Near St. Petersburg, in the area of the seaport of Ust-Luga, it is planned to build a plant for the production of liquefied gas. The large-scale project is estimated at 1 trillion rubles of investment.
Construction preconditions
Despite the fact that the purchase price of pipeline gas is lower than that of liquefied gas, there is a steady upward trend in consumer demand. In this regard, the management of Gazprom decided to build facilities designed to secure lucrative contracts and saturate the market with a product in demand. The planned plant, B altic LNG, will be located in the Leningrad region, namely at the site near the port of Ust-Luga.
In addition to macroeconomic prospects, the construction of the B altic LNG will solve some problems in the Leningrad region, several branches of gas pipelines and processing facilities will be built. In addition, it is planned to establish the supply of natural gas to the Kaliningrad region by building the necessary infrastructure for this.
Goals
The priority goals of the B altic LNG project are the supply of liquefied gas to Europe, as well as India and Latin America. An additional purpose of the construction of the enterprise is to increase the flow of small-tonnage supplies in the B altic, as well as to serve the market for refueling ships with fuel (bunkering).
Project
The design capacity of the enterprise is laid at the level of ten million tons of liquefied gas per year, with the prospect of increasing production to fifteen million tons per year. The final decision on the laying of the enterprise was announced by the leaders of Gazprom in April 2015. The construction of the B altic LNG is planned to be completed in 2020. In the fourth quarter, according to the announced plan, the first batch of products should be shipped. According to the latest publications in the media, the completion of construction is postponed to 2021-2022, but there are no official comments on this matter.
The project has three parts:
- B altic LNG.
- Pipeline.
- Port terminal for reloading gas containers onto tankers.
The initial cost of construction was estimated at 460 billion rubles, the rise in price occurred only in ruble terms, since all the necessary equipment will be purchased abroad. In dollar terms, the cost of the project remained unchanged.
Construction will be carried out by Gazprom's subsidiary Gazprom LNG St. Petersburg. Gazprom and Shell corporations have been named as partners in the implementation of the plans, and negotiations are underway with Mitsui and Mitsubishi. About six thousand people will build the B altic LNG. The general designer of the investment justification is the design institute of OAO Giprospetsgaz. On thethe construction of the gas pipeline will involve about two and a half thousand specialists.
Members
Several investors will be attracted to the implementation of the B altic LNG project. Gazprom has decided on one of the leading participants in the construction of the future plant. As part of the St. Petersburg International Economic Forum, held in June 2016, the corporation signed a memorandum with Royal Dutch Shell, which confirms the intentions of the parties.
And although the German concern expresses an active desire to participate in the construction, nevertheless, an agreement on this was never signed, they limited themselves only to assurances of desire. Most experts associate the suspiciousness of the German concern with European sanctions against the Russian Federation. At the moment, negotiations are underway on the size of Shell's share in the project.
The justification of the project refers to the possibility of the general shareholder receiving a share of 49% of the shares. Negotiations continue, but backstage conversations confirm the information that Shell can get almost half of the plant. The reason for this decision may be the fact that the German concern is ready to provide gas liquefaction technology.
In July 2016, it was announced that the structure of participants in the construction of the B altic LNG project could change. The desire was declared by Japanese companies that have experience in the Russian market in the implementation of the Sakhalin-2 project.
Designer's Choice
To the priority listGazprom also includes B altic LNG. The design of the complex is at the stage of selecting a general contractor. Experts name several companies with which Gazprom has already cooperated in the process of solving other problems. In this row is JSC VNIPIgazdobycha - in the past the general designer of a similar enterprise in Primorye (the project has not been implemented).
Also called the Scientific Research Institute of OAO Gazprom Promgaz, one of the oldest enterprises in the industry. But Giprospetsgaz OJSC (St. Petersburg) remains the most likely to receive an order. One of the structural divisions of this company deals with LNG issues and has experience in implementing tasks similar to the B altic LNG project (plant). The enterprise has already completed a certain part of the work - it has carried out a justification of investments.
Additional production
The future B altic LNG will be located on the lands of the Ministry of Defense, which are located a hundred meters from the industrial zone of the port of Ust-Luga. An important part of the implementation of the entire array of construction is the gas pipeline. It will be stretched from the city of Volkhov in the Leningrad region. Financing is highlighted in a separate article, which speaks of an independent industrial and commercial unit. The gas pipeline will supply raw materials directly to the plant and other consumers. The construction will be financed from the consumer gasification program.
The capacity of the pipeline is projected at 34 billion m3/year, the first stage of LNG will require 16.8 billion m3. The remaining gas consumers are still inplanning stages. There is a project for the construction of two plants for the production of methanol. The third part of the massive LNG project is the offshore terminal.
Long story
The first LNG construction projects were considered by Gazprom Corporation back in 2004. At first, they intended to build a plant in Primorsk, its design capacity was 7 million m33/year, it was planned to supply products to the USA and Canada. In 2007, the idea was abandoned in favor of the promising LNG at the Shtokman field, which was also mothballed, deciding to devote all efforts to the construction of the Nord Stream gas pipeline.
The idea of building an LNG in the Leningrad Region was returned in 2013. The choice lay between sites in the areas of Vyborg, Primorsk and the port of Ust-Luga. The final decision in favor of the port was made in early January 2015. The basis was several advantages in the form of a convenient fairway for the passage of ships, safety of the ice situation. A significant role was played by the plans of the leadership of the Leningrad Region to build a vast industrial zone, which should include about six oil refineries and gas chemical complexes, which requires gas supplies in the amount of up to seven billion cubic meters.
Expected effect
According to energy market experts, the construction of the B altic LNG will make it possible to deliver Russian gas to those European countries where the pipeline does not reach. In particular, it statesSpain, where energy-intensive industries are located, consuming only liquefied fuel imported in large volumes. No less promising market is Portugal, the French coast, as well as the southern regions of Italy. Great Britain is a major consumer of liquefied resource, although gas is delivered there by pipeline in a fairly large volume.
But experts have doubts about the demand for Russian liquefied gas by foreign consumers. This highly competitive market is occupied by long-term players, and the only way to win back a part of it is to reduce the cost of supplies. To what extent this will be possible is impossible to say. The construction of the B altic LNG will play a positive role for the local region, which risks being left without gas supply after leaving the single energy ring of the B altic countries. The construction of a gas pipeline branch not only solves the problem, but also gives impetus to the development of industry in the Leningrad region.
