Ust-Luga & Baltic LNG overview
Source of the Gas / Upstream
Gazprom takes FID on new gas project in Western Siberia
Gazprom and RusGazDobycha have reached a final investment decision (FID) on the development of the giant Semakovskoye gas field in Western Siberia, Kallanish Energy reports.
The partially offshore/onshore field in the Yamal-Nenets autonomous region has recoverable gas reserves of over 320 billion cubic meters (Bcm). The project is slated to enter commercial production in 2022 with 19 wells, Gazprom said in a statement on Thursday.
The 50-50 joint venture RuzGazAlyans will operate the project and has already started development drilling. The first horizontal development well is expected to be completed by the month-end. By the first quarter of 2021, the plan is to have six development wells drilled and complete.
Construction of associated infrastructure is set to actively start in the second half of the year.
Gazprom didn’t provide details on the cost of the project and its planned production capacity.
RusGazDobycha is a special-purpose company established by Russia’s National Chemical Group with the purpose of increasing the efficiency of the group’s production chain, gaining access to feedstock – natural gas. It’s investing in different gas production and processing projects, including the Ust-Luga LNG plant proposed on the Baltic coast.
Original source: https://www.kallanishenergy.com/2020/06/05/gazprom-takes-fid-on-new-gas-project-in-western-siberia/
Current EPC contracts
Russia’s Gazprom signs Ust-Luga LNG deals
June 10, 2020, by Mirza Duran
Russian gas giant Gazprom said it signed several deals for its large liquefied natural gas export and chemical project in the Baltic port of Ust-Luga.
Gazprom and RusGazDobycha agreed to build the gas processing and liquefaction complex worth more than 700 billion rubles ($10.2 billion) in March last year.
The gas giant said in a statement released on Monday it signed 20-year commercial contracts to supply feed gas to the integrated project from its Achimov and Valanginian deposits in West Siberia.
It signed the deal with RusKhimAlyans, the project operator of the integrated complex established on a parity basis by Gazprom and RusGazDobycha.
Under the deal, Gazprom will deliver 45 billion cubic meters per year of ethane-containing natural gas to the facility.
Most of this gas will feed the 13 million tonnes per year LNG plant, but it will also be used for ethane fraction and LPG production.
Gazprom said it will also take around 18 billion cubic meters per year of this processed gas into its network.
Additionally, RusKhimAlyans entered into an EPC contract with Sibur Group’s Nipigaz for a full cycle of operations to create gas processing and off-site facilities at the complex.
Howevher, the joint venture is yet to pick contractors to build the liquefaction plant and other related facilities.
Gazprom said last month it was working to attract investors to fund the large LNG export plant.
The company plans later this year to submit the plant’s design documentation for state review and place orders for long-lead equipment for the project.
Original source: https://www.offshore-energy.biz/russias-gazprom-signs-ust-luga-lng-deals/
History & background of Baltic LNG
The Baltic LNG project is an integrated gas processing and liquefaction facility proposed at Ust-Luga, Leningrad Oblast, Russia. The total estimated investment for the project is approximately £8.1bn ($10.5bn).
The integrated LNG production complex is planned to be jointly developed by Russia’s state-run gas behemoth Gazprom and RusGazDobycha, a subsidiary of the National Gas Group (NGS).
The facility will be operated by RusKhimAlyans, a special purpose vehicle established by both the companies.
Scheduled to commence operations in 2023, the Baltic LNG complex will process 45 billion cubic metres (bcm) of gas to produce 13 million tonnes (Mt) of LNG, 4Mt of ethane and more than 2.2Mt of liquefied petroleum gases (LPG) a year.
PROJECT GALLERY
Baltic LNG project background
The Baltic LNG project was originally proposed to be developed by Gazprom and the Anglo-Dutch oil company Shell.
Gazprom and Shell signed a memorandum of understanding (MoU) for the joint development of the project at the International Economic Forum in June 2016.
The companies signed heads of agreement for the Baltic LNG project in 2017, while a framework agreement on the design concept was signed between the two companies in October 2018.
However, Shell decided to exit the project after Gazprom changed the development concept to integrate the LNG project with its gas processing facilities and collaborated with RusGazDobycha to implement the project in March 2019.
Location and site details
The Baltic LNG project is proposed to be developed on a 1,400ha-site in the southern part of the Baltic Sea port of Ust-Luga, in Leningrad Oblast, Russia.
The LNG plant and other gas processing facilities at Ust-Luga
The Baltic LNG project at Ust-Luga includes an LNG export facility with two liquefaction trains of 6.5Mtpa capacity each, as well as other processing plants to produce up to 4Mtpa of ethane and more than 2.2Mtpa of LPG.
The first LNG train is scheduled for commissioning in 2023, while the train two is expected to come on stream in 2024.
While the LNG and LPG output is meant for export, the ethane produced at the facility will be delivered to a nearby gas chemical plant to be developed by RusGazDobycha, for producing up to 3Mt of polymers a year.
The Ust-Luga processing complex will treat approximately 45bcm of gas annually. The residue gas after processing (approximately 20bcm per annum) is also planned for export through the Nord Stream 2 pipeline.
Feed-gas supply for the Baltic LNG complex
The Ust-Luga LNG complex will be supplied with natural gas from the Achimov and Valanginian deposits located in the Nadym-Pur-Taz region of West Siberia.
The feed-gas for the processing complex will be sourced via the Northern Lights pipeline section of Russia's Unified Gas Supply System (UGSS).
Financing for the Baltic LNG project
Russian state-owned development bank VEB (formerly Vnesheconombank) agreed to lend up to £1.3bn ($1.6bn) for the Baltic LNG project in September 2019.
The project is also expected to be financed by other state banks as well as the Russian Sovereign fund.
Technology provider
Gazprom is expected to utilise the liquefaction technology developed and patented by German-based industrial gases group Linde.
Potential contractors and partners
Gazprom signed an MoU with Japan-based Mitsui for a preliminary front-end engineering and design (pre-FEED) study for the Baltic LNG project in September 2018.
Japan’s Itochu Corporation also confirmed its interest to participate in the project by signing an MoU with Gazprom in December 2018.
Original source: https://www.nsenergybusiness.com/projects/baltic-lng-project/
Overall picture of Ust-Luga
Gas processing and chemical cluster near Ust-Luga presented at St. Petersburg International Economic Forum
RELEASE
June 7, 2019, 20:30
The project for a large-scale industrial cluster to be created in the northwest of Russia in 2019–2024 was presented today at the St. Petersburg International Economic Forum 2019.
The event was attended by Alexey Miller, Chairman of the Gazprom Management Committee, Konstantin Makhov, Chief Executive Officer of RusGazDobycha, Kirill Seleznev, Director General of RusKhimAlyans, Andrey Ivanov, Deputy Minister of Finance of the Russian Federation, Igor Shuvalov, Chairman of the State Development Corporation VEB.RF, and Andrey Kostin, President and Chairman of VTB Bank Management Board.
The project envisages the creation of an integrated complex for natural gas processing and liquefaction near the seaport of Ust-Luga, Leningrad Region. The complex will be processing ethane-containing gas, which will be supplied via allocated gas pipelines from Gazprom's deposits in the Nadym-Pur-Taz region. The operator of the complex is RusKhimAlyans, a special-purpose company owned on a parity basis by Gazprom and RusGazDobycha. A gas chemical facility technologically interconnected with the complex will be constructed by RusGazDobycha.
Every year, the complex will process 45 billion cubic meters of gas and produce around 13 million tons of liquefied natural gas (LNG), up to 3.8 million tons of ethane fraction, up to 2.4 million tons of liquefied petroleum gases (LPG), and 0.2 million tons of pentane-hexane fraction. The gas remaining after the processing (about 19 billion cubic meters) will go into Gazprom's gas transmission system. The ethane produced by the complex will be processed by the abovementioned gas chemical facility with an output of up to 3 million tons of various polyethylene grades. The commissioning of the facilities will be synchronized: the first trains will come onstream in the fourth quarter of 2023, and the second trains will become operational in the fourth quarter of 2024.
The vertical integration of the capacities for production, transmission and processing of hydrocarbons, coupled with the creation of a single site for ethane production and natural gas liquefaction, will substantially improve the economics and specific indicators of the complex, as well as considerably mitigate resource and price risks. With the gas chemical facility in place, the unique industrial cluster in northwestern Russia will become the only industrial complex of its kind in the world.
Implementation of these projects will significantly contribute to Russia's social and economic development. The facilities will help increase Russian LNG and LPG exports, as well as boost the production of ethane, which is in high demand by the industry, and high-value-added products of gas chemistry.
Original source: https://www.gazprom.com/press/news/2019/june/article482173/
