Gazprom outlines LNG project plans

REUTERS

PETERSBURG

GAZPROM expects to launch the first stage of a liquefied natural gas (LNG) plant in the Pacific port of Vladivostok in 2018 and double its output capacity to 10 million tonnes a year in 2020, a company official said on Saturday.

This is the first time that Gazprom is outlining a more concrete timeframe and volumes for the project. It previously talked of a maximum envisaged output capacity of 20 million tonnes annually.

President Vladimir Putin has urged Russian firms to forge closer ties with energyhungry Asian markets as Europe, the traditional market for their hydrocarbons, is plagued by economic problems resulting in sluggish demand for oil and gas.

Pavel Oderov, the head of Gazprom’s foreign department, said there was a possibility for a third line, but the original plan was for two lines with capacity of 5 million tonnes a year each.

“It’s not a secret that our Far Eastern projects are oriented to the market of the Asia-Pacific region. And we would be ready to look into the possibility of using a part of the products for sea and automotive transportation,” he told a conference.

Gazprom has committed more than $38 billion to develop an East Siberian gas field and build a pipeline to the Pacific port of Vladivostok. For years the state-controlled company has been in gas delivery talks with China, and last month signed a memorandum to supply 38 billion cubic metres (bcm) of gas a year via the Eastern route starting from 2018.

Vladivostok LNG could fit in with the plans to ship gas to China. Russia now aims to sign the deal with the world’s top energy consumer before the year end. Russia, the world’s second-largest gas producer after the United States, has a sole LNG-producing plant, the Gazpromled Sakhalin-2 project, which produces 10 million tonnes of frozen gas a year.

Oderov also said LNG could be used as fuel in the Baltic Sea region as part of the drive to fight off pollution and improve the environment, as gas is cleaner than oil products, the traditional fuel for ships.