Putin signs law ratifying protocol on additional favorable terms for Russian cooperation with China in LNG projects
MOSCOW. Feb 24 (Interfax) - Russian President Vladimir Putin has signed a law ratifying a protocol between the Russian and Chinese governments dated December 27, 2024 on additional favorable terms for cooperation in liquefied natural gas projects.
The law is published on the official legal information portal.
The protocol concerns the application of certain provisions of the agreement between the Russian and Chinese governments on cooperation in the Yamal LNG project and on further conditions for the implementing joint projects to develop liquefied natural gas production.
Alexander Sinenko, the government's representative in the State Duma, the lower house of parliament said earlier that "this protocol reinforces additional favorable terms for cooperation in joint projects to develop liquefied natural gas production."
"The protocol contains rules that differ from those stipulated by Russian law, and is subject to ratification by the Russian Federation, in keeping with the Federal Law on International Treaties. It is important to mention that China has already completed its own internal procedures to enact the protocol," he said.
"We respect China's desire to strengthen energy security and are convinced that Russian and Chinese interests in this area are completely aligned," said Alexei Chepa, first deputy chairman of the Duma's International Affairs Committee.
"The role of natural gas in power generation is increasing within the framework of China's absolutely correct policy of reducing the share of coal in its energy mix and improving the environment," he said.
China is now the world's biggest LNG importer, so "the key task in strengthening China's energy security is to diversify energy supply routes," he said.
"Russia, for its part, is successfully developing Northern Sea Route infrastructure. Novatek is carrying out the huge Yamal LNG project on the Yamal Peninsula, and the port of Sabetta has been built and is operating on the Kara Sea coast. Chinese companies were actively involved in this large-scale project. This is a fine example of the depth of the Chinese leadership's strategic vision. This protocol was drafted and signed on the basis of our mutual desire to expand cooperation in the joint implementation of LNG production development projects," Chepa said, adding that the document would put favorable conditions in place for investment cooperation between the two countries.
The intergovernmental agreement initially provided tax incentives for the Yamal LNG project, including zero mineral extraction tax rates for natural gas and gas condensate, zero export customs duties on LNG and stable gas condensate, and exemption from value-added tax on imported equipment not produced in Russia.
China has committed to buying at least 3 million tonnes of LNG per year and to facilitating project financing from Chinese financial institutions. The agreement lasts until December 31, 2045.
Chinese companies are participating in the Yamal LNG project, under which an LNG plant with a capacity of 20 million tonnes per year was built, and are also participating in the Arctic LNG 2 project. Novatek plans other LNG projects as well.
