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FSUOGM: Chinese investor signs up for Far East LNG project

A Chinese energy firm has lent its support to what could be the first large-scale Russian liquefaction plant not to be developed by one of the country’s leading gas majors.

Zhejiang Energy, a gas and power supplier in east China that also imports LNG, has agreed to buy a 10% stake in Yakutsk LNG, a proposed liquefaction terminal on the shore of Russia’s remote Yakutia region that at full capacity will export up to 18mn tonnes per year (tpy) of LNG to markets in Asia.

The deal is worth €500mn ($567mn), the project’s developer, the Yakut Fuel and Energy Co. (YATEC), said in a statement on January 19, with closure expected in October.

Russia has sizable gas deposits in a number of remote areas, and given the country’s position between European and Asian markets, this gives it the potential to become one of the world’s leading LNG suppliers. But while Novatek has had success realising export projects in the Arctic, other schemes have faltered.

So far only Gazprom and Novatek, Russia’s largest and second-largest gas producers respectively, have successfully realised LNG export projects. Rosneft, the country’s number three gas supplier, wants to build a plant in the Far East but the project has been stuck in limbo for years.

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