Page 11 - FSU OGM Week 11 2021

FSUOGM PROJECTS & COMPANIES FSUOGM

Gazprom scraps contract for

$13bn Baltic gas complex

RUSSIA RUSSIA’S Gazprom and its private partner Rus- designer. It added that the project’s developers
GazDobycha have cancelled an engineering, could not decide on how to finance the scheme
Reports in the Russian procurement and construction (EPC) contract nor how much of its equipment should be local-
press suggest that the awarded for a gas processing and LNG complex ised. It also pointed to “discrepancies” in the pro-
project has encountered on the Baltic Sea. ject’s risk assessment, and how risks should be
difficulties. The contract covers processing facilities and shared between customer and contractor.
was issued to Nipigaz, a subsidiary of Russian “These factors led to the customer’s decision
petrochemicals group Sibur, in June 2020. Gaz- to terminate the work under the EPC contract,”
prom said the decision had been taken to opti- Nipigaz said.
mise project costs, without elaborating. The project involves the construction of
“The contractor to carry out these works will a hub capable of annually processing 45bn
be determined in the near future,” Gazprom said cubic metres of natural gas into 19 bcm per
in a statement on March 15. “The decision to year of treated gas, which will be exported via
replace the contractor will not affect the project the Nord Stream 2 pipeline, along with 13mn
schedule.” tonnes of LNG, 3.6mn tonnes of ethane and
The $13bn Baltic gas complex at Ust-Luga is a more than 2.2mn tonnes of LPG. Ethane from
50:50 joint venture between Gazprom and Rus- the project will be supplied to a nearby petro-
GazDobycha, a company affiliated with Kremlin chemical plant that RusGazDobycha plans to
ally Arkady Rotenburg. Gazprom took a decision erect on its own.
on its implementation in March 2019 and it is Gazprom has been working on plans for liq-
slated for completion in 2023-2024. uefaction facilities in north-west Russia for over
Reports in the Russian press suggest that a decade. It originally wanted to build a 10mn
the project has encountered difficulties. The tonne per year (tpy) LNG terminal with Royal
Moscow-based RBC news agency reported on Dutch Shell. But the international oil major
March 14 that Nipigaz had repeatedly failed to left the venture in April 2019 after Gazprom
meet project deadlines. expanded its scope to include processing facil-
The company issued its own statement saying ities and brought on board RusGazDobycha as
it would continue to serve as the project’s general a partner. ™

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