17 Oct 2023 18:04

Russian State Duma adopts bill in first reading allowing Novatek to export LNG without reference to specific fields

MOSCOW. Oct 17 (Interfax) - The Russian State Duma adopted a bill in its first reading allowing subsidiaries of Novatek to export liquefied natural gas (LNG) without reference to specific fields.

According to the amendments under consideration, the right to export LNG is proposed to be given to entities affiliated with LNG exporters within the second group: "legal entities implementing investment projects for production of LNG with a capacity of more than 20 tonnes per hour as per strategic planning documents (about 175 thousand tonnes per year), provided that the right to directly or indirectly dispose of more than 50% of the total number of votes attributable to voting shares constituting the charter capital of these legal entities belongs to persons who have the right to directly or indirectly dispose of more than 50% of the total the number of votes (shares) constituting the charter capital of entities granted the right to export gas in accordance with paragraph 2 of this part."

The bill (N400571-8) is posted in the electronic database of parliament; the authors are a group of deputies including the head of the committee on natural resources, Dmitry Kobylkin, and the head of the committee on economic policy, Maxim Topilin.

According to the specified paragraph of the law on gas exports, the export of LNG is permitted to users of subsoil plots in subsoil plots of federal significance, the license for the use of subsoil resources of which, as of January 1, 2013, provides for the construction of an LNG plant or the sending of produced gas for liquefaction to an LNG plant that liquefies gas produced in the specified subsoil in areas of federal significance, for whom licenses for the use of the subsoil were issued to the specified users of the subsoil areas after January 1, 2013.

In Russia, these licenses were issued only to Novatek subsidiaries. Deputy Energy Minister Anastasia Bondarenko confirmed that the second group of exporters includes Novatek projects. In addition, the bill will allow Novatek to directly export LNG from the currently operating Cryogas-Vysotsk project. Currently, Cryogas-Vysotsk exports LNG under an agency agreement with Gazprom Export.

"The draft federal law proposes to ensure the possibility of exporting LNG from LNG projects without reference to subsoil plots of federal significance, licenses for which provide for the use of extracted natural gas for the production of LNG, as well as the possibility of exporting LNG to legal entities that are part of the same group with organizations which already have the right to export LNG. Currently, licensing of LNG exports provides for the provision in the subsoil use license of the condition on sending products to an LNG production plant. At the same time, the introduction of new LNG projects may provide for their resource support from various sources. In this regard, it is necessary to review current approaches to licensing LNG exports," the explanatory note to the bill says.

Earlier, the head of Novatek, Leonid Mikhelson, called for the adoption of such a bill in order to be able to export LNG from the company's new Murmansk LNG project with a capacity of almost 20 million tonnes of LNG per year, as well as Cryogas-Vysotsk, with a capacity of about 800,000 tonnes per year.

Novatek plans to use its gas from the fields of the Gydan Peninsula to supply Murmansk LNG, he said. To deliver this gas through the Unified Gas Supply System, it will be necessary to build the Murmansk-Volkhov gas pipeline. Unlike Novatek's ongoing LNG projects in Yamal, Murmansk LNG will not require icebreaker-class gas carriers to export products.