Page 7 - GLNG Week 42 2021

GLNG COMMENTARY GLNG

Other potentially
affected projects
include the series of
new LNG terminals
that Novatek plans to
build on the Yamal and
Gydan peninsulas.

Vladimir Putin dismissed that the proposed ban potential recipients – but not if the EU’s pro-
would hurt Russia, suggesting instead it might posed ban comes into force.
even benefit it. Rosneft is currently searching for investment
“If such decisions lead to a certain price partners to bring Vostok Oil to development,
volatility, [Russia’s economy] wouldn’t suf- having already brought on board commodity
fer that much,” he said at an energy con- traders Trafigura, Vitol and Mercantile & Mari-
ference in Moscow. “That’s because we will time as minority shareholders with a combined
reduce production, but will get the prices we 15% interest. The risk of a ban could undermine
wanted.” the search for additional partners, however.
However, the Arctic is seen as the new fron- Other potentially affected projects include the
tier for oil and gas development in Russia, and is series of new LNG terminals that Novatek plans
estimated to contain billions of barrels of oil and to build on the Yamal and Gydan peninsulas.
many trillions of cubic metres of gas. Russian Europe already takes gas from Novatek’s 17mn
producers are moving into the region as once- tpy Yamal LNG plant, and will obtain additional Further down
large Soviet fields further south reach maturity volumes from its 20mn tpy Arctic LNG-2 termi-
and eventually depletion. Development could nal that is due to start up in 2023. Further down the line Novatek
be significantly undermined if Russia cannot the line Novatek wants to develop the Arctic wants to develop
count on EU buyers to purchase some of these LNG-1 and Arctic LNG-3 terminals, which will
reserves. both also have 20mn tpy capacities. the Arctic LNG-1
The largest up and coming project in the Gazprom’s Kharasaveyskoye field would also
Russian Arctic is Vostok Oil, managed by state- be hit by the ban. The field is due online in 2023 and Arctic LNG-3
owned Rosneft. Comprising a cluster of large and is due to supply 32bn cubic metres per year
oil and gas fields located mostly on the Taymyr of gas, likely to the European market. Gazprom terminals.
Peninsula, analysts have likened Vostok Oil’s Neft and the Achimov oil layers it is targeting in
scope to that of the exploration of Western the Russian Arctic would also be affected.
Siberia in the 1970s and the US Bakken oil play Despite the ban’s significance, analysts at BCS
over the past decade. Rosneft estimates that the Global Markets view the news as negative for
project will yield 1mn barrels per day of oil by oil and gas share prices in Russia, as it would be
2027 and possibly up to 2mn bpd at a later stage. impossible to implement in the near future.
It is also expected to produce up to 50mn tonnes “However, if this development expands, we
per year (tpy) of LNG. believe that oil and gas shares might see some
While the primary destination for Vostok pressure from institutional investors’ approach
Oil’s production is expected to be energy mar- to their stock investment decisions on the back
kets in Asia, the project’s relatively close prox- of the ongoing increase in climate-related prac-
imity to European consumers also makes them tices,” the analysts said.™

Week 42 22•October•2021 www. NEWSBASE .com P7