VLADIVOSTOK, Sep 3 (PRIME) – Russia has to monetize its gas stocks before 2030–2035 with green energy taking over, Novatek Chairman Leonid Mikhelson said at the Eastern Economic Forum (EEF) on Friday.
“I believe energy transition will happen at some point. And we forecast it is still possible to sign long-term contracts until 2030–2035. Then gas will not be in demand, it is necessary to monetize it now,” Mikhelson told a news conference.
Novatek’s Ob facility was reoriented from liquefied natural gas (LNG) production to gas chemistry after President Vladimir Putin’s visit to Tobolsk in December 2020, when he suggested creating a gas chemical cluster in the region.
“We have asked the government … to allow us to use the reserves we have at the Ob facility in the new gas chemistry production,” Mikhelson said.
He also said that Novatek is considering implementation of the Ob Gas Chemical Complex project in two phases, and partnership with oil and gas giant Sibur may become part of the second phase.
“We have already reached pre-FEED; we want to consider two ammonia lines with a capacity of about 2.5 million tonnes. This is somewhere around 3 billion cubic meters of gas,” he said.
“We will create the line of ammonia ourselves, but if there is anything else besides ammonia, we might do it together with Sibur,” Mikhelson said.
According to Mikhelson, the companies from Europe and Japan express their interest in buying ammonia, and Novatek is considering them as partners.
Mikhelson also said that the fourth LNG production line of the Yamal LNG plant is malfunctioning, and the equipment has to be improved.
“We have to admit that our manufacturers, our factories still have to learn and learn and learn. … It works, but not very well. There are intermittent stoppages,” Mikhelson told reporters, noting that the equipment has to be improved, rather than thrown away.
He also said that Japan’s Mitsui plans to join Novatek’s transshipment business in Kamchatka and Murmansk by the end of 2021.
“Our partner Mitsui is considering entering the transshipment business. I think it will make a decision this year,” Mikhelson said.
He said that all shareholders of Arctic LNG-2 received an offer to enter the LNG transshipment business with the same share as they have in the project.
“Total has entered, the others are considering,” Mikhelson said.
He also said that the Arctic LNG-2 project has no difficulties due to the lack of support from the European states, and the share of Russian banks in its financing can be increased to 60%, and loan raising will definitely be completed in 2021.
“We have no problems with financing, I had to apologize to some banks, because they wanted one kind of limits, but we cut the limits. … We have partners, yet we do not see support from the governments of these partners. … We have credit lines open for one third of financing from Russian banks. Without any question, we can increase it from one-third to 60%,” Mikhelson said.
“We will certainly complete the loan raising in 2021,” he said.
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