The Russian government has allocated nearly 50 billion Russian rubles ($800 million) to construct liquefied natural gas (LNG) carriers for the Arctic LNG 2 project, expected to start in 2023, Kallanish Energy understands.
Denis Manturov, Russia’s Industry and Trade minister, told journalists about government support for the Zvezda Shipbuilding Complex, a Rosneft-led shipyard that, together with Russia’s shipping company Sovkomflot PJSC, will construct the vessels, Caspian News reports.
Growing its LNG potential
“I can only say that approximately the total amount of subsidies, taking into account 15 gas carriers, will be about 50 billion rubles, but the final calculation has not yet been made,” Russian news agency RIA Novosti quoted Manturov as saying Tuesday.
Russia intends to grow its LNG potential amid the escalating pressure coming from Washington, D.C. via sanctions. In 2017, the Trump Administration released the Countering American Adversaries Through Sanctions Act in order to push for Europe to abandon multi-billion energy projects with Russia, including the Nord Stream-2 pipeline.
The Arctic LNG 2 project is the second LNG export building project by Novatek, one of Russia’s largest natural gas producers.
Located on the Gydan Peninsula in northwestern Siberia, the Arctic LNG 2 plant is being designed to produce an estimated 6.6 million tons of LNG annually for each of its three lines, or 19.8 million tons overall.
Novatek controls project
Novatek controls a 90% stake in the project, while the French oil and gas company Total holds a 10% share. However, Novatek’s ownership stake will shrink to 60% when deals struck with Chinese and Japanese partners come into force.
At the G-20 summit held in Osaka, Japan last month, the Japanese energy consortium of Mitsui & Co. and Japan Oil, Gas and Metals National Corp. acquired a 10% share each in Novatek’s Arctic LNG 2 liquefied natural gas project.
Cnpc, Cnooc join project
Last month, Novatek also signed an agreement with two Chinese companies, China National Petroleum Corp. (Cnpc) and China National Offshore Oil Corp. (Cnooc), under which the two will also get a 10% stake.
“We are very glad that Cnooc has joined our Arctic LNG 2 project as our new partner, since China represents one of the key consuming markets for our LNG sales,” Russian television network RT quoted Leonid Mikhelson, Novatek’s chairman, as saying last month on the sidelines of the St. Petersburg International Economic Forum.
Mikhelson also emphasized Novatek plans to sell roughly 80% of its production from the Arctic LNG 2 project to customers in the Asia-Pacific region, while the remaining 20% will be exported to Europe.
Russia, holding the world’s largest natural gas reserves, currently possesses two LNG plants, including the Gazprom-led Sakhalin LNG plant situated on Sakhalin Island, which has an annual capacity of 9.6 million tons of LNG; and the three-train Yamal LNG plant, which has proven reserves of 683 billion cubic meters of gas.
This post appeared first on Kallanish Energy News.
