Gazprom Fights Rosneft to Get Export License for Pechora LNG

September 2, 2014

Gazprom has written a letter to government where it warns against granting a LNG export license for the Pechora LNG project to its main domestic competitor Rosneft, writes Barentsobserver.  In the letter addressed to the Ministry of Energy, company Board deputy Valery Golubev underlines that additional amendments in the federal Law on gas exports could negatively affect the development of Russian LNG. Competition between Gazprom and Rosneft within the field of LNG could lead to lower prices and subsequently less incomes for the state, he argues, Forbes reports.

As previously reported, Rosneft is about to take over a majority share of the Pechora LNG, a project developed by Alltech. The project is dependent on an export permission.

Gazprom is under increasing pressure from Rosneft, a company which itself possesses major gas resources, especially in its offshore fields. Rosneft has also indicated that it wants an end to Gazprom’s export monopoly on pipeline gas.

Earlier this year, the federal government amended the Law on gas exports, allowing Rosneft to export LNG. Also Novatek was given permission to export LNG from the Yamal LNG project. However, Alltech was not given export permission for its Pechora LNG project. With powerful Rosneft on board, the situation has changed and the project could soon take steps towards implementation.

The Pechora LNG will produced an estimated 10 million tons per year, most of it planned shipped to western markets.

The plant is to be built near the village of Indiga, about 230 km west of regional capital Naryan-Mar. Originally, the Pechora LNG is planned to be based on the resources of the Kumzhinskoye and Korovinskoye fields. However, with Rosneft on board the plant could easily include also offshore resources.

By Atle Staalesen

Copyright 2014.