Page 4 - FSUOGM Week 12 2021

FSUOGM COMMENTARY FSUOGM

Russia approves long-

term LNG strategy

The country has a raft of new LNG export projects in the works, but how many

will materialise is another matter

RUSSIA RUSSIA has approved a long-term programme Novatek aims to commission its next major
for developing its LNG industry, targeting up to project, the 19.8mn tpy Arctic LNG-2 plant,
WHAT: a three-fold increase in production to 140mn between 2023 and 2025. A final investment
Russia estimates it could tonnes per year (tpy) by 2035. decision (FID) was taken in 2019 on the develop-
boost production to as The country currently produces the bulk of ment, which is underpinned by 2.2 trillion cubic
high as 140mn tonnes per its LNG at the Gazprom-operated 9.6mn tpy metres of C1+C2 gas reserves at the Utrenneye
year by 2035. Sakhalin LNG plant in the Far East and the field on the Gydan Peninsula.
Novatek-led 16.5mn tpy Yamal LNG facility in Another Novatek project on the horizon is
WHY: the far north. Novatek also operates a second the 5-6mn tpy Obsk LNG, also in the Arctic,
Novatek, Gazprom, 660,000 tpy plant called Cryogas-Vysotsk in although an FID has not yet been reached. The
Rosneft and private north-west Russia. There are a number of other company was meant to employ Arctic Cascade at
developers are all projects in the pipeline, however, ranging from the plant, but it is reportedly looking to use tech-
working on projects. some that are already under construction to oth- nology supplied by Germany’s Linde instead,
ers that are highly speculative. because of the problems at the fourth Yamal
WHAT NEXT: LNG train.
There is considerable Projects on the way Novatek was due to take an FID on Obsk
uncertainty about the The next two projects expected on stream are LNG in 2020 but delayed the move until 2021,
pace of Russian LNG both small in scale. Novatek plans to launch a citing the impact of the coronavirus (COVID-
development. 0.9mn tpy fourth train at Yamal LNG in the com- 19) pandemic on gas markets. According to the
ing months. The unit was originally due online government’s programme, Obsk LNG is not
in late 2019, and the reasons for continual delays expected to go online until 2024 or later.
are not clear. Novatek has blamed market con- Further ahead there are more unsanctioned
ditions, although reports in the Russian press projects such as Novatek’s Arctic LNG-1 and
suggest the company has had difficulties with its Arctic LNG-3 ventures, each expected to have a
Arctic Cascade liquefaction technology. Arctic capacity of 19.8mn tpy. Arctic LNG-1 is under-
Cascade is being deployed for the first time at pinned by 357.7bn cubic metres of resources at
the train. the Soletsko-Khanvaiskoye, Geofizicheskoye
Gazprom, meanwhile, aims to launch the and Trekhbugornoye fields. It is not anticipated
1.5mn tpy Portovaya LNG facility in north-west online until 2027 or later, according to the gov-
Russia this year. That terminal too was originally ernment. The start date for Arctic LNG-3, mean-
on track to start up in 2019. while, will depend on progress in exploration,

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