Rosneft Targets 50mn mt/yr of Arctic LNG Supply: Press
Russian state oil giant Rosneft plans to ship 35-50mn metric tons/yr of LNG from an export terminal it plans to build at Sever Bay on the Arctic Taymyr peninsula, its CEO Igor Sechin said at a forum on October 23, according to Russia's Kommersant newspaper.
Rosneft intends to export the gas as part of its Vostok Oil project, originally conceived as an oil-only venture. Vostok Oil brings together the Vankor oilfields and other Rosneft assets in Russia's far north, as well as private firm Neftegazholding's Paiyakha deposits. In addition to LNG, the Sever Bay terminal will also deliver 2mn barrels/day of oil and 50mn mt/yr of coal.
"The LNG angle was expected, but the numbers appear ambitious," analysts at BCS Global Markets wrote in a research note on October 23, "leading us to think that the fields in the lightly explored region may, as is the case with the relatively nearby Yamal and Gydan peninsulas, be relatively gas prone."
The company has been trying to expand its gas reserves in the Russian Arctic to help justify an LNG project. Russian natural resources minister Dmitry Kobylkin confirmed to Russian media on October 21 that Rosneft would be the only company eligible to take part in an upcoming contest for two gas fields in the area, Deryabinskoye and Kazantsevskoye. Sechin is understood to have requested the auction, while proposing terms that would rule out any other bidders.
Rosneft will have the opportunity to bid for more Arctic gas, after Russia's subsoil licensing agency Rosnedra on October 21 launched an auction for rights to the Zapadno-Minkhovsky block on the Gydan peninsula. The block holds nearly 330bn m3 of gas and 27.2mn mt of condensate, according to Rosnedra.
Bids will be accepted until November 20 and the starting price is fixed at rubles 124.2mn ($1.6mn). A winner in the auction will be announced on December 16. Rosneft has rights to the neighbouring Minkhovsky block, containing a further 210bn m3 of gas.
There are no special terms in this contest, though, which means Rosneft could face competition from private rival Novatek, currently Russia's only LNG producer in the Arctic.
Rosneft has tried and failed to advance an LNG project in the Arctic before. It gave up on plans for the Pechora LNG terminal in the Nenets region in 2018, after concluding that its resource base was not large enough. Concerns about available gas supply have also dogged its Far Eastern LNG project, which has been stuck in limbo for years.