MOSCOW: Vladimir Putin officially launched on Friday the Yamal LNG project in the Arctic—Russia’s second LNG plant and its push to challenge the dominance of Qatar and Australia, and the U.S. in the future, on the global LNG market.
The first tanker from the US$27-billion project will be shipped to China’s CNPC, in what the majority holder of the project, Russia’s Novatek, said in October is “in recognition for their overall contribution to the project and the importance the Asian Pacific market represents as a key-consuming region.”
Novatek is the majority shareholder of Yamal LNG with 50.1 percent, France’s oil and gas supermajor Total has 20 percent, CNPC holds another 20 percent, and China’s Silk Road Fund owns the remaining 9.9 percent. All LNG production will be sold to customers in Europe and Asia under 15- to 20-year contracts, Total says.
Novatek, which has been on the U.S. list of sanctions since 2014, has turned to Chinese partners for financing to complete the multi-billion-dollar project. The Russian natural gas producer sold the 9.9-percent stake to the Silk Road Fund in early 2016, after having received a 15-year loan of around US$860 million (730 million euro) by the fund for the financing of the project.
Earlier this year, Putin said that Russia not only can but will become the world’s biggest LNG producer.
At a meeting with Russia’s top oil and gas industry officials in Yamal on Friday, Putin saidthat the project “contributes to strengthening economic cooperation with the countries of the Asia-Pacific region, primarily, our key partners in this region, including Chinese companies.”
