Page 9 - FSUOGM Week 28 2019

FSUOGM POLICY FSUOGM
Russia weighs up funding options for Arctic LNG-2 port
RUSSIA
The port will also support development of the Northern Sea Route.
THE Russian government is yet to decide on a means of nancing construction of a RUB100bn ($1.6bn) port to serve the Arctic LNG-2 project.
A project committee met on July 1 to discuss funding options for the port of Utrenny, which will be built on the western coast of the Gydan Peninsula, Moscow business daily Kommersant reported last week.
According to a copy of the meeting’s minutes, the nance ministry has called for funding to come solely from a national infrastructure fund, set to receive RUB2.3tn ($36bn) from the federal budget over the next ve years. Transport Min- ister and Deputy PM Maxim Akimov, however, wants additional nancing to be drawn from beyond this fund.
Rosatom, which has been put in charge of the port’s development, has estimated project costs at RUB33bn in 2020, RUB33.8bn in 2021 and RUB33bn in 2022.
The port will support operations at the 19.8mn tonne per year Arctic LNG-2 export
terminal, due to start up in either 2022 or 2023, while also handling general cargo tari along Russia’s Northern Sea Route (NSR).
In related news Mordaga, a Russian subsid- iary of Belgium’s DEME Group, was reported last week as having won a contract for dredging work this year in the waters of the Gulf of Ob sur- rounding the port’s planned location.
Arctic LNG-2 is operated by Russia’s Novatek, which also owns the nearby 17.4mn tpy Yamal LNG terminal that was commissioned in late 2017. e company has brought on board sev- eral partners to provide nancing and expertise to implement the project.
France’s Total now has a 10% stake in the venture, while China’s CNPC and CNOOC have agreed to share 20% and Japan’s JOGMEC and Mitsui together to take 10%. Total, which is also a minority shareholder in Novatek, will be able to claim an additional 5% of Arctic LNG-2 if Novatek decides to reduce its ownership below 60%.™
Kyiv slashes household gas prices
UKRAINE
Recent price cuts
come ahead of snap parliamentary elections.
UKRAINE’S state gas supplier Naftogaz will slash its household gas tariffs by 11.7% this month, under a government decree issued in June.
e move should help rally support for the party of Ukraine’s new president, Volodymyr Zelenskiy, ahead of snap parliamentary elections scheduled for July 21.
The decree requires Naftogaz to set its rates to match the lowest among either import prices, those at the Ukrainian Energy Exchange (UEEX), those for prepaid industrial supplies or those under public service obligations (PSOs). In July, the lowest price of UAH4,905 ($190.3) per 1,000 cubic metres was at UEEX. Na ogaz will therefore charge residential users this amount, excluding VAT and transport and supply tari s.
e government noted in a July 11 statement that this represented a 11.7% reduction in prices from UAH5,554 ($215) in June.
The head of Naftogaz’s gas operations, Andriy Favorov, con rmed that the cut would
be implemented in a meeting with Zelenskiy last week, according to the president’s media o ce. He explained that the revision did not contradict commitments under bailout agreements with the IMF, Ukraine’s main creditor.
A er securing a landslide victory in Ukraine’s presidential elections in April, Zelenskiy urged the government and Na ogaz to hold talks with the IMF to reduce household prices. He said tari s should be lowered in light of falling prices on European markets this year. Ukraine raised residential tari s sharply in October, in return for $3.9bn of fresh IMF aid.
Na ogaz’s Favorov explained on July 11 that the drop in European gas prices had enabled the company to expand purchases and inject more supplies into underground gas storage (UGS) facilities, in preparation for winter. Na ogaz’s gas infrastructure subsidiary Ukrtransgaz has said it aims to have 20bn cubic metres of gas in storage by the start of the next heating season, up from just above 14bcm at present.™
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