* Gives full name of president Putin in final para
By Andrew Callus
LONDON, Feb 19 Plans to export gas from the
Yamal peninsula on Russia's Arctic coast are attracting Asian
gas buyers and investors who have been put off Australian
developments by soaring costs, according to the Yamal project's
Novatek, which holds 80 percent of the Yamal
liquefied natural gas (LNG) development licence but has no
rights yet to export future production, is offering for sale a
29 percent holding to help fund development.
State-backed number-one Gazprom's monopoly on
Russian gas exports is seen as a major barrier to that sale, and
to the project's future. However, access to major resources is
increasingly limited worldwide, and Moscow has just launched a
review of whether to liberalise gas exports.
In addition, according to Novatek's chief financial officer
Mark Gyetvay, the rising costs of Australian projects being
pursued by Royal Dutch/Shell, Chevron and
others are increasing the attraction of Yamal.
"From our experience with the Australian side we are seeing
more interest from Asia-Pacific buyers to look at our project
where a year ago their primary focus would have been closer to
home," he told a conference in London this week.
"We are talking to companies now in the Asia-Pacific region
largely because they see that there's a huge amount of risk from
all these Australian projects ... that either may not come
onstream, or they can get a better deal by coming into a more
cost-effective, conventional onshore type development."
Australia has nearly $190 billion of liquefied natural gas
export projects under construction that would add more than 80
million tonnes per annum (mtpa) of LNG production before the end
of the decade, an increase that would make the country the
world's top LNG exporter.
But by last November, three of seven Australian LNG projects
in early stages of construction had already announced cost hikes
averaging more than 20 percent, mainly because of rising labour
outlays and the strong Australian dollar.
And industry experts say few additional projects are likely
as investors are turning towards lower-cost locations such as
North America and East Africa.
Novatek and Total plan their first 5 million tonne per year
Yamal LNG line in 2016 to liquefy gas from the 418 billion cubic
metre (bcm) South Tambei field on the Yamal Peninsula.
They hope to raise capacity to 15 million tonnes by 2018 and
ship the LNG east through Arctic seas using special icebreaker
But a final investment decision on Yamal is two months
GOVT DECISION SOON?
Novatek has asked the government for an exemption that would
break the Gazprom monopoly. But Gyetvay played down the
importance of any looming liberalisation to the future of Yamal,
in which French international oil company Total
already holds a 20 percent stake.
"There've been discussions over the last week with the
Russian government about liberalising the LNG markets and we'll
wait for them to come back to us, supposedly by the end of
March," he told Reuters on the sidelines of the International
Petroleum Week conference.
"(But) the interest in our project is that it's going to
deliver 15 to 16 million tonnes (per year) of LNG around the
world, and there's a market for that LNG."
Igor Sechin, head of leading Russian state oil and gas firm
Rosneft, is also eyeing a possible LNG project with
ExxonMobil, partner in its Sakhalin-1 project, which is
sited closer to potential buyers such as China or Japan.
Sechin visited both China and Japan this week for LNG talks
after lobbying for Gazprom's export monopoly to be lifted only
for LNG produced offshore - as would be the case for its output
off the Pacific island of Sakhalin.
Sechin also serves as secretary of Russia's strategic energy
policy commission and wields influence on gas policy behind the
scenes. Russian media have reported that he backs an exemption
Novatek is controlled and owned by its Chief Executive
Leonid Mikhelson and by trading house Gunvor's co-owner Gennady
Timchenko. Timchenko is also a close associate of Russian
president Vladimir Putin.