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Saudi Arabia will consider investing in Russia’s Arctic LNG project, especially if it could be used to deliver LNG to the Middle Eastern country, Saudi Energy Minister Khalid al-Falih told Russian news agency TASS in an interview on Friday.
“At this stage, of course, it is too early to talk about specific projects. LNG business is challenging, there is a lot of supply. However, we don’t think in terms of years, we think in terms of decades,” al-Falih told TASS.
Saudi Arabia should look into long-term projections, and if it finds the projects justified, it will consider investing in them, especially if part of the LNG output can be supplied to Saudi Arabia, the minister said.
“Saudi Arabia is a huge market for gas, so we’re looking at existing projects like Yamal LNG, but we’re also looking at future projects with Russian companies that we can do elsewhere - Africa, Mediterranean,” TASS quoted al-Falih as saying.
Earlier this year, Russia’s President Vladimir Putin said that the country not only can—but will—become the world’s biggest LNG producer.
Russia is currently building LNG plant and export capacities in the Arctic—with the help of Asian partners, among others—that will compete in the future with supplies to Asia, the world’s top LNG importing region, from the leading exporting counties Qatar and Australia.
Currently, Russia has just one operating LNG export facility, Sakhalin, whose majority shareholder is Russian gas giant Gazprom. But soon the Yamal LNG project in the Arctic will become operational. The project plans to begin selling LNG on the sport market this year, and start deliveries under long-term contracts next year, Leonid Mikhelson, the chief executive of Yamal LNG’s majority shareholder Novatek has said.
According to a Wood Mackenzie report from April, this year will be a decisive year for Russian LNG, when the first ever multi-train Arctic LNG project – Yamal LNG – is commissioned. The Arctic LNG-2 project in northern West Siberia will be the second large-scale LNG project led by Novatek, after Yamal LNG.
Despite its huge conventional gas reserves, Russia’s share in the global LNG market is small, at around 4 percent, WoodMac says.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.