* Gazprom's gas exporting monopoly still in place
* Government studying offer to allow Novatek to export LNG
* Capacity of LNG projects on Yamal seen over 30 mln T/year
(Adds CEO quotes and background)
By Alexei Anishchuk
ST PETERSBURG, Russia, Jan 10 Russian gas
companies Novatek and Gazprom signed a deal
on Thursday to build liquefied natural gas production facilities
on the Arctic Yamal peninsula as part of a Russian plan to
export more gas to Asia.
The new facilities would be near a project already proposed
by Novatek to build a 16.5 million tonne LNG facility on Yamal
in partnership with Total. The total capacity of both
on Yamal would eventually amount to over 30 million tonnes per
"At the moment we view this as a doubling of production
volumes compared to Novatek's initial plans," Gazprom CEO Alexei
Miller told reporters. "With Gazprom's resource base, we could
even double output on Yamal."
President Vladimir Putin has ordered a new focus on Asia in
a revamp of Russia's gas export strategy, which now depends on
Gazprom's pipeline deliveries to Europe, where it faces falling
demand and deep regulatory uncertainty.
Putin presided at a ceremony on an icebreaker docked in St.
Petersburg, at which Miller and Novatek CEO Leonid Mikhelson
signed an agreement to create a joint venture by the end of the
year to build LNG facilities.
The vessel was a symbolic venue for the signing, because
icebreakers will be needed to clear a path through Russia's
Arctic seas to take LNG from the gas-rich peninsula to target
customers in Asia.
Russia, the world's largest conventional gas producer,
currently has just one functioning LNG plant - a 10 million
tonne per year liquefaction facility operated by Gazprom and
Royal Dutch Shell on the island of Sakhalin.
ISSUE OF EXPORT MONOPOLY
The Novatek-Total project is controversial because Novatek
has requested rights to market LNG directly to customers without
going through Gazprom, which has a monopoly on exports of
A Russian energy ministry source said the government was
still reviewing the proposals from key ministries and agencies,
which supported LNG export rights for Novatek.
The request has broad backing within the government, but a
final decision is likely to be taken in the Kremlin, which keeps
a tight grip on policy for gas exports, a vital source of
Gazprom insists it can carry out marketing responsibilities
under an agency agreement, but analysts say banks will be
reluctant to finance the project if Novatek and Total cannot
control export flows of LNG.
The partners were aiming to make a final investment decision
on Yamal LNG last year but have yet to do so. A Total executive
in Moscow has said the granting of export rights is not a
Miller and Mikhelson did not comment directly on the
conflict over Novatek's request for export rights. In response
to a reporter who asked whether the export monopoly could be
broken, Miller said, "No".
In regard to the Gazprom-Novatek joint venture, Mikhelson
said there would be no obstacle to selling the LNG through
(Additional reporting by Vladimir Soldatkin; Writing by Melissa
Akin; editing by Jane Baird)