Russia Is Now Producing LNG Near The Shuttered Nord Stream Pipeline

• Russia's Gazprom has shut down the Nord Stream 1 pipeline to Germany, claiming that it has been unable to repair the necessary equipment.
• Now, in a facility near the start point of Nord Stream 1, Russia has launched LNG production and has a tanker ready to take the gas to market.
• Russia has been shutting down pipelines and flaring gas instead of selling it to Europe, and this LNG facility is further evidence of its new natural gas strategy.

Gazprom has launched liquefied natural gas (LNG) production at a facility close to the starting point of the now-shut Nord Stream gas pipeline to Germany, the Russian company’s deputy CEO Vitaly Markelov said on Tuesday. 

The Portovaya plant close to Nord Stream’s compressor station of the same name, where Russia typically starts gas supply via the pipeline, has already produced 30,000 tons of LNG and has two operational lines, Russian news agency Interfax quoted Markelov as telling the Eastern Economic Forum in Vladivostok.

“A tanker will arrive now to ensure LNG supply to customers. Considering the global markets, our LNG will be in demand,” Markelov said.

LNG production from the Portovaya plant will go to Kaliningrad, the Russian enclave on the Baltic Sea surrounded by Lithuania and Poland, and to expand Gazprom’s LNG portfolio, according to Interfax. 

Apart from the Portovaya compressor station and the turbine repairs saga, the area close to the plant and the start of Nord Stream came to notoriety in recent weeks with reports that Russia is flaring natural gas at the plant near the Finnish border while drastically cutting gas flows via the Nord Stream pipeline to Germany.

The plant northwest of St. Petersburg is flaring an estimated around $10 million worth of natural gas per day - gas that would have gone to Germany otherwise, a Rystad Energy analysis shared with BBC News showed last month.

The Portovaya plant is near the compressor station of the same name where the Nord Stream route to Germany begins. Since June, Russia has significantly cut flows via Nord Stream, first to 40% of the pipeline's capacity and then to just 20% of Nord Stream capacity after a ten-day regular maintenance period ended on July 22. 

Last week, after a three-day halt to the flows, Gazprom said that the Nord Stream gas pipeline to Germany would remain closed indefinitely, and blamed on Monday the Western sanctions for this situation.  

By Tsvetana Paraskova for Oilprice.com

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