Page 13 - GLNG Week 11 2021

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Gazprom scraps contract for

$13bn Baltic gas complex

INVESTMENT RUSSIA’S Gazprom and its private partner Rus- designer. It added that the project’s developers
GazDobycha have cancelled an engineering, could not decide on how to finance the scheme
procurement and construction (EPC) contract nor how much of its equipment should be local-
awarded for a gas processing and LNG complex ised. It also pointed to “discrepancies” in the pro-
on the Baltic Sea. ject’s risk assessment, and how risks should be
The contract covers processing facilities and shared between customer and contractor.
was issued to Nipigaz, a subsidiary of Russian “These factors led to the customer’s decision
petrochemicals group Sibur, in June 2020. Gaz- to terminate the work under the EPC contract,”
prom said the decision had been taken to opti- Nipigaz said.
mise project costs, without elaborating. The project involves the construction of
“The contractor to carry out these works will a hub capable of annually processing 45bn
be determined in the near future,” Gazprom said cubic metres of natural gas into 19 bcm per
in a statement on March 15. “The decision to year of treated gas, which will be exported via
replace the contractor will not affect the project the Nord Stream 2 pipeline, along with 13mn
schedule.” tonnes of LNG, 3.6mn tonnes of ethane and
The $13bn Baltic gas complex at Ust-Luga is a more than 2.2mn tonnes of LPG. Ethane from
50:50 joint venture between Gazprom and Rus- the project will be supplied to a nearby petro-
GazDobycha, a company affiliated with Kremlin chemical plant that RusGazDobycha plans to
ally Arkady Rotenburg. Gazprom took a decision erect on its own.
on its implementation in March 2019 and it is Gazprom has been working on plans for
slated for completion in 2023-2024. liquefaction facilities in north-west Russia for
Reports in the Russian press suggest that over a decade. It originally wanted to build a
the project has encountered difficulties. The 10mn tonne per year (tpy) LNG terminal with
Moscow-based RBC news agency reported on Royal Dutch Shell. But the international oil
March 14 that Nipigaz had repeatedly failed to major left the venture in April 2019 after Gaz-
meet project deadlines. prom expanded its scope to include processing
The company issued its own statement saying facilities and brought on board RusGazDoby-
it would continue to serve as the project’s general cha as a partner.™

Small-scale LNG needed to boost

Far East gas access: Russian PM

POLICY SMALL-SCALE LNG is needed to increase Power of Siberia pipe to China runs through
access to gas supply in the Russian Far East and the Far East, but only state-owned Gazprom is
support economic growth, Russian Prime Min- allowed to use its capacity.
ister Mikhail Mishustin said on March 15. “The reasons are known and understanda-
The level of gasification in the Far East is very ble, you don’t need to list them,” Mishustin said.
low and this needs to be addressed, Mishustin “The main question today is not who is to blame
said at a meeting on the region’s development, but what to do. It is quite obvious that without a
the government reported in a statement. modern reliable fuel and energy base we cannot
“Despite its large reserves of this natural raw talk about accelerating economic growth in the
material, the level of gasification [in the Far East] Far East.”
is three times lower than the national average,” The PM said it was therefore necessary to
the PM said, estimating that only 18% of the study the delivery of LNG in containers to gas
population had access to gas supply. users as an alternative to conventional gasifica-
The Far East is sparsely populated, which tion involving the construction of new pipelines.
can make establishing pipeline infrastructure Russia is about to embark on a RUB1.9 tril-
to many settlements unfeasible. At the same lion ($25bn) ten-year gasification programme,
time the region has significant gas resources, aimed at expanding the share of the population
but development has been impeded because of a with access to gas from the current 70% to 83%
lack of a market and constraints on exports. The by 2030.™

Week 11 19•March•2021 www. NEWSBASE .com P13