• 2 days Shell Oil Trading Head Steps Down After 29 Years
  • 2 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 2 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 2 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 2 days Venezuela Officially In Default
  • 2 days Iran Prepares To Export LNG To Boost Trade Relations
  • 2 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 2 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 3 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 3 days Rosneft Announces Completion Of World’s Longest Well
  • 3 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 3 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 3 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 3 days Santos Admits It Rejected $7.2B Takeover Bid
  • 3 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 4 days Africa’s Richest Woman Fired From Sonangol
  • 4 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 4 days Russian Hackers Target British Energy Industry
  • 4 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 4 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 4 days Lower Oil Prices Benefit European Refiners
  • 4 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 5 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 5 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 5 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 5 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 5 days OPEC To Recruit New Members To Fight Market Imbalance
  • 5 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 5 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 6 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 6 days GE Considers Selling Baker Hughes Assets
  • 6 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 6 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 6 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 6 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 6 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 9 days The Oil Rig Drilling 10 Miles Under The Sea
  • 9 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 9 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 9 days Italy Looks To Phase Out Coal-Fired Electricity By 2025

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

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