27 Oct 2022 17:01

Novatek calls for int'l cooperation to deliver LNG projects, end energy crisis

BAKU. Oct 27 (Interfax) - International cooperation is needed to deliver liquefied gas projects and bring the energy crisis to an end, Leonid Mikhelson, CEO of Russia's Novatek , said at the Eurasian Economic Forum.

"In current conditions, there can't be 'good' or 'bad' LNG projects. The LNG market is global. Producers are not tied to specific sales regions. It does not matter where an LNG plant is built, each one will cover the global gas market deficit. No country in the world can fully implement an LNG project without international cooperation. So the availability of this cooperation, the opportunity combine the efforts of LNG producers, financial institutions, and shipbuilders will determine how soon this crisis ends," he said.

He said the initiative to tax the windfall profit of energy companies would not solve the problem of gas shortages: "Covering the deficit requires investment decisions, but instead Europe is considering a tax on the windfall profits of energy companies. Even if this money is collected from companies and distributed to the public, this will only prolong the crisis. The market can be stabilized only with investments in the sector and by commissioning new capacity," he said.

Mikhelson said no major new LNG capacity was expected to be commissioned until 2026. "Considering that storage facilities have been filled by this winter, this might be the easiest of the next three," he said.

The said LNG cargoes were being removed from the Asian market as prices rise in Europe. Deliveries to Korea and Japan remain at roughly the same level as last year, while to China they have fallen 23% and to India 19%.