Gazprom accelerates its export LNG terminal projects
After the expansion of the Sakhalin-2 LNG project and the future Vladivostok LNG project on the east coast, the Russian gas leader Gazprom is looking west and investigating solutions to substitute the challenging Shtokman project in reviving the old Baltic LNG project on the Gulf of Finland.
Among all the scenarios envisaged by Gazprom and its partners Total and Statoil in the giant Shtokman project, some plans had considered to build a liquefied natural gas (LNG) plant in Saint-Petersburg region on the western Russia.
If the Shtokman project was finally turned down because Gazprom and its partners could not find a viable solution for the offshore portion of the project, the opportunity to build an export LNG plant on the Baltic Sea appeared to be still valid.
Europe and especially the UK remains attractive markets for the Russian gas even if it may face in the future the direct competition of the US exports from the abundant shale gas.
In addition the countries lying along the Baltic Sea and the Norther Sea are working on a project to cap the carbon dioxide and nitric oxide emissions produced by the vessels crossing these seas.
The consequence will be to replace the conventional fuel by LNG to power most of these ships.
Gazprom estimates that this market only should represent 6 to 7 million tonnes per year (t/y) of LNG.
In this context, Gazprom has decided to revive its old Baltic LNG project in addition to keep up to speed its two other projects on the east coast of Russia with the Sakhalin-2 LNG project and Vladivostok LNG to supply Asia markets.
Gazprom to select project location on Gulf of Finland
Shelved in 2007 the Baltic LNG project seems to have all the characteristics required by Gazprom to develop a LNG project in Western Russia on fast track.
In that purpose Gazprom signed a memorandum of understanding with the Authorities of Saint Petersbrug Region to investigate the most convenient location to build an export LNG plant on the Baltic Sea.
Among the different options considered for this project, such as Primorsk and Vyborg, Primorsk seems to be in the lead.
Primorsk is located 150 kilometers northwest of Saint Petersburg and approximately 50 kilometers from the Russian Finnish border.
This Baltic LNG project should be supplied with natural gas coming from the West Siberia through the Unified Gas Supply System Pipelines .
Currently the working size of the Baltic LNG is to produce 10 million t/y to be adjusted or phased with multi LNG trains in respect with the commercial agreements that Gazprom will sign.
In this context, Gazprom estimates the Baltic LNG project to require $7 billion capital expenditure and to be in operations in 2020.
