Here’s Putin’s Answer To The U.S. Shale Boom
Last week saw Japan’s Mitsui and Japan Oil, Gas and Metals National Corporation agree to buy a 10% stake in Novatek’s Arctic LNG (liquefied natural gas) 2 project for an officially undisclosed price, although Russia’s President Vladimir Putin independently stated that the investment would be around US$3 billion. The fact that Putin himself commented on the deal underlines how important the exploration and development of the Arctic region is for the Russian state as a source of potentially vast new oil and gas resources and the accretion of further geopolitical influence, akin to the game-changing shale industry for the U.S. Russia’s current development of the Arctic region is centred around the Yamal Peninsula and led principally Novatek but further developments are in the offing from Gazprom and Gazprom Neft, even in the face of current and future U.S. sanctions.
Novatek’s main Arctic project, the Yamal LNG (unofficially referred to as ‘Arctic 1’) last week announced that it produced 9.0 million tons of LNG and 0.6 million tons of stable gas condensate in the first half of this year, with all three LNG trains running above the 5.5 million tons per annum (mtpa) nameplate capacity over that period. This resulted in 126 LNG tanker shipments being dispatched in the six month period via trans-shipment from the ice-class LNG carriers to conventional vessels in Norway and delivered onto the global markets, mostly to Russia’s key target markets in Asia. Overall, the Yamal LNG project consists of a 17.4 mtpa natural gas liquefaction plant comprised of three LNG trains of 5.5 mtpa each and one LNG train of 900 thousand tons per annum, utilising the hydrocarbon resources of the South-Tambeyskoye field in the Russian Arctic.
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