BOFIT Viikkokatsaus / BOFIT Weekly 2019/19

In March, Russian officials granted permits to the Russian gas company Novatek for siting a liquefied natural gas (LNG) storage and transhipment terminal in Avacha Bay on the Kamchatka Peninsula on the Pacific Ocean coast. In April, officials followed up with permits for construction of similar terminal in Ura Bay on the Kola Peninsula on the Arctic Sea coast. Once these ports are completed, expensive shipping vessels with ice-breaking capability will focus on transporting natural gas from Novatek’s facilities at the Arctic Sea in the Gulf of Ob to these ice-free ports, where cheaper vessels without ice-breaking capability will transport the gas further. The approach substantially reduces transport costs.

The French oil and gas company Total announced plans in April to acquire 10 % stakes in both ports. Total is a minority shareholder in Novatek and has invested directly in the Yamal LNG plant and the planned Arctic LNG 2 plant. The sites of these plants are located on opposite shores of the Gulf of Ob.