April 11, 2013 / 9:30 AM / 5 years ago

Rosneft challenges Gazprom in Asia-Pacific LNG race

* Wants to build Sakhalin LNG plant by 2018

* Sees plant capacity at 5 mln tonnes per year

* Rosneft, Novatek want gas exporting rights

MOSCOW, April 11 (Reuters) - Russian state energy major Rosneft said on Thursday it wants to start supplying liquefied natural gas (LNG) to Asia from 2018, challenging rival Gazprom’s plans to launch its own plant in the Pacific port of Vladivostok.

Rosneft and U.S. major ExxonMobil have agreed to study the possibility of building a plant to liquefy gas from their Sakhalin-1 oil and gas project off Russia’s Pacific coast.

Only Gazprom, according to a 2006 law, has the right to export gas from Russia. Rosneft is, however, lobbying to win the right to export LNG, as is Russia’s largest independent gas producer Novatek.

Rosneft Chief Executive Officer Igor Sechin said the annual capacity of the plant’s first line would total 5 million tonnes.

“We think that we have to offer our gas to the market no later than 2018. If we do it later, our chances will be significantly reduced,” Sechin was quoted by Interfax as saying in Yuzhno-Sakhalinsk, Sakhalin’s capital.

He said that companies from South Korea and Japan, the world’s top LNG consumer, had shown interest in the project.

Russia is the world’s second largest producer of conventional natural gas after the United States, but has only one working LNG plant, a 10-million-tonne-per-year facility operated by a Gazprom-led consortium that includes Royal Dutch Shell and Mitsui.

President Vladimir Putin has said the production of LNG, which can be shipped by sea, should be made a priority, enabling Russia to diversify away from supplying pipeline gas to Europe’s weakening market.

Gazprom has already announced plans to build its Vladivostok LNG facility, with a capacity of 10 million tonnes a year, in 2018.

Analysts say that it will be 2015 at the earliest before material new LNG supplies are expected to come on to the market and there is a risk of delay due to worldwide financial and economic turmoil.

Australia will supply the next new supply of LNG from 2014 and is set to overtake top exporter Qatar in 2017.

“Huge possibilities of LNG supplies to Asia Pacific region will open in the nearest future, in 2015,” Sechin said, according to Russian news agencies.

“That’s why we want to use this possibility and are working hard in this direction,” he was quoted as saying by Interfax.

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