2 Apr 2024 10:01

Russian govt, Novatek draft agreement to develop LNG equipment production

MOSCOW. April 2 (Interfax) - The Russian authorities will sign a letter of intent with gas producer Novatek with the aim of developing equipment for production of liquefied natural gas (LNG).

The government issued an order on April 1 (No. 775-r) approving the signing of the letter of intent and the document has been posted on the official website for legal information.

The document is expected to be signed by Deputy Prime Minister Alexander Novak and Novatek CEO Leonid Mikhelson.

The main mechanism for the implementation of the agreement will be a roadmap to 2030, which is subject to approval by the Industry and Trade Ministry, Energy Ministry and Novatek. The Industry Ministry has been designated the responsible federal agency and the Coordinating Council for Import Substitution of Oil and Gas Equipment will be responsible for coordinating the development of this area.

The agreement states that "interested organizations" will provide cofinancing for the roadmap in an amount that is at least equal to what is provided by the federal budget. It also calls for mutually beneficial cooperation with manufacturing, research and educational organizations, development of market relations and the exclusion of any unilateral actions aimed at restricting competition.

The government will pledge to create a comfortable regulatory environment and eliminate administrative barriers; establish experimental legal regimes, including to expand opportunities for risky investments; and provide tax incentives and financial support, including in the form of budget investments if necessary.

Novatek, in turn, will recruit interested organizations to conduct research and development, create a mechanism for attracting partners and coordinating their actions, and represent their interests in cooperation with the government.

Russia aims to increase LNG production to 100 million tonnes by 2030 from 32.9 million tonnes in 2023.