Putin pledges to unblock Russia LNG to tackle Asia demand

Mon Oct 7, 2013 8:04am EDT

Related Topics

* Putin confirms Russia plans to liberalise LNG exports

* Voices support for Novatek, Gazprom projects

* Russia seeks Asia-Pacific markets as European demand stalls

NUSA DUA, Indonesia, Oct 7 (Reuters) - Russia will press ahead with opening up its exports of liquefied natural gas in a move to meet the growing demand from Asia-Pacific markets, President Vladimir Putin said on Tuesday.

Putin stressed Russia's importance as the world's biggest energy supplier is keen to expand in the region, where gas demand is driven by China, which expects to consume up to 230 billion cubic metres (bcm) of gas by 2015.

"We realise our responsibility in this sector, and therefore are planning to expand our energy cooperation with our Asian partners," he told businessmen at the Asian-Pacific Economic Cooperation summit in the Indonesian island of Bali.

"We... will make a step towards liberalisation of liquefied natural gas trade in the nearest future."

Removing restrictions on LNG exports from Russia is seen as a big blow to state-controlled giant Gazprom which controls a monopoly on exports of all natural gas under a law passed in 2006.

It will on the other hand strengthen Gazprom's competitors aspiring to cash in on booming Asia-Pacific energy demand.

Putin said the liberalisation plan will accommodate both Gazprom and Novatek, in a sign the Kremlin is seeking a compromise decision in the strategic energy sector.

"We support the projects... run by Novatek, we will also support the projects of our main gas producing and exporting company - Gazprom," he said.

Novatek and Russia's top oil producer Rosneft have both lobbied for LNG export rights, with the latter agreeing with ExxonMobil to build an LNG plant in the Russian Far East at an estimated cost of $15 billion.

Currently, only one LNG export terminal is operating in Russia - the 10 million tonnes per year Sakhalin-2 project built by Shell that is now majority owned by Gazprom.

China's LNG imports rose 20 percent to 14.7 million tonnes in 2012 from the previous year, customs data has shown. That would be equivalent to about 20.3 billion cubic metres (bcm), or 14 percent of China's total gas demand last year at 147 bcm.

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