FSUOGM: Gazprom starts on Baltic gas complex

Russia’s Gazprom has formally started construction on a major gas processing and LNG complex at the Baltic Sea port of Ust-Luga.

The project, a joint venture between Gazprom and a private Russian partner RusGazDobycha, is poised to become Russia’s largest gas processing facility and one of the world’s largest in terms of production volumes. At full capacity it will process up to 45bn cubic metres per year of ethane-rich Siberian gas, producing 18 bcm per year of treated gas for export to Europe via the Nord Stream 2 pipeline and 13mn tonnes per year (tpy) of LNG. The separated ethane will go to a gas chemical complex that RusGazDobycha is developing in its own, also in Ust-Luga, in order to produce 3mn tpy of polymers.

The $13bn project is part of Gazprom’s strategy of expanding processing, LNG and petrochemicals, in order to add value to its gas resources.

Meanwhile, Gazprom’s domestic rival Novatek expects its flagship Arctic LNG-2 project to reach full capacity in 2025, one year earlier than anticipated, CEO Leonid Mikhelson announced in a meeting with Russian President Vladimir Putin on May 17.

The project, which involves the construction of three liquefaction trains capable of producing nearly 20mn tpy of LNG combined, was reported as 39% complete at the end of March. Its first train was said to be 53% complete. Its first and second trains will come on stream in 2023 and 2024 respectively as originally planned, Mikhelson told Putin, but the third train is now anticipated to be up and running in 2025.

Russia approved a strategy for accelerating development of its LNG sector in March, targeting output of up to 140mn tpy by 2035. Novatek will contribute 64mn tpy of this supply by 2030, Mikhelson, who is also a major shareholder of the gas producer, told the Russian president.

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