Russia to take share of product, possibly royalties on Sakhalin-2 gas before 2014 - resolution
MOSCOW. Sept 20 (Interfax) - Russia will be receiving a share of the product of the profit-sharing Sakhalin-2 project gas from this month to December of 2014 to supply to consumers in the country's Far East, as per a resolution signed by Prime Minister Vladimir Putin on September 6.
As reported earlier, the Sakhalin-2 PSA allows for the possibility of paying out the state share and royalties either in gas or in cash. The shareholders in the project, above all state-controlled Gazprom , are more interested in paying out the share in gas. This gas could be used for the gasification of regions in the Far East using the Sakhalin-Khabarovsk-Vladivostok gas pipeline being launched in September.
If the share of product does not suffice to meet market needs, then a move might be made to the receipt of royalties - or regular project payments for the right to extract subsurface resources.
Gas will be sold on Russia's behalf by Gazprom at distribution prices and tariffs determined by the Russian Federal Tariffs Service (FTS) "factoring in the cost of replaceable fuel and considering the energy equivalent, environmental and technological advantages of natural gas" in 2011, and starting in 2012 there will be indexation depending on the increase in tariffs for generated electrical power and heat.
Gazprom will transfer to the budget earnings from gas sales to Far East consumers less transportation costs. For 2011 and 2012, those will be set at 100 rubles per thousand cubic meters for Sakhalin Region and 2,250 rubles per 1,000 m3 for Primorsk Territory consumers; and in 2013 and 2014 - the 2012 amount indexed to the level of inflation.
The document puts the receipt of royalty and product share for the Sakhalin-1 and Sakhalin-2 projects in monetary funds, save for the above exceptions.