Page 10 - GLNG Week 39 2022

GLNG EUROPE GLNG

LNG taxes in Russia

could double, Novatek

exposed

TAXES RUSSIA’S Finance Ministry could ramp up although that is scheduled to expire in 2029
corporate income taxes on liquefied natural gas and revert to Russia’s standard 20% corporate
(LNG) projects to 32%, targeting RUB200bn income tax, BCS GM reminds and estimates that
($3.5bn) of revenues from the sector, according in 2023 the reportedly planned increase in taxes
to Interfax. Russia’s Finance Ministry could ramp might raise an additional RUB100bn for the gov-
up corporate income taxes on liquefied natural ernment, roughly in line with MinFin’s estimates
gas (LNG) projects to 32%, targeting RUB200bn for the sector as a whole.
($3.5bn) of revenues from the sector, according For Novatek, which owns 50% of Yamal LNG,
to Interfax. this implies a loss of RUB50bn, and thus lower
As followed by bne IntelliNews, the govern- dividends of RUB25bn, given its 50% payout
ment is preparing to finance the looming fiscal policy. Other small-scale LNG projects might
squeeze at the expense of commodity exporters. drive that up slightly to the RUB60bn loss.
The Finance Ministry’s decision on LNG Notably, higher taxes could affect Novatek’s
could result in a RUB50bn loss for Russia’s sec- pending decision to buy Shell’s 27.5% stake in
ond-largest gas producer Novatek, BCS Global Sakhalin-2 LNG project. Previously Novatek
Markets analysts estimated, seeing the news as bought a 49% stake in its Terneftegaz joint ven-
“moderately negative”. ture with TotalEnergies from its French partner,
Currently, Yamal LNG project of Novatek bringing its ownership to 100%.™
pays a special income tax rate of only 15.5%,

P10 www. NEWSBASE .com Week 39 30•September•2022