with the United Arab Emirates’ commitment in October last year to cut carbon dioxide emissions to net zero by 2050.


OPEC+ has begun talks on output cut for Oct. 5 meeting, source tells Reuters

OPEC+ has begun talks on output cut for Oct. 5 meeting, source tells Reuters
Updated 29 September 2022

OPEC+ has begun talks on output cut for Oct. 5 meeting, source tells Reuters

OPEC+ has begun talks on output cut for Oct. 5 meeting, source tells Reuters

DUBAI: Leading members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have begun discussions about an oil output cut when the group meets on Oct. 5, according to Reuters.

One OPEC source told Reuters a cut is “likely” and two other OPEC+ sources said key members had spoken about the topic. 

A source familiar with Russian thinking told Reuters earlier this week that Moscow could suggest a cut of up to 1 million barrels per day.

The latest comments suggest that key OPEC members have started communicating over the matter, although the volume of any potential cut is still unclear.

Next week’s meeting takes place against a backdrop of falling oil prices from multi-year highs hit in March, and severe market volatility.

OPEC+, which combines OPEC countries and allies such as Russia, agreed a small oil output cut of 100,000 barrels a day at its September meeting to bolster prices.

Top OPEC producer Saudi Arabia flagged in August the possibility of output cuts to address market volatility. 

Also at the group’s last meeting, OPEC+ members agreed to stick to their forecasts for robust global oil demand growth in 2022 and 2023, citing signs that major economies were faring better than expected despite headwinds such as surging inflation.

Oil demand will increase by 3.1 million barrels per day in 2022 and by 2.7 million bpd in 2023, unchanged from last month, OPEC said in its monthly report.

 


TASI extends gain as global recession fears fizzle out: Opening bell

TASI extends gain as global recession fears fizzle out: Opening bell
Updated 29 September 2022

TASI extends gain as global recession fears fizzle out: Opening bell

TASI extends gain as global recession fears fizzle out: Opening bell

RIYADH: Saudi Arabia’s main index rose in early trade on Thursday, extending gains from the previous session as investors brushed off fears of a global recession.

The Tadawul All-Share Index grew 1.22 percent to reach 11,306, while the parallel market Nomu started flat at 19,922, as of 10:08 a.m. Saudi time.

Saudi oil giant Aramco began with a 1.29 percent gain, while Rabigh Refining and Petrochemical Co. climbed 1.15 percent.

The Saudi National Bank, the Kingdom’s largest lender, increased by 1.46 percent, while Saudi British Bank rose 4.18 percent.

The Kingdom’s highest valued bank, Al Rajhi, went up 0.88 percent, while Alinma Bank gained 1.57 percent.

Saudi Basic Industries Corp. rose 0.34 percent, as it announced the resignation of its CEO Yousef Al-Benyan to serve as Education Minister, and appointed Abdulrahman Al-Fageeh as acting CEO.

Retal Urban Development Co. fell 0.14 percent, after it sold its 50 percent stake in a land plot in Al Khobar for SR113 million ($30 million).

Arriyadh Development Co. added 0.29 percent, after it declared a cash dividend of SR0.25 per share for the first half of 2022.

Ladun Investment Co. gained 0.78 percent, after it completed the process of acquiring raw lands in Riyadh.


Here’s what you need to know before Tadawul trading on Thursday

Here’s what you need to know before Tadawul trading on Thursday
Updated 29 September 2022

Here’s what you need to know before Tadawul trading on Thursday

Here’s what you need to know before Tadawul trading on Thursday

RIYADH: Saudi Arabia’s main index ended higher for a second session following a sharp drop earlier in the week sparked by economic concerns.

The Tadawul All-Share Index rose 1.39 percent to reach 11,120 at the end of Wednesday, while the parallel market Nomu rose 1 percent to 19,916.

Abu Dhabi’s main followed the Saudi trend to close 0.4 percent up to 9,740 on Wednesday.

In a different direction, Dubai’s and Kuwait’s indexes ended Wednesday in red, shedding 0.9 percent and 1.51 percent, respectively.

In energy trading, Brent crude traded at $88.35 a barrel and WTI crude reached $81.34 a barrel, as of 9:15 a.m. Saudi time.

Stock news

Yousef Al-Benyan, the CEO of SABIC, has resigned after being appointed Minister of Education by Royal Decree; accordingly, Abdulrahman Al-Fageeh was appointed as acting CEO for six months effective Sep. 28, 2022.

Saudi Azm for Communication and Information Technology Co. reported SR19 million ($5 million) in profit for the fiscal year ending June 30, 2022, an increase of 23 percent.

Alkhorayef Water and Power Technologies Co. raised credit facilities with Saudi British Bank to SR509 million.

Sumou Real Estate Co. signed an agreement with National Housing Co. to develop an area in Dammam for a total of SR305 million.

Leen Alkhair Trading Co. was approved by the Capital Markets Authority to register and offer 958,750 shares on the Nomu-Parallel Market.

Meshkati Trading Co. received approval from the CMA to offer 900,000 shares on the Nomu-Parallel Market.

Arriyadh Development Co. has declared a cash dividend of SR0.25 per share for the first half of 2022.

National Fertilizer Co. will distribute an interim cash dividend of SR1.5 to shareholders in the first half of 2022.

Retal Urban Development Co. has sold its 50 percent stake in a land plot in Al-Khobar for SR113 million.

Ladun Investment Co. said it completed the process of acquiring raw lands in Riyadh.