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Pechora LNG to produce methanol instead

PROJECTS & A pair of gas fields in Russia’s northern Nen- the deal, without commenting on its terms.
COMPANIES ets region previously expected to underpin an The new owners envisage producing 2
LNG export project will now be used to produce bcm per year of gas from Korovinskoye and
methanol instead, the Moscow-based Kommer- Kumzhinskoye, according to Kommersant.
sant newspaper reported on November 27. These supplies will be pumped via a new pipe-
Private Russian investor Alltech has sold line to the Barents Sea, near the village of Indiga
the Korovinskoye and Kumzhinskoye fields to some 300 km away, where they will be used to
businessman and former Duma member Vitaly produce some 1.7mn tpy of methanol.
Yuzhilin and his partners. Alltech was previ- Gas supplies could be ramped up to 4 bcm
ously working with Russia’s Rosneft on a plan to per year by 2027, Kommersant reported. The
export the fields’ gas in LNG form, known as the project’s first phase is expected to cost RUB12bn
Pechora LNG project. But it became clear that ($160mn), with the developers anticipating
their reserves, estimated at 160bn cubic metres making a return on this investment in seven to
of gas, were only large enough to produce 5mn eight years.
tonnes per year (tpy) of LNG or less, making pro- Yuzhilin’s Ruskhim company was previously
ject costs uncompetitive. considering methanol production in the Len-
Rosneft left the project in 2018 and it was ingrad region, but has now dropped this plan,
revealed that Alltech was seeking to sell the according to Kommersant.
assets in September last year. Alltech’s billion- Alltech and Rosneft had originally hoped
aire owner Dmitry Bosov committed suicide to gain access to two more gas fields nearby
in May, leaving it up to his heirs to sell Pechora to underpin their LNG project, but they were
LNG. defeated in a subsoil auction by Gazprom. At
Under a preliminary agreement, Yuzhilin one point they considered the construction of a
will take a 50% position in the Pechora LNG gas-based petrochemical plant, but this plan was
operating company, while his partners Gennady also dismissed as unrealistic.
Mirgorodsky and Dmitry Ozersky will each The assets also have value given their close
take 25%. The Russian Direct Investment Fund proximity to the Layavozhskoye and Vneyviss-
(RDIF) could also play a role, Kommersant said. koye gas deposits that Gazprom is looking to
Representatives of Alltech have confirmed develop with Lukoil.™

Week 48 04•December•2020 www. NEWSBASE .com P15