• 4 minutes U.S. Shale Output may Start Dropping Next Year
  • 8 minutes Read: OPEC WILL KILL US SHALE
  • 12 minutes Tidal Power Closer to Commercialisation
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 2 hours Why U.S. Growers Are Betting The Farm On Soybeans Amid China Trade War
  • 14 hours Trump to Make Allies Pay More to Host US Bases
  • 7 hours US-backed coup in Venezuela not so smooth
  • 16 hours BATTLE ROYAL: Law of "Supply and Demand". vs. OPEC/Saudi Oil Cartel
  • 1 day THE DEATH OF FOSSIL FUEL MARKETS
  • 1 day Solar to Become World's Largest Power Source by 2050
  • 17 hours Biomass, Ethanol No Longer Green
  • 2 days this is why Climate Friendly Agendas Tread Water
  • 2 days Boeing Faces Safety Questions After Second 737 Crash In Five Months
  • 15 hours Trump Tariffs On China Working
  • 1 day Exxon Aims For $15-a-Barrel Costs In Giant Permian Operation
  • 2 days Sounds Familiar: Netanyahu Tells Arab Citizens They’re Not Real Israelis
Pakistan Aims To Become A Natural Gas Hotspot

Pakistan Aims To Become A Natural Gas Hotspot

Positioned perfectly in the Asian…

Oil Markets In Limbo Ahead Of OPEC Meeting

Oil Markets In Limbo Ahead Of OPEC Meeting

Oil investors are taking a…

Russia to Focus on LNG in Effort to Reduce Dependence on European Market

Historically Russia has relied heavily on the European market to send its natural gas exports and earn huge revenues that make up most of the government’s annual earnings. However, fed up with their reliance on Gazprom, Europe has steadily been distancing itself from Russia and searching for alternative suppliers.

This reduction in market share within Europe, coupled with the falling general demand across the continent due to the lasting financial crisis, has forced Russia itself to also begin looking around for new customers.

One method by which it hopes to take advantage of other markets around the world is through LNG exports.

Related article: Shell Claims Global Liquid Fuel Demand will Peak in 2035

EurActiv reports that President Vladimir Putin has ordered the government to expand the tax breaks that it offers, to more natural gas fields that supply the proposed liquid natural gas plant (LNG) in the Yamal peninsula.

Putin has asked his country’s energy companies to focus on LNG production to be shipped by sea, strong in the belief that this will help them diverge away from Europe’s falling demand. Certainly China and Japan offer large markets for LNG, and by making the most of the thawing Arctic Sea Ice, Russia could send tankers from the Yamal Peninsula, around the tip of Siberia, and down towards East Asia.

The Yamal LNG project will cost an estimated $20 billion and produce 16.5 million tonnes of liquid gas a year; and whilst it already receives the benefit of some tax breaks, such as no mineral extraction tax or export duties, Putin wants to offer more tax breaks to the fields along the Gydan peninsula which supply the majority of the plants natural gas.

Map showing the existing LNG plant Sakhalin island, and the proposed plant in the Yamal peninsula.
Map showing the existing LNG plant Sakhalin island, and the proposed plant in the Yamal peninsula.

Analysts at Sberbank CIB, said that “the news of the potential extension of the tax incentives is welcome.

Related article: Saudi Arabia to Use Shale Gas for Domestic Power Generation

Novatek's Salmanovsky and Geofizichesky fields in Gydan, right across the narrow Ob Bay from Yamal's South Tambey, have resources to be producing up to 30 billion cubic metres of gas and 1.2 million tonnes of condensate as soon as 2020, with output potentially starting in 2017.”

Currently Russia’s only operating LNG plant is controlled by Gazprom and exists on the island of Sakhalin, but the government is working on laws to reduce Gazprom’s monopoly of control on LNG exports and the Yamal LNG project, led by Novatek, will play a big part in this effort.

By. Charles Kennedy of Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News