Russia’s plans to liberalise LNG exports on track
The Russian draft bill aimed at removing incumbent Gazprom’s monopoly on LNG exports is on schedule and expected to go before the Russian lower house of parliament (Duma) this November, after which it is expected to come into force on 1 January 2014, the Russian energy ministry told ICIS on Wednesday.
“President Putin gave instructions for the gradual liberalisation of LNG exports and the work has as of today been finalised. The draft clause is in the government and has been coordinated by all the ministers. It is going to be submitted to the State Duma to consider and we expect it to be adopted by 1 January next year,” energy minister Alexandr Novak told a press briefing at the World Energy Congress in Daegu, South Korea.
The draft law will end Gazprom’s export monopoly for LNG, although the natural gas incumbent will retain its export monopoly on piped gas exports from Russia.
The draft bill permits companies to export LNG from LNG projects in fields of federal significance (those are fields with reserves of over 50 billion cubic metres). It also allows Russian government-controlled producers to export LNG from their own production or production sharing agreements, the ministry said. This would include onshore and offshore production in territorial waters, including production on the continental shelf and the Black and Azov seas.
The ministry said the draft bill to amend the law “On gas exports” envisaged a coordination mechanism for the export of LNG from Russia, aimed at avoiding competition between Russian exporters on foreign markets. This would oblige exporters to follow an officially prescribed procedure to inform the energy ministry of their gas export plans. The ministry did not elaborate on how such information would be used or whether it could affect a company’s LNG export plans.
The draft bill also transfers the licensing authority for LNG away from the Russian ministry of industry and trade to the energy ministry.
The two Russian companies which have been calling for a lifting of the export monopoly on LNG have been the independent gas producer Novatek , leader of the 16.5mtpa Yamal LNG project, and the state-owned oil and gas major, Rosneft, with its participation in the Sakhalin-1 LNG project.
Novatek’s Yamal LNG project with estimated gas reserves of 1.56 trillion cubic metres is based around the Tambey fields on the Yamal Peninsula and is scheduled for commissioning in 2016.
Yamal LNG has a number of precursory agreements with Asian and European buyers, including Paris-based major Total and UK-headquartered major BP, as well as a 3mtpa supply agreement with Chinese CNPC. Novatek has secured significant Chinese finance on the back of expectations of LNG export liberalisation in Russia. CNPC has also agreed to take 20% in the Yamal-LNG project. Elizabeth Stonor
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