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the recovery of most of its investment on already under-way refining upgrade projects, which was followed by announcements of similar agreements signed by Gazprom Neft and Tatneft. Now Vedomosti’s sources indicate that Lukoil and Novatek will seek cRUB100bn and cRUB50bn, respectively, for export- oriented projects. In Novatek’s case, this almost certainly means its planned expansion of its Ust Luga plant, while for Lukoil we think it may indicate yet-to- be-started projects in the petrochem sector. The ‘reverse excise tax premium’ is proving popular: As a reminder, this new break, introduced at the first of the year, allows refiners to receive a 30% premium to the reverse excise tax (a subsidy, despite the nomenclature) for up to 10 years to help recoup the investment into major refining upgrades (totaling RUB50bn or more). So far, estimated EBITDA boosts from this program have ranged from 0.5-2%.
The Russian government has approved the long-term gas strategy, Interfax reports. The key takeaways are below.
§ Russia is to create LNG clusters in the Arctic and Russian Far East in the next 5-15 years so as to monetise gas reserves via exports of pipeline gas and LNG. The focus is on the Asian markets. LNG production might grow to 140mnt/a by 2030. LNG capacities could triple over 15 years.
§ By July, the government is going to evaluate whether the incentives for supplying LNG from the Arctic to new markets are sufficient, and also consider measures to incentivise exploration so as to develop the resource base.
§ Gazprom could launch two new LNG plants by 2025: Vladivostok LNG (1.5mnt/a, pre-investment stage, Kirinskoye and South- Kirinskoye fields as the resource base) and a facility on the shore of the Black Sea (0.5-1.5mnt/a). According to Vedomosti, Black Sea LNG might receive the feedstock through the pipeline system. Vladivostok LNG’s output is to be used for exports and bunkering.
§ Gazprom Neft is evaluating the creation of a gas chemical complex on the Yamal peninsula.
§ The capacity of Rosneft’s Far East LNG (6.2mnt/a, launch after 2027-28) might be increased to 10mnt/a after 2035 through the use of the Veninsky offshore cluster of fields and fields in East Siberia. Rosneft might also build a 35-50mnt/a LNG plant (Taimyr LNG) as part of its Vostok Oil project. Another probable project is Kara LNG (up to 30mnt/a, launch in 2030-2035) in the Kara Sea, linked to the development of the East-Prinovozemelskiy-1 licence area.
The gas strategy was mainly expected and does not change the outlook for the
126 RUSSIA Country Report April 2021 www.intellinews.com