Page 4 - FSUOGM Week 37 2021

FSUOGM COMMENTARY FSUOGM

Gazprom pushes forward with

$13bn Baltic LNG project

Gazprom is set to become a serious player in Russian LNG, with a liquefaction

project on the Baltic shore now looking likely to be realised

RUSSIA RUSSIAN gas supplier Gazprom has awarded in addition to LNG, 19 bcm of gas ready for pipe-
an engineering procurement and construction line transport to Europe, as well as 3.6mn tpy of
WHAT: (EPC) contract for the $13bn LNG complex it is ethane and 2.2mn tpy of LPG. Some of these
Gazprom has awarded an developing on the Baltic Sea, bringing the ambi- liquids will be used as feedstock at a nearby pet-
EPC contract for a $13bn tious project one step closer to realisation. rochemicals plant that Rusgazdobycha is devel-
LNG complex. Despite its status as Russia’s top gas producer oping on its own.
and top gas exporter, Gazprom has struggled to Gazprom has been trying to move an LNG
WHY: expand in the LNG arena. This contrasts with project on the Baltic Sea for many years, with
The plant will produce the success of independent producer Novatek, limited success. It had wanted to develop a plant
13mn tpy of LNG at full which is developing one of the world’s largest with Royal Dutch Shell, but after years of stunted
capacit.y hubs for LNG in the Russian Arctic. It hopes to progress, the Anglo-Dutch major pulled out of
close the distance with Novatek by developing the plan in 2019, after Gazprom changed the
WHAT NEXT: the Ust-Luga complex on Russia’s north-west project’s scope to include processing facilities
Analysts say the contract coast, which would allow Gazprom to target gas and brought on board Rusgazdobycha as a part-
award means the project markets beyond those it can supply with its many ner. Rusgazdobycha has ties to Russian billion-
now looks set to be export pipelines. aire Arkady Rotenburg, who was placed on a US
realised. Gazprom and its project partner Rusgazdo- sanctions blacklist in 2014 because of his close
bycha announced on September 9 they had ties to the Kremlin.
awarded the EPC contract for the 13mn tonne There were concerns that the project in its
per year (tpy) Ust-Luga liquefaction plant to a new guise was also floundering, after Gazprom
joint venture between Germany’s Linde and Tur- and Rusgazdobycha cancelled an EPC award to
key’s Renaissance Heavy Industries. Russian contractor Nipigaz in March this year.
The Ust-Luga complex will handle 45bn The Moscow-based RBC news agency reported
cubic metres per year of gas in total, producing, at the time that Nipigaz had repeatedly missed

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