Companies offered to build pipes for NOVATEK gas

NOVATEK was allowed to build a small regasification terminal with a capacity of up to 600 thousand tons of LNG in Avacha Bay near Petropavlovsk-Kamchatsky. The previous plan to gasify the region with a gas pipeline from NOVATEK’s transshipment terminal in Kamchatka was thus deemed too expensive and rejected. But the question of the associated gas pipeline infrastructure remains: Acting Governor of the region Vladimir Solodov has already asked Vladimir Putin to use Gazprom for its construction. However, the company is not legally obliged to build these pipes, and the economic attractiveness of the project is questionable.

The command of the Pacific Fleet has agreed on the placement of NOVATEK’s regasification terminal in Avacha Bay, Acting Governor of Kamchatka Vladimir Solodov said at a meeting with Vladimir Putin on August 12. Thus, a fundamental obstacle to the project of gasification of Petropavlovsk-Kamchatsky due to liquefied gas has been removed, which NOVATEK will be able to deliver by small tankers from Bechevinsky Bay, where its complex for transshipment of LNG from Yamal will be located.

According to the previous plan, NOVATEK would supply to Petropavlovsk-Kamchatsky the so-called stripping gas generated during the LNG transshipment at the terminal in Bechevinskaya Bay – there, by the end of 2022, liquefied gas will be loaded from ice-class LNG carriers into conventional LNG tankers. The main issue was the need to build a pipe to Petropavlovsk-Kamchatsky with a length of up to 140 km, its approximate cost due to the difficult terrain could exceed 100 billion rubles. In particular, Deputy Prime Minister Yuri Trutnev reported that the construction of gas pipelines from Bechevinskaya Bay to Petropavlovsk-Kamchatsky would cost too much – about 100-120 billion rubles.

In addition, it was not clear who would finance the project: Gazprom is not legally obliged to build this infrastructure, since the region does not belong to the zone of the Unified Gas Supply System.

An alternative option with a regasification terminal near the city is much cheaper, but its construction had to be coordinated by the military, given the presence in the region of a large naval unit and a base of nuclear submarines. Now this issue has been resolved, but others remain: for example, gas pipelines should be built from the terminal to local thermal power plants and main consumers. Vladimir Solodov asked the president to entrust their construction to Gazprom, which until recently was solely involved in the gasification of Kamchatka. Vladimir Putin agreed to send the question for study.

Vladimir Putin, President of the Russian Federation, on the gasification of Petropavlovsk-Kamchatsky with the help of liquefied gas, August 12

Apparently, NOVATEK itself needs to take part here, and Gazprom, the government, and the region.

The head of NOVATEK, Leonid Mikhelson, estimated the gas needs of Petropavlovsk-Kamchatsky at 300-400 million cubic meters per year, and the maximum capacity of the regasification terminal at 600 thousand tons of LNG per year. It is not yet clear at what price NOVATEK will supply gas and how the construction of the regasification terminal and supply infrastructure will be financed. Taking into account the small volumes of gas, it will be extremely difficult to recoup its construction; moreover, we are talking about the sale of gas to NOVATEK, which reduces Gazprom’s interest in the project.

In “Gazprom” “Kommersant” did not answer. NOVATEK reported that it had sent technical and economic options for gas supply to the region’s facilities to the government. The mechanisms and principles for implementing the measures necessary for gas supply will be discussed together with the Russian government, the region and the relevant economic entities, the company added.

Ivan Timonin from Vygon Consulting notes that in world practice, the cost of building medium-sized regasification terminals is in the range of $ 280-580 per ton of capacity, depending on location, configuration and other factors. For example, the floating Benoa LNG for 0.35 million tons, launched in 2016 in Indonesia, cost $ 100 million, the land-based Jeju Island LNG in South Korea for 1 million tons – $ 461 million. Based on this, according to the analyst, the cost of receiving terminal, which provides the needs of Petropavlovsk-Kamchatsky, can be about $ 260 million.

Tatiana Woodpecker

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