Russia licenses four energy companies to export LNG

Russia has taken another step towards liberalising its LNG market, granting four major energy companies the right to export the commodity.

Prime minister Dmitry Medvedev on Tuesday approved a list comprising Yamal LNG (a joint venture between Russia’s independent producer Novatek and French major Total), the two government-owned producers Rosneft and Gazprom, as well as the latter’s subsidiary Gazprom Export.

The four companies fall under a new Russian law passed in November 2013, liberalising the export of LNG – a right previously maintained by incumbent Gazprom alone. Gazprom still retains an exclusive right to export Russian gas via pipelines.

The law came into effect on 1 December last year. It was primarily lobbied for by Novatek, which holds a majority stake in the 16.5mtpa Yamal LNG project, and by Rosneft, which plans to develop a 5mtpa project in Sakhalin together with US-based oil major ExxonMobil.

Under the terms of the new legislation, the export of LNG is reserved for companies that as of 1 January 2013 have been granted a licence to build an LNG plant and to companies that have more than a 50% government stake.

In addition, such companies must be engaged in the production of gas in internal waters, territorial waters and the continental shelf. The Black Sea and Sea of Azov are included in these provisions.

Only the four companies listed above have satisfied these conditions so far, according to the prime minister. Roman Kazmin