Rosneft eyes Arctic gas hub in Pechora

May 26, 2014

The Rosneft engagement in the Pechora LNG comes after project owner Alltech for some time has tried to get on board the powerful state company. In a deal planned to be signed this week, Rosneft gets a 50+1 percent stake in a joint venture.

Rosneft will pay about $100 million for its stake in the project, a source close to the company says to newspaper Vedomosti.

As previously reported, Alltech previously worked hard to engage also Gazprom in the project and in 2012 established a joint working group on project development. However, as Gazprom’s  has shifted its focus towards the Far East, the interest in the Pechora project has cooled.

Alltech is dependent of an alliance with one of the two state companies because of their monopoly position on LNG exports. New legislation adopted in 2013 gives only Gazprom, Rosneft, as well as Novatek in the Yamal LNG project, the right to export LNG. The Pechora LNG will produced an estimated 10 million tons per year, most of it planned shipped to western markets.

The plant is to be built near the village of Indiga, about 230 km west of regional capital Naryan-Mar.

Copyright, Barents Observer, 2014.