Posted on 08/28/2015 5:03:22 AM PDT by thackney
A $27 billion energy project is rising rapidly on this icy peninsula jutting above the Arctic Circle, but the race to shore up its finances has emerged as a test of Moscow’s ability to weather Western sanctions.
U.S. restrictions on OAO Novatek, the project’s Russian leader, are squeezing the massive Yamal LNG liquefied-natural-gas venture, a centerpiece of President Vladimir Putin’s plan for Russia to reduce its heavy dependence on natural-gas customers in Europe by increasing exports to Asia and, in turn, cementing Russian ties with China.
Barred by the sanctions from raising long-term dollar loans, Novatek and its foreign partners, Total SA of France and China National Petroleum Corp., are having to seek more money from Chinese lenders than they had intended, in addition to kicking in nearly $10 billion of their own, according to company executives. But they have, so far, failed to secure the $15 billion or so they need to complete the project.
Russia had hoped that Chinese investment would help soften the economic blow from its souring relations with the West. But that bet now looks more perilous as China, which had already proved slower to invest than Moscow expected, struggles with a deepening economic slowdown that has rattled global markets.
In a conference call with investors and analysts last month, Novatek Chief Financial Officer Mark Gyetvay said a financing agreement was “imminent.” He also said Novatek was close to selling a further 9% stake in the project.
But time is growing short for the Yamal LNG partners, which have contracts to ship almost all of the project’s gas, mostly to Asia, with deliveries starting in 2017. A major holdup could force the Kremlin or the partners to cover the financing shortfall... the companies could have to buy gas on the spot market to fulfill contracts.
(Excerpt) Read more at wsj.com ...
Some interesting stuff on the logistics of buliding this facility including a neat video at this website.
Thanks, in 2006 I did some engineering work for “nearby” Vankor oil field for Rostneft.
It may source some of the gas for Yamal.
http://www.rosneft.com/news/today/21082009.html
16 ice breaking tankers? Year round operation?
Daewoo Shipbuilding and Marine Engineering is building the world’s first icebreaker tankers—16 of them—to carry liquid natural gas (LNG) through the route year-round. LNG tankers today have to be escorted by icebreaking ships that clear the way through the Northern Sea Route.
The Yamal LNG project, run by companies in Russia, France, and China, proposes drilling more than 200 wells in the Arctic to produce 16.5 million tons of LNG per year, supported by Daewoo’s first 16 Arc7 tankers. Year-round, Yamal LNG will ship LNG from the project’s Sabetta port in Russia’s Yamal Peninsula westward to Europe, South America, India, China, and South Korea. For the warmer half of the year, it’ll also ship east from Sabetta to Japan and South Korea.
As Russia leans more heavily on fuel exports and the prices for them drip lower and lower, a dormant 17th-century Russian ambition is coming back to life: to open the Arctic year-round.
http://www.popsci.com/worlds-first-ice-breaking-tanker-ships-open-arctic-route
more at link
From comments at link; they are a goldmine of info today!
As for the second Russia/China pipeline:
http://siberiantimes.com/business/investment/news/n0325-signing-of-deal-on-gas-supply-route-to-china-via-altai-is-postponed-indefinitely/
..Vedomosti newspaper today cited 2 federal officials saying that..the Altai pipeline - also known as Power of Siberia 2 - is being postponed for an indefinite period..The move - a significant blow to Russia - arises because demand for gas in China is decreasing...Combined with the fall in oil prices, this means it is now more advantageous for China to buy LNG from Australia, said Valery Nesterov, an analyst from Sberbank CIB.
According to BP, in 2012-2013 the consumption of gas in China grew by 12-13% and in 2014 by 8.5%. In the first six months of 2015 consumption grew by only 2%.
Nice find!!!
The construction costs must be a huge multiple of a warm weather, accessible lng plant.
Same for operating costs.
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