Page 11 - FSUOGM Week 48

FSUOGM PIPELINES & TRANSPORT FSUOGM

The project was bought
by businessman and
former Duma member
Vitaly Yuzhilin and his
partners.

Pechora LNG to produce

methanol instead

RUSSIA A pair of gas fields in Russia’s northern Nen- the deal, without commenting on its terms.
ets region previously expected to underpin an The new owners envisage producing 2 bcm
The two fields are LNG export project will now be used to produce per year of gas from Korovinskoye and Kumzhin-
estimated to contain methanol instead, the Moscow-based Kommer- skoye, according to Kommersant. These supplies
160 bcm of gas. sant newspaper reported on November 27. will be pumped via a new pipeline to the Barents
Private Russian investor Alltech has sold Sea, near the village of Indiga some 300 km away,
the Korovinskoye and Kumzhinskoye fields to where they will be used to produce some 1.7mn
businessman and former Duma member Vitaly tpy of methanol.
Yuzhilin and his partners. Alltech was previ- Gas supplies could be ramped up to 4 bcm
ously working with Russia’s Rosneft on a plan to per year by 2027, Kommersant reported. The
export the fields’ gas in LNG form, known as the project’s first phase is expected to cost RUB12bn
Pechora LNG project. But it became clear that ($160mn), with the developers anticipating
their reserves, estimated at 160bn cubic metres making a return on this investment in seven to
of gas, were only large enough to produce 5mn eight years.
tonnes per year (tpy) of LNG or less, making pro- Yuzhilin’s Ruskhim company was previously
ject costs uncompetitive. considering methanol production in the Len-
Rosneft left the project in 2018 and it was ingrad region, but has now dropped this plan,
revealed that Alltech was seeking to sell the assets according to Kommersant.
in September last year. Alltech’s billionaire owner Alltech and Rosneft had originally hoped
Dmitry Bosov committed suicide in May, leaving to gain access to two more gas fields nearby
it up to his heirs to sell Pechora LNG. to underpin their LNG project, but they were
Under a preliminary agreement, Yuzhilin defeated in a subsoil auction by Gazprom. At
will take a 50% position in the Pechora LNG one point they considered the construction of a
operating company, while his partners Gen- gas-based petrochemical plant, but this plan was
nady Mirgorodsky and Dmitry Ozersky will also dismissed as unrealistic.
each take 25%. The Russian Direct Investment The assets also have value given their close
Fund (RDIF) could also play a role, Kommer- proximity to the Layavozhskoye and Vneyviss-
sant said. koye gas deposits that Gazprom is looking to
Representatives of Alltech have confirmed develop with Lukoil. ™

Week 48 02•December•2020 www. NEWSBASE .com P11