Home International Russian president launches huge $27 billions LNG project in Arctic

Russian president launches huge $27 billions LNG project in Arctic

Image Credit @ Geo.tv

SABETTA: President Vladimir Putin on Friday launched a $27 billion liquefied natural gas (LNG) plant in the snow-covered plains of the Arctic as Russia hopes to surpass Qatar to become the world’s biggest exporter of the chilled fuel.

The Russian president congratulated workers as he oversaw the first gas shipment being loaded onto an ice-breaking tanker from an LNG plant amid minus 28 degrees Celsius (minus 18 degrees Fahrenheit) weather in the port of Sabetta on the Yamal Peninsula above the Arctic Circle.

“This is a large-scale project for Russia,” Putin said. “At the start of the project, people told me not to pursue this. Those who started this project took a risk but achieved a result.”

Saudi Arabian Energy Minister Khalid al-Falih and other top officials were present for the occasion.

Qatar is currently the world’s biggest LNG exporter. Russia, the world’s biggest gas exporter, derives a huge share of income from pipeline deliveries to Europe.

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With Yamal LNG, Russia intends to strengthen its market presence in Asia and demonstrate its capacity to exploit huge Arctic reserves despite major technological challenges.

The tanker carrying the first LNG cargo is named after Christophe de Margerie, a former Total CEO who died in an accident on a runway of a Moscow airport in 2014.

The site is operated by Yamal LNG company, owned by Novatek (50.1 percent), Total (20 percent), CNPC (20 percent) and Silk Road Fund (9.9 percent).

The $27 billion (23 billion euro) project is set to start with a production capacity of 5.5 million tonnes per year and increase it to 16.5 million tonnes by the start of 2019.

US sanctions against Novatek made it virtually impossible to borrow from Western banks, and Chinese partners eventually stepped in to resolve the issue.

Transportation through the Northern Sea Route also remains undeveloped, and “its feasibility as a major LNG delivery route is unclear”. Russia hopes the route will become an easier path to coveted Asian markets.

The route along the northern coast of Siberia allows ships to cut the journey to Asian ports by 15 days compared with the conventional route through the Suez Canal, according to Total.

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