Gazprom's Sakhalin LNG Expansion on Hold: Press
Gazprom’s plan to add a third 5mn mt/yr export train at its LNG plant in the Russian Far East has been put on hold, sources told Reuters on November 1, dashing the company's hopes of expanding non-pipeline gas sales.
Gazprom is partnered at the Sakhalin-2 oil and gas venture on Sakhalin Island with Shell and Japan’s Mitsui and Mitsubishi. The group has been discussing an expansion at their 10mn mt/yr LNG export terminal for years, with limited apparent progress.
The main obstacles are a lack of gas resources and international sanctions, the sources said. Gazprom had previously earmarked the offshore Yuzhno-Kirinskoye field as a source of gas, but the project ground to a halt after being targeted by US sanctions in 2015. Yuzhno-Kirinskoye is assessed by Gazprom to hold 711.2bn m3 in recoverable gas – enough to support an annual output of 21bn m3.
Gazprom has found another new field off Sakhalin, Yuzhno-Lunskoye, but it is too small to justify a new Sakhalin LNG train alone, the sources said. The company had been in talks to buy gas from the Rosneft-led Sakhalin-1 consortium as well, but the group now plans to advance its own LNG project.
Sources also pointed to Gazprom’s planned launch of piped gas sales to China next month via the 38bn m3 Power of Siberia as another reason for the lack of progress.
Gazprom became Russia’s first LNG producer when the Sakhalin terminal entered operations in 2009. But it has since been overtaken in terms of output by private rival Novatek, which is advancing a raft of LNG export projects in the Arctic. In addition to expansion plans on Sakhalin, Gazprom also wants to launch a 13mn mt/yr terminal on the Baltic coast in 2023.