Yamal LNG Loads First Two Tankers (Update/correction)
(Updates, with details of new buyer in para 6, corrects quote in para 5 to show CNPC is among the buyers)
The first two tankers with liquefied natural gas (LNG) from Yamal LNG plant departed from the far northern Russian port of Sabetta December 8-9, in the presence of one man who helped make it possible: Vladimir Putin, the Russian president who authorised tax breaks and guaranteed state funds and other assistance for the $27bn project.
He reportedly told attendees at the ceremony December 8 that the project was complex and risky; but the risk was justified and those who took it on had succeeded. The ice-class Christophe de Margerie set sail in the morning, carrying LNG from the first, 5.5mn metric tons/year train to Asia. (Photo above shows the vessel whilst at Zeebrugge earlier this year, © Fluxys Belgium, J. Van Droogenbroeck)
Production of LNG started December 5, following state approval the week before to start the Yamal LNG commissioning process.
The buyer of the first batch of LNG was Novatek Gas and Power, the Swiss-based 100% subsidiary of Novatek, said the private Russian company's CEO Leonid Mikhelson. In addition, according to the vessel tracking system, the second tanker, Boris Vilkitsky, left the port of Sabetta the following day.
Mikhelson said that three LNG cargoes will be shipped this year: "They will all go to the Asian market – among the buyers is China National Petroleum Corp – where gas is now more expensive than in Europe," he said.
However Novatek announced December 11 that the first LNG cargo was sold to Malaysian Petronas LNG UK, and that LNG sales according to the long-term contracts do not start until April 2018. All LNG sales prior to that date will be sold by Yamal LNG shareholders on a spot basis, it said, making no reference to the likely destination of that first cargo.
Yamal LNG receives natural gas from South Tambey field. The shareholders of Yamal LNG are Novatek (50.1%), Total (20%), CNPC (20%) and the Silk Road Fund (9.9%).
Total, as shareholder of project also confirmed shipping first LNG from the project and its CEO Patrick Pouyanné said that "this first LNG cargo is a testament to the tremendous efforts of the project partners, contractors and all parties who managed to deliver Yamal LNG on time and on budget. With remarkably low upstream costs, Yamal LNG is one of the world’s most competitive LNG projects and it will contribute to the group’s gas production for many years."
Christophe de Margerie was the CEO of Total who bought into Novatek but who died at Moscow airport October 20 2014; Boris Vilitsky was a captain and northern explorer in the pre-revolutionary navy.
Gazprom sets new exports record
Russian giant Gazprom CEO Alexei Miller also said December 8 that “we have reached the home stretch on the way to a new absolute record of annual export of gas to the far abroad for the entire history of Gazprom and the Russian gas industry."
He told journalists at the Sabetta terminal during the ceremony of sending the first tanker within the Yamal-LNG project that as of December 8 the volume of gas supply to the far abroad (Non-CIS countries) from the beginning of the year exceeds 179.8bn m³, about 0.5bn m³ more than the whole of 2016. December will see that figure grow as Europe's winter starts to bite.
"European consumers choose unconditional reliability of deliveries and their economic feasibility. Today, Gazprom is implementing projects for the construction of new, modern and highly efficient gas pipelines in order to continue to meet Europe's high demand for Russian gas," he added, referring to Turkstream 1 & 2 and Nord Stream 2. Gazprom is also a minority shareholder in Novatek.