Page 4 - FSUOGM Week 04 2022

FSUOGM COMMENTARY FSUOGM

Arrival of Chinese investor

lifts prospects for Far

Eastern LNG project

Yakutsk LNG is unique in that it does not involve any of Russia's leading gas majors

RUSSIA A Chinese energy firm has lent its support to projects. Rosneft, the country’s number three gas
what could be the first large-scale Russian liq- supplier, wants to build a plant in the Far East
WHAT: uefaction plant not to be developed by one of the but the project has been stuck in limbo for years.
China's Zhejiang Energy country’s leading gas majors. In contrast, YATEK is a little-known com-
is buying a stake in a Zhejiang Energy, a gas and power supplier pany whose assets comprise only a handful of
prospective LNG export in east China that also imports LNG, has agreed gas fields in Yakutia that yield 1.7bn cubic metres
project in the Far East. to buy a 10% stake in Yakutsk LNG, a proposed per year of gas – a modest amount based on Rus-
liquefaction terminal on the shore of Russia’s sian standards. It was rescued from bankruptcy
WHY: remote Yakutia region that at full capacity will in 2019 when Russian investment firm A-Prop-
The main target for the export up to 18mn tonnes per year (tpy) of LNG erty, owned by Russian-Armenian businessman
facility's sales is China. to markets in Asia. Albert Avdolyan, took over majority control.
The deal is worth €500mn ($567mn), the pro- Yakutia is the most gas-prone region in the
WHAT NEXT: ject’s developer, the Yakut Fuel and Energy Co. Eastern Siberian basin, and is home to Gaz-
Russia needs to remove (YATEC), said in a statement on January 19, with prom’s giant Chayandinskoye field, which has
barriers and enable a closure expected in October. been pumping gas to China via the Power of
greater pool of investors Russia has sizable gas deposits in a number Siberia since late 2019. But as Gazprom has
to develop LNG projects. of remote areas, and given the country’s position exclusive access to Power of Siberia under Rus-
between European and Asian markets, this gives sian law, other producers in the area have limited
it the potential to become one of the world’s lead- means of monetising their resources, given that
ing LNG suppliers. But while Novatek has had local demand is not excessive.
success realising export projects in the Arctic, YATEC’s plan is to launch an aggressive
other schemes have faltered. exploration campaign to expand its reserves
So far only Gazprom and Novatek, Russia’s sufficiently to justify the LNG terminal. The
largest and second-largest gas producers respec- facility will initially comprise two trains with a
tively, have successfully realised LNG export combined output of 8.7mn tpy. Two more larger

P4 www. NEWSBASE .com Week 04 26•January•2022