Page 7 - FSUOGM Week 08 2022

FSUOGM PIPELINES & TRANSPORT FSUOGM

Novatek revives Obskiy LNG project

RUSIA NOVATEK has revived plans for the single-train Critically, though, Obskiy LNG will no longer
Obskiy LNG plant in Russia’s far north, with the employ Novatek’s proprietary Arctic Cascade
Novatek will now use terminal set to have a capacity of 6.6mn tonnes technology, and will instead rely on a foreign
imported technology for per year (tpy), Russian business daily Kommer- alternative. Arctic Cascade has been test-trialled
the project, however. sant reported last week. at a fourth, small-sized liquefaction terminal.
Novatek originally intended to build a 4.8mn It was eventually launched in May 2021 after
tpy LNG terminal at the site on the Yamal Penin- repeated delays.
sula, underpinned by 350bn cubic metres of gas In 2020, the Russian press reported that some
reserves at the West-Seyakhinskoye and Verkh- of the fourth train’s processing pipelines had
netiuteyskoye fields. But it subsequently revised been designed incorrectly, and Novatek has also
the project’s scope to include blue hydrogen and attributed delays to the coronavirus (COVID-
ammonia production that could be exported 19) pandemic and subsequent slump in global
as clean fuels to Europe, without specifying gas prices. But operational problems since its
whether LNG would still be part of the plan. launch have also been reported.
Thanks to a further 450 bcm of gas being Russia is anxious to reduce dependence on
confirmed at the Arkticheskoye and Neytin- foreign equipment and technology in its LNG
skoye fields, Kommersant said Novatek had now industry, in order to shield the sector from pos-
decided to go ahead with both LNG and hydro- sible future Western sanctions. But Novatek has
gen and ammonia production. It is expected to so far relied mostly on imported equipment and
go online in 2026 or 2027, and citing sources, the technology for its large-scale LNG plants, and
newspaper said that France’s TotalEnergies had has also ordered most of its LNG carriers from
already shown interest in the project. TotalEner- foreign shipyards, after securing exemptions
gies is an investor in Novatek’s Yamal LNG and from recently introduced rules that state that
Arctic LNG-2 terminals. such vessels must be built domestically. ™

INVESTMENT

Lukoil expands ownership

at Shah Deniz gas field

AZERBAIJAN RUSSIA’S Lukoil has closed a deal with Malay- of gas and over 80,000 bpd of condensate.
sia’s Petronas that expands its share of the BP-led As it stands now, BP has a 29.99% stake in
Lukoil is expanding in Shah Deniz gas development off the coast of the project, while SOCAR has 14.35%, Turkish
its core region. Azerbaijan, as the company looks to hone its Petroleum has 19%, Iran’s NICO has 10% and
focus on a key growth region. Azerbaijan-owned SGC has 6.67%.
Lukoil has bought an extra 9,9% stake in the Lukoil is eager to build up its position in the
field for $1.45bn, raising its ownership position Caspian Sea, one of its few remaining growth
to 19.99%. Initially it sought Petronas’ entire positions in Russia, where many of its fields
15.5% interest for $2.25bn, but BP and SOCAR are now mature and output is declining. The
used their pre-emptive rights as existing part- company already operates the Korchagin and
ners at the project to acquire stakes of 4.35% and Filanovskoye fields, and various other deposits
1.16% respectively. in Russian waters, as well as several exploration
Shah Deniz pumps gas to Georgia, Turkey prospects off the coast of Kazakhstan. It has
and Europe via the Southern Gas Corridor recently held talks with authorities in Turkmen-
(SGC) network of pipelines stretching all the way istan on expanding there as well.
to Italy. The field came on stream in 2006, deliv- Marking a reversal from the typical trend,
ering an initial 10bn cubic metres (bcm) of gas Lukoil reported a climb in oil production in
and 50,000 barrels per day of condensate under Russia to 1.53mn barrels per day last year from
its first stage of development. This was later 1.48mn bpd in 2020, thanks to eased OPEC+
expanded when SGC’s capacity was expanded, quotas. Gas extraction fell to 16.1bn cubic
and last year production came to 23 bcm per year metres, however, down from 17.6 bcm. ™

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