Page 103 - RusRPTDec20

Russian LNG is expected to remain the second most competitive in the world (after Qatari LNG). The strategy estimates the total LNG delivery cost at $5.0-7.0/MMBtu, including costs for gas lifting of $0.2-1.0/MMBtu, LNG plant construction of $3.0-4.0/MMBtu including the cost of financing (assumes a unit cost of $1,000/tonne) and transportation cost of $1.5/MMBtu. The draft estimates the total cost for competitors such as Qatar, Australia and the US at $2.8-11.0/MMBtu for delivery to Asian markets.
Novatek has already announced plans to construct Artic LNG-1 (based on the Geofisicheskoye field) and Ob LNG. We previously highlighted that we think Novatek has a sufficient reserve base in Yamal and Gydan for another one or two LNG projects similar to Arctic LNG-2.
The main new development is the use of the Gazprom Tambey group of fields for LNG, although we also highlighted this potential earlier. The fields have significant reserve potential - we estimate enough for annual LNG capacity of 40mn tonnes.
Gazprom recently disclosed the Tambey group includes the Severo-Tambeyskoye, Tasyiskoye and Zapadno-Tambeyskoye fields, which have annual projected capacity of 33.0 bcm, 16.6 bcm and 5.7 bcm, respectively.
The draft strategy notes that Gazprom and the RusGazDobycha Ust-Luga LNG/GPP project will be delayed past the targeted 2023-24. We see a delay as likely, as the FID is expected only next year, while the project is less competitive than the Yamal/Gydan developments.
Moscow will work out a possibility for Belarus to acquire an oil field in Russia but so far there are no specifics on this issue, ​Kremlin Spokesman Dmitry Peskov told reporters on Thursday, ​TASS​ reported. “There are no specifics on this issue yet,” he said adding that such a plan was an initiative of the Belarusian side. “It will be worked out by our relevant ministries and departments,” Peskov said. On November 4, Belarus’ President Alexander Lukashenko, in a telephone conversation with his Russian counterpart Vladimir Putin, voiced the initiative on the possible acquisition of an oil field by Minsk on the territory of the Russian Federation. According to the press service of the Belarusian leader, the conversation was about the start of negotiations on the supply of oil and gas to Belarus next year.
The share of natural gas on the world energy market will grow in the coming decades, and Russia has no plans to dampen down its fossil fuel production, but it plans to be a world leader in hydrogen production. That’s according to Alexander Novak, the country’s energy minister, ​RT reported. “I believe natural gas to be an eco-friendly energy source,” Novak
103 ​RUSSIA Country Report​ December 2020 www.intellinews.com