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Novatek sets up small-scale LNG business

PROJECTS & RUSSIA’S largest LNG exporter Novatek has Russian authorities want to see the sector grow in
COMPANIES established a subsidiary to target the domestic order to reduce emissions from road transport
market for the super-cooled gas as well. and lower transport costs, which would boost the
The subsidiary, Novatek LNG Fuel, would international competitiveness of many Russian
be tasked with building small-scale lique- industries. Gazprom estimates that converting
faction plants, Novatek said last week, and vehicles to natural gas can reduce fuel costs by
would also carry out the retail sale of LNG for up to 60%.
use as a vehicle fuel and for expanding access Russian authorities have already introduced
to the population in areas without pipeline support mechanisms to expand gas use in vehi-
access. cles, including subsidies that partially cover the
LNG is environmentally friendlier than con- cost of vehicles. The country’s energy ministry is
ventional motor fuels, but supporting its use eager to do more, proposing in March a zero-im-
requires the development of refuelling infra- port duty on overseas-produced equipment
structure and the installation of necessary equip- needed for small-scale liquefaction plants, and
ment on vehicles. Novatek currently has 12 LNG for vehicles that run on the fuel.
filling stations across Russia, as well as a plant LNG is viewed as more suitable for heavy
in the Chelyabinsk region capable of producing goods, long-distance road transport, whereas
40,000 tonnes per year (tpy) of LNG. passenger cars and other light vehicles are better
The company’s rivals Gazprom and Rosneft served with compressed natural gas. There are
are also pursuing opportunities in the emerging currently only a handful of LNG stations, versus
natural gas vehicles (NGVs) market. Meanwhile, 530 CNG stations.™

Russia’s Sakhalin Island eyes co-operation

with Japan on carbon capture and storage

ENERGY RUSSIA’S Far Eastern Island of Sakhalin is near- hydrogen as a fuel source. Some are also buying
TRANSITION ing a co-operation agreement with a Japanese emission-offsetting certificates, while others are
firm on developing carbon capture and storage drawing up plans for CCS.
(CCS) technology, its regional governor Valery Depleted oil and gas fields can serve as ideal
Limarenko told Reuters on July 21. storage locations for such emissions. The Sakha-
Russia is striving to make Sakhalin its first lin LNG plant is supplied with gas from the Pil-
carbon-neutral region by as early as 2025, hoping tun-Astokhskoye and Lunskoye fields. As these
to develop strategies it can then apply to other fields move towards depletion, CO2 from Sakha-
areas of the country at a later stage. Sakhalin lin LNG and other industry on Sakhalin Island
hosts Russia’s first LNG plant, developed by Rus- could be injected into their reservoirs to boost
sia’s Gazprom, Royal Dutch Shell and Japanese the recovery of remaining reserves.
firms Mitsui and Mitsubishi. The consortium Sakhalin authorities want the region to gen-
has worked out an “ecological LNG” strategy erate 28% of its energy from wind, solar, geo-
to reduce its carbon footprint and supply car- thermal and small-scale hydroelectric plants
bon-neutral fuel, Limarenko said. by 2025. Much of this capacity is to be built on
There are a number of ways that LNG export- the Kuril Islands, partly claimed by Japan as its
ers around the world are looking to reduce territory.
emissions from their activities. Besides general Sakhalin also wants to roll out 10,000 elec-
efforts to cut planned and fugitive emissions, tric-powered vehicles and 1,000 charging sta-
some are looking to supply renewable energy to tions by 2025, as well as convert domestic boilers
their facilities, and others are considering using to run on gas.™

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