Russian gas giant Gazprom said that the company’s board sees an opportunity to take advantages from the current slowdown in the global LNG investment. Gazprom’s board noted that Russia has vast gas reserves that can be converted into LNG to penetrate new markets. The board pointed out that the ongoing macroeconomic environment had negatively impacted the long-term prospects of LNG projects development.
Sempra’s 3.25 million tons/year Energia Costa Azul LNG terminal has so far become the only LNG project that receives a final investment decision (FID) in 2020. Market participants initially expected numerous LNG project FIDs this year following a record number of FIDs in 2019. However, the coronavirus ravaged the world’s energy demand, resulting in companies cutting their spending plans.
The slowdown in LNG development would also create an additional opportunity for Gazprom’s gas supplies, the company said. Russia exports natural gas via pipelines to Europe, Turkey, and China. Gazprom operates the 10.8 million tons/year Sakhalin LNG export facility and is developing the 13 million tons/year LNG export plant at Ust-Luga in the country’s northwestern region.
There are only two operational LNG export terminals in Russia, Sakhalin and the 16.5 million tons/year Yamal LNG plant. These terminals can operate at above nameplate capacity, giving Russia an annual LNG production capacity of nearly 30 million tons/year. Novatek is developing the 19.8 million tons/year Arctic LNG 2 plant, while A-Property is working on the 13 million tons/year LNG export terminal in the country’s Far East region.
