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projects that were slated to come online in the medium term. Gazprom, which plans to launch two new facilities by 2025, is an exception, though. We think the Black Sea project might also supply LNG as bunker fuel to improve the ecological impact. Vladivostok LNG might help the company to monetise its Sakhalin resource base better, as gas production at Kirinskoye is now limited by the insignificant domestic demand for gas in the Russian Far East. We estimate the potential capex for both projects at USD 2-3bn, which is 3-4% of the total capex for the next three years and 7-10% of 2021F EBITDA. We believe, though, that the company is likely to opt for a project finance scheme for its LNG plans in order to ease pressure on its own balance sheet.
Russia retained its position of the world’s second largest oil producer
after the US in January, when its output grew by 1.8% on the month to 9.489mn barrels per day, the Joint Organizations Data Initiative (JODI) said in a report on Thursday. The US produced 10.955mn barrels per day, down by 1%. Saudi Arabia’s output grew by 1.4% to 9.103mn barrels per day.
The amount of gas lifted from underground storages in Russia during the current heating season has reached a historical high, Interfax reports, citing the company. Since last autumn, 57.4bcm has been lifted, which is 76% more than last year’s amount and 14% above the previous high during the 2007-08 season. The lifting of gas continues. This news points to quite strong domestic sales volumes in 1Q21 for Gazprom. While we had expected this and think it is likely neutral for the stock, the amount could present upside risks to our financial forecasts.
Current investments into the Arctic LNG 2 project amount to 1.6 trillion rubles ($21.7bn), Novatek CEO Leonid Mikhelson says on March 11. "Despite the pandemic, Novatek also did not reduce investments last year. We are implementing the giant Arctic LNG 2 project, with investments totaling 1.6 trillion rubles. About 40% are direct investments of foreign partners," the top manager said. Arctic LNG 2 is the second LNG project of Novatek. It provides for construction of three liquefied natural gas trains with the capacity of 6.6mn tonnes per year for each and production of stable gas condensate up to 1.6mn tonnes annually. The first train is scheduled to be launched in 2023
Poland’s Orlen and Rosneft have signed a new oil delivery contract for two years, Kommersant reports. The new contract envisages deliveries going down to 3.6mnt/a, from 5.6-6.6mnt/a previously. The oil is to be delivered using the Druzhba pipeline to Orlen’s refinery in Plock. Lower contract volumes and the extended negotiation of the new contract after the expiry of the previous one in January can be explained by the difference in price expectations, according to the paper: Rosneft reportedly wanted to raise the price, given the increased prices for seaborne oil cargoes. Orlen might replace Rosneft’s oil from other sources, and it has already entered into a one- year agreement with Exxon for the delivery of 1mnt of oil. Elsewhere, Rosneft supplied oil to Grupa Lotos’s Gdansk refinery (2.8-5.6mnt/a) under the contract that also expired at the beginning of the year. Lotos was acquired by Orlen in
127 RUSSIA Country Report April 2021 www.intellinews.com