Belarus wants to create industrial hub in Oman's Sohar Port, Freezone

Belarus plans to establish an industrial and logistics hub in Oman's Sohar Port and Freezone to promote its goods in third-country markets, Belarusian Industry Minister Alexander Yefimov said, as per Interfax.

"The purpose of visiting the port and the freezone is to select a site for creating joint ventures, and in the future implement a project to form a hub for Belarusian industrial goods in the Sultanate of Oman to promote our products in third-country markets," Yefimov was quoted as saying by the state agency BelTA.

Yefimov is currently in Oman as part of a Belarusian delegation led by Belarusian President Alexander Lukashenko.

"Given the favorable logistical location of this port, our interests are specifically tied to establishing our industrial hub here. We are primarily considering freezone sites to house future joint ventures," Yefimov said.

Belarus aims to produce a wide range of industrial products in Oman, he said. "This includes [for] the domestic market. They need agricultural products, tractors and related equipment - trailers, mounted equipment, municipal and road construction machinery. Products with significant potential include those that can be redirected to third-country markets, where the list expands significantly. This includes mining and heavy-duty equipment as well as everything related to logistical infrastructure. This range of technologies and products is what we are ready to offer our Omani partners for implementation on their territory," he said.

Sohar Port was built in 2002. It is located southeast of the Strait of Hormuz on the coast of the Gulf of Oman. The port handles over 1 million tonnes of maritime cargo per week and around 3,500 vessels per year. The Sohar Freezone was established in 2010 near the port, with resident company investments exceeding $26 billion. The freezone hosts enterprises in petrochemicals, logistics, plastics manufacturing, metallurgy, mining, food production and the automotive industry.

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The State Duma has approved a law at its third reading that enshrines the practice of concluding regulatory contracts between government authorities and gas distribution organizations in the law on gas supply in the Russian Federation, as per Interfax.

The document (no. 508638-8) was introduced to parliament by senators Andrei Kutepov and Ivan Evstifeyev in December 2023.

According to the adopted law, tariff regulation for gas transportation services through gas distribution networks can be carried out on the basis of regulatory contracts. The procedure for concluding these contracts will be determined by the Russian government. The contract is concluded between the federal executive body responsible for tariff regulation, the highest executive body of a Russian constituent entity and the gas distribution organization. The contract's duration is to be no less than three years and no more than ten years.

Regulatory contracts are already provided for in Russian legislation for the electricity supply, water supply and wastewater sectors.

A regulatory contract in current legislative practice is an agreement between a government body and a regulated organization, in which the regulatory framework for tariff formation is fixed for the entire contract term in exchange for investment by the regulated entity.

It became possible to conclude regulatory contracts in gas supply from September 2021, when government resolution no. 1549 of 13.09.2021 was issued, which removed the stipulation that the Federal Antimonopoly Service (FAS) should not consider costs related to constructing gas transportation and distribution network facilities, as well as expenses for implementing interregional and regional gas infrastructure development programs for housing and utilities, industrial and other organizations, when setting regulated tariffs for gas transportation services.

"Since 2019, agreements (regulatory contracts) have been concluded in the field of gas supply between the FAS, the heads of more than ten Russian constituent entities and gas distribution organizations (including in the Vladimir, Tyumen and Rostov regions, Perm Territory and the republics of Bashkortostan and Tatarstan)," the explanatory note said.

"The introduction of regulatory contracts in the gas supply sector will allow for regions' faster gas infrastructure development by attracting additional sources of financing for regional gas infrastructure development programs and ensure regions' socio-economic development and the efficient functioning and development of the economy by expanding gas distribution and consumption networks, increase gas supply volumes while ensuring established reliability and quality service parameters and balance supply and demand," the document's authors said.

The law will come into force on September 1, 2025.

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European governments have agreed on a new mechanism according to which tankers transporting Russian oil in European waters should present appropriate insurance for accidents, the Financial Times said, citing informed sources, as per Interfax.

This agreement was reached at a meeting of the northern European countries' Joint Expeditionary Force (JEF) on Monday, the sources said.

European maritime agencies will request documents confirming insurance from vessels passing through the Danish Straits, the Gulf of Finland and the waters between Sweden and Denmark. Insurance should be issued by one of the coastal states - Great Britain, Denmark, Sweden, Poland, Finland or Estonia.

Vessels may be threatened with sanctions in the event that they do not have insurance. Sanctions may also be introduced for tankers that decline to respond to requests from the authorities, one of the sources said.

Sanctions introduced by the G7 countries forbid Western insurers from providing insurance to vessels that violate restrictions on the price of Russian oil. The price ceiling for Russian oil has been set at $60 per barrel.

The EU suspects Russia of using a shadow fleet of vessels for transporting oil, and such vessels often do not have insurance for accidents, the FT said. This threatens European countries with serious financial and environmental harm in the event accidents involving such vessels occur in European waters.

A unanimous decision of all 27 EU countries will be needed to include tankers in the sanctions list, Latvian Foreign Minister Baiba Braze said.

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Kazakhstan's oil production fell 2% year-on-year in January-November to 80.5 million tonnes, Kazakh Energy Minister Almassadam Satkaliyev said, as per Interfax.

"Oil and condensate production in the period amounted to 80.5 million tonnes, or 98% of output for the same period last year (82.2 million tonnes)," he said at a government meeting.

He said the missed production target had affected oil exports. "Thus, during the reporting period 11 months, 63.2 million tonnes of oil were exported, 98.3% of the same period last year 64.3 million tonnes," Satkaliyev said.

He said earlier that oil production for the year should be 87.8 million tonnes. Kazakhstan's two largest oil and gas fields, Tengiz and Kashagan, saw a decline in production in the first 11 months of 2024, Satkaliyev said in a report distributed at the meeting.

At Tengiz, oil production totaled 25.9 million tonnes during this period, down 2.1% from last year's figure of 26.5 million tonnes.

The decline was steeper at Kashagan, where production totaled 15.8 million tonnes in 11M, down 7.6% from 17.1 million tonnes a year earlier.

Output at the Karachaganak field edged up 0.9% to 11.1 million tonnes from 11 million tonnes.

The report outlined key reasons behind the production decline. At Tengiz, extensive maintenance work lasting a total of 50 days was carried out in May and August 2024 to prepare for the Future Growth Project. Additionally, unscheduled repairs at the second-generation plant, caused by an internal steam leak, began on October 26 and are ongoing.

At Kashagan, repairs were undertaken in the fall to replace the slug catcher, leading to a full 21-day shutdown of operations.

Tengiz, located in Kazakhstan's Atyrau region, is one of the country's largest oil fields, holding oil reserves of 3.1 billion tonnes. According to the latest company data, the field produced 14.4 million tonnes of oil (114.6 million barrels) in January-June 2024, a 3.4% decline compared to the same period in 2023.

Tengizchevroil LLP, the consortium operating the field, includes Chevron (50%), ExxonMobil Kazakhstan Ventures Inc. (25%), Kazakhstan's KazMunayGas (20%), and Lukoil (5%).

Kashagan field is Kazakhstan's first Caspian offshore oilfield and its biggest international investment project. Its recoverable reserves range from 9 billion-13 billion barrels of oil. Commercial production at Kashagan started on November 1, 2016. Kashagan produced 18.8 million tonnes of oil in 2023.

The shareholders of NCOC, the operator of the Kashagan field, are KMG Kashagan B.V., Shell (SPB: RDS.A) Kazakhstan Development B.V., Total EP Kazakhstan, AgipCaspian Sea B.V. and ExxonMobil Kazakhstan Inc., each with 16.807% stakes, as well as CNPC Kazakhstan B.V. with 8.333% and Inpex North-Caspian Sea Ltd. with 7.563%.

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Moldova's Energy Ministry has confirmed reports that Russian gas giant Gazprom has not reserved pipeline capacity for gas transit to the unrecognized Transnistria republic for January 2025, as per Interfax.

"Moldovan specializes are in contact with colleagues from countries on the Trans-Balkan route and know that Gazprom has not reserved transport capacity for January 2025," the ministry's press service said. In the course of auctions held on December 16, capacity was reserved by international traders.

"Capacity was reserved on the Trans-Balkan gas pipeline at the following junctions: at the border of Turkey and Bulgaria (Malkoclar/Strandja 2) about 2.55 million cubic meters per day of transport capacity was reserved, 3.58 mcm/day remains available; at the border of Bulgaria and Romania (Cardam/Negru Voda 1) about 0.9 mcm/day was reserved, 8.77 mcm/day remains available; at the border of Romania and Ukraine (Isaccea 1/Orlivka) transport capacity was not reserved, 10.35 mcm/day remains available; at the border of Romania and Moldova (Ungheni/Ungheni) about 4.45 mcm/day of transport capacity was reserved, 1.65 mcm/day remains available," the ministry said.

The ministry recalled that Gazprom will supply 5.7 mcm of gas per day to Transnistria in the period to the end of December. The gas is being transported through Ukraine.

"Daily natural gas consumption on the left bank of the Dniester in January, including at the Moldavskaya GRES [power plant] for production of electricity for the left bank, is estimated at up to 3.7 mcm per day without the implementation of measures to increase consumption efficiency. If the Moldavskaya GRES operates on coal, industry reduces activity to a minimum and measures are taken to reduce consumption, the Transnistria region's daily consumption in January is estimated at 2.3 mcm to 2.7 mcm per day," the ministry said.

The next auction to reserve transport capacity for January will be held daily starting December 31 and throughout all of January. In the event of daily booking, gas transit will cost more.

The Moldovan government does not rule out the possibility that Russian gas supplies to Transnistria will be halted after January 1. In light of this, Moldova's parliament, at the government's request, decided to impose a state of emergency for 60 days starting December 16. The administration of Transnistria earlier imposed a state of emergency in the economy for 30 days starting December 11.

If Russian gas stops flowing to Transnistria, Moldova will face disruptions in power supplies, as the country buys about 70% of the electricity it needs from the Moldavskaya GRES plant, which is located in the unrecognized republic.

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