29 Dec 2017 12:21

Russia exempts gas prices for Gazprom exports in liquefied form from regulation

MOSCOW. Dec 29 (Interfax) - The Russian government has exempted gas prices for Gazprom exports in liquefied form from regulation.

The corresponding decree from December 27 has been published on the official portal for legal information.

The writers of the draft decree said that this mechanism "will enable high-tech LNG projects to be implemented in collaboration with foreign partners, who will make a significant contribution to the development of the Russian gas sector and economy and will provide a long-term source of budget revenues."

The bill has been under discussion since February this year. In its initial form it envisaged gas deliveries at unregulated prices not only for LNG plants, but also "to organizations producing processed gas goods and chemicals for export at facilities commissioned after January 1, 2017." However, gas chemicals were later retracted from the draft.

Future Russian LNG projects include the high tonnage Baltic LNG, stage three of Sakhalin 2 as well as the small- and medium tonnage plants at Portovaya Compressor Station in Vysotsk and Kaliningrad.

Gas bought from Gazprom is already being exported from small-tonnage LNG units. This concerns LLC Gazprom transgaz Yekaterinburg as well as plants belonging to Gazprombank subsidiary Cryogas. At the moment, regarding gas deliveries for Cryogas, this could involve not a markup but a discount: the LNG producer already buys the bulk of its gas from Gazprom Mezhregiongaz but is also trys to save money by buying gas on the SPIMEX.